WORLD FACING & INVESTED

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
technology, market information and marke t
innovation as a driver of value. Indeed, in the global
market, 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.)

1
MISSION
MISSION STATEMENT
To stimulate, facilitate and promote investment
opportunities for foreign and local investors and to
promote the economic development of Saint Lucia.

VISION
VISION STATEMENT
To become a world-class Investment Promotion and
Development Agency, positioning Saint Lucia as a
leading investment location.

2
 CONTENTS

N 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

3
 RE-ENGINEERING
& REPOSITIONING
CHAIRMAN’S REVIEW
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. Callistus Vern Gill |
Chairman
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 Review
& 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-orientating

its economy from agriculture towards a broad services

1
Competitiveness Review and Benchmarking Study 2009

4
 based economy. Services sector activities as a
percentage of GDP and exports have grown rapidly
in the past decade;
• Saint Lucia’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.
2
Doing Business 2009: Organisation of Eastern Caribbean States; World Bank
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.
5
 Pinkley Francis |
Businessman

Jacqueline Emmanuel |
Director – OPSR

Callistus Vern Gill |

Chairman

WORLD FACIN
THE NATIONAL DEVELOPME
 Jodi Boodhoo |
Consultant

Robert Norstrom |
Group Managing Director –
ECFH

NG & INVESTED
ENT BOARD OF DIRECTORS
 Timothy Greene |
Corporate Services Manager
Deale Lee |
Legal Officer/ Acting
Corporate Secretary
John Labadie |
Assistant Properties
Manager

WORLD FACIN
THE NATIONAL DEVELOPMENT CO
 O’Donavan Yarde |
International Investment
Development Director

Callistus Vern Gill |

Chairman

NG & INVESTED
ORPORATION INVESTMENT TEAM
 INVESTMENT PROMOTION / SERVICES
GLOBAL TRENDS AND OUTLOOK
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
double-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
1
Information obtained from Saint Lucia Competitiveness Review and Benchmarking Study 2008
10
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.
 INVESTMENT PROMOTION / SERVICES
CORPORATE GOVERNANCE IN 2008
Sound corporate governance is essential to the
Corporation’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, stakeholders,
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
Corporation’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.
Audit
Financial management is another important aspect of the
Corporation’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 Parliament,
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 People
Just 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
staff, 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.
11
 INVESTMENT PROMOTION / SERVICES
As a major player on the Saint Lucian economic
landscape, the Corporation embraces its role as
a facilitator of opportunity for its clients…
Giving Voice to Saint Lucian Development
Effective 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 Brand
2008 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
12
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 beckon
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 Chain
Over 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 Society
Cooperation 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 Rates
In 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
 INVESTMENT PROMOTION / SERVICES
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 Activities
The 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 Support
The 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)
Harmonites Steel Band at Jazz on the Pier
• 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 Arts
and Culture
The 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.
Soca Artiste, Mantius, at Mas on the Pier
13
 INVESTMENT PROMOTION / SERVICES

HIGHLIGHTS FOR 2008

Investments
Against 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:

• Ark TeleServices The entry of the company has added much value to
Estimated Project Value: EC$2M 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.

ArkTeleservices is one of the new entrants into the

Saint Lucia call centre industry at Bisee. Government • e-Services
in its quest to promote ICT has granted fiscal Estimated Project value: EC$2M
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 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.

14
 INVESTMENT PROMOTION / SERVICES
INSTITUTIONAL SUPPORT
AND STRENGTHENING
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 Trade
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
correspondence.
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 Promotion
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.
15
 INVESTMENT PROMOTION / SERVICES
THE WAY FORWARD »»
Targeted Investment Promotion Strategy
Saint 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.
Deliverables
The Corporation in its new thrust has identified and will
continue to identify key sectors in which Saint Lucia has an
16
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.

PROPERTIES
Introduction
As 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 Fort
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.
PROPERTIES
Land Use Plan
Vieux Fort Lands
The recently completed land use plan for Vieux Fort
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 Developments
The 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
17
 PROPERTIES
Proposed Land Use for Black Bay (Ocean View)
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 Facelift
This 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
18
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
stakeholders 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 Properties
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.
Conclusion
It 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.
DUTY FREE POINTE SERAPHINE
ENSURING SUSTAINABILITY
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 Complex
The 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
Complex
There 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
give-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 Industry
The 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.
19
 SPECIAL FEATURE

HOTEL CHOCOLAT
SWEETENING SAINT LUCIA’S ECO TOURISM PRODUCT

A sound international
foundation
The 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
workers, 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. Hotel Chocolat Launch Party, April 2008

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 Advantage

In 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
Building Nurseries

1
Hotel 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.

20
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
Farmers Mid-Harvest Cracking Cocoa
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-eco-
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.
21
 Saint Lucia is successfully undergoing a significant
transition from an agriculture-based economy to a
more modern and sophisticated service-based
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
LOOKING AHEAD »» 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.

22
 PricewaterhouseCoopers
April 22, 2009 Pointe Seraphine
P.O. Box 195
Castries
Independent Auditors’ Report Saint Lucia, West Indies
Telephone: (758) 456 2600
To the Members of Facsimile: (758) 4521061
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 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. 23
 National Development Corporation
Non-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

24
National Development Corporation
Non-consolidated Statement of Income
For the year ended March 31, 2008

(expressed in Eastern Caribbean dollars)

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)

25
 National Development Corporation
Non-consolidated Statements of Changes in Equity
As of March 31, 2008

(expressed in Eastern Caribbean dollars)

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
At beginning of year 15,356,214 15,945,159
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

26
National Development Corporation
Non-consolidated Statement of Cash Flows
For the year ended March 31, 2008

(expressed in Eastern Caribbean dollars)

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

27
 National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

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.

28
National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

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.

29
 National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

2 Summary of significant accounting policies…continued

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.

30
National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

2 Summary of significant accounting policies…continued

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.

31
 National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

2 Summary of significant accounting policies…continued

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.

32
National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

2 Summary of significant accounting policies…continued

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.

33
 National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

2 Summary of significant accounting policies…continued

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 n on-consolidated
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-end
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.

34
National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

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.

35
 National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

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.

36
National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

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

37
 National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

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

Between 2 and 5 years 2,055,092 2,839,812
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 %).

38
National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

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

At beginning of year 5,310,205 5,310,205
Provision for impairment of land (4,392,789) (4,392,789)

At end of year 917,416 917,416

Other developments
At beginning of year 5,613,454 5,833,225
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
$ $

At beginning of year 18,873,462 18,915,214

(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

39
 National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

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) - -
40
National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

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

Year ended March 31, 2008

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

41
 National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

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

Year ended March 31, 2008

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

42
National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

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
$ $

Between 1 and 2 years 3,186,265 3,763,107

Between 3 and 5 years 3,290,638 3,506,159
Over 5 years 32,795,725 31,191,783

39,272,628 38,461,049

43
 National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

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
$ $

At beginning of year 4,868,834 6,320,148

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

44
National Development Corporation
Notes to Non-consolidated Financial Statements
March 31, 2008

(expressed in Eastern Caribbean dollars)

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

45
 National Development Corporation
Non-consolidated Balance Sheet
March 31, 2008

(expressed in Eastern Caribbean dollars)

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

46
National Development Corporation
Non-consolidated Balance Sheet
March 31, 2008

(expressed in Eastern Caribbean dollars)

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

47
 National Development Corporation
Non-consolidated Balance Sheet
March 31, 2008

(expressed in Eastern Caribbean dollars)

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

48
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.