As the leader in the industry, RML continually seeks to raise the standard of performance and the year 2007 was no exception. The theme used in this

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2 As the leader in the industry, RML continually seeks to raise the standard of performance and the year 2007 was no exception. The theme used in this report Soaring High, celebrates RML s growth and achievements in the critical areas of Profitability, Health & Safety, Production and Finance. Our 2007 performance has cleared the path ahead to take the organisation upward, soaring to new heights.

3 TABLE OF CONTENTS 1 Mission Statement 2 Board of Directors Management Team 3 Notice of Annual Meeting Corporate Information 4 Chairman s Review 5 Management/ Support Team 6 New Appointments 7 Directors & Substantial Interests 8 Auditors Report 9 Consolidated Balance Sheet 10 Consolidated Statement of Earnings Our MISSION To lead as a customer-driven producer and supplier of high quality pre-mixed concrete and related products and services, providing a superior rate of return to our shareholders, whilst being committed to the development of our human resources and the preservation of the environment. 11 Consolidated Statement of Changes in Equity 12 Consolidated Statement of Cashflows 13 Notes to the Consolidated Financial Statements 28 Management Proxy Circular

4 THE BOARD OF DIRECTORS L-R: 1.Ms. Eutrice Carrington [Chairman] 2.Dr. Rollin Bertrand 3.Mr. Lawford Dupres 4.Mr. Arun K. Goyal 5.Mr. Hollis N. Hosein 6.Mr. Anton Ramcharan 7.Mr. C.H. Wayne Manning MANAGEMENT TEAM L-R: 1.Mr. Manan Deo [General Manager] 2.Mrs. Isha Reuben-Theodore [Finance Manager/ Company Secretary] 3.Mr. Dexter East [Operations Manager] 4.Mr. Gerard Torres [Marketing Manager] 5.Mr. Learie Hinds [Human Resource Manager] 6.Mr. Richard Dash [Materials Manager] 7.Mr. John Cardenas [Plant Manager - Premix & Precast Concrete Inc.] 8.Mr. Jaris Liburd [Manager - Island Concrete Products N.V.] 9.Ms. Murielle Lancien [Manager - Island Concrete SARL] 2

5 3 CORPORATE INFORMATION Company Secretary: Mrs. Isha Reuben-Theodore Registered Office: Tumpuna Road, Guanapo Arima, Trinidad, W.I. Tel: (868) /2430 Fax: (868) Registrar: Trinidad & Tobago Central Depository Ltd. 10th Floor, Nicholas Tower Independence Square Port of Spain, Trinidad, W.I. Auditors: Ernst & Young 5-7 Sweet Briar Road, St. Clair Port of Spain, Trinidad, W.I. NOTICE OF ANNUAL MEETING Notice is hereby given that the ANNUAL MEETING of READYMIX (WEST INDIES) LIMITED for the year ended 31st December 2007 will be held at the Nelson Mandela Hall, Dr. Joao Havelange Centre of Excellence, Macoya Road, Tunapuna, on Thursday 8th May, 2008 at 2:30 p.m. for the transaction of the following business: ORDINARY BUSINESS 1. To receive and consider the Report of the Directors and the Audited Financial Statements for the financial year ended 31st December 2007, with the Report of the Auditors thereon. 2. To elect Directors. 3. To appoint Auditors and authorize the Directors to fix their remuneration for the ensuing year. 4. To transact any other business which may be properly brought before the meeting. NOTES 1. Record Date The Directors have fixed Monday 14th April, 2008 as the record date for shareholders entitled to receive notice of the Annual Meeting. Formal notice of the Meeting will be sent to shareholders on the Register of Members as at the close of business on that date. A list of such shareholders will be available for examination by shareholders at the registered office of The Trinidad & Tobago Central Depository, 10th Floor, Nicholas Tower, Independence Square, Port of Spain during usual business hours and at the Annual Meeting. 2. Proxies Members of the Company entitled to attend and vote at the Meeting are entitled to appoint one or more proxies to attend and vote instead of them. A proxy need not also be a member. Where a proxy is appointed by a corporate member, the form of proxy should be executed under seal or signed by some officer or attorney duly authorized. To be valid, the Proxy Form must be completed and deposited at the registered office of The Trinidad & Tobago Central Depository, 10th Floor, Nicholas Tower, Independence Square, Port of Spain, not less than 48 hours before the time fixed for holding the Meeting. BY ORDER OF THE BOARD Attorneys At Law: J.D. Sellier & Company Abercromby Street Port of Spain, Trinidad, W.I. ISHA REUBEN-THEODORE COMPANY SECRETARY 7th April, 2008

6 CHAIRMAN S REVIEW In 2007, the RML Group posted record-breaking profit of TT$38.4 million. This exceeded prior year profit of TT$16.2 million by TT$22.2 million. Reduction in the input cost associated with local aggregate relative to imported aggregate, enhanced operational efficiencies, significantly improved controls and a decline in loan capital are among the several factors which contributed to the 2007 stellar performance. The Group s sales volume grew marginally in Year-on-year ICNV/ICSARL sales volume expanded by 4,500m 3 or 21%. In Barbados, PPCI s sales volume fell by 6% while in Trinidad and Tobago RML s volume remained unchanged. By the end of the third quarter 2007, RML s sales were ahead of prior year s sales by 6%, however, following the November General Elections, there was a significant slowdown of construction activity which affected sales volume during the final months of In spite of the foregoing, overall revenue rose by TT$36.7 million or 14% resulting in earnings per share (EPS) of TT$3.16, an increase of TT$1.87 over the prior year s EPS. In the area of Health and Safety, the Group implemented a number of initiatives aimed at reversing the trend of accidents and incidents experienced during These included training and placement of Safety Monitors at all of its various plants, and the introduction of a Defensive Driving programme for key equipment operators. The net effect of the safety initiatives was a reduction in accidents and man-days lost by 21% and 58% respectively. At the Melajo quarry, both the pitrun and aggregate production levels reached a record, with pitrun production exceeding the prior year by 11%, and aggregate production surpassing the 2006 performance by 20%. The Company was able to reduce its third-party purchases of aggregate from 60,000 tonnes in 2006 to 20,000 tonnes in In Trinidad and Tobago, with seven (7) batch plants the Company maintained a 35% market share and continued to be the main supplier to several signature projects, notably the Waterfront Project, the Highway Interchange, and the Oncology Centre respectively. In Barbados, PPCI held 16% market share, while in St Maarten/St Martin ICNV/ICSARL maintained a 20% share of the market. During the year, RML Trinidad successfully undertook the recertification of its ISO Quality System, and made significant progress towards achieving ISO certification. On the industrial front, the Group enjoyed a stable climate throughout all its subsidiaries. In Trinidad, a fourth production shift was introduced at the quarry in July. This resulted in the permanent employment of fifteen (15) additional employees, who were hitherto retained only on a casual basis. In St Martin, negotiations for a new Collective Agreement commenced during the last quarter of the year, to replace the Agreement which expired 31st December Conclusion of the new agreement is expected by the end of the first half of In 2007, RML restructured its materials and inventory management function. This resulted in the hiring of a Materials Manager in July. Additionally during the year under review, RML completed the restructuring of its Finance Department, thereby putting financial procedures and controls more in line with best practice. At the Audit Committee level, both the Board and Management dedicated themselves to the timely and effective execution of the 2007 Audit Plan. In the process, the Company was subject to the highest level of oversight. In 2007, Capital Expenditure was contained. TT$1.2 million was expended on construction of the second phase of the garage at Melajo. A down-payment of TT$0.4 million was made on a Cone Crusher, which will be delivered in April The Cone Crusher is expected to impact favourably on the production of aggregate at the quarry. In order to achieve planned operational efficiency targets in 2007, major repair works were performed on the existing mobile fleet at the quarry and concrete plants. Over the review period, the Group strengthened its Balance Sheet. Indebtedness was reduced through the repayment of inter-company loans and the pay-down of bank loans. Shareholders capital expanded as net income grew by TT$22.2 million year-on-year. In 2007, the Group built on its 2006 successes. In 2008, the Group expects to continue to grow organically. Therefore, as the Group positions itself to achieve the 2008 sales and customer service targets, emphasis will be placed on increasing the production of aggregate in Trinidad. The concrete delivery fleet in all markets will be enhanced. In all territories outside of Trinidad, further improvement to all mobile equipment is planned. The Board thanks shareholders for their patience during the challenging years. For the year just ended, the growth in earnings reported by your company is appropriately reflected in the stock price which rose from TT$4.22 at the beginning of the year to TT$7.01 at the close of As we continue to position the company for the future growth and expansion, the Board has approved a dividend of twenty (20) cents per share for the financial year Ms. Eutrice Carrington Chairman the Company maintained a 35% market share and continued to be the main supplier to several signature projects

7 5 MANAGEMENT/ SUPPORT TEAM GENERAL MANAGER S OFFICE FINANCE OPERATIONS MARKETING HUMAN RESOURCES MATERIALS Mr. Manan Deo General Manager Mrs. Isha Reuben-Theodore Finance Manager/Company Secretary Mr. Dexter East Operations Manager Mr. Gerard Torres Marketing Manager Mr. Learie Hinds Human Resource Manager Mr. Richard Dash Materials Manager Mr. Austin Rodriguez Technical Services Manager Ms. Ayanna Garnes Financial Accountant Mr. Siewdath Bahal Production Superintendent Mrs. Cheryl Mungal Co-ordinator Customer Care Ms. Nicole Giuseppi Human Resource Specialist Mr. Horace Boodoo Materials Officer Mr. Sanish Maharaj Acting Health, Safety, Environment & Security Officer Ms. Gayatri Mangroo Management Accountant Mr. Gordon Richards Quarry Manager Mr. Nirmal Nanan Co-ordinator Customer Care Mr. Anson King Credit Controller Mr. Steve Ramdhani Maintenance Engineer II Mr. Reval Sankar Co-ordinator Customer Care Mr. Allan Kong Co-ordinator Customer Care

8 NEW APPOINTMENTS Ms. Eutrice Carrington - Chairman Ms. Carrington is the Vice President, Asset Management at the Trinidad and Tobago Unit Trust Corporation. She holds a BSc (Honours) degree and MSc in economics. Her career in investments spans a period of thirteen years and during her tenure she has held positions of Manager, Investment Managements Services, Portfolio Manager and Research and Security Analyst. She also worked as a Policy Analyst II in the Ministry of the Economy and has spent several years in the domestic banking sector. Ms. Carrington has served as secretary of the Economics Association of Trinidad and Tobago. She was a member of the Technical Committee appointed by the Cabinet of Trinidad and Tobago to assist in the formulation of Mutual Fund Legislation. Ms. Carrington is Vice President and Treasurer of the Chaconia Income and Growth Fund Inc. She is Vice President of Chaconia Fund Services Inc., and Chairman of the Board of Chaconia Financial Services Inc., both wholly owned subsidiaries of the UTC. Ms. Carrington is also a Director on the Board of Trinidad Cement Limited. Mr. Wayne Manning Director Mr. Manning is the Chief Executive Officer of Black Bess Quarry Limited (Barbados). He has been with the company since 1993, when he was appointed as Contracts Manager for its Civil Works Department. Four years later, Mr. Manning became the company s General Manager, a position he held for 10 years before being appointed CEO. To his credit, he was responsible for the establishment of the Company s Health and Safety Programme in 2002, which was the first such programme in the Construction Industry in Barbados. Mr. Manning holds a BSc (Honours) degree in Surveying & Mapping Sciences and is also the President of the Barbados Land Surveyors. Mr. Richard Dash Materials Manager Mr. Dash joined Readymix in July, 2007 as Materials Manager and is responsible for the operations of the Materials Department. He has twelve years of experience in Warehousing, Inventory Control, Purchasing and Export Coordination in the construction sector. Mr. Dash holds a Graduate Diploma from the Chartered Institute of Purchasing and Supply (CIPS), a Diploma in Marketing from London Chamber Commerce & Industry (LCCI) and a Diploma in Business Administration from the Association of Business Executives. Mr. Learie Hinds Human Resource Manager In February 2008, Mr. Learie Hinds was appointed Human Resource Manager of Readymix and its subsidiaries in Barbados and St. Maarten/St. Martin. Mr. Hinds has thirty (30) years of experience in all areas of Human Resource Management and Industrial Relations, in public and private enterprises of services, manufacturing and hospitality industries. He is also a trained ISO System Lead Auditor. 6

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10 AUDITORS REPORT INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS OF READYMIX (WEST INDIES) LTD. We have audited the accompanying financial statements of Readymix (West Indies) Limited and its subsidiaries ( the Group ) which comprise the consolidated balance sheet as at 31st December, 2007 and the consolidated statement of earnings, consolidated statement of changes in equity and consolidated cash flow statement 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 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 the 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 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 mis-statement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors 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 for the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Group as at 31st December 2007, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards. Chartered Accountants 5-7 Sweet Briar Road St. Cair, Port of Spain, Trinidad, West Indies 4th April,

11 9 CONSOLIDATED BALANCE SHEET AS AT 31ST DECEMBER, 2007 (Expressed In Thousands of Trinidad and Tobago Dollars) Notes $ $ Non - current assets Property, plant and equipment 7 50,961 58,442 Goodwill 8 7,169 9,669 Employee benefits asset 16 1, Deferred tax asset 17 (b) 1,795 1,680 60,928 70,299 Current assets Inventories 9 31,072 17,378 Receivables and prepayments 10 52,277 46,200 Cash and short term deposits 11 10,148 4,477 93,497 68,055 Current liabilities Bank advances 12 14,958 16,383 Payables and accruals 13 46,229 54,540 Current portion of parent company loan 15 6,737 Current portion of medium and long-term borrowings 14 5,199 5,449 66,386 83,109 Net current assets/(liabilities) 27,111 (15,054) Non - current liabilities Medium and long-term borrowings 14 16,151 21,334 Deferred tax liability 17 (b) 6,574 7,119 22,725 28,453 Total net assets 65,314 26,792 Equity attributable to the parent Stated capital 18 12,000 12,000 Retained earnings 51,613 13,571 63,613 25,571 Minority interests 1,701 1,221 Total equity 65,314 26,792 The accompanying notes form an integral part of these financial statements. On 4th April, 2008, the Board of Directors of Readymix (West Indies) Limited authorised these financial statements for issue. Director Director

12 CONSOLIDATED STATEMENT OF EARNINGS (Expressed In Thousands of Trinidad and Tobago Dollars) Notes $ $ Revenue 3 295, ,611 Operating profit 3 55,242 27,933 Finance costs 4 (3,594) (4,933) Profit before taxation 51,648 23,000 Taxation 5 (13,286) (6,826) Profit after taxation 38,362 16,174 Attributable to: Shareholders of the Parent 37,907 15,526 Minority interests ,362 16,174 Earnings per share 6 $3.16 $1.29 (Basic and diluted) The accompanying notes form an integral part of these financial statements. 10

13 11 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT YEAR ENDED 31ST DECEMBER, 2007 (Expressed In Thousands of Trinidad and Tobago Dollars) Equity attributable to the parent Minority Total Stated Retained interests equity capital earnings Total $ $ $ $ $ Balance at 1st January, ,000 13,571 25,571 1,221 26,792 Profit after taxation 37,907 37, ,362 Currency translation differences Balance at 31st December, ,000 51,613 63,613 1,701 65,314 Year ended 31st December, 2006 Balance at 1st January, ,000 (1,949) 10, ,642 Profit after taxation 15,526 15, ,174 Currency translation differences (6) (6) (18) (24) Balance at 31st December, ,000 13,571 25,571 1,221 26,792 The accompanying notes form an integral part of these financial statements

14 CONSOLIDATED STATEMENT OF CASH FLOWS (Expressed In Thousands of Trinidad and Tobago Dollars) $ $ Operating activities Profit before taxation 51,648 23,000 Adjustments to reconcile profit before taxation to net cash generated by operating activities: Depreciation 11,401 11,657 Increase in provision for doubtful debts 2,045 1,038 Impairment of goodwill 2,500 Other non-cash items 156 (695) Increase/(decrease) in stock write-off/provision 51 (127) Interest expense (net) 3,594 4,933 Employee benefits asset 1,483 1,423 Gain on disposal of property, plant and equipment (58) (35) 72,820 41,194 Changes in net current assets Increase in inventories (13,745) (1,242) Increase in receivables and prepayments (8,878) (3,749) (Decrease)/increase in payables and accruals (10,278) 6,162 Cash generated by operating activities 39,919 42,365 Taxation paid (11,484) (600) Tax refund 756 Net interest paid (4,087) (5,271) Pension contribution (1,976) (1,903) Net cash generated from operating activities 23,128 34,591 Investing activities Additions to property, plant and equipment (4,220) (4,657) Proceeds from sale of property, plant and equipment Net cash used in investing activities (3,862) (4,194) Financing activities Repayment of borrowings (12,170) (13,518) Proceeds from borrowings 95 Net cash used in financing activities (12,170) (13,423) Net increase in cash and cash equivalents 7,096 16,974 Net borrowings - beginning of year (11,906) (28,880) Net borrowings - end of year (4,810) (11,906) Represented by: Cash and short term deposits (note 11) 10,148 4,477 Bank advances (note 12) (14,958) (16,383) (4,810) (11,906) The accompanying notes form an integral part of these financial statements. 12

15 13 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Thousands of Trinidad and Tobago dollars) 1. Incorporation and activities Readymix (West Indies) Limited (the Company ) is a limited liability company incorporated and resident in the Republic of Trinidad and Tobago and its shares are publicly listed on the Trinidad and Tobago Stock Exchange. The Company is the parent company of subsidiaries operating in Barbados, St. Maarten and St. Martin. The registered office of the parent company is Tumpuna Road, Guanapo, Arima. Trinidad Cement Limited, also incorporated in the Republic of Trinidad and Tobago, is the ultimate parent company and holds 71% of the issued ordinary shares of the Company. Readymix (West Indies) Limited and Consolidated Subsidiaries (the Group ) operate in Trinidad and Tobago, Barbados, St. Maarten and St. Martin. The principal business activities of the Group are the manufacture and sale of pre-mixed concrete and the winning and sale of sand and gravel. Readymix (West Indies) Limited has a 100% shareholding in Island Concrete Products N.V. and Island Concrete SARL companies, who are registered and operate in St. Maarten and St. Martin respectively. The Company also holds a 60% shareholding in Premix & Precast Concrete Incorporated, a company incorporated in Barbados. 2. Significant accounting policies a) Basis of preparation These financial statements are prepared under the historical cost convention in accordance with International Financial Reporting Standards (IFRS). The accounting policies adopted are consistent with those of the prior year except that the Group has adopted the following new and amended IFRS and IFRIC (International Financial Reporting Interpretations Committee) interpretations during the year. Adoption of these revised standards and interpretations did not affect the financial performance or position of the Group. These new and revised standards gave rise to additional disclosures, including in some cases, revisions to accounting policies: IFRS 7 Financial instruments disclosures IAS 1 Amendment - presentation of financial statements IFRIC 8 Scope of IFRS 2 IFRIC 10 Interim financial reporting and impairment The Group has not adopted early the following new and revised IFRS s and IFRIC interpretations, that have been published and are mandatory for the Group s accounting periods beginning on or after 1 January, 2008 or later periods: IFRIC 14, IAS 19 (effective 1 January, 2008) The IFRIC provides guidance on assessing the limit in IAS 19 on the amount of the surplus that can be recognized as an asset. The expected impact of the IFRIC is still being assessed by management. IFRS 8 Operating segments (effective 1 January, 2009) - This standard replaces the existing IAS 14: Segment Reporting and aligns with the requirements of the US Standard SFAS 131: Disclosures about segments of an enterprise and related information, and requires a management approach for segment reporting. The expected impact of the new standard is still being assessed by management. IAS 23 amendment (effective 1 January 2009) This standard has been revised to require capitalization of borrowing costs when such costs relate to a qualifying asset. The option of immediately expensing these borrowing costs will be removed. This is not expected to impact the Group, as the existing policy practice of the Group is to capitalize all such borrowing costs relating to qualifying assets. b) Basis of consolidation These consolidated financial statements comprise the financial statements of Readymix (West Indies) Limited (the Parent ) and its subsidiaries. The financial statements of the subsidiaries are prepared for the same reporting period as the Parent, using consistent accounting policies. Subsidiary undertakings, being those companies in which the Group, directly or indirectly has an interest of more than one half of the voting rights, are fully consolidated from the date of acquisition, being the date on which the Group obtained control. All intercompany transactions, balances and unrealised surpluses and deficits on transactions between group companies are eliminated. Minority interests represent the interests not held by the Group and are presented separately in the statement of earnings and within equity in the consolidated balance sheet.

16 14 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2. Significant accounting policies (continued) (Expressed in Thousands of Trinidad and Tobago dollars) (Continued) c) Significant accounting judgments, estimates and assumptions In the process of applying the Group s accounting policies, management has made certain judgments, assumptions and estimates that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The most significant of these are discussed below: Deferred tax assets In recognizing a deferred tax asset for unused tax losses, management uses judgment to determine the probability that future taxable profits will be available to facilitate utilization of these unused tax losses. Impairment of goodwill The Company determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value in use of the cash generating units to which the goodwill is allocated. Estimating a value in use amount requires management to make an estimate of the expected future cash flows from the cash generating units and also to choose a suitable discount rate in order to calculate the present value of those cash flows. Further details are given in note 8. Pension benefits The cost of defined benefit pension plans is determined using actuarial valuations. The Group s independent actuaries use judgment and assumptions in determining discount rates, expected rates of return on assets, future salary increases and future pension increases. Due to the long term nature of these plans, such estimates are subject to significant uncertainty. Property, plant and equipment Management exercises judgment in determining whether costs incurred can accrue significant future economic benefits to the Company to enable the value to be treated as a capital expense. Management exercises judgment in the annual review of the useful lives of all categories of property, plant and equipment and the resulting depreciation charge determined thereon. d) Business combinations and goodwill Business combinations are accounted for using the purchase method of accounting. This involves recognizing identifiable assets (including previously unrecognized intangible assets) and liabilities (including contingent liabilities) of the acquired business at fair value. Goodwill is initially measured at cost, and represents the excess of the cost of acquisition over the fair value of the Group s share of the assets, liabilities and contingent liabilities of the acquired subsidiary undertaking at the date of acquisition. Goodwill on acquisition is reported in the balance sheet as an intangible asset with an indefinite useful life which is reviewed at least annually for impairment. Impairment is determined by assessing the recoverable amount of the cash generating unit (group of cash generating units), to which the goodwill relates. Where the recoverable amount of the cash generating unit (group of cash generating units) is less than the carrying amount, an impairment loss is recognized. Where the cost of acquisition is less than the fair value of the Group s share of the assets, liabilities and contingent liabilities of the acquired subsidiary at the date of acquisition, the difference is negative goodwill which is written off immediately to the statement of earnings. e) Property, plant and equipment It is the Group s policy to account for property, plant and equipment at cost less accumulated depreciation (Note 7). Depreciation is provided on the straight line basis at rates estimated to write-off the assets over their expected useful lives. The estimated useful lives of assets are reviewed periodically, taking account of commercial and technological obsolescence as well as normal wear and tear, and the depreciation rates are adjusted if appropriate. Current rates of depreciation are: Buildings - 2% - 4% Plant, machinery and equipment - 3% - 40% Motor vehicles - 10% - 20% Office furniture and equipment - 10% - 25% Leasehold improvements are amortised over the remaining term of the lease. Land and work-in-progress are not depreciated.

17 15 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2. Significant accounting policies (continued) (Expressed in Thousands of Trinidad and Tobago dollars) (Continued) e) Property, plant and equipment (continued) Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. It is the Group's policy to capitalise borrowing costs on loans specific to capital projects during the period of construction. Borrowing costs capitalized during the year amounted to nil (2006: nil). Repairs and renewals are expensed when the expenditure is incurred. f) Inventories Plant spares and raw materials are valued at the lower of cost and net realizable value using the average cost method. Work in progress and finished goods are valued at the lower of cost, including attributable production overheads, and net realizable value. Net realizable value is the estimate of the selling price less costs of completion and direct selling expenses. g) Foreign currency translation Foreign currency transactions The consolidated financial statements are presented in Trinidad and Tobago dollars (expressed in thousands), which is the Company s functional and presentation currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Transactions in foreign currencies are initially recorded in the functional currency at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Trinidad and Tobago dollars at the rate of exchange ruling at the balance sheet date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. Exchange differences on foreign currency transactions are recognized in the statement of earnings. Foreign entities On consolidation, assets and liabilities of foreign entities are translated into Trinidad and Tobago dollars at the rate of exchange ruling at the balance sheet date and their income statements are translated at the weighted average exchange rates for the year. The exchange differences arising on re-translation are taken directly to reserves. h) Taxation The taxation charge for the current year is based on the results for the year as adjusted for items, which are nonassessable or disallowed. The taxation charge is calculated using the tax rate in effect at the balance sheet date. A deferred tax charge is provided, using the liability method, on all temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets are recognized for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that future taxable profit will be available against which these deductible temporary differences, carry-forward of unused tax credits and tax losses can be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient future taxable profit will be available to allow all or part of the deferred tax assets to be utilised. i) Employee benefits The parent company employees are members of the Trinidad Cement Limited Employee s pension plan, while Premix & Precast Concrete Incorporated s employees are members of the Arawak Cement Limited Employee s pension plan. The pension plans are generally funded by payments from employees and by the relevant Group companies, taking account of the rules of the pension plans and recommendations of independent qualified actuaries. The Group accounts for this defined benefit plan using the projected unit credit method. Under this method, the cost of providing pensions is charged to the statement of earnings so as to spread the regular cost over the service lives of the employees in accordance with the advice of independent actuaries who carry out a full valuation every three years. The pension obligation is measured at the present value of the estimated future cash outflows using interest rates of long term government securities. All actuarial gains and losses are spread forward over the average remaining service lives of employees.

18 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Thousands of Trinidad and Tobago dollars) (Continued) 2. Significant accounting policies (continued) j) Financial instruments Financial instruments carried on the balance sheet include cash and short term deposits, payables, receivables, and borrowings. The particular recognition methods adopted are disclosed in the individual policy statements associated with each items. k) Cash and cash equivalents Cash and cash equivalents include all cash and short term deposits, net of bank advances, with maturities of less than three months from date of establishment. l) Revenue recognition Revenue, net of value added tax and discounts, is recognised upon delivery of products or performance of services and customer acceptance. Interest income is recognized as interest accrues. m) Trade and other receivables Trade and other receivables are carried at anticipated realisable value. A provision is made for doubtful receivables based on a review of all outstanding amounts at year-end. n) Trade and other payables Liabilities for trade and other amounts payable, which are normally settled on day terms are carried at cost, which is the fair value of the consideration to be paid in the future for goods and services received whether or not billed to the Group. o) Earnings per share Earnings per share is computed by dividing net profit attributable to the shareholders of the parent for the year by the weighted average number of ordinary shares in issue during the year. p) Provisions Provisions are recognized when the Group 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 a reliable estimate of the amount can be made. q) Leases Operating leases Leases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the statement of earnings on a straight-line basis over the period of the lease. Finance leases Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased assets or if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term. r) Interest bearing loans and borrowings Borrowings are stated initially at cost, being the fair value of the consideration received, net of issue costs associated with the borrowings. After initial recognition, borrowings are stated at amortised cost using the effective yield method; any difference between proceeds and the redemption value is recognised in the statement of earnings over the period of the borrowings. 16

19 17 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Thousands of Trinidad and Tobago dollars) (Continued) 2. Significant accounting policies (continued) s) Impairment of assets Non-financial assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset s recoverable amount. An asset s recoverable amount is the higher of an asset s or cash generating unit s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of continuing operations are recognized in the statement of earnings in those expense categories consistent with the function of the impaired asset. For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company makes an estimate of recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset s recoverable amount since the last impairment loss was recognized. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment been recognized for the asset in prior years. Such reversal is treated as a revaluation increase. Impairment losses recognized in relation to goodwill are not reversed for subsequent increases in its recoverable amounts. Financial assets The carrying value of all financial assets not carried at fair value through the income statement is reviewed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. The identification of impairment and the determination of recoverable amounts is an inherently uncertain process involving various assumptions and factors, including the financial condition of the counterparty, expected future cash flows, observable market prices and expected net selling prices Operating profit $ $ Revenue 295, ,611 Less expenses: Raw materials and consumables 114, ,861 Personnel remuneration and benefits 44,764 39,359 Equipment hire 34,409 27,299 Repairs and maintenance 18,051 10,506 Other operating expenses 19,016 20,992 Provision for doubtful debts 2,045 1,038 Stock (write-back)/provision/write-off (net) 51 (127) Depreciation 11,401 11,657 Fuel and electricity 4,395 4,311 Impairment of goodwill 2,500 Insurance Changes in raw materials and work in progress (10,828) (690) 53,782 27,529 Other income 1, Operating profit 55,242 27,933 Included in other income is the gain on disposal of property, plant and equipment of $58 (2006: $35).

20 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Thousands of Trinidad and Tobago dollars) (Continued) 3. Operating profit (continued) Personnel remuneration and benefits include: $ $ Salaries and wages 39,570 34,522 Pension cost defined benefit plan (Note 16 (a)) 1,483 1,423 Other benefits 2,753 2,759 National insurance Termination benefits (205) 44,764 39, Finance costs Interest costs 3,610 4,960 Interest income (147) (16) Exchange loss/(gain) 131 (11) 3,594 4, Taxation $ $ a) Taxation charge Deferred taxation (Note 17) (658) 5,764 Current taxation 13,944 1,062 13,286 6,826 b) Reconciliation of applicable tax charge to effective tax charge Profit before taxation 51,648 23,000 Tax calculated at the rate of 25% 12,912 5,750 Effect of different tax rates outside Trinidad and Tobago (118) (403) Net effect of other charges and allowances (375) (115) Effect of disallowed expenses 818 1,394 Business and green fund levies Taxation charge 13,286 6, Earnings per share Net profit attributable to shareholders of the Parent for the year 37,907 15,526 Weighted average number of ordinary shares issued (thousands) 12,000 12,000 Basic earnings per share $3.16 $1.29 The Company has no dilutive potential ordinary shares in issue. 18

21 19 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Thousands of Trinidad and Tobago dollars) (Continued) Plant, machinery & Land equipment Office and & motor furniture buildings vehicles equipment WIP Total 7. Property, plant and equipment $ $ $ $ $ At 31st December, 2007 Cost 19, ,615 5,605 2, ,279 Accumulated depreciation (9,796) (80,691) (4,831) (95,318) Net book amount 9,679 37, ,584 50,961 1st January, ,490 45, ,620 58,442 Additions 181 2, ,663 4,220 Transfer from WIP (699) Disposals and adjustments 2 (334) 32 (300) Depreciation charge (1,343) (9,654) (404) (11,401) 31st December, ,679 37, ,584 50,961 At 31st December, 2006 Cost 18, ,547 5,249 1, ,359 Accumulated depreciation (8,453) (71,037) (4,427) (83,917) Net book amount 10,490 45, ,620 58,442 1st January, ,522 47, ,287 65,870 Additions 172 3, ,657 Transfer from WIP 54 5,551 (5,605) Disposals and adjustments (430) 2 (428) Depreciation charge (1,258) (10,001) (398) (11,657) 31st December, ,490 45, ,620 58,442 The carrying value of plant and equipment held under finance lease at 31st December, 2007 amounted to $7.0 million (2006-$8.9 million). Leased assets are pledged as security for the related finance lease obligation Goodwill $ $ Opening net book amount 9,669 9,669 Provision for impairment (see (i) below) (2,500) Closing net book amount 7,169 9,669 (i) Provision of impairment During 2007, the Group performed an impairment test on its goodwill. The recoverable amount of the cash generating units was determined based on value in use calculations, by applying a discount rate of 10% and 11.75% per annum to the projected cash flows of Premix & Precast Concrete Incorporated and Island Concrete Products N.V./Island Concrete SARL, respectively, over a five year period, based on the financial budget approved by the Board of Directors. This budget has taken into consideration the specific operating challenges facing the companies in St. Maarten and Barbados. The following describes the key assumptions on which management has based its cash flow projections to undertake impairment testing of goodwill:

22 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 8. Goodwill (continued) (Expressed in Thousands of Trinidad and Tobago dollars) (Continued) (i) Provision of impairment (continued) (i) Cash flows for the 5 year period are extrapolated using a 1% growth rate. (ii) Discount rates of 10% and 11.75% (2006: 10% and 11.75%) have been applied to the cash flows for a period of five years. Based on the results of the impairment test in 2007, an impairment charge of $2.5 million was recorded against goodwill in relation to the Island Concrete Products N.V./ Island Concrete SARL acquisition as a result of the continuing operational challenges being experienced by this entity Inventories $ $ Plant spares 11,343 8,477 Raw materials and work in progress 19,547 8,719 Consumables ,072 17,378 Inventories are shown net of provision and (write-back)/write-off of $614 (2006:$405) and ($51) (2006:($127) - write-off) respectively Receivables and prepayments $ $ Trade receivables 60,713 52,580 Less: provision for bad and doubtful debts (15,290) (13,245) Trade receivables (net) 45,423 39,335 Sundry receivables and prepayments 4,072 3,327 Corporation tax recoverable 2,782 3,538 As at 31st December, the aging analysis of trade receivables is as follows: 52,277 46,200 Past due but not impaired Neither past Over Total due nor impaired 1-90 days days 180 days $ ,423 11,443 24,588 5,597 3, ,335 15,243 14,856 4,254 4,982 As at 31st December, trade receivables at a value of $15.3 million (2006: $13.2 million) were impaired and fully provided for. Movements in the provision for impairment of receivables were as follows: $ $ At 1st January 13,245 12,207 Charge for the year 2,045 1,038 At 31st December 15,290 13,245 20

23 21 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Thousands of Trinidad and Tobago dollars) (Continued) Cash and short term deposits $ $ Cash on hand and bank 5,053 4,387 Short term deposits 5, ,148 4,477 Cash at bank earns interest at floating rates based on daily deposits rates. Short term deposits are readily convertible into cash and consist of TT$ deposits and interest is earned at rates ranging between 6.00% and 7.00 % per annum. 12. Bank advances Bank advances bear interest at rates ranging from 8.5% to 9.5% per annum and are secured by charges over the fixed and floating assets of the parent company and a first mortgage over property situated at Valencia. The facility held by Island Concrete Products N.V. attracts interest at the rate of 8.5% per annum and is secured by a charge over the fixed and floating assets of that company and by a guarantee from Readymix (West Indies Limited Payables and accruals $ $ Due to related parties 10,025 22,054 Sundry payables and accruals 13,105 13,817 Trade payables 17,119 15,149 Corporation tax 5,980 3,520 46,229 54, Medium and long-term borrowings Amounts payable within: One year 5,199 5,449 Two years 4,770 5,569 Three years 4,376 4,376 Four years 7,005 4,384 Five and more years 7,005 21,350 26,783 Current portion (5,199) (5,449) 16,151 21,334 Borrowings comprise: A medium term loan, with outstanding balance of $12.1 million, taken by the parent company carrying rates of interest of 6%, fixed for the first five years and variable over the remaining five years. The security for this loan is a first charge on the fixed and floating assets of Readymix (West Indies) Limited. Medium term loans, with aggregate outstanding balance of $3.04 million, taken by Premix & Precast Concrete Incorporated, carrying variable rate of interest in the range 7% to 10.25%, and secured by a charge over the fixed and floating assets of the company and a guarantee from Readymix (West Indies) Limited. A loan, with outstanding balance of $1.1 million, taken by Island Concrete Products N.V. carries interest at 8.5% and is secured by a charge over the fixed and floating assets of the company and by a guarantee from Readymix (West Indies) Limited. Finance leases for plant and machinery with present value of $5.2 million ( $6.3 million) and secured by the related leased assets. Future minimum lease payments under these leases are as follows:

24 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Thousands of Trinidad and Tobago dollars) (Continued) 14. Medium and long-term borrowings (continued) Finance leases $ $ Amounts payable within: One year 1,332 1,376 After one year but not more than five years 4,723 6,180 Total minimum lease payments 6,055 7,556 Less amounts representing interest charges (865) (1,291) Present value of minimum lease payments 5,190 6, Parent company loan Total outstanding 6,737 Payable within one year (6,737) Non-current portion This loan was fully repaid in Employee benefits asset Pension plan-asset 1, a) Pension plan The details below were extracted from information supplied by independent professional actuaries. Amounts recognized in the statement of earnings are as follows: $ $ Current service cost 1,708 1,655 Interest cost 1, Actuarial gain/loss Expected return on plan assets (1,578) (1,231) Total included in personnel remuneration and benefits (Note 3) 1,483 1,423 Actual return on plan assets 1, b) Movement in the pension plan benefit asset in the balance sheet: Balance brought forward Total expense for the year (as shown above) (1,483) (1,423) Contributions paid 1,976 1,903 Other adjustment 2 Net pension plan asset 1, Pension asset recognized in the balance sheet are as follows: Fair value of pension plan assets 18,286 14,735 Present value of funded obligations (pension plan) (18,467) (15,332) (181) (597) Unrecognized actuarial loss 1,184 1,105 Pension plan asset 1,

25 23 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Thousands of Trinidad and Tobago dollars) (Continued) Employee benefits asset (continued) $ $ Changes in the present value of the defined benefit obligation are as follows: Defined benefit obligation at January 1 15,332 12,564 Interest cost 1,337 1,655 Current service cost 1, Actuarial gain (362) (53) Benefits paid (125) (316) Members contributions Expense allowance (165) (156) Other adjustment (4) Defined benefit obligation at December 31 18,467 15,332 Changes in the fair value of plan assets are as follows: Fair value of plan assets at January 1 14,735 12,281 Expected return 1,578 1,191 Actuarial loss (457) (520) Benefits paid (125) (316) Employer and employees contribution 2,720 2,255 Expense allowance (165) (156) Fair value of plans assets at December 31 18,286 14,735 The principal actuarial assumptions used for accounting purposes for the pension plans are: Discount rate 7.75% % 8.00% % Expected return on plan assets 7.75% % 8.00% % Rate of future salary increases 3.75% % 4.00% % Rate of future pension increases 3.50% % 3.50% % The Company expects to contribute $1.959 million to its defined benefit plan in The major categories of plan assets in Trinidad Cement Limited Employees Pension Fund are as follows: Equities 47% 45% Debt 40% 38% Other 13% 17% Experience history for the current and previous period is as follows: $ $ Defined benefit obligation (18,467) (15,332) Plan assets 18,286 14,735 Deficit (181) (597) Experience adjustments on plan liabilities Experience adjustments on plan assets (457) (520) The plan s financial funding position is assessed by means of triennial actuarial valuations carried out by an independent actuary. The last funding valuation was carried out as at 31st December 2006 and revealed that Readymix (West Indies) Limited s section of the plan was in deficit to the extent of $0.7 million. The report of the actuary states that if Readymix continues to contribute at its current rate of 15.7% of salaries, the past service costs in its section will be removed by the middle of A roll forward valuation in accordance with IAS 19 Employee Benefits using assumptions indicated below was done as at 31st December 2007 for the sole purpose of preparing these financial statements.

26 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Thousands of Trinidad and Tobago dollars) (Continued) Deferred taxation $ $ (a) Movement in deferred taxation (net) Balance as at 1st January 5,439 (324) Other adjustments (2) (1) (Credit)/charge to earnings (658) 5,764 Balance at 31st December 4,779 5,439 (b) Components of deferred tax asset/(liability) Tax losses 1,565 1,581 Provisions Deferred tax asset 1,795 1,680 Accelerated depreciation (5,863) (6,035) Finance leases (457) (955) Post retirement asset (254) (129) Deferred tax liability (6,574) (7,119) Net balance at 31st December 4,779 5,439 Tax losses available for set off against future taxable profit amounted to $30 million (2006: $32.4 million) but are yet to be agreed with the tax authorities. A deferred tax asset on losses amounting to $23.8 million (2006:$26.2 million) has not been recognized. 18. Stated capital $ $ Authorised An unlimited number of ordinary shares of no par value Issued and fully paid 12,000,000 (2006: 12,000,000) ordinary shares of no par value 12,000 12, Related party transactions Purchases of goods 74,116 72,667 Management fees 1,674 1,275 Interest income Compensation of key management personnel: Short term employment benefits 2,818 1,635 Pension plan benefits These transactions were conducted with Trinidad Cement Limited, Arawak Cement Company Limited and TCL Trading Limited, who are all companies within the Trinidad Cement Limited Group. Management believes that these transactions were consummated on terms no less favourable than those that could have been obtained from other parties providing those goods and services. In 2007, the total directors fees were $120 ( $129). 24

27 25 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Thousands of Trinidad and Tobago dollars) (Continued) 20. Segmental information The primary segment reporting format is determined to be its business segments. Secondary information is reported geographically. The Group derives 99% of its revenue from the sale of pre-mixed concrete in Trinidad & Tobago, Barbados and St. Maarten, whilst the sale of aggregates and the provision of technical services are purely incidental to this main activity. Accordingly, practically all of the Group s assets and liabilities are associated with the pre-mixed concrete business. The Group s geographical segments are based on the location of the Group s assets. Sales to external customers disclosed in geographical segments are based on the geographical location of its customers. The following table presents information regarding the Group s geographical segments for the years ended 31st December, 2007 and 2006: Trinidad St. Maarten/ & Tobago St. Martin Barbados Eliminations Total Year ended 31st December, 2007 $ $ $ $ $ Total revenue 232,117 44,178 26, ,187 Inter-segment revenue - (7,903) - - (7,903) Third party revenue 232,117 36,275 26, ,284 Profit/(loss) before tax 51,175 (721) 1,194-51,648 Segment assets 148,492 13,679 11,419 (19,165) 154,425 Capital expenditure 2,358 1, ,220 Trinidad St. Maarten/ & Tobago St. Martin Barbados Eliminations Total Year ended 31st December, 2006 $ $ $ $ $ Total revenue 201,333 30,822 29, ,867 Inter-segment revenue - (3,256) - - (3,256) Third party revenue 201,333 27,566 29, ,611 Profit/(loss) before tax 24,611 (3,458) 1,847-23,000 Segment assets 128,153 11,352 12,558 (13,709) 138,354 Capital expenditure 2, ,812-4, Financial instruments Fair value The fair value of cash and bank balances, receivables and payables approximate their carrying amount due to the short-term nature of these instruments. The fair value of the long term portion of the fixed rate loans amounts to approximately $10.03 million (2006:$14.1 million) as compared to its carrying value of $16.2 million (2006: $21.3 million). 22. Commitments and contingencies Contingencies At 31st December, 2007 the Group had contingent liabilities in respect of bank guarantees and custom bonds amounting to $5.3 million ( $5.3 million). Operating lease commitments The Company had entered into commercial leases on certain motor vehicles under which all risks and benefits of ownership are effectively retained by the leasing company. These leases have an average life of four (4) years with no renewal options. Future minimum lease rentals payable under these leases as at 31st December are as follows: $ $ Within one year After one year but not more than five years

28 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Thousands of Trinidad and Tobago dollars) (Continued) 23. Compliance with loan covenant As at December 31, 2007, the Group was in compliance with all of its loan covenants As at 31st December, 2006 the Group was in breach of its financial ratio covenants in one agreement covering loans with a value of $4.1 million. The non-compliance related to current asset, and debt service coverage ratios exceeding their limits. The consequence of the breach on the agreement, was that the loan became payable on demand. This loan however was already classified as a current liability. However, the lender granted the Group a grace period ending 31st December, 2008 in which the Group s financial position was to be remedied without any change in the terms or repayment schedule of the loan. 24. Financial risk management disclosures The Group s activities expose it to a variety of financial risks, including the effects of changes in debt and equity prices, interest rates, marketing liquidity conditions and foreign currency exchange rates which are accentuated by the Group s foreign operations, the earning of which are denominated in foreign currencies. Accordingly, the Group s financial performance and position are subject to changes in the financial markets. Overall risk management measures are focused on minimizing the potential adverse effects on the financial performance of the Group s changes in financial markets. (i) Credit risk The Group has no significant concentrations of credit risk and has policies in place to ensure that sales of products are made to customers with an appropriate credit history. (ii) Foreign exchange risk The Group operates in the Caribbean region and is subject to foreign exchange risk. Risk management in this area is active to the extent that hedging strategies are available and cost effective. (iii) Interest rate risk The Group has no significant interest rate risk. Changes in interest rate relates primarily to bank overdraft and bankers acceptance. (iv) Liquidity risk The Group maintains a balance of funding via internally generated funds and the use of available credit facilities such as loans, overdraft and other financing options where required. (v) Capital management The capital management practice of the Group is to safeguard its ability to continue as a going concern and to reduce the cost of capital. The Group monitors capital on the basis of the debt to equity ratio. (a) Interest rate risk The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with other variables held constant of the Group s profit before tax (through the impact on floating rate borrowings). Increase/ Effect on Effect on decrease in profit equity basis points before tax $ $ 2007 Banker s acceptances (67) (46) 2006 Banker s acceptances (75) (47) 26

29 27 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Thousands of Trinidad and Tobago dollars) (Continued) 24. Financial risk management disclosures (Continued) (b) Foreign currency risk The following table demonstrates the sensitivity to a reasonably possible change in the US dollar exchange rate, with all other variables held constant, of the Group s profit before tax (due to changes in the fair value of monetary assets and liabilities) and the Group s equity (due to changes in the fair value of forward exchange contracts and net investment hedges). Increase/ Effect on decrease in profit Effect on US dollar rate before tax equity $ $ % % (7) % % (5) 4 (c) Fair values Set out below is a comparison by category of carrying amounts and fair values of all the Company s financial instruments that are carried in the financial statements. Carrying amounts Fair values $ $ $ $ Financial assets Cash 10,148 4,477 10,148 4,477 Accounts receivables 52,277 46,200 52,277 46,200 Financial liabilities Bank advances 14,958 16,383 14,958 16,383 Loans 21,350 33,520 19,224 26,320 Accounts payable 46,229 54,540 46,229 54, Proposed dividends On 19th February, 2008, the Board of Directors of Readymix (West Indies) Limited declared a final dividend of 20 cents per share (2006: nil) amounting to $2.4 million (2006: nil).

30 REPUBLIC OF TRINIDAD AND TOBAGO The Companies Act, 1995 (Section 144) MANAGEMENT PROXY CIRCULAR 1. Name of Company: READYMIX (WEST INDIES) LIMITED. Company No. R-84 (C). 2. Particulars of Meeting: Forty-eighth Annual Meeting of the Company to be held on 8th May 2008 at the Nelson Mandela Hall, Dr. Joao Havelange Centre of Excellence, Macoya Road, Tunapuna, Trinidad. 3. Solicitation: It is intended to vote the Proxy solicited hereby (unless the Shareholder directs otherwise) in favour of all resolutions specified therein. 4. Any director s statement submitted pursuant to Section 76 (2): No statement has been received from any Director pursuant to Section 76 (2) of The Companies Act, Any auditor s statement submitted pursuant to Section 171 (1): No statement has been received from the Auditors of the Company pursuant to Section 171 (1) of The Companies Act, Any shareholder s proposal and/or statement submitted pursuant to Sections 116 (a) and 117 (2): No proposal has been received from any Shareholder pursuant to Sections 116 (a) and 117 (2) of The Companies Act, DATE NAME AND TITLE SIGNATURE April 7th, 2008 Isha Reuben-Theodore, Secretary 28

31 No bird soars too high, if he soars with his own wings William Blake Designed by Saga Studios Ltd. Printed by CPPP Ltd.

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