NDC - Annual Report 2008 - World Facing & Invested [St Lucia]

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Saint Lucia stands poised to lead as the premiere investment market of

the Eastern Caribbean. Against the bold and visionary plans that

promise an historic physical and socio-economic transformation of

the Castries Waterfront, the city of Castries itself, the Rodney Bay

Marina and surrounding communities, our proposition is very

s t r o n g. As such our target must be the most financially

endowed partners

Simply put, this market must frame a strategy that can

engage and excite at the most influential levels of the

investor community where resources and investment

agendas align with ours.

Conceptually World Facing & Invested interprets

NDC’s marketing strategy, and corporate approach. It

also resonates with the values that underpin our

investment action plan. Significantly it demonstrates

that NDC is ready to engage in the new investment

paradigm that has been fuelled by globalization; one

which places information communication

t e c h n o l o g y, market information and marke t

innovation as a driver of value. Indeed, in the global

m a r ket, the NDC must place a premium on its

powerful proposition, and promote this proposition in

a targeted manner at the vantage of the investment

power brokers who guarantee material and collateral

value to our national assets.

This report is also introspective as the NDC takes stock of

where we are, what we have to offer, who we need to

engage and how we position to do so. In that regard, this

year’s theme communicates NDC’s corporate strategy and

business approach in this exciting though highly competitive

global investment environment.

Investor Relations is used to dealing with risk solely from an investor’s

point of view. The focus must now be widened to include all audiences

that impact enterprise value. The approach must become holistic and

top-down, not fragmented and bottom-up.Managing the Perception of Risk and Reward,

(G. A Graut & Co Inc.)

WORLD FACING & INVESTED

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VISION

MISSIONTo stimulate, facilitate and promote investment

opportunities for foreign and local investors and to

promote the economic development of Saint Lucia.

To become a world-class Investment Promotion and

Development Agency, positioning Saint Lucia as a

leading investment location.

VISION STATEMENT

MISSION STATEMENT

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NCONTENTS

RE-ENGINEERING & REPOSITIONING . . . . . . . . . . . . . . . . . . 4

CHAIRMAN’S REPORT

BOARD OF DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

INVESTMENT TEAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

GLOBAL TRENDS AND OUTLOOK . . . . . . . . . . . . . . . . . . . . 10

CORPORATE GOVERNANCE IN 2008 . . . . . . . . . . . . . . . . . 11

HIGHLIGHTS FOR 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

INSTITUTIONAL SUPPORT & STRENGTHENING . . . . . . . . . 15

THE WAY FORWARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

DUTY FREE POINTE SERAPHINE. . . . . . . . . . . . . . . . . . . . . 19

ENSURING SUSTAINABILITY

HOTEL CHOCOLAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

SWEETENING SAINT LUCIA’S ECO TOURISM PRODUCT

LOOKING AHEAD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

AUDITORS’ REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 24

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One would be hard-pressed to identify a 12-month span over the

past 50 years that could surpass, in number and scope, the

challenges that the past year held — for Saint Lucia, the

Caribbean and the world. Headlines told of an economic collapse

that reverberated in all corners of the globe, seen in the erratic

rise and fall of oil prices; the crumbling of major financial

institutions; the crash of stock markets throughout the

industrialized world; the bankruptcy of top airline carriers; and

record unemployment figures.

We here in Saint Lucia — like our Caribbean neighbours — were

certainly not immune. Our economy pivots on tourism and

foreign direct investment, and these two vital industries found

themselves vulnerable and exposed.

Challenging times, however, are hardly the time for national

d e s p a i r. Instead, these challenges must be seen as

opportunities for re-assessment, realignment, new focus and

growth. For within each challenge lies the chance to become

wiser — to learn from the mistakes of ourselves and others, and

to refashion and reposition what we have to offer to meet the

evolving needs of our marke t .

And so, over the past 12 months, in light of slowing FDI flows the

world over, the Saint Lucia National Development Corporation —

our island’s principal development agency and investor’s link to

relevant government ministries — undertook a Competitive Re v i e w

& Benchmarking Study, the purpose of which was to better

understand both the positive and negative aspects of our island’s

investment product; our unique and marketable selling points as an

investment destination, and the policy / regulatory changes that

may be needed to improve our investment climate while

contributing to long-term economic vibrancy.

Conclusions emanating from this study1, conducted in partnership

with the United States Agency for International Development

(USAID), have certainly demonstrated that our nation is a sound

investment destination. This study has also equipped us with the

information necessary to strategically chart the way forward.

Among the conclusions were:

• Saint Lucia is making significant progress in re-o r i e n t a t i n g

its economy from agriculture towards a broad services

1Competitiveness Review and Benchmarking Study 2009

Callistus Vern Gill |

Chairman

RE-ENGINEERING

& REPOSITIONINGCHAIRMAN’S REVIEW

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based economy. Services sector activities as a

percentage of GDP and exports have grown rapidly

in the past decade;

• Saint Lu c i a’s relative development offers a wide

range of opportunities for a more diversified

tourism offering;

• Saint Lucia already has one of the highest stocks of

overseas investment among the comparator

countries — a strong selling point for new investors;

• In terms of trade, Saint Lucia ranks as the sixth most

open economy among those benchmarked — an

important selling point for overseas investors. This

indicates that a modern, accommodating regulatory

environment governs aspects of international trade.

In addition, Saint Lucia ranks number 1 in the

Caribbean in the World Bank’s Doing Business 2009

Survey2; and

• Saint Lucia, given the stage of development of its

tourism sector, remains one of the most cost

competitive countries in the region — in particular

when compared to Barbados and the Bahamas.

As stated before, the past 12 months have been replete

with challenges, but with each challenge comes the

chance to emerge stronger and with clearer vision. We

at the National Development Corporation are excited

about the overall investment product which our nation

has to offer.

2Doing Business 2009: Organisation of Eastern Caribbean States; World Bank

WORLD FACINGTHE NATIONAL DEVELOPME

Jacqueline Emmanuel |

Director – OPSR

Pinkley Francis |

Businessman


Chairman

NG & INVESTEDMENT BOARD OF DIRECTORS

Jodi Boodhoo |

Consultant

Robert Norstrom |

Group Managing Director –

ECFH

Deale Lee |

Legal Officer/ Acting

Corporate SecretaryJohn Labadie |

Assistant Properties

Manager

Timothy Greene |

Corporate Services Manager

WORLD FACINGTHE NATIONAL DEVELOPMENT CO


Chairman

O’Donavan Yarde |

International Investment

Development Director

NG & INVESTEDCORPORATION INVESTMENT TEAM

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INVESTMENT PROMOTION / SERVICES

According to the United Nations Conference on Trade

and Development (UNCTAD) World Investment Report

2008, global Foreign Direct Investment (FDI) inflows fell

by 21% in 2008 to US$1.4 trillion. The impact of the

global crisis varied widely in 2008 depending on region

and country, with consequently varying impacts on the

geographic patterns of FDI flows. In developing and

transition economies, FDI inflows were more resilient

than in developed countries, though the worst impacts of

the global economic crisis had still, at year´s end, to be

fully transmitted to these countries.

FDI flows to Latin America are expected to have shown

significant resilience to the world economic slowdown.

They increased by 13% in 2008, partly as a result of a

strong rise in FDI flows to South America. However,

Central America and the Caribbean — which are

traditionally highly dependent on the United States

economy, registered a decline.

In the short-term, the negative impacts of the financial and

economic crises on FDI are expected to remain dominant

and to contribute to a continued fall in overall FDI through

2009. Developing countries will not be exempted — FDI

falls in 2009 will be more widespread and it is probable

that small-island states in the Caribbean will be hit even

harder by declines in FDI as well as falls in remittances and

d o u b l e-digit declines in tourism.

However, various positive factors are at work and will

trigger, sooner or later, a resurgence of FDI. These

factors include investment opportunities based on cheap

asset prices and industry restructuring, relatively large

amounts of financial resources available in emerging

countries, quick expansion of new activities such as new

energy and environment-related industries, and the

relative resilience of international companies. It is

possible that 2010 will see a modest recovery in FDI

levels with momentum increasing in 2011.

Against this backdrop, the critical challenge faced by

small economies like Saint Lucia is to secure

investments that have the maximum economic impact

and the highest calibre of potential employment.

Already, Saint Lucia has a very high level of FDI stock

relative to the size of the economy. As early as 2007; the

stock of FDI in Saint Lucia reached US$1,669 million in

2007, which equals 174% of GDP indicating that the

country has been very successful in the past in attracting

FDI — a key selling point for future investors1.

Saint Lucia remains one of the most favored economies

in Latin America and the Caribbean for doing business.

According to the World Bank 2009 doing business report,

Saint Lucia ranks 3rd amongst Caribbean & Latin America

countries and placed 34th in the world with regards to

ease of business in 2008.

Given these attributes, the NDC will continue to

capitalize on these unique selling points and work with

key stakeholders in improving the country’s weaknesses

in the coming months. The NDC in partnership with a

wide array of national stakeholders will continue to re-

position Saint Lucia and ensure that we are viewed as a

prime location for global investment.

GLOBAL TRENDS AND OUTLOOK

1Information obtained from Saint Lucia Competitiveness Review and Benchmarking Study 2008

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Sound corporate governance is essential to the

C o r p o r a t i o n’s successful pursuit of its development

mandate. The National Development Corporation Act Cap

15.24 of the Revised Laws of Saint Lucia 2001 establishes

a corporate governance structure that is robust enough to

ensure that the Corporation is accountable for its

activities and yet flexible enough to enable it to cope with

the fluid dynamics of investment promotion. The

structure also seeks to balance the Corporation’s various

interests — namely those of its customers, stake h o l d e r s ,

employees and the national community.

Board of Directors

The Corporation is governed by a Board of Directors

appointed by the Minister with responsibility for the

Corporation. The Board of Directors is charged with

overall responsibility for the management of the

Corporation and in particular for determining the

C o r p o r a t i o n’s focus and strategic vision and risk

management.

By the close of 2008 a five member board was well

established and was on its way in serving for a three year

period. The Board, under the Chairmanship of prominent

attorney Callistus Vern Gill possesses a range of

professional skills and experience.

The Board of Directors has three sub committees —

Finance, Human Resource and Properties, each charged

with overseeing a core function of the Corporation and

providing guidance and a regular means of

communication with the management of the Corporation.

Management

The management team is responsible for the day to day

administration of the Corporation and the

operationalisation of the strategic plan. The new

management structure is an integral part of the

repositioning of the Corporation and reflects its

investment promotion focus.

AuditFinancial management is another important aspect of the

C o r p o r a t i o n’s Corporate Governance Structure.

Management has instituted strong internal controls to

govern procurement of goods and services and the

handling of the Corporation’s assets. The Act also provides

guidelines for the maintenance of the Corporation’ s

accounts and the conduct of annual financial audits. At the

Board’s recommendation, the Minister appoints a

chartered firm to audit the books of the Corporation.

These audited statements are then laid before Pa r l i a m e n t ,

making the NDC truly accountable to the People of Saint

Lucia. In addition, an Annual Report is prepared and made

available to all stakeholders. In fulfillment of this objective,

this document reports on the Corporation’s activities and

performance for the year 2008.

Corporate Services

The NDC and Its PeopleJust as national development is people-centred, the

Corporation is similarly anchored and focussed. 2008

was characterised by a Human Resource audit, with a

view to assessing and strengthening internal capacity to

better align corporate effort with the Corporation’s vision

and strategic focus. In that regard, the Corporation set

out to assemble a cadre of qualified, dynamic and highly

motivated professionals, appropriately skilled with the

various competences needed for the task of facilitating

economic development, through visionary planning, bold

prospecting and the pursuit of sound investment

opportunities and partnerships.

In effect, an improved organizational structure was

implemented which resulted in operational streamlining

and the elimination of workflow redundancies, ultimately

improving response times to clients and stakeholders.

Capacity building and institutional strengthening

continued in 2008 with key appointments in several

departments. The appointment of an International

Investment Development Director and additional support

s t a f f, equipped the Investments Department with

requisite leadership to negotiate the rough terrains of a

global economic crisis; at the same time successfully

negotiating a number of prudent and profitable

investments, over this reporting period.

A number of challenges peculiar to Saint Lu c i a’s south

— among them a vexing issue of land rationalization —

necessitated action to improve the Corporation’s reach

and response, and ultimately, it’s corporate image in

that part of the country. The recruitment of

professional staff, improved systems of control and

procedures as well as revised policies have been

instituted, and the Corporation can boast of a more

c u s t o m e r-focussed Vieux Fort operation and an

improved customer experience.

CORPORATE GOVERNANCE IN 2008


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Giving Voice to Saint Lucian DevelopmentEffective communication is critical to business growth

and sustainability. In recognition of the value of timeliness

and consistency of marketing communications, 2008 saw

the deliberate effort by the Corporation to amplify its

voice so as to resonate within the global marketplace, on

behalf of the Saint Lucian businesses. Internally:

• The Corporation effected improvements to its

Information Communication Technology with state-

of-the-art software that has enabled it in delivering a

more highly responsive service.

• The Corporation continued its regular publication of

press releases and widened the distribution of its

newsletter to more clients and stakeholders.

• Specifically targeted advertising campaigns were

also designed and implemented to sensitize and

educate the general public on various development

issues and on the work of the Corporation.

Making Its Mark — The Corporation and The National Brand2008 saw the continuation of a process which began in

2007, and one that sought to rebrand the Corporation in

tandem with the Saint Lucia Tourist Board’s efforts to

reposition Saint Lucia as a place for fine hospitality,

good business and sound investment. This corporate

rebranding was accomplished through the creation of a

national brand. In effect, the Corporation’s brand is

adapted from the new Saint Lucia [Tourist Board] brand.

This accomplished a practical alignment, given the

different, although, related mandates of the two

entities; one being economic development through

destination marketing in the tourism and hospitality

segment, and the other, the pursuit of foreign direct

investment, for multi-sector growth

and economic expansion.

The rationale was the adaptation of a

brand strategy that focused on many

of the elements that becko n

discerning travellers and investors

seeking a rare and unmatched destination experience

and lucrative business opportunities. Giving support to

this was a noted cultural shift, which imbued within staff

an enhanced work ethos, one clearly discernable to our

various publics.

Improving The Stakeholder Value ChainOver the last financial year and consistent with its

economic development mandate, the Corporation

maintained focus on relationship building and

collaboration with key agencies and private sector

organizations on a number of initiatives. The goal has

been to link these institutions into a network of

stakeholders collaborating to position Saint Lucia as a

business-friendly destination of choice for investors. This

network is premised on sound ethical principles, fairness

and accountability as the pivot upon which sustainable,

mutually beneficial relationships flourish. This expanded

marketing network includes suppliers, contractors and a

gamut of service providers.

Moreover, by embracing the principles of good corporate

governance, the Corporation has sought to improve the

s t a keholder value chain by introducing continuous

improvements in its procurement procedures to ensure

sound ethical business practices.

Contributing to a Stronger SocietyCooperation and cohesion are the hallmarks of a strong

society and by extension, a strong economy. As a major

player on the Saint Lucian economic landscape, the

Corporation embraces its role as a facilitator of opportunity

for its clients, demonstrated through:

• Concessionary rates

• Sponsoring of social and business activities

• General Support

Concessionary RatesIn 2008, the NDC owned 31 factory shells, which house

a variety of business interests of both a business and

social nature. Many benefit from the Corporation’s policy

As a major player on the Saint Lucian economic

landscape, the Corporation embraces its role as

a facilitator of opportunity for its clients…


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of start-up support through concessionary rental fees.

That contribution amounts to over $2.9M in support to

help many of Saint Lucian businesses stay afloat.

Sponsoring of Social and Business ActivitiesThe National Development Corporation continues to

partner with the general business community on

worthwhile ventures. The Corporation’s inputs take the

form of capacity building, facilitation/sponsorship and

institutional support. Organizational beneficiaries included

the Saint Lucia Chamber of Commerce and the Saint

Lucia Industrial and Small Business Association.

General SupportThe Corporation continued to support a number of

organizations such as:

• Saint Lucia Bureau of Standards — the agency

responsible for leading the country towards meeting

global standards. ($200,000.00 in reduced rental)

• Centre for Adolescent Renewal and Education

(C.A.R.E.) — a non-profit organization which has

provided support for disadvantaged and

marginalized young people since 1993.

($120,000.00 in rental waiver)

• The Saint Lucia Fire Service — Training Centre

($128,000.00 in rental wavier)

NDC — Patron of Saint Lucian Artsand CultureThe Corporation continues to be involved in a wide

variety of activities on Saint Lucia’s artistic and cultural

scene, in the capacity of patron of several special events

throughout the year — Jazz on the Pier, Mas on the Pier

and Jounen Kweyol.

As such, the NDC continues to stay closely linked to the

Saint Lucian people, while giving a platform to Saint

Lucia’s dynamic and developing cultural industries.

Harmonites Steel Band at Jazz on the Pier Soca Artiste, Mantius, at Mas on the Pier


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HIGHLIGHTS FOR 2008

• Ark TeleServices

Estimated Project Value: EC$2M

A r k Teleservices is one of the new entrants into the

Saint Lucia call centre industry at Bisee. Government

in its quest to promote ICT has granted fiscal

incentives for the company to operate a 300 seat call

centre facility. The NDC has been a substantial

partner in this project as its team was responsible for

retrofitting of the shell to create the modern IT facility.

• Karib Cable

Estimated Project Value: EC$50M

After three years of mobilizing its operations in Saint

Lucia, Karib Cable finally opened its doors to the

public in May 2008. The Company launched its

services offering both cable tv and high-s p e e d

internet to the local public. Although most of Karib

Cable’s operations have been concentrated in the

Northern corridor of the island, work on directing

services to the south are now at an advanced stage.

The entry of the company has added much value to

the telecommunications industry in Saint Lucia.

Additionally, approximately eighty-three locals have

been employed and trained in the areas of customer

care, line construction and installation and other

technical areas. As the company expands

southwards a further EC$20M is expected to be

invested into its operations. It is expected that 120

persons will be employed by year end.

• e-Services

Estimated Project value: EC$2M

The company opened its doors to the Saint Lucia

public in 2006. At that time approximately 150

persons were employed as customer service agents

and technical support staff. Since its inception the

company has continued to thrive as a leading BPO

contact centre in the Caribbean. Last year, the

company undertook major expansion works

allowing it to increase capacity to 300 customer

service agents. The company currently provides

inbound customer care to fortune 500 companies

such as LIME, Grey Hound and Xerox.

InvestmentsAgainst the background of the worsening economic climate the number of new enquiries

received by the NDC from foreign investors was down in 2008. Nevertheless, a number of foreign

investors confirmed their intention to invest or reinvest in Saint Lucia, notable amongst these

were NDC facilitated projects such as:

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Recruitment:In 2008 the Investment Services Department became

fully functional with a five member team consisting of an

International Development Director, two Investment

Services Officers, two Investment Promotion Officers

and one Research Officer. The team's primary

responsibility is to facilitate and promote Foreign Direct

Investment (FDI) into Saint Lucia as well as provide after

care services to all new and established companies.

Capacity Building• Training & Implementation of ACT Software

Staff of the Investment Services Division of the

National Development Corporation received training

in a new system designed to track current and

potential investors. The training was made possible

through the financing of Caribbean Open Tr a d e

Support Programme, an initiative of the United States

Agency for International Development (USAID).

The system is designed to assist the NDC in tracking

contact with investors from the initial inquiry,

throughout the investment process. The specialized

database brings all of the information for a particular

client under the finger tips of NDC Investment

Services staff. The information contained in the

database includes business opportunities, official

documents, investment projects and all relevant

c o r r e s p o n d e n c e .

In addition to staff training, the consulting firm

assisted in the customization of the software to suit

the specific needs of the NDC. The use of the new

software has allowed the NDC to modernize its

functions and operating procedures. This

streamlining of operations and data sharing has

resulted in improved efficiency and accountability

within the Investment Services Department.

• Strategic, Promotion and

Competitiveness Workshop

A strategic objective for the year was the

repositioning of the organization as an International

Investment Agency to better attract sustainable, high-

quality foreign investment into Saint Lucia. In

endeavoring to accomplish this objective,

management decided that it would begin this

programme of change through the training of the

investment team in Strategic, Investment Pr o m o t i o n

and Competitiveness. The two week training was

facilitated by International Development Ireland and

Ireland Development Agency. The work shop took

place in June 2008 and was held in Dublin.

Training with the Ireland Development Agency was a

tactical choice because Ireland’s ability to attract

foreign investment has been the cornerstone of its

economic success. For several years, the NDC has

strived to achieve better, more equitable regional

balance in investment across Saint Lucia. Like Saint

Lucia, over a third of Ireland’s population resides

within city areas and therefore developing its rural

areas has been an important priority. There are

lessons to learn from Ireland’s success story since

the development agency has successfully attracted

investments in a number of rural regions while

sustaining an innovative environment in which

enterprise can thrive.

Corporate Rebranding:The NDC continues to embark on its rebranding

initiatives. The Investment Services Department has

been assigned the task of reintroducing the NDC to the

public. This reintroduction would come with a new

marketing name for the Corporation. The name National

Development Corporation (NDC) will remain as the legal

entity. The new brand name has already been chosen

and is in keeping with best practices as it relates to

Investment Promotion agencies. Additionally, the name

is expected to confirm the investment facilitation role of

the Corporation. To date, the NDC’s website has been

completed and is expected to be launched in the latter

part of 2009.

INSTITUTIONAL SUPPORT

AND STRENGTHENING


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THE WAY FORWARD »»

Targeted Investment Promotion StrategySaint Lucia’s potential as an investment location remains

sound and opportunities continue to grow in various

economic sectors. In seeking to realize this potential and

in keeping with the economic and financial shifts

occurring in the global environment, greater emphasis is

being placed on selective targeting of investments

related to Saint Lucia’s development thrust rather than

general investment promotion activities.

It is anticipated that targeted investments would have

the potential to have a transformational impact on the

industry sector and contribute to the social and

economic development of the island. Investments in

sectors such as the creative industry in particular, will be

pursued with a view to diversifying the economic base of

the island as well as create a sustainable platform for

cultural and social expression.

The financial events of the past year have given new

impetus to the Corporation’s drive to seek investment in

alternative markets whilst remaining open to

opportunities in traditional target markets.

DeliverablesThe Corporation in its new thrust has identified and will

continue to identify key sectors in which Saint Lucia has an

existing competitive strength and comparative advantage.

The NDC is proposing to identify foreign investments in

niche sectors within the following industries:

1. Tourism

2. Creative Industries

3. Education

4. ICT (Information Communication Technology)

5. Business Process Outsourcing

6. Agro-Processing

In targeting these sectors the Corporation will:

• Perform opportunity analysis of industry sectors

• Develop value propositions for investors for

each sector

• Proactively engage with target companies/investors

We believe that a more focused approach will result in

more value-added investments as well as investments

which represent a close fit with the country’s strategic

objectives. Part of our strategy is to derive wider benefits

from FDI by building stronger links between foreign

investors and Saint Lucian companies through supply

contracts. This will help investors establish deeper roots

in the country and create new jobs in the supply chain.

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PROPERTIES

IntroductionAs one of the core units of the Corporation, the

Properties Department remains steadfast in its pursuit to

aid in the development of Saint Lucia through

commercial, agricultural, industrial, residential, and

tourism investments, whilst seeking to ensure maximum

returns accrue to the country.

The past year has been very challenging and saw the

continuation of preparatory activities towards the

development of a comprehensive Land Use Plan for

the areas of Vieux Fort and Dennery. Despite these

challenges — in particular developing rationalization

concepts for densely populated lands occupied by

varied users, and the variety of land uses i.e.

residential, commercial and agricultural — the

Properties Department has managed to pull through

and has now completed its master plan for Vieux Fo r t

and is 25% complete with its master plan for Dennery.

This land use plan has now enabled the Corporation to

better manage the lands asset portfolio, whilst making

provision for investor facilitation through commercial,

touristic, agricultural and residential development.

Land Use PlanVieux Fort Lands

The recently completed land use plan for Vieux Fo r t

outlines and highlights the Corporation land development

strategy for the period 2009 – 2014.

Dennery Lands

Whilst the land use plan for Dennery represents a work

in progress, the Corporation has taken decisive action as

it relates to the management of these lands. The end

product will see a detailed land use plan which will take

into account the various avenues the Corporation and

the Government of Saint Lucia believes to be most

beneficial for Dennery.

Proposed Residential DevelopmentsThe Corporation believes that land is one of the most

valuable assets and that every Saint Lucian should be

afforded an opportunity to own it. It is our goal to provide

within reason, residential lands to locals at all levels of

the financial and social sphere. We believe that once

citizens are given the opportunity to own land this would

translate into more efficient land use, less land use

PROPERTIES

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PROPERTIES

conflicts and greater economic benefits, such as

collateral, mortgage etc.

The Properties Department has already taken the initiative

and has prepared residential subdivisions for lands in

Vieux Fort and Dennery to meet the growing demand.

Vieux Fort Residential Developments

• Black Bay Gardens: 56 residential lots

• Black Bay Seaview East: 12 residential lots

• Black Bay Ocean View: 20 residential lots

• La Tourney Phase 6

• Campeche Heights 1&2

Dennery Residential Developments

• Bois Jolie Extension

• Bois Jolie phase 3

Estates FaceliftThis project comprised the execution of broad-based

condition surveys of the Corporation’s seven (7) estates,

which comprises thirty one (31) factories. This project is

intended;

1. To create a database of works required.

2. To improve the ambience of the estates.

3. To improve on the customer service relationship

with our tenants.

The condition surveys are now completed, and the

implementation phase has commenced. It is the

Properties Department goal to create a more appealing

work environment; the outcome of which is expected to

greatly improve the corporate image

from the vantage of our internal and

external publics.

Squatting of NDC Lands In this reporting period and through a

series of animated television

advertisements, the Corporation

intensified its campaign at sensitizing

the general public on the

ramifications of squatting/un-planned

development.

This program has received the

support and endorsement of ke y

s t a keholders such as Saint Lucia Air

and Seaports Authority (SLASPA), the

National Emergency Management

Organization (NEMO), Saint Lucia Fire Service,

Development Control Authority (DCA) and the Water and

Sewerage Company (WASCO).

Special attention was given to this vexing issue in the

preparation for our land use plan with the development of

rationalization concepts. To date, the Pr o p e r t i e s

Department has prepared two such rationalization

concepts for lands in Cantonement and Pomme Black Bay,

taking into account illegally occupied lands whilst making

allocations for new residential, commercial, mixed use,

recreational and institutional lots. It is our goal to

transform, within reason, all illegally occupied lands into a

community concept by regularizing what happens on the

ground whilst making allocations for infrastructure.

ConclusionIt is the ultimate goal of the Properties Department to

remain a core department of the Corporation by

providing the requisite services to accommodate

investment in Saint Lucia.

Proposed Land Use for Black Bay (Ocean View)

19

Following the significant structural improvements and

modifications at the Duty Free Pointe Seraphine

Shopping Complex made in 2007, the NDC undertook to

implement a comprehensive strategy to increase the

efficiency of operating procedures at Duty Free Pointe

Seraphine. This decision was taken in recognition of

value of the Duty Free Pointe Seraphine Complex to the

Cruise sector in particular, and the tourism sector as a

whole. This is with a view to ensuring the sustainability

of the DFPS Complex as a viable investment for the NDC

and its users, and maintaining its popularity as a unique,

customer-service friendly, cruise ship destination.

Recommendations emanating from a comprehensive

review of the Complex were discussed with the

management team and the following priority areas

agreed upon:

Streamlining of Procedures and Operations

at the ComplexThe shop tenants/operators of the Shopping Complex

are important partners with the NDC and their buy-in and

support are imperative in ensuring the viability and

sustainability of the Shopping Complex. A review of

operations of the Complex's tenants/service providers

was undertaken in November 2008 following which a

series of meetings and consultations were held with all

users of the Complex.

Security concerns are continuously juxtaposed against

the demands of the growing cruise sector and the

balancing of needs of tour-related operators and tenants

which remain a challenge.

Notwithstanding, it is anticipated that the streamlining

and reinforcement of procedures will positively impact

the efficiency of service providers conducting

commercial activities at the Complex in terms of time

management and cost effectiveness.

Strengthening Communication Channels

with Tenants and Service Providers The NDC continues to dialogue with the

tenants/operators of the Shopping Complex with a view

to identifying opportunities for development and growth,

seeking solutions to challenges and providing feedback

where relevant.

Marketing and Promoting of the Shopping

ComplexThere was an increased focus on marketing and

promotion of the complex which commenced at the

opening of the Christmas season. The aggressive two

week marketing and promotion campaign dubbed

“Courtyard Christmas — Duty Free Style” was

successfully sustained through radio promotions and

g i v e-aways, store customer appreciation days, a

children's tea party onboard a cruise ship, and a Cultural

Christmas portrayal featuring local artistes.

Jazz on the Pier continues to be a successful event on

the Saint Lucia Jazz calendar in keeping with the

Corporation’s drive to develop the event into a first rate

activity while allowing as wide a participation as possible.

The addition of Mas’ on The Pier to the suite of activities

at the Complex during Carnival celebrations in July also

forms part of the overall marketing strategy in keeping

with the island's annual calendar of activities.

Establishing and Maintaining Effective

Dialogue with all Agencies involved in the

Cruise Sector and the Wider Tourism IndustryThe Duty Free Pointe Seraphine Shopping Complex is an

important asset to the cruise industry. However, in recent

years, the NDC has not fully maximized its role as a key

player in the island's cruise Industry. In 2009, the NDC

sought greater involvement and participation as a player

in the industry in order to gain optimal benefits and to

contribute effectively towards the future of tourism. An

increase in cruise ship calls to Saint Lucia saw even more

vessel facilitation activities undertaken at the Complex.

There is ongoing dialogue with the relevant agencies on

administrative procedures and port security measures.

Further, the NDC will actively seek to have a visible role

in the 16th Florida-Caribbean Cruise Association’s (FCAA)

annual conference scheduled for October 2009 in Saint

Lucia. The 16th FCAA conference will provide the NDC the

opportunity to showcase the Shopping Complex,

establish relationships with key industry executives and

gain valuable insight into cruise industry trends.

It is anticipated that these trends/developments in the

cruise industry would guide the operations of the

Complex and would be determining factors in guiding

the NDC’s development of policies for the Complex into

the near future.

DUTY FREE POINTE SERAPHINEENSURING SUSTAINABILITY

20

A sound internationalfoundationThe vision is novel and

pioneering. It marks an exciting

new chapter in the story of

Saint Lu c i a’s most historic

town — Soufrière, where the

cocoa crops have weathered

time over the centuries to

become more than a hot

morning beverage for estate

w o r kers, but an industry supporting community

livelihoods, agricultural diversification, sector linkages

and international competitiveness for Saint Lucia.

Saint Lucia is coupled with the state of Boston, USA as

one of two new expansion markets of Hotel Chocolat1. A

direct-to-consumer luxury chocolate brand international

group operating primarily within the UK and established

in 1993, Hotel Chocolat, is one of the UK’s fastest

growing private companies, with the envious ranking by

The Sunday Times / Virgin Atlantic FAST TRACK 100

listed Number 1 company.

With more than 300,000 active

customers who buy its products

via catalogue, website and a

developing number of company

retail stores totalling 32 to date,

Hotel Chocolat’s success is driven

by original and exclusive products

only available from Hotel Chocolat,

authenticity and quality, made

from the very best ingredients, a

strong entrepreneurial culture, and

exceptional marketing skills and

experience.

The Saint Lucia AdvantageIn the early 2000’s, the company’s

global expansion strategy

considered the world’s cocoa

producing regions and determined

(1) the Caribbean as being

strategically suited (2) and Saint

HOTEL CHOCOLATSWEETENING SAINT LUCIA’S ECO TOURISM PRODUCT

1Hotel Chocolat is a brand name with no connections (at present) to the hotel industry. The name alludes to a metaphorical place where

chocolate dreams are fully realised and true chocolate bliss point is reached.

Hotel Chocolat Launch Party, April 2008

Building Nurseries

SPECIAL FEATURE

21

Lucia as an ideal central

chocolate manufacturing hub for

the cocoa growing region of the

Caribbean and Central America.

The Saint Lucia advantage was

determined by (1) The suitability

of available cocoa plantations (2)

the degree of support measures

available from government

agencies (3) The reputation and

esteem of the Governance of

Saint Lucia (4) The people and

the culture.

To this end, the Caribbean/Saint Lucia business was

launched in mid 2005 and the Rabot Estate acquisition

was completed on April 2006, with plans for expansion

via a suitable additional Estate acquisition in 2009. The

intention is to develop linkages to Saint Lucia’s Eco-

Tourism aspects, through Hotel Chocolat’s extensive

marketing programmes in the UK and the USA.

Facilitating the shift in manufacturing…from local to global An initial investment of just over EC$ 50,000,000 is

being injected into the Hotel Chocolat cocoa-e c o-

tourism concept.

The vision is in three phases. Phase one will see a

renaissance and regeneration of both the Rabot Estate

and the island wide cocoa growing industry.

In Phase two, the design and build of a Chocolate

Manufactory and tourist/visitor interaction center within

the Rabot Estate.

This Manufactory will convert beans not only from Hotel

Chocolat’s own Rabot Estate, but from all the Saint Lucia

cocoa growers as well as the wider Caribbean region,

making Saint Lucia a central hub of cocoa and chocolate

manufacturing for the Caribbean.

The project aims to secure employment and reverse

decline through compensation to local farmers above

market rates to make cocoa growing financially viable,

and to enable farmers to reinvest and grow more. The

completion timeline for the Saint Lucia chocolate factory

is 3 to 4 years.

Phase three will see the construction of a Unique

Boutique Hotel, operated in accordance with

environmentally friendly principles, and marrying the

cultivation, research and development, production and

packaging aspects into the visitor experience, thus

linking agriculture with tourism and educating the

consumer through direct experience.

Progress to date — (Phase 1) Cocoa Renaissance & Regeneration Currently in the cocoa crop renaissance phase, there is

much to report — 15,000 seedlings ready for planting at

Rabot Estate, over 68 farmers engaged through the

HCCAPEE scheme; Markets provided for 65,000 Kg wet

cocoa beans — already purchased from local growers;

and the Rabot Estate Centre of Excellence established.

Well on train is the construction of new nurseries to

support farmers’ expansion plans.

The HCCAPEE standard was launched in June 2008 and

a guaranteed cocoa price of EC$ 5.0 per lb dried cocoa

beans for cocoa farmers secured. This price it is

estimated, will constitute 30% to 40% above world

market price.

By 2009, Hotel Chocolat anticipates that through its

aggressive marketing, the name of Saint Lucia will be re-

established as a source of Fine-Flavour cocoa in the

world cocoa/chocolate market.

Farmers Mid-Harvest Cracking Cocoa

22

Saint Lucia is successfully undergoing a significant

transition from an agriculture-based economy to a

more modern and sophisticated service- b a s e d

economy. Competition for trade and investment is

increasing both within the region and beyond, and

as such we must strengthen our proposition to the

market in order to remain a relevant and attractive

investment destination.

As we continue our much-needed focus on tourism,

we must also address the vital requirements of

other services such as international financial

services, overseas education, business process

outsourcing and ICT. Indeed, the development of a

national policy or vision for enterprise development

would be useful in this regard.

And as the availability of a skilled workforce is

perhaps the single biggest driver of

competitiveness, our nation must continue to strive

for improvements in this area. After all, our greatest

resource is our human resource, and we must

therefore invest heavily in training and education

endeavours from primary through to tertiary and

vocational levels.

We must continue to invest as well in our

infrastructure: e.g. road maintenance; renewable

energy sources; and air and sea port

modernization. And our regulatory environment in

Saint Lucia, though currently a significant strength,

must be kept well-aligned with the needs of a

changing global marketspace.

It is the commitment of the NDC to work with both

government ministries and agencies as well as with

the private enterprise sector to better meet the

needs of both our local stakeholders and our valued

international partners.

LOOKING AHEAD »»

23

April 22, 2009

Independent Auditors’ Report

To the Members of

National Development Corporation

Report on the Financial Statements

We have audited the accompanying non-consolidated financial statements of National Development Corporation (the

Corporation) which comprise the non-consolidated balance sheet as of March 31, 2008 and the non-consolidated

statements of income, changes in equity and cash flow for the year then ended and a summary of significant

accounting policies and other explanatory notes.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these non-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 non-consolidated financial statements based on our audit. We

conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply

with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial

statements are free from material misstatement.

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

statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of

material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,

the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial

statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of accounting estimates made by management,

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

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

Basis for Qualified Opinion

As discussed in Note 2, the Corporation has not consolidated the financial statements of its subsidiaries as required

by International Accounting Standard Number 27, “Consolidated and Separate Financial Statements”. The

investments are accounted for on a cost basis. Had the subsidiaries been consolidated, many elements in the

accompanying financial statements would have been materially affected.

Qualified Opinion

In our opinion, except for the effect of matters described in the Basis for Qualified Opinion paragraph, the

accompanying non-consolidated financial statements present fairly, in all material respects, the financial position of

the Corporation as of March 31, 2008 and its financial performance and its cash flows for the year then ended in

accordance with International Financial Reporting Standards.

Chartered Accountants

PricewaterhouseCoopers

Pointe Seraphine

P.O. Box 195

Castries

Saint Lucia, West Indies

Telephone: (758) 456 2600

Facsimile: (758) 4521061

PricewaterhouseCoopers refers to the Easter Caribbean firm PricewaterhouseCoopers International Limited, each of which is a separate and independent legal

entity. A full listing of the partners of the Eastern Caribbean firm is available on request at the above address.

24

National Development CorporationNon-consolidated Balance Sheet

As of March 31, 2008

(expressed in Eastern Caribbean dollars)

2008 2007

$ $

Assets

Current assets

Cash and cash equivalents (Note 5) 1,744,377 4,581,639

Trade and other receivables (Note 6) 1,053,130 1,666,309

2,797,507 6,247,948

Non-current receivables (Note 6) 34,859,598 34,911,925

Land developments (Note 7) 11,168,400 6,530,870

Land for sale and lease (Note 8) 18,262,323 18,873,462

Available-for-sale financial assets (Note 9) 1,380,000 600,000

Investment in subsidiary companies (Note 10) 6 6

Property, plant and equipment (Note 12) 1,275,850 984,468

Investment properties (Note 13) 32,617,007 34,099,421

Other assets 374,066 374,066

Total assets 102,734,757 102,622,166

Liabilities

Current liabilities

Borrowings (Note 14) 3,689,300 2,210,272

Trade and other payables (Note 15) 3,319,693 3,193,943

Provision for future development costs (Note 16) 3,315,932 1,500,000

10,324,925 6,904,215

Borrowings (Note 14) 39,272,628 38,461,049

Provision for future development costs (Note 16) 4,868,834 3,368,834

Deferred revenue (Note 17) 2,423,782 2,222,677

Due to subsidiary (Note 18) 1,578,651 1,578,651

Total liabilities 58,468,820 52,535,426

Equity

Contributed capital (Note 19) 34,200,178 34,730,526

Fair value reserve (Note 9) 30,000 -

Retained earnings 10,035,759 15,356,214

Total equity 44,265,937 50,086,740

Total liabilities and equity 102,734,757 102,622,166

Approved by the Board of Directors on April 22, 2009

Director Director

25

National Development CorporationNon-consolidated Statement of Income

For the year ended March 31, 2008


2008 2007

$ $

Departmental operating profit (Note 21)

Properties Department 880,000 1,070,144

Pointe Seraphine 472,724 1,491,508

1,352,724 2,561,652

Other income – net (Note 22) 2,741,557 1,820,036

Administrative and general expenses (Note 23) (9,235,802) (4,741,077)

Operating profit (5,141,521) (359,389)

Finance costs (178,934) (229,556)

Loss for the year (5,320,455) (588,945)

26

National Development CorporationNon-consolidated Statements of Changes in Equity

As of March 31, 2008


2008 2007

$ $

Contributed capital (Note 19)

At beginning of year 34,730,526 34,730,526

Adjustment during the year (530,348) -

At end of year 34,200,178 34,730,526

Fair value reserve

At beginning of year - -

Fair value adjustment during the year 30,000 -

At end of year 30,000 -

Retained earnings


Loss for the year (5,320,455) (588,945)

At end of year 10,035,759 15,356,214

Equity, end of year 44,265,937 50,086,740

27

National Development CorporationNon-consolidated Statement of Cash Flows

For the year ended March 31, 2008


2008 2007

$ $

Cash flows from operating activities

Loss for the year (5,320,455) (588,945)

Adjustments for:

Dividend income (Note 22) (2,068,439) (1,240,540)

Depreciation on investment properties (Note 13) 883,959 904,975

Finance costs 178,934 229,556

Depreciation on property, plant and equipment (Note 12) 133,758 124,752

Gain on disposal of investment property (Note 22) (78,114) (167,295)

Operating loss before working capital changes (6,270,357) (737,497)

Decrease/(increase) in trade and other receivables 613,179 (786,775)

Increase/(decrease) in trade and other payables 125,750 (272,107)

Increase in provision for future development costs 1,815,932 -

Cash used in operations (3,715,496) (1,796,379)

Finance costs paid (178,934) (229,556)

Net cash used in operating activities (3,894,430) (2,025,935)

Cash flows from investing activities

Decrease/(increase) in land developments (4,637,530) 219,771

Dividends received 2,068,439 1,586,376

Increase/(decrease) in provision for future development costs 1,500,000 (1,451,314)

Increase in available-for-sale financial assets (Note 9) (750,000) (374,066)

Proceeds from sale of investment property 705,648 -

Decrease in land for sale and lease 611,139 41,752

Decrease in contributed capital (530,348) -

Purchase of plant and equipment (Note 12) (425,140) (31,698)

Increase/(decrease) in deferred revenue 201,105 1,293,600

Decrease in non-current receivables 52,327 1,553,857

Increase in investment properties (29,079) -

Proceeds from sale of plant and equipment - 167,295

Net cash (used in)/provided by investing activities (1,233,439) 3,005,573

Cash flows from financing activities

Proceeds from borrowings 2,881,894 -

Repayment of borrowings (1,943,144) (1,589,571)

Net cash provided by/(used in) financing activities 938,750 (1,589,571)

Net decrease in cash and cash equivalents (4,189,119) (609,933)

Cash and cash equivalents, at beginning of year 4,378,146 4,988,079

Cash and cash equivalents, at end of year (Note 5) 189,027 4,378,146

28

National Development CorporationNotes to Non-consolidated Financial Statements

March 31, 2008


1 General information

National Development Corporation (the Corporation) is a Government Statutory Body and was established by the

National Development Corporation Act, 1971 (with subsequent amendments) to promote the economic

development of Saint Lucia.

This Act of 1971 was superseded by Act # 23 of 2001 in support of the new focus/ functions of the Corporation’s

economic activities. The Act defines the powers of the Corporation. The Corporation is wholly exempt from the

payment of Income Tax and Customs Duties.

The registered office and principal place of business of the Corporation is Government Buildings, The

Waterfront, Castries, Saint Lucia.

2 Summary of significant accounting policies

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

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

Basis of preparation

The non-consolidated financial statements of National Development Corporation have been prepared in

accordance with the International Financial Reporting Standards (IFRS) and under the historical cost convention

as modified by revaluation on available-for-sale financial assets. Consolidated financial statements have not

been prepared due to the absence of audited financial statements of the subsidiaries (Note 10) as required by

International Accounting Standard Number 27, “Consolidated and Separate Financial Statements” and

accordingly assets liabilities and operating results of the subsidiaries are not reflected in these financial

statements.

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 Corporation's

accounting policies. The areas involving a higher degree of judgement or complexity, or areas where

assumptions and estimates are significant to the financial statements are disclosed in Note 4.

Standard effective in 2007

IFRS 7, Financial instruments: Disclosures, and the complementary amendment to IAS 1, Presentation of financial

statements — Capital disclosures, introduces new disclosures relating to financial instruments and does not have

any impact on the classification and valuation of the Corporation's financial instruments, or the disclosures

relating to taxation and trade and other payables.

Standards, amendments and interpretations effective in 2007 but not relevant to the Corporation

The following standards, amendments and interpretations are mandatory for accounting periods beginning on

or after January 1, 2007 but are not relevant to the Corporation's operations:

• IFRS 4, Insurance contracts;

• IFRIC 7, Applying the restatement approach under IAS 29, Financial reporting in hyper-inflationary economies;

• IFRIC 8, Scope of IFRS 2;

• IFRIC 9, Re-assessment of embedded derivatives; and

• IFRIC 10, Interim financial reporting and impairment.

29


March 31, 2008


2 Summary of significant accounting policies…continued

Standard not yet effective and has not been early adopted by the Corporation

The following standard has been published and is mandatory for the Corporation's accounting periods

beginning on or after January 1, 2008 or later periods, but the Corporation has not early adopted:

• IAS 1, ‘Presentation of Financial Statements (revised)’, (effective for annual periods beginning January 1, 2009)

replaces the income statement by a statement of comprehensive income which will include all non-owner

changes in equity, such as the revaluation of available for sale financial assets. Alternatively, entities will be

allowed to present two statements: a separate income statement and a statement of comprehensive

income. Management expects the revised standard to affect the presentation of the Corporation's financial

statements but to have no impact on the recognition or measurement of any of its transactions or balances.

• IAS 23 (Amendment), Borrowing costs (effective from January 1, 2009). The amendment to the standard is

still subject to endorsement by the European Union. It requires an entity to capitalise borrowing costs directly

attributable to the acquisition, construction or production of a qualifying asset (one that takes a substantial

period of time to get ready for use or sale) as part of the cost of that asset. The option of immediately

expensing those borrowing costs will be removed. The Corporation will apply IAS 23 (Amended) from

January 1, 2009 but is currently not applicable to the Corporation as there are no qualifying assets.

Standard and interpretations to existing standards that are not yet effective and not relevant for the

Corporation’s operations

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

Corporation’s accounting periods beginning on or after 1 January 2008 or later periods but are not relevant for

the Corporation’s operations:

• IFRS 8, ‘Operating segments’, (effective from January 1, 2009);

• IFRIC 12, ‘Service concession arrangements,’ (effective from January 1, 2008);

• IFRIC 13, ‘Customer loyalty programmes’, (effective from July 1, 2008);

• IFRIC 14, ‘IAS 19 – The limit on a defined benefit asset, minimum funding requirements and their interaction’,

(effective from January 1, 2008);

• IFRIC 15, ‘Agreements for the Construction of Real Estate’, (effective for annual periods beginning January 1,

2009); and

• IFRIC 16, ‘Hedges of a Net investment in a Foreign Operation’ , (effective for annual periods beginning

October 1, 2008).

Cash and cash equivalents

Cash and cash equivalents represent cash on hand, deposits held on call with banks and bank overdraft. The

bank overdraft is shown within borrowings in current liabilities on the balance sheet.

Investments in associates

Associates are all entities over which the Corporation has significant influence but not control, generally

accompanying a shareholding of between 20% and 50% of the voting rights.

Investments in associates are recorded at cost.

30


March 31, 2008



Investment in subsidiary undertakings

Subsidiaries are those entities over which the Corporation has the 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 Corporation controls another entity. Subsidiaries are fully consolidated from the date on which

control is transferred to the Corporation. That is de-consolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiary by the Corporation. The

cost of acquisition is measured as 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.

The investments in subsidiaries are recorded at cost and accordingly, the subsidiary's assets, liabilities and

results of operations are not reflected in these accounts.

Financial assets

The Corporation classifies its financial assets in the following categories: loans and receivables, held-to-maturity

investments and available-for-sale investments. The classification depends on the purpose for which the

investments were acquired. Management determines the classification of its investments at initial recognition

and re-evaluates this designation at every reporting date.

(a) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted

in an active market and where management has no intention of trading. They are included in current assets,

except for maturities greater than 12 months after the balance sheet date in which case, these are classified as

n o n -current assets. Cash and cash equivalents and trade and other receivables are included in this category.

(b) Held-to-maturity investments

H e l d - t o-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed

maturities that the Corporation’s management has the positive intention and ability to hold to maturity. They are

included in non-current assets, except for those with maturities less than 12 months from the balance sheet date,

which are classified as current assets. Held-to-maturity investments are carried at amortised cost using the

effective interest method. The Corporation does not hold any held-to-maturity investments as of March 31, 2008.

(c) Available-for-sale investments

Available-for-sale investments are non-derivative financial assets that are either designated in this category or

not classified into any other categories. They are included in non-current assets unless management intends to

dispose of the investment within 12 months of the balance sheet date.

Purchases and sales of financial assets are recognised on trade date — the date on which the Corporation

commits to purchase or sell the asset. Financial assets are initially recognised at fair value plus transaction costs.

Financial assets are derecognised when the rights to receive cash flows from financial assets have expired or

have been transferred and the Corporation has transferred substantially all the risks and rewards of ownership.

Available-for-sale financial investments are subsequently carried at fair value. Unrealised gains and losses arising

from changes in the fair value of investments 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 are

included in the non-consolidated statement of income as gains and losses from investment securities.

31


March 31, 2008



Financial assets…continued

If the market for a financial asset is not active (and for unlisted securities), the Corporation

establishes fair value by using valuation techniques. These include the use of recent arm's length

transactions, reference to other instruments that are substantially the same and discounted cash

flow analysis.

The Corporation assesses at each balance sheet date whether there is objective evidence that a

financial asset or a group or financial assets is impaired. In the case of equity securities classified as

available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is

considered in determining whether the securities are impaired. If 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 profit or loss — is removed from equity and recognised in the non-consolidated statement of

income. Impairment losses recognised in the non-consolidated statement of income on equity

instruments are not reversed through the non-consolidated statement of income.

Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost

using the effective interest method, less provision for impairment. A provision for impairment of

trade receivables is established when there is objective evidence that the Corporation will not be

able to collect all amounts due according to the original terms of receivables. The amount of the

provision is the difference between the asset’s carrying amount and the present value of estimated

future cash flows, discounted at the effective interest rate. The amount of the provision is

recognised in the non-consolidated statement of income.

Land for sale and lease

Land for sale and lease consists of agricultural and undeveloped lands that have been vested by the

Government of Saint Lucia which is rented/ lease out and sold to investors. Inventory of land held

for sale and lease is valued at the lower of cost and net realisable value. Cost is determined using

the weighted average cost method. Net realisable value is the estimated selling price in the ordinary

course of business, less applicable variable selling expenses.

Land developments

Land developments comprise of inventory of land held for development and future expected

development costs. The estimated cost of infrastructural development of land held for resale is

included in land development. The total deferred expense is written to cost of sales on the basis of

land sold in each development in each period. Inventory cost of unsold lands included within land

development is valued at the lower of cost and net realisable value. Net realisable value is the

estimated selling price in the ordinary course of business, less applicable variable selling expenses.

Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation. Historical

cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent

costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate,

only when it is probable that future economic benefits associated with the item will flow to the

Corporation and the cost of the item can be measured reliably. All other repairs and maintenance are

charged to the non-consolidated statement of income during the financial period in which they are

occurred.

32


March 31, 2008



Property, plant and equipment…continued

Depreciation on other assets is calculated using the reducing balance and straight line method to allocate their

cost to their residual values over their estimated useful lives as follows:

Leasehold improvements 2% Straight line method

Furniture and fittings 10% Reducing balance method

Office equipment 12% Reducing balance method

Engineering equipment 12 – 20% Reducing balance method

Motor vehicles 20% Straight line method

The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An assets’ carrying amount is written down immediately to its recoverable amount if the asset's carrying amount

is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included

in the statement of income.

Investment property

Investment property, principally comprise a shopping complex and factory shells. Investment property is carried

at cost, held for long-term rental yields and capital gains and is not occupied by the Corporation. Depreciation

is calculated on the straight-line method to write off the cost of each asset to their residual value over their

estimated useful lives at a rate of 2%. Land is not depreciated.

Impairment of 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 whenever events or changes in

circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for

the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the

higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets

are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).

Trade payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the

effective interest method.

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 non-consolidated statement of income over the period of the borrowings using the

effective interest method.

Borrowings are classified as current liabilities unless the Corporation has unconditional right to defer settlement

of the liability for at least 12 months after the balance sheet date.

Contributed capital

Contributed capital represents investments, cash, land and buildings vested by the Government of Saint Lucia

and are recognised at fair value in the period in which they are vested.

33


March 31, 2008



Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are

classified as operating leases. Payments received under operating leases are credited to the non-consolidated

statement of income on a straight-line basis over the period of the lease.

Revenue and expense recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services,

net of discounts in the ordinary course of the Corporation’s activities. Revenue is recognised as follows:

(a) Land Sales

Income from land sales is recognised upon issuance of deed of sale and when costs incurred or to be incurred

in respect of the transaction can be measured reliably. Deposits received prior to the completion of the

transaction are recorded as advance deposits in deferred revenue.

(b) Rental income

Rental Income is recorded on an accrual basis.

(c) Dividend income

Dividend income is recognised when the right to receive payment is established.

(d) Other income

Other income is recorded on an accrual basis.

(e) Interest income

Interest income is recognised on a time-proportion basis using the effective interest method.

Expenses are recognised when incurred.

Cost of land sold

Cost of land sold is determined on the basis of the cost of land inventory plus future estimated cost of

development of unsold land apportioned on the total area sold each year for each project.

Termination benefits

Termination benefits are payable when employment is terminated by the Corporation before the normal

retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The

Corporation recognises termination benefits when it is demonstrably committed to either; terminating the

employment of current employees according to a detailed formal plan without the 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 balance sheet date are discounted to present value.

34


March 31, 2008



Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic

environment in which the entity operates (“the functional currency”). The financial statements are presented in

Eastern Caribbean dollars, which is the Corporation's functional and presentation currency.

(b) Transaction and balances

Foreign currency transactions are translated into the functional currency using the exchange rate 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 non-consolidated statement of income.

Translation differences on non-monetary items, such as equities classified as available-for-sale financial assets,

are included in the fair value reserve in equity.

Provisions

Provisions, if any, are recognised when the Corporation has a present legal or constructive obligation as a result

of past events; it is probable that an outflow of resources will be required to settle the obligation; and the

amount has been reliably estimated. 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. Interest expense is included in finance cost in the non-c o n s o l i d a t e d

statement of income.

Contingent liabilities

Contingent liabilities are not recognised in the non-consolidated financial statements but are disclosed unless

the possibility of the outflow of resources embodying the economic benefits is remote. A contingent asset is

not recognised in the non-consolidated financial statements but disclosed when an inflow of economic benefits

is probable.

Subsequent events

Post year-end events that provide additional information about the Corporation’s position at the balance sheet

date (adjusting events) are reflected in the Corporation’s non-consolidated financial statements. Post year-e n d

events that are not adjusting events are disclosed when material to the non-consolidated financial

statements, if any.

Comparatives

Where necessary, comparative figures have been adjusted to conform with changes in presentation in the

current year.

35


March 31, 2008


3 Financial risk management

The Corporation’s activities expose it to a variety of financial risks; foreign currency risk, credit risk, liquidity risk

and interest risk.

Foreign currency risk

Changes in foreign currency rates may expose the Corporation to currency risk. The Corporation’s borrowings

are denominated United States dollars and Trinidad and Tobago dollars (TT$). The exchange rate of the Eastern

Caribbean dollar (EC$) to the United States dollar (US$) has been formally pegged at EC$2.70 = US$1.00 since

July 1976. The exposure to US$ and TT$ is detailed in Note 14. Management does not believe significant

exposure to foreign currency risk exists as at March 31, 2008.

Credit risk

Credit risk arises from the possibility that counterparties may default on their obligations to the Company. The

amount of the Corporation's maximum exposure to credit risk is indicated by the carrying amount of its

financial assets.

The Corporation operates primarily in the real estate industry and financial instruments which potentially expose

the Corporation to concentrations of credit risk consist primarily of cash and cash equivalents, trade and other

receivables and available-for-sale financial assets. Management does not believe significant credit risk exists at

March 31, 2008.

Maximum exposure to credit risk:

2008 2007

$ $

Cash and cash equivalents 1,744,377 4,581,639

Trade and other receivables 35,912,728 36,578,234

Available-for-sale financial assets 1,380,000 600,000

39,037,105 41,759,873

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents and the availability

of funding through an adequate amount of committed credit facilities. Due to the dynamic nature of the

underlying business, the Corporation attempts to maintain flexibility in funding by maintaining availability under

committed credit facilities coupled with support from the Government of Saint Lucia.

Management monitors the Corporation's liquidity position on the basis of expected cash flow.

36


March 31, 2008


3 Financial risk management…continued

Liquidity risk…continued

The table below analyses the Corporation’s financial liabilities into relevant maturity groupings based on the

remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the table are

the contractual undiscounted cash flows. Balances due within 12 months are estimated to equal their carrying

balances as the impact of discounting is not significant.

Less than Between 1 Between 2

1 year and 2 years and 5 years Over 5 years

$ $ $ $

At March 31, 2008

Borrowings 3,965,018 3,562,356 3,652,242 33,066,696

Trade payables 3,319,693 - - -

Due to subsidiary - - - 1,578,651

7,284,711 3,562,356 3,652,242 34,645,347

At March 31, 2007

Borrowings 2,371,401 3,953,067 3,606,067 31,076,003

Trade payables 3,193,943 - - -

Due to subsidiary - - - 1,578,651

5,565,344 3,953,067 3,606,067 32,654,654

Interest rate risk

Differences in contractual repricing or maturity dates and changes in interest rates may expose the Corporation

to interest rate risk. The Corporation’s exposure and interest rate risk on its financial assets and liabilities is

disclosed in Notes 5, 6 and 14.

Fair value estimation

Fair value amounts represent estimates of the consideration that would currently be agreed upon between

knowledgeable, willing parties who are under no compulsion to act and is best evidenced by a quoted market

value, if one exists. Estimated fair values are assumed to approximate their carrying values.

The nominal value less estimated credit adjustments of trade receivables and payables assumed to

approximate their fair value. 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

Corporation for similar financial instruments.

37


March 31, 2008


4 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors,

including expectations of future events that are believed to be reasonable under the circumstances.

The Corporation 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 may 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:

Provision for future development costs

The Corporation's Properties Department determines the future estimated costs of infrastructural development

of land held for resale, based on projected expenditure required to complete developments to facilitate the

transfer to the local authority under section 11(1) National Development Corporation Act, 2001 or sale.

Management reassesses the estimate at each year end and adjust the provision for future development costs

as considered necessary. If the actual cost to complete the developments will differ by 20% from

management’s estimate, the carrying amount of development lands and provision for future development costs

would be higher or lower by $1,636,953.

5 Cash and cash equivalents

2008 2007

$ $

Cash at bank and on hand 950 950

Short-term bank deposits 1,743,427 4,580,689

1,744,377 4,581,639

The weighted average effective interest rate on short-term bank deposits at March 31, 2008 was 5% (2007 – 5%).

Cash and cash equivalents include the following for the purposes of the cash flow statement:

2008 2007

$ $

Cash at bank and on hand 1,744,377 4,581,639

Bank overdraft (Note 14) (1,555,350) (203,493)

189,027 4,378,146

38


March 31, 2008


6 Trade and other receivables

2008 2007

$ $

Trade receivables 6,122,172 6,102,265

Provision for impairment on trade receivables (5,849,307) (5,680,166)

Trade receivables – net 272,865 422,099

Due from related parties (Note 18) 10,316,209 6,896,289

Provision for impairment on due from related parties (7,813,211) (4,406,086)

Due from related parties - net (Note 18) 2,502,998 2,490,203

Other receivables 32,996,912 33,719,004

Provision for doubtful receivables (33,209) (79,810)

Other receivables - net 32,963,703 33,639,194

Prepayments 173,162 26,738

35,912,728 36,578,234

Current (1,053,130) (1,666,309)

Non-current 34,859,598 34,911,925

On July 23, 2003 the Corporation entered into a secured loan facility with a bank. Under the terms of an

emphyteutic lease agreement between the Corporation and a third party, the loan facility at March 31, 2008

amounting to $32,420,590 (Note 14) (2007 – $33,105,621) is payable by the third party.

The non-current receivable matures as follows:

2008 2007

$ $

Between 1 and 2 years 1,665,984 2,175,518


Over 5 years 31,138,522 29,896,595

34,859,598 34,911,925

The weighted average effective interest of non-current receivables at March 31, 2008 was 7% (2007 – 7 %).

39


March 31, 2008


6 Trade and other receivables…continued

The movement on the Corporation's provision for impairment of trade and other receivables follows:

2008 2007

$ $

Beginning of year 10,166,062 9,689,965

Provision during the year (Note 23) 4,408,581 924,922

Recovery (Note 23) (20,217) (11,566)

Written off during the year (858,699) (437,259)

13,695,727 10,166,062

7 Land developments

2008 2007

$ $

Southern Shores development


Provision for impairment of land (4,392,789) (4,392,789)

At end of year 917,416 917,416

Other developments


Land sales recognised in the year (897,071) (219,771)

Development cost accrued during the year 45,473 -

Increase during the year 5,489,128 -

At end of year 10,250,984 5,613,454

11,168,400 6,530,870

8 Land for sale and lease

2008 2007

$ $


(Decrease)/increase in land for sale and lease (575,076) 3,119

Land sales recognised in the year (36,063) (44,871)

At end of year 18,262,323 18,873,462

40


March 31, 2008


9 Available-for-sale financial assets

2008 2007

$ $

At beginning of year 600,000 600,000

Investment during the year 750,000 -

Fair value adjustment during the year 30,000 -

At end of year 1,380,000 600,000

Available-for-sale financial assets include the following:

Unlisted equity securities 600,000 600,000

Listed equity securities 780,000 -

1,380,000 600,000

10 Investment in subsidiary companies

Provision for Net Net

No. of Interest Cost impairment 2008 2007

Shares % $ $ $ $

Dennery Farmco Limited 456,000 100 4,560,000 (4,560,000) - -

Saint Lucia Livestock Limited 1,600,000 100 1,804,221 (1,804,221) - -

National Landco Limited 3 100 1 - 1 1

Saint Lucia Fish Marketing

Corporation Limited 3 100 5 - 5 5

6,364,227 (6,364,221) 6 6

On January 15, 2007, the National Development Corporation received correspondence from the Prime Minister,

instructing management to transfer the Saint Lucia Livestock Limited and Saint Lucia Fish Marketing to the

Government of Saint Lucia. At the time of the audit, management was engaged in regulating operational issues

to facilitate same.

11 Investment in associated undertakings

Provision for

Reduction Net Net

No. of Interest Cost in value 2008 2007

Shares % $ $ $ $

Northrock Limited 196,000 49 196,000 (196,000) - -

Saint Lucia Model Farms Limited 10,000 33 10,000 (10,000) - -

SCIC (Windward Islands) Limited 2,700 25 270,000 (270,000) - -

476,000 (476,000) - -

41


March 31, 2008


12 Property, plant and equipment

Leasehold Furniture Office Engineering Motor

Improvements and Fitings Equipment Equipment Vehicles Total

$ $ $ $ $ $

At March 31, 2006

Cost 268,090 484,067 1,450,745 177,353 166,070 2,546,325

Accumulated depreciation (43,430) (307,552) (926,436) (153,902) (37,483) (1,468,803)

Net book amount 224,660 176,515 524,309 23,451 128,587 1,077,522

Year ended March 31, 2007

Opening net book value 224,660 176,515 524,309 23,451 128,587 1,077,522

Additions - - 25,730 5,968 - 31,698

Depreciation charge (5,362) (18,665) (63,841) (3,670) (33,214) (124,752)

Closing net book value 219,298 157,850 486,198 25,749 95,373 984,468

At March 31, 2007

Cost 268,090 484,067 1,476,475 183,321 166,070 2,578,023

Accumulated depreciation (48,792) (326,217) (990,277) (157,572) (70,697) (1,593,555)

Net book amount 219,298 157,850 486,198 25,749 95,373 984,468


Opening net book value 219,298 157,850 486,198 25,749 95,373 984,468

Additions 153,038 51,370 194,702 26,030 - 425,140

Depreciation charge (6,922) (18,471) (71,802) (3,349) (33,214) (133,758)

Closing net book value 365,414 190,749 609,098 48,430 62,159 1,275,850

At March 31, 2008

Cost 421,128 535,437 1,671,177 209,351 166,070 3,003,163

Accumulated depreciation (55,714) (344,688) (1,062,079) (160,921) (103,911) (1,727,313)

Net book amount 365,414 190,749 609,098 48,430 62,159 1,275,850

42


March 31, 2008


13 Investment properties

Land Buildings Total

$ $ $

At March 31, 2007

Cost 4,184,824 45,248,716 49,433,540

Accumulated depreciation - (15,334,119) (15,334,119)

Net book amount 4,184,824 29,914,597 34,099,421


Opening net book value 4,184,824 29,914,597 34,099,421

Additions 3,693 29,000 32,693

Disposals (3,614) (627,534) (631,148)

Depreciation charge - (883,959) (883,959)

Closing net book value 4,184,903 28,432,104 32,617,007

At March 31, 2008

Cost 4,184,903 44,115,616 48,300,518

Accumulated depreciation - (15,683,511) (15,683,511)

Net book amount 4,184,903 28,432,104 32,617,007

Investment properties were last valued by the directors on March 31, 2004 at $65,665,688. Management

estimates that there has been no significant movement in fair value and all additions approximate fair value.

The following amounts have been recognised in the statement of income:

2008 2007

$ $

Rental income 5,443,622 5,656,125

Direct operating expenses arising from investment property

that generates rental income 3,382,360 1,740,024

Direct operating expenses arising from investment property

that did not generates rental income 1,979,401 1,773,390

43


March 31, 2008


14 Borrowings

2008 2007

$ $

Current

Bank overdraft (Note 5) 1,555,350 203,493

Bank borrowings 2,133,950 2,006,779

3,689,300 2,210,272

Non-current

Government of Saint Lucia 2,601,461 2,601,461

Bank borrowings 36,671,167 35,859,588

39,272,628 38,461,049

Total borrowings 42,961,928 40,671,321

The Corporation’s overdraft is guaranteed by a lien over the Corporation's 100,000 shares in Windward and

Leeward Brewery Limited.

All loans from Caribbean Development Bank are in the name of the Government of Saint Lucia. The Corporation

acts as the executing agency. The Government of Saint Lucia guarantees the loans.

Other bank borrowings are secured by a first mortgage debenture of $33,885,000 (US$12,550,000) over certain

properties of the Corporation in Vieux Fort. The loan is for an amortisation period of 13.5 years and interest is

charged at a rate of LIBOR (present 360 day LIBOR is about 1.33%) plus 4% per annum.

The loan balance for this facility as at March 31, 2008 amounted to $32,420,590 (US$12,007,626). The prior

year's balance was $33,105,621 (US$12,261,341).

The loans from the Government of Saint Lucia are unsecured.

Maturity of non-current borrowings:

2008 2007

$ $



Over 5 years 32,795,725 31,191,783

39,272,628 38,461,049

44


March 31, 2008


14 Borrowings…continued

The weighted average effective interest rates at the balance sheet date were as follows:

2008 2007

% %

Bank overdraft 10.00 10.00

Bank borrowings 6.00 6.00

The Corporation’s exposure to foreign currency exchange rate risk at year end is as follows:

2008 2007

$ $

US$ 36,083,026 37,449,500

TT$ 45,668 54,242

36,128,694 37,503,742

The exchange rate of the Eastern Caribbean dollar (EC$) to the United States dollar (US$) has been formally

pegged at EC$2.70 = US$1.00 since July 1976. The TT rate to the US dollar at March 31, 2008 was TT$6.24.

15 Trade and other payables

2008 2007

$ $

Trade payables 456,482 478,914

Deferred revenue (Note 17) 2,103,677 1,830,016

Security deposits 307,130 338,697

Retention fund 274,085 185,813

Accrued expenses 114,826 131,899

Other payables 63,493 228,604

3,319,693 3,193,943

16 Provision for future development costs

2008 2007

$ $


Provision utilised during the year (2,173,196) (1,451,314)

Increase during the year 5,489,128 -

At end of year 8,184,766 4,868,834

Current (3,315,932) (1,500,000)

Non-current 4,868,834 3,368,834

45


March 31, 2008


17 Deferred revenue

2008 2007

$ $

Advance deposits 4,527,459 4,052,693

Current portion (Note 15) (2,103,677) (1,830,016)

2,423,782 2,222,677

18 Related party balances and transactions

Parties are considered to be related if one party has the ability to control the other party or exercise significant

influence over the other party by making financial and operational decisions.

2008 2007

$ $

Due from related parties (Note 6)

Non-current

Saint Lucia Livestock Limited 5,018,021 4,406,086

Southern Development Corporation 724,347 500,000

Saint Lucia Fish Marketing Corporation Limited 200,000 200,000

Dennery Farmco Limited 4,373,841 1,790,203

10,316,209 6,896,289

Less provision for impairment (7,813,211) (4,406,086)

2,502,998 2,490,203

Due to subsidiary

Dennery Farmco Limited 1,578,651 1,578,651

The Corporation is related to the above companies by common ownership and management. The amounts due

from and due to the related parties are unsecured, non-interest bearing and payable upon demand.

Transactions with related parties during the year were as follows:

2008 2007

$ $

Advances:

Saint Lucia Livestock Limited 611,935 122,196

Southern Development Corporation 224,347 32,595

836,282 154,791

46


March 31, 2008


19 Contributed capital

2008 2007

$ $

Cash 1,434,821 1,434,821

Investment 6,281,350 6,281,350

Land - Vieux Fort 12,564,057 13,094,405

- Pointe Seraphine 4,051,080 4,051,080

- Bisee 247,879 247,879

- La Toc 100,000 100,000

- Dennery 32,000 32,000

Buildings - Cantonement 6,081,629 6,081,629

- Beauchamp Industrial 2,864,506 2,864,506

- Odsan 388,581 388,581

- Vieux Fort 154,275 154,275

34,200,178 34,730,526

20 Vested property

Cabinet by conclusion No. 842 of 2000 agreed to vest in Free Zone Management Authority eleven (11)

warehouses and (1) administrative building at a total value of $17,000,000. The land and other contiguous

parcels totalling to approximately 15.3 acres are to be transferred by National Development Corporation.

The value of the land and compensation payable has not been agreed and vesting orders have not been

executed. These financial statements therefore do not reflect the value of the assets.

21 Departmental operating profit

2008 2007

$ $

Properties department

Revenue

Land sales 2,287,549 723,404

Rental 2,521,611 2,746,037

4,809,160 3,469,441

Direct costs (Note 23)

Factory and land rental (2,996,853) (2,137,773)

Cost of land sales (932,307) (261,524)

(3,929,160) (2,399,297)

880,000 1,070,144

47


March 31, 2008


21 Departmental operating profit…continued

2008 2007

$ $

Pointe Seraphine

Rental income 2,685,041 2,625,316

Facility fees 133,750 100,500

Other 103,219 181,272

2,922,010 2,910,088

Direct costs (Note 23) (2,449,286) (1,418,580)

472,724 1,491,508

22 Other income – net

2008 2007

$ $

Dividend income 2,068,439 1,240,540

Sundry administrative income 510,099 332,007

Interest income 84,905 80,194

Gain on disposal of investment property 78,114 167,295

2,741,557 1,820,036

48


March 31, 2008


23 Expenses by nature

2008 2007

$ $

Bad debts (Note 6) 4,388,364 913,356

Employee benefit expense (Note 24) 2,734,932 2,507,352

Repairs and maintenance 2,090,832 368,789

Legal and professional fees 1,253,751 577,163

Depreciation 1,017,717 1,029,726

Cost of land sales 932,308 261,524

Insurance 614,078 664,347

Utilities 522,479 490,974

Promotions and publicity 402,130 468,345

Grant funding 387,970 212,130

Security 336,000 340,350

Office expenses 324,112 280,014

Office rent 255,357 243,108

Travelling and entertainment 206,430 131,933

Advertising 81,664 32,816

Printing and stationary 40,292 19,090

Bank charges 22,832 8,187

Members allowance 3,000 9,750

15,614,248 8,558,954

24 Employee benefit expense

2008 2007

$ $

Salaries and wages 2,457,080 2,227,842

Termination benefits 138,100 164,070

Other staff costs 139,752 115,440

2,734,932 2,507,352

ACKNOWLEDGEMENTS

The National Development Corporation acknowledges the

support received throughout 2008 from all government

agencies, private sector agencies, Board of Directors,

subsidiaries, Ministers of Government as well as

community organizations and client companies we have

worked with throughout the year.

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NDC - Annual Report 2008 - World Facing & Invested [St Lucia]

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