Annual Report 2012

A. Normal Sabga

The year under review was of particular National significance as it marked the 50th Anniversary of the Independence of Trinidad & Tobago. While this historic achievement was cause for joyful celebration of this milestone across the country, it was also a time to reflect on the opportunities for our people and the nation in the decades ahead.
With great pride we recalled the successes earned by the sacrifice, hard work and dedication of so many of our ‘heroes’ and ‘nation builders’ in the last five decades. We applauded the attainments in the fields of sport, arts and entertainment, education, industry, commerce and reflected that in spite of the social, economic and political challenges of an emerging Nation, we have preserved our cherished freedom and democracy.

It is in this spirit, that I take great pride to present my 14th report as Group Chairman and Chief Executive as the Group’s 131st year was also marked by many accomplishments and celebrations and value creation for our stakeholders and customers.

FINANCIAL PERFORMANCE

For yet another year your Group has delivered strong growth in the face of tough economic conditions that continue to prevail across the Region. I am pleased to report revenues of $5.9 billion an improvement of 12% on 2011 and PBT of $952 million up 5% on prior year. Earnings per share (EPS) of $3.69 also improved by 7% over the previous period and total assets now stand at $11.3 billion.

At this point in our history, the Group and every Sector in the Group is stronger and healthier than ever before. We have repaid approximately $1 billion of long-term debt over the last five years reducing our finance costs by $49 million or 45%.

Our gearing ratio is at 0.3%, cash generation from operations has improved by 4% and debt capacity can comfortably support our business growth and investment strategy in the coming years. Our Executive teams are sharply focused on improving execution and remain committed to the core values that have honed our competitiveness and sustained growth from inception and particularly in less than favourable market conditions.

SECTOR REVIEW

AUTOMOTIVE SECTOR – RAY A. SUMAIRSINGH

In 2012, the Automotive Sector launched Trafalgar Motors, located on the corner of Charles and Melborne Streets, Port of Spain, the new showroom of our luxurious Jaguar, Land Rover and Range Rover brands. We also unveiled the new 2012 Ford Focus Sedan, the world’s top selling car, at the Ford Showroom on Richmond Street.

BEVERAGE SECTOR – ANDREW SABGA

A significant investment was made in the Beverage Sector as Carib Brewery undertook a monumental task where three new stainless steel fermenting tanks, each with a riding height of 24ft and a standing height of 74ft, were installed. The investment signified our drive to expand brewing capacity and increased efficiency to meet the growing demands for our brands at home and in our export markets. We also signed a regional partnership agreement with Heineken and our new Heineken distribution was rolled out in Trinidad & Tobago, Barbados, Guyana, Grenada and St. Kitts & Nevis. This year also marked the launch of a new multimedia campaign to support our flagship Carib Beer brand that boosted interest and sales in the under 25 age group.

DISTRIBUTION SECTOR – JOSE NIVET

The Distribution Sector has continued to reshape and reposition its business model in response to the evolution of the retail trade and customer expectations. The acquisition of TWEE Duty Free Shop at PIA deepened our involvement in the retail space and the merging of our Barbados power houses into one entity Brydens Stokes, one of the largest distribution operations in Barbados, has improved our operational efficiencies and the service levels in all channels. Our Guyana distribution business experienced another consecutive year of double digit growth.

FINANCIAL SERVICES SECTOR – CHIP SA GOMES

In the Financial Services Sector, Tatil celebrated its 50th Anniversary of providing financial security to policy holders in Trinidad and Tobago. The Sector also restructured its Finance & Merchant Bank business in Barbados to respond to market conditions and improve the business performance. Several new leadership appointments were made in the sector, deepening the mix of talent, energy and experience. We congratulate Mr. Chip Sa Gomes in his new role as Sector Head, effective March 2013 and are confident of the Sector’s future. We wish to thank Mr. Nigel Romano for his contribution to the Sector and extend best wishes.

MANUFACTURING SECTOR – GERRY C. BROOKS

Companies in the Manufacturing Sector continued to improve market share in key segments in the local and export markets, while ANSA Chemicals expanded production capabilities by 20% and ABEL Building Solutions introduced a cutting edge clay block production facility – the first of its kind in the Caribbean and Central America, to provide customers with a wider range of construction products.

MEDIA AND SERVICES SECTOR – DAVID G. INGLEFIELD

In the Media Sector, our strategy for developing new and improved content across Guardian Media Ltd continued in 2012. Our Editorial team was strengthened to deliver fresh, accurate and hard-hitting journalism to our readers. CNC3 expanded production capabilities producing ‘TASTE’, a dynamic local cooking series and Digicel Rising Stars, both produced to the highest international standards. CNC3 also attained the number one position in Prime Time, while Slam 100.5FM expanded the TBC portfolio reach into the urban youth market and is the only radio station to attain 50,000 social media hits in less than one year. GML now reaches 700,000 customers every day!

Service delivery and financial performance in the Services Sector has been addressed through restructuring and refocusing key business units on the core competencies that deliver values to their customers. ANSA McAL US Inc (AMUS), a global supply chain management company, with warehouses in Miami, offers world-class global procurement and distribution services to the Group and customers in the Caribbean.

RETAIL SECTOR – ANEAL MAHARAJ

The Retail Sector expanded from our supermarket operations in Barbados by the acquisition of the very successful Standard Distributors Group (Standard), which includes Standard Trinidad, Standard Barbados and Bell Furniture. With twelve retail stores, product offerings have expanded to include world-class brands such as GE, Samsung, LG, Whirlpool, Sony and Frigidaire. Performance is already beginning to improve.

Even though your Group has delivered a good performance in every Sector, our Executives and their teams remain restless in the search for new business opportunities and for ways to improve performance. In 2012, the Group invested $410 million in new projects that are completed or are actively being implemented that will upgrade our production capacity or improve efficiency and competitiveness in our domestic and export markets.

SHAREHOLDER VALUE

I am pleased to report that Shareholders have continued to benefit from investments in AML as once again our stock has responded positively to the Group’s reported quarterly performance in 2012. Our share price increased from $55.00 to $66.60 in 2012, representing a 21% capital appreciation. This together with a dividend of $1.10 has delivered an increase in shareholder returns at the end of 2012 of 22%+.

CORPORATE RESPONSIBILITY

The Group remained heavily committed to our Corporate Social Responsibility by support for diverse activities and projects throughout the length and breadth of Trinidad & Tobago and the region. The advent of the 50th Anniversary of Independence in Trinidad & Tobago was the highlight for us in 2012. Themed “With Boundless Faith”, our Group aligned its own celebration of this historic event in a unique manner that matched the exuberance of the moment with the reverence for the icons whose vision, initiative, fortitude and effort, built our country over the last half century.

We unveiled a special logo featuring the hummingbird in flight, which signified the freedom that Trinidad & Tobago achieved through Independence and the forward-thinking principles upon which our nation’s development was built. The upwelling of patriotism was given expression by 5,000 of our employees displaying the National Flag, provided by the Group, at their homes. All our locations in Trinidad & Tobago were expertly decorated and draped in our national colors.

At a moving ceremony on the eve of Independence, the ANSA McAL Time Capsule: 2012-2062, containing the aspirations for the next fifty years, of fifty Trinidad & Tobago nationals, drawn from all walks of life, was encased in a plinth on the grounds at our Tatil Building headquarters. I am grateful to the Corporate Communications Department for creating such a meaningful event and proud to have shared this celebration with our ANSA McAL family and the Nation.

An important component of the Group’s success continues to be the partnerships fostered within communities, stakeholders, NGOs and amongst our own people. 2012 was no different as the Group and its subsidiaries invested over eight million dollars towards sustainable community projects and sponsorships in the areas of sport, education and training, the environment, arts and culture.

We take particular pride in the continued sponsorship of the Anthony N. Sabga Caribbean Awards for Excellence which started in 2005 and continues to recognise indigenous excellence in fields of Science and Technology; Arts and Letters and Public and Civic contributions. To date, we have contributed close to nine million dollars towards the Foundation and recognised over fifteen Caricom Nationals spanning Trinidad & Tobago, Dominica, Jamaica, Guyana, Grenada, Barbados, St Vincent, St Kitts & Nevis and St Lucia.

OUR PEOPLE

At ANSA McAL, we continue to recognise that it is the talent, strength and resilience of our people that is the foundation on which we continue to grow the business. Over 8,180 years of service was delivered by over three hundred employees who were honoured at our Long Service and Group Awards held at the Trinidad Hilton and Conference Centre. A new award category was introduced where the top performer in each of the eight sectors were recognised for excelling in their field.

The continued emphasis of carefully aligning people’s aptitude and qualifications to the goals of the organisation is transforming the way we manage and grow our most valuable assets. We believe, as we have expressed in our ‘Leap of Faith’ commitment to “get the people basics right” in 2011, that our investment in our people is an investment in the future of the Group, and will enrich the investment that over 4,000 shareholders have placed in our care.

Group Human Resources Director, Mrs. Teresa White-Driver will expand on the progress of the key initiatives that have been implemented since 2011. We remain committed to not only recruit and reward the best people but to grow talent at home, providing a clear pathway to upward mobility within the Group throughout the region.

In 2012, Mr. Aneal Maharaj was appointed the new Sector Head of Retail, in addition to his duties as Group Finance Director and we are confident he will also add value to the business in this sector. Additionally, the Group’s shareholders approved the addition of former Citibank Executive, Mr. Steve Bideshi as a Director of the Company’s Parent Board; we welcome him and look forward to his contribution.

Congratulations to Mr. Andrew Sabga on his re-election as President of the Trinidad & Tobago Chamber of Commerce in 2012 for a second term. As you read this report, the people of ANSA McAL are already at full stride focused on ‘winning’ our goals one quarter at a time for 2013. As I move around the Group visiting the businesses, I feel an energy and a momentum that I believe is fueled by the achievements made in 2012, a year that was predicted to be sub- optimal for the country and region.

I feel privileged to head an organisation as diverse as we are, and proud of the accomplishment of our people. As our ‘Leap of Faith’ covenant enters its second year, we have made good progress on our commitments – Getting the People Basics Right – Building an Entrepreneurial Culture – Excellence in Execution, but we do all recognise there is still lots of room to improve.

I am therefore confident that your Group will continue to be propelled by the energy and innovation of our people and will deliver growth and superior returns in the years ahead. In closing, let me also take this opportunity to thank our Parent Board members and my Executive Team for their support and dedication to our shared goals and for the achievements in 2012.

A. Norman Sabga
Chairman & Chief Executive

Annual Report 2011

A Norman Sabga

In this historic year that the Group celebrates its 130th year, it gives me great pride to present my 13th report as Group Chairman and Chief Executive particularly as growth, performance and value creation are again predominant themes. At the core of the Group’s resilience and success is a business built on hard work, team collaboration and a fanatical focus on the fine details in everything we do. The fact that your Group can report a 4% growth in top-line revenues at bottom-cycle economic conditions is evidence of this and the sustainability of our business model.
When the world was talking about economic hardship and recession, our people were focused on the opportunities and found growth in every sector – the award of the BMW dealership, acquisition of the minority position in our Barbados businesses, new healthcare lines’ acquisition of the Trimart chain of supermarkets in Barbados, acquisition of new distribution brands, increase in export sales, start-up of a new vinyl window production line and an MOU to pursue a renewable energy project in Guyana.

Also, during the past three years, we have re-invested over $300 million to build a world-class clay block plant, invested in technology by installing a cutting edge ERP system and upgraded our manufacturing sector – all of which will contribute to future growth and delivering enhanced value to our shareholders.

In fact, over the past two years, Shareholders who would have invested in the AMCL stock at the start of 2010 would be pleased to note that the total returns were 33% and with a five year return of 37%.

Yet, we continue to be restless, constantly looking for opportunities to improve performance. On September 3, 2011, the extended leadership team – some one hundred and fifty members from all our companies, locally, regionally and the U.S.A. came together in Trinidad and declared a renewed focus and commitment to growth. We simply call this declaration “a leap of faith” – each Sector Head, CEO, MD and GM committed to a three year goal of growth and performance based on three pillars measured by a set of KPIs. This is an expression of three basic pillars which underpin our strategies and influence our actions in the future, namely (i) getting the people basics right; (ii) acting like an entrepreneur and (iii) excellence in execution.

It is a tangible commitment that binds each manager in every company across the region to the same aspirations. Everything we do will be measured against achieving our targets in these three areas.
We recognize that a Group such as ours with regional scale and reach has a duty of social care in the communities in which we operate. Over the past five years, we have invested $10 million towards sustainable community projects and sponsorships in the areas of sport, education, the arts and culture.

We take particular pride in the sponsorship of the Anthony N. Sabga Caribbean Awards for Excellence which recognizes indigenous excellence in fields of Science and Technology, Arts & Letters and Public & Civic Contributions. To-date, we have contributed $6 million towards the Foundation and recognized 13 Caricom Nationals in Trinidad and Tobago, Guyana, Barbados, Suriname, St Lucia etc.

OUR PEOPLE
At ANSA McAL, we recognise that it is the talent and strength of our people that continues to be the foundation on which we grow the business. This year our Human Resource Director, Mrs. Teresa White-Driver who has been a member of the Parent Board for 5 years, took up an Executive role within the Group at the start of 2011 and will report to you on some of the progress made in developing and streamlining our Human Resources strategies and structures.

We remain committed to not only to recruiting and rewarding the best people but to growing talent at home providing a clear pathway to upward mobility within the Group.

In 2011 David Inglefield returned to Trinidad after serving as President/CEO of ANSA McAL Barbados for four and a half years to take up the role of Sector Head for the Retail, Services & Media Sectors. Mr. Nicholas V. Mouttet, replaces Mr. Inglefield as President/CEO of ANSA McAL Barbados and as a director on the ANSA McAL Limited Parent Board. I wish to thank Mr. Inglefield for his diligent contribution to our business during his tenure in Barbados. In welcoming Mr. Mouttet to the Parent Board I also wish to advise that both Mr. Mouttet and Mr. Inglefield as senior executives remain part of the Executive Committee to the Parent Board. Further, I wish to thank Mrs. Judy Y. Chang who has opted not to be re-elected as a non-executive Director of the Parent Board in 2012, for her valuable contribution to the Board over the last four years.

We also welcome Mr. Nigel Romano as the Sector Head for Financial Services and thank Mr. Ray A. Sumairsingh for the significant contribution to the Financial Services Sector and congratulate him on his appointment as Sector Head- Automotive. Mr. David Sabga, formally Sector Head – Automotive, remains the Deputy Chairman of ANSA McAL Limited and now assumes the role of Managing Director of Anthony N. Sabga Limited. Congratulations to Mr. Andrew Sabga on his election as President of the Trinidad & Tobago Chamber of Commerce.

I also wish to congratulate Dr. Anthony N. Sabga, Chairman Emeritus and founder of our Group on his receipt of the country’s Highest National Award, the Order of the Republic of Trinidad and Tobago. Dr Sabga attributes the achievement of this honour to the people who have worked together with him over the years to grow and develop the Group in to the successful organization that it is today.

As you read this report, the people of ANSA McAL have already started writing the performance of 2012. I feel privileged to head an organization as diverse as we are and proud of the accomplishment of our people. We have embarked on a new journey and have taken a Leap of Faith and I am confident that your Group will continue to grow and deliver superior returns in what is still a tough trading environment.

In closing let me also take this opportunity to thank our Parent Board members and my Executive Team for their support and dedication to our shared goals and the achievements in 2011.

A. Norman Sabga
Chairman & Chief Executive

Annual Report 2010

The year 2010 proved to be a high performance year for the ANSA McAL Group of Companies, demonstrating the versatility of our businesses and the great value of our people. This versatility and the commitment of our people produced impressive financial improvements in declining or stagnant economies.
Revenues remained steady at 2009 levels, PBT grew 11% to $954 million (our best result yet), export sales grew an impressive 19%, profit margins improved 2% due to containment of expenses, improved efficiencies and we also cut our finance costs 8%.
These improvements were achieved in a market where in Trinidad, GDP was virtually static, growing marginally year over year by 0.1%, with growth emerging in only the 4th quarter. The Group repurchased the majority of the remaining outstanding shares of ANSA McAL Barbados Limited and expects to acquire 100% by the second Quarter of 2011.

Total assets now stand at $11 billion and we continue generating very good cash flows quarterly. The Group’s balance sheet is the strongest in its 130-year history. The Group has maintained focus on building and developing significant partnerships, and on implementing growth strategies in our regional subsidiaries.

In Financial Services, an energetic focus on customer service retraining and on creating the enabling infrastructure through future state IT enhancements have already created a new sense of purpose for our experienced professionals as well as all support staff in building and expanding our franchise.

We expect that in 2011, closer working relationships in Trinidad and Barbados will lead to greater market penetration and growth. We restructured the construction sector by combining the resources of the five divisions of what was formerly ABEL and Bestcrete into ABS Building Solutions, creating a one-stop shop to improve the level of service delivery in these industries. We have also retained a cadre of professional engineers and technicians to enhance our capabilities in this emerging area.

The automotive sector in Trinidad and Barbados expanded the luxury segment of this portfolio with the acquisition of the prestigious BMW and MINI brands which should generate substantial new business in 2011.

Our Media sector, originally forming a part of the Trinidad Publishing Group, successfully rebranded as Guardian Media Limited highlighting the inherent synergies across our widely dispersed media services. The name change represents a far more fundamental shift in the approach to business and is reflective of a more coordinated and flexible involvement in the quickly evolving multimedia segment.

I am also very pleased that to advise that copies of this year’s Annual Report was printed using the state of the art printing press owned by Guardian Media Limited.

Dividend

I am pleased to announce that as a result of our creditable performance, the Board of Directors has recommended a final dividend of $0.80 (2009 – $0.70) per ordinary share. This together with the interim dividend paid of $0.30 (2009 – $0.30) per share, will bring the total dividend payable to shareholders for the year to $1.10 (2009 – $1.00) per share. The final dividend will be paid on June 17, 2011.

Our share price increased from $43.00 to $46.00 during the year, reflecting the market’s confidence in the Group’s ability to deliver extraordinary returns to investors even in challenging times.

Environmental and Social Responsibility

Over the last three years, the Group has contributed approximately $30 million across the region by way of charitable donations, community development, social events, sport and cultural activities.

Further, we are quite conscious of our responsibility to carry on business in a manner that is environmentally friendly and take great pride in operating for over 60 years the largest glass recycling plant in the region, Carib Glassworks Limited.

This year, we have taken the initiative as part of our aggressive green policy, to distribute to you, our shareholders, the Company’s Annual Report on compact disc. The Report continues to be available on line at www.ansamcal.com and copies can be made available upon request.

ANSA McAL Foundation

This Anthony N. Sabga Caribbean Awards for Excellence continues to be a very important aspect of the work of the Foundation. This recognition programme celebrates the excellence of Caribbean People and offers tangible significant benefits to the Awardees. The 2010 winners are the third set of Laureates named since the programme’s inception in 2005.

Adrian Augier from St. Lucia received the award in the category of Arts and Letters, Professor Kathleen Coard from Guyana (Science and Technology) and Sydney Allicock (Public and Civic Contributions). As a result of the tremendous positive feedback received over the years, the Foundation has decided to change in 2011 from a biennial to an annual cycle for the Awards.

In December 2010, the Foundation mourned the passing of one of its most respected and cherished members of its Regional Eminent Persons Selection Panel, Sir
Ellis Clarke, Trinidad and Tobago’s first President and last Governor General. His remarkable presence and significant contribution will be greatly missed.

Our People

For some time, we have been conscious of the need to develop and grow our talented people and your Board saw it necessary to appoint a new Group Human Resource Director. Mrs. Teresa White-Driver already sits on the Parent Board and with her extensive experience in strategic human resource management, organizational transformation and change management, she has already begun to build on existing models and introduce new concepts into the Group’s Human Resource structure.

I take the opportunity to thank my fellow Parent Board Directors, our Management teams, staff, customers, suppliers and shareholders for their commitment and support over the past year which contributed to such an excellent result.

Outlook

While there is market volatility and economic challenges we must face, there are signs of growth on the horizon and our Group will actively evaluate potential investment opportunities on a continuing basis. As always, we will work assiduously to increase shareholder value.

We will therefore continue to invest in people, processes and equipment to ensure that we are poised to take advantage of any opportunities which may be beneficial to the Group.

We are quite conscious of the need to be able to compete on a global level and will continue to build our brands and provide quality products to our customers. As we start another decade in the ANSA McAL Group’s long history, I am confident that with the commitment of our talented people, the Group will continue to be resilient and grow from strength to strength.

A. Norman Sabga
Chairman and Chief Executive

Annual Report 2009

Your Board of Directors is confident that our operating results in the future will continue to grow and have recommended a final 2009 dividend of $0.70 (2008 – $0.70) per ordinary share. This, together with the interim dividend paid of $0.30 (2008 – $0.30), will bring the total dividend payable to shareholders for the year to $1.00 (2008 -$1.00).
Social Conscience
At a time when global economic adjustments create uncertainty in the business world, as a Group, we recognise our responsibility to support communities and individuals to achieve a better quality of life across the region. In 2009, the Group invested over $15 million on a wide range of community partnerships in the areas of sport, culture, education, community development and environmental sustainability.

The ANSA McAL Foundation continues to focus on the Anthony N. Sabga Caribbean Awards for Excellence, and has in its 4 years of existence, awarded a total of $3 million to individuals who have uplifted and made an impact to our Caribbean communities in the areas of Arts & Letters, Public & Civil Contributions and Science & Technology. Our reach goes even beyond the territories in which we operate – the Group mobilised its Regional network in an immediate response to the devastating earthquake that struck Haiti and our teams raised in excess of $1 million in cash and vital medical and other supplies for aid relief.

Our People

Beyond our diversified portfolio of businesses and behind our performance, is the energy and commitment of an exceptionally gifted 6,000 strong ANSA McAL Team, who have rallied to the call to keep costs down, productivity up and thus deliver exceptional value to our customers. I would like to take this opportunity to thank our people, customers and investors for their continuing loyalty and support.

The Group, following the Leadership Development and Executive Development Programmes in 2007 and 2008, will be embarking on the construction of a Learning Resource Centre. This multimillion dollar facility will be located in Champs Fleurs and will become the knowledge hub for our staff and employees.

We wish to also acknowledge the support and contribution of all the Directors who sit on the Parent Board and all the Boards of our various subsidiaries. Our talented team of Executives provided sound advice and guidance throughout the year and effected strategies that keep ANSA McAL the most progressive conglomerate in the region.

I would like to specifically recognise the contribution of Mr. Grenfell Kissoon, who recently retired as a member of the Group’s Parent Board. During his tenure with the Group, Mr. Kissoon has made sterling contributions to the deliberations of the Parent Board, and his leadership in the overall management of the Media Group since January 1994, has led to significant developments in this area. Mr. Kissoon will continue in a non-executive capacity as the Head of the Media Sector.

We take the opportunity to express sincere gratitude to him for his years of service and wish him well in the future. In the same vein, it is with great pleasure that we welcome Mr. Andrew Sabga as a Director of the Group’s Parent Board.

Mr. Andrew Sabga has worked for 20 years in the Group, and as Sector Head, has led the Beverage Sector (the Group’s largest Sector). He has demonstrated strong and effective leadership, as is evidenced by the significant growth of this Sector.

In Barbados, we also said farewell to Mr. John Bellamy, who retired from the position of Chairman of ANSA McAL (Barbados) Limited, a post he held since January 1, 2005. Mr. Bellamy joined A. S. Bryden & Sons (Barbados) Ltd. On May 1, 1968, in the Insurance Division. In March 1979, he became a Director of the company and on December 1, 1994, Managing Director, and Chairman from 1996.

When A. S. Bryden & Sons (Barbados) Ltd. was acquired by ANSA McAL (Barbados) Ltd., Mr. Bellamy played an important role in the cultural transformation of Brydens’ operations into our Group.

Mr. Bellamy’s contribution to the Group is much appreciated and we take this opportunity to thank him for his many years of excellent service and guidance.

Outlook – 2010

The outlook predicts another tough trading period for the international and regional economies. I recognise that the teams have continued to execute well against the V2010 plan. However, the EPS Target of $5 that was announced in 2006, is proving to be a tough challenge in light of the significant, unpredicted changes in the business environment. Whilst our Executive teams continue to be relentless in their execution of this V10 plan, the reality is that more time will be needed to achieve this EPS objective. The Group’s performance continues to be very commendable and is based on solid business fundamentals.

A. Norman Sabga
Chairman and Chief Executive

Annual Report 2008

I am very pleased to report that our Group has again performed well in 2008. We delivered a strong underlying profit performance exceeding the record results achieved in 2007, and we continued to generate significant cash from our operations allowing us to retire a portion of our external debt and acquire one of our competitors Sissons. Our turnover increased by 7% over 2007 and for the first time in our history exceeded $5 billion dollars.

In our manufacturing, packaging and brewing sector we increased turnover and profit before tax by 10% and 13% respectively, despite significant inflationary pressure on the cost of raw materials, labour and utility costs. Our auto trading and distribution sector produced results marginally below those we achieved in 2007. The media, services and parent company sector increased its turnover by 21% and profit before tax by 23%.

Our operating profit of $987 million was 5% lower than we achieved in 2007. However the results for 2008 have been impacted by the recognition of impairment losses of $130 million arising in our financial services sector. Despite increasing our turnover in this sector, the impact of the impairment losses results in our profit before tax from this sector being 45% lower than we achieved in 2007.

It is important to recognize that these losses are not cash losses, and do not represent an additional liability of the group. Over a period of time I am confident that the losses will reverse. We have recognized these losses in 2008 in order to comply fully with International Accounting Standards, and had these losses not arisen our operating profit for 2008 would have exceeded the level we attained in 2007.

Dividends

I am pleased to report that your Board of Directors has recommended a final dividend of 70 cents per share. This, together with the interim dividend paid of 30 cents will bring the total dividend payable to shareholders for the year to $1.00 (2007:$0.90). The final dividend will be paid to shareholders on 5th June 2009. The level of dividend that we have recommended reflects your Board’s confidence in the underlying performance and strength of the Group.

Investment in ANSA McAL People

Despite the downturn in world economic activity we continue to extend and invest in training our team. At the centre of our V10 philosophy we will continue to recruit only the brightest people, train them with the best resources available, and nurture them so that they perform exceptionally as individuals and team members within the Group.

During 2008 more executives graduated from the Executive Development Programme run in conjunction with the University of the West Indies, and many of our subsidiaries have also invested significant amounts in the year on additional training. Further training programs will be introduced in 2009 as we continue to seek to equip our team with the tools necessary to excel.

Investment in our Community

The Group continues, as in prior years, to make a significant contribution and social investment into the communities that we live and work in. In 2008 we invested over fourteen million dollars in individual and nation building projects locally and regionally within the Caribbean basin. These projects have had a positive effect contributing to the upliftment of our people, our environment, our communities, and our national heritage.

The social investment we have made at a group and subsidiary level has played a vital role in linking our growth as a group to the growth of our regional human potential as a nation. We take very seriously the relationship between our group and the positive impact we can have on the development of our local communities. We will continue to invest time, effort and resources in building this relationship.

The ANSA McAL Foundation

The ANSA McAL Foundation was developed to publicly recognize, reward, and encourage excellence in human Caribbean Community. The foundation continued to focus on its principal project, the Anthony N. Sabga Caribbean Awards for Excellence. These awards are made on a biannual basis. In 2008 four awards were made. Professor David Dabydeen was awarded in the category of Arts & Letters, Ms. Annette Arjoon and Mrs. Claudette Richardson-Pious were joint awardees in the category of Public & Civic Contributions, and Mr. James Husbands was awarded in the category of Science & Technology.

The ANSA McAL Family

As in all years I wish to acknowledge the support and contribution of all of the Directors who sit on the parent and subsidiary boards in the Group. I also wish to thank the group’s executive team for providing excellent advice, guidance and support during the year, and our total staff complement of over 6,000 people for working hard to achieve the results set in these accounts.

Despite the challenges we have experienced in 2008, I am convinced that we have the right team of highly motivated and dedicated people, who understand
and are focused on achieving the objectives we have set in our V10 mission. I remain confident in the ANSA McAL family. The impact our group has locally and internationally continues to leave an indelible and proud footprint in the social and economic landscape of Trinidad and Tobago and the Caribbean region as a whole.

2009 will clearly be a very difficult year for the world economy, but I strongly believe that our group is particularly well placed to respond to these challenges and to take advantage of the opportunities that will undoubtedly arise. The events of 2008 highlight the strength of the conglomerate business model, the ANSA McAL Group of companies, and the wisdom of the strategic initiatives that underpin the V10 vision your Board has set for the group. However the group does enter this testing period with a number of significant advantages. Under our V10 mission, we have pursued a consistent strategy which has created a business that is well diversified in terms of products, services, customers, currency and geography. We also have a strong balance sheet with very low gearing.

As part of our V10 mission, and in recognition of the serious impact inflation has on our manufacturing companies, early action was taken to ensure that our manufacturing companies are equipped with modern low production cost facilities, and we continue to take steps to reduce operation costs to ensure that all our businesses remain on a sustainable footing. As a group, I am confident that we are better prepared to deal with the uncertainties that lie ahead.

A. Norman Sabga
Chairman and Chief Executive

A. Norman Sabga
Chairman and Chief Executive