2006 - Eastern Caribbean Securities Exchange

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Notes to the Consolidated Financial Statementsfor the year ended 31st December, 2006Expressed in Thousands of Trinidad and Tobago dollars16. Medium and long term financing (continued)BondsBarbados$50 million BondThis bond, with current book value of TT$102.4 million, is secured by a charge on the fixed and floatingassets of Arawak Cement Company Limited, is repayable by 18 equal semi-annual instalments commencingin March 2008. The bond may be drawn in tranches at which time the rate of interest is fixed based onGovernment of Barbados Debenture or Treasury Notes plus 0.90%. The rates of interest for the drawnamounts are 7.4% on B$15.6 million and 7.75% on B$18.0 million.TT$346.5 million BondThis bond, with current book value of TT$274.4 million, is secured by a charge on the fixed and floatingassets of the Group, is repayable by 20 equal semi-annual instalments of TT$17.3 million ending in August2014 and carries a fixed rate of interest of 6.87% per annum.TT$247.6 million BondThis bond, with current book value of TT$216.1 million, is secured by a charge on the fixed and floatingassets of the Group. It carries a fixed effective rate of interest of 14.08% per annum payable semi-annuallywith principal repayable by one lumpsum amount of TT$185.2 million in June 2009.TT$127.4 million BondThis bond, with current book value of TT$113.8 million, is secured by a charge on the fixed and floatingassets of the Group. It carries a fixed effective rate of interest of 13.9% per annum payable semi-annuallywith principal repayable by one lumpsum amount of TT$96.8 million in February 2008.Project financingThe Group has secured a loan package amounting to US$105 million for funding of the expansion andmodernisation capital projects at Trinidad Cement Limited and at Caribbean Cement Company Limited.The loans are secured by a first charge on the specific plants to be constructed and a second rankingcharge on the other fixed and floating assets of the Group in addition to the maintenance of severalfinancial ratios and covenants.TT$315 million Project BondThis bond, with current book value of TT$308.7 million, is secured by a charge on certain fixed assets ofthe Group, is repayable by 18 equal semi-annual instalments of TT$17.5 million commencing in March2009 and carries a fixed rate of interest of 6.71% per annum.Annual Report 200627
Notes to the Consolidated Financial Statementsfor the year ended 31st December, 2006Expressed in Thousands of Trinidad and Tobago dollars16. Medium and long term financing (continued)US$25 million Project ‘A’ LoanThis loan, with current book value of TT$68.4 million, is secured by a charge on certain fixed assets ofthe Group, is repayable by 18 equal semi-annual instalments of US$1.389 million commencing in October2008 and carries a floating rate of interest of 6-month Libor plus 225 basis points. At December 31st2006, US$11.6 million of the available US$25 million loan was drawn down.US$10 million Project ‘C’ LoanThis loan, with current book value of TT$61.2 million, is secured by a charge on certain fixed assets ofthe Group, is repayable by 2 installments of US$5 million each in April 2016 and in April 2017. It carriesa floating rate of interest of 6-month Libor plus 100 basis points. In addition to interest, the lender isentitled to an additional annual margin capped at 600 basis points above Libor calculated on the excessEarnings before Interest, Taxes, Depreciation and Amortisation (‘Ebitda’) of Caribbean Cement CompanyLimited over US$27.7 million from 2008 to the end of the loan. At December 31st 2006, the full US$10million of the loan was drawn down.US$20 million Project ‘Parallel’ LoanThis loan, with current book value of TT$57.3 million, is secured by a charge on certain fixed assets ofthe Group, is repayable by 18 equal semi-annual installments of TT$1.1 million commencing in October2008 and carries a floating rate of interest of 6-month Libor plus 225 basis points. At December 31st,2006, US$9.4 million of the available US$20 million loan was drawn down.Interest rate swapIn order to hedge against the floating interest rate risk of the ‘Project’ US$ loans, the Group has enteredinto interest rate swap agreements for the full value and period of the loans. Under the swap agreements,the Group agreed to pay or receive from a counter party, at semi-annual intervals, the difference betweenthe fixed and variable interest amounts, the effect of which is to effectively fix the rates of interest on theloans as follows: US$25 million Project ‘A’ Loan – 7.308%; US$10 million Project ‘C’ Loan – 6.11%; US$20million Project ‘Parallel’ Loan – 7.36%. The hedge relationship and resulting cash-flows are expected toarise over the full period of the loans.The swap instruments are carried at market values representing the present values of all future settlementsunder the swaps as determined by a specific formula based upon current market conditions. The carryingvalues, which will vary in response to changes in market conditions, are recorded as assets or liabilitieswith the resultant charge or credit recorded as a ‘Hedging Reserve’ directly in shareholders equity. Ateach balance sheet date, the swap instruments are marked to market and the change in value recordedin the Hedging Reserve. For each accounting period, an amount is transferred from the Hedging Reserveand charged or credited in the statement of earnings such that the overall interest expense on the relatedproject loans is reflective of the fixed interest rates. As at December 31st, 2006, the swaps carried anaggregate value of a $0.2 million (4.2 million) liability in the books of the Group.28
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ContentsOur Vision and Mission Stat
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Notice of Annual MeetingNotice is h
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Consolidated Financial Summary 2001
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Share PerformanceTrading Volumes (t
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A new record in TrinidadSince the b
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Board of Directorsfrom left to righ
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Board of Directorsand Director of U
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On the ball in GuyanaWhen the crowd
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Beyond Boundaries in JamaicaAcross
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Group Executive Committeefrom left
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Chairman’s Reviewslings by 92%. T
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Playing to win in BarbadosThe missi
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Group Chief Executive Officer’s R
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Group Chief Executive Officer’s R
Page 30 and 31: Group Chief Executive Officer’s R
Page 36 and 37: Trinidad Cement LimitedTrinidad Cem
Page 38 and 39: Caribbean Cement Company LimitedCar
Page 40 and 41: Arawak Cement Company LimitedArawak
Page 42 and 43: Readymix (West Indies) LimitedReady
Page 44 and 45: TCL Packaging LimitedTCL Packaging
Page 46 and 47: TCL Ponsa Manufacturing LimitedTCL
Page 48 and 49: TCL Guyana Inc.TCL Guyana Inc. was
Page 50 and 51: Rally ‘round the youthWithin our
Page 52 and 53: Management Proxy CircularREPUBLIC O
Page 54 and 55: Independent Auditors’ ReportTo th
Page 56 and 57: Consolidated Balance Sheetas at 31s
Page 58 and 59: Consolidated Statement of Changes i
Page 60 and 61: Notes to the Consolidated Financial
Page 74: Notes to the Consolidated Financial
Page 79: Notes to the Consolidated Financial
Page 89: Proxy FormPLEASE INDICATE WITH AN
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2006 - Eastern Caribbean Securities Exchange

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