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Annual Report 2005

 The ANSA McAL Group produced good results for the year ended December 31, 2005. Profit before tax grew by 41.8% or $190.4 million. Our profit attributable to shareholders improved by 45% or $139.1 million to $447.9 million. Earnings per share increased from $1.81 to $2.61, a 44% increase.

Vision 2006

In 2001/2002 the Group set a challenge for the team through the enunciation of “Vision 2006” more intimately known as “V’06”. The vision mandated the Group to double profitability, deliver an Earnings Per Share of $2.20 and a share price of $40.00. In my previous report I gave the commitment that we would deliver on this covenant one year earlier. Indeed, I am very pleased to report that the Group has in 2005 delivered on the V’06 promise – One Year Earlier!

In my reports from previous years I have also spoken of the investments made in plant and equipment in anticipation of the FTAA and CSME. These investments would enable our companies to expand capacity and simultaneously realise cost efficiencies that in turn would assist in positioning the Group’s products and brands for global competitiveness.

For the period 2001 to 2005 the Group invested over $1.13 billion in new assets primarily in the key sectors of Brewing and Manufacturing. These sectors have already begun to accelerate and deepen the Group’s export thrust well beyond Caribbean markets and into Central and North America, the UK and Europe.

Significant progress has been made generally. Exports for 2005 into Central America have increased by 47% over 2003 and all our brands are now registered in these markets. With the completion of plant upgrades and new line commissioning at CDC being completed in the fourth Quarter of 2005 and early in the first Quarter of 2006 respectively, significant benefits in the areas of bottling capacity will begin to be realised.

2005 Significant Events

With increasing diversity and geographical spread in 2005 and after careful review, the Group revamped its governance model by introducing a sectoral structure that
would allow for a deeper, richer sectoral focus, enhanced synergies and opportunities for value creation and faster, more informed decision-making.

The Sectors are: Automotive – Beverage – Distribution – Finance – Manufacturing – Media – Services. Each sector is driven and led by a Sector Head who is a member of the Group’s Executive Committee.
Recognising the intensifying competition for talent and the need to ‘institutionalise leadership’ as a vital business strategy, the Group partnered with the University of the West Indies and launched its own Leadership Development Programme in October 19, 2005. This is a pioneering programme. Its unique custom design is intended to not only “grow our own timber” by identifying potential MD’s from among our senior management, but it will also provide them with a complete arsenal of the skill sets necessary to harness the full potential of the Group’s most important assets…our people.

A complement of twenty (20) Executives was selected from across the Group for the first cohort and the feedback from participants’ coaches and mentors is very encouraging. Faced with the prospect of achieving its V’06 objectives a year earlier, your Board set about crafting the Group’s new vision and distilled its new objectives now referred to as “V’10 — Beyond Blue”. In essence, the plan takes cognisance of the investments made in new plants that would generate increased production, enhanced efficiencies while substantially growing our exports beyond the region, further developing our reach into Latin America, North America and Europe. The plan envisions an EPS of $5.00 by the end of 2010 and a share price of $100.00.

In my previous report, I indicated that the Group continues to actively explore other opportunities including a significant Energy Sector project. I am pleased to report that in recent weeks a Project Agreement was signed with the Government of Trinidad and Tobago that saw the Group and its international partners moving one step further to the realisation of this venture. Much work still has to be completed before this venture comes to fruition. All things being equal, production from this plant should commence in 2009.

The construction of the plant for our Joint Venture Company — Caribbean Roof Tile Company Limited — has been completed and commissioning of the equipment is well advanced. Exports of roof tiles into the United States are scheduled for the third Quarter of this year. This facility is capable of producing 15 million clay roof tiles per annum.

Shareholders would recall that during 2005 the State acquired the assets of Robinson Crusoe Limited. This oneoff gain on the sale represented a $0.49 contribution to the Group’s overall Earnings Per Share. If that gain were to be
isolated from the EPS generated for the year of $2.61 the Group would still have produced a healthy 18% increase over 2004.

Group’s Overseas Operations You would recall that the ANSA McAL Barbados Group
expanded its operations in 2004 through the acquisition of the A S Bryden and Sons (Barbados) Limited group. Last year, the first full year’s operations in the ANSA McAL Group saw the optimisation of the synergies of the Bryden Group with ANSA McAL Barbados which resulted in ANSA McAL (Barbados) Limited being adjudged the number one performing Company on the Barbados Stock Exchange in 2005. The share price on the market improved a healthy 178% or $11.75 Barbados dollars.

The Group continues to make significant investments in its breweries in Grenada and St. Kitts and Nevis to meet local and export demand. However, the Group is deeply concerned about the volume of illegally imported products into those territories through informal commercial traders. It is therefore imperative that the commitment of the respective Government authorities is obtained in combating that activity which compromises not only government revenues but also jeopardises the investment in the local economy as well as employment creation.
In Guyana, the Group’s operations are performing quite satisfactorily and the Executive is actively perusing the deepening of its investment in this market to accommodate the Company’s expanding portfolio.

Dividends

I am pleased to announce that the Board of Directors has recommended a final dividend of $0.40 per ordinary share. This, together with the interim dividend paid of $0.25, will bring the total dividend payable to shareholders for the year to $0.65.

The final dividend will be paid on June 23, 2006. Milestones In 2005, Alstons Shipping Limited celebrated its 100th anniversary. That Company moved from being a small cocoa trading Company located on St. Vincent Street, to becoming one of the leading shipping and logistics service providers in the region. Alstons Shipping is the largest shipping agency in Trinidad and Tobago, representing some seventy (70) international cargo and passenger companies. It has built a well-respected reputation both locally and regionally.

In 2006 the Group is celebrating another major anniversary that of ANSA McAL’s 125th anniversary. There are a number of planned events to mark this very auspicious occasion in the production of a documentary, a book, employee recognition both past and present and a Thanksgiving service.

The ANSA McAL Foundation

On October 28, 2005, the ANSA McAL Foundation launched the Anthony N Sabga Caribbean Awards for Excellence. This programme is set to become the region’s leading recognition programme. Three awards will be made in October 2006 and the selection process is currently underway.

This Programme represents a coming-of-age in which Caribbean people recognise their own. It celebrates the excellence and the potential of Caribbean people, working for the benefit of the region. It is the first regional, nongovernmental, recognition programme of its type. It offers tangible, significant benefits to the Awardees. It is one of the most noteworthy, philanthropic initiatives by a Caribbean organisation in recent times.

The objective of the Anthony N Sabga Caribbean Awards for Excellence is to recognise significant Caribbean achievement, to encourage and to support the pursuit of excellence by Caribbean persons for the benefit of the region.

The ANSA McAL Foundation is convinced that talent needs to be sought out, brought to light and encouraged. It is in this context that these Awards were conceived. The Anthony N Sabga Caribbean Awards for Excellence is geared towards publicly recognising, rewarding and thereby supporting and encouraging excellence in human endeavour that benefits and uplifts the Caribbean community.

The ANSA McAL Family

During the year, the Group saw the retirement of Conrad O’Brien, CMT as Chairman of our US companies ANSA McAL (US) Inc. and DCI Miami Inc. Mr. O’Brien as you
would recall, was a former Chairman and Chief Executive of the ANSA McAL Group and I would like to thank him for the sterling contributions made to the Group in the course of his long and distinguished career.

More recently, the Chairman of our operations in St. Kitts and Nevis — Carib Brewery (St. Kitts & Nevis) Limited — Mr. William A Kelsick, OBE tendered his resignation from the Board at the venerable age of 87. Mr. Kelsick was a former member of the Board of Directors of ANSA McAL Limited and again I wish to extend my sincere thanks to him for the stewardship provided to the Group over the years.

To my colleagues on the Parent Board I wish to acknowledge the support that you have provided over the year gone by. I look forward to your continued support. To the Executive Management Teams and Staff — the Group saw the realisation of its Vision 2006 a year earlier. This feat could not have been achieved without your cooperation and support. To our shareholders and partners, I wish to acknowledge your contributions and look forward to your continued support.

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A. NORMAN SABGA
CHAIRMAN & CHIEF EXECUTIVE