Stanley Temal, Director of the Chemical, Food and Drug Division (CFDD) of the Ministry of Health said the division recently upgraded the local bottle legislation and hoped to have it approved by the Ministry of Legal Affairs, under which falls the Ministry of Consumer Affairs.

He said the CFDD tries its best to ensure that bottled water is safe for consumption. He noted though that within recent times they have not received any complaints about the quality of bottled water. He recalled the last time there was a major problem was in 1999, when a few brands of local and imported bottled water which contained “unacceptable microbiological quality.” Temal said the CFDD conducts lots of tests on both local and imported bottled water. He dismissed claims that there are no standards for bottled water in TT, noting that standards for bottled water are set by the World Health Organisation (WHO). “The Food and Drugs Division,” he said, “has not received any complaints within recent months or the longest while about bottled water either from consumers of the Consumer Affairs Division.”

The CFDD, he insists, carries out tests on most if not all bottled waters in TT. “We know where the problems lie and we consistently check up on producers, but most water producers adhere to the WHO standards. They have no other choice but to adhere to these standards otherwise we remove their products from the shelves.” He noted that when bottled water first became a craze in the country there were many complaints about residues and the smell of the products. Temal said the CFDD has strict testing schemes and looks at the sanitation, processing and producing procedures for bottling water. The CFDD has about 14 inspectors which travel around the country and conducts random tests on bottled water. “If the water is deemed unsuitable or unsafe for consumption, it is removed from wherever it is being sold,” he said. This, he said, all has to do with public health and safety. “Our laboratories inspect the shipments from abroad and then releases it for consumption. Our job is to ensure that consumers get products that are good and safe for their health.” Inspectors also have the added task of monitoring labels on bottled water to ensure that they conform to the specified requirements. Water producers can also get the water tested at independent testing labs like CARIRI. Irma Burkett, public relations manager, CARIRI, said  the organisation conducts regular testing but only for three local bottled water producers and only occasionally for others.

Scotiabank Trinidad and Tobago Limited Results for the half-year ended April 30, 2003.

Scotiabank continues to achieve impressive sequential growth in profitability.  For the half year ended April 30, 2003, Scotiabank’s income after taxation was $99.141 million, an increase of 26.17% over the corresponding figure of $78.580 million in 2002.

Top line growth was 10.61% as net interest and other income increased from $236.939 million in 2002 to $262.083 million in 2003.  Non-interest expenses grew by a paltry 4.65% moving from $119.171 million in 2002 to $124.718 million in 2003. As a consequence, net income before taxes increased by a steeper 16.64% moving from $117.768 million in 2002 to $137.365 million in 2003. Taxation declined by 2.46% moving from $39.188 million in 2002 to $38.224 million in 2003.  This as a consequence of the lower corporation tax rate. The effective tax rate declined from 33.28% in 2002 to 27.83% in 2003.  The bank continues to achieve impressive ratios with return on assets increasing to 2.67% in 2002 as compared to 2.19% for the corresponding period in 2003. The return on equity also increased from 23.05% in 2002 to 24.08% in 2003. The Managing Director in his report stated that the market continues to be characterised by ongoing weak credit demand and high levels of liquidity. He also stated that the strong performance of the Bank to the half year will provide a challenge over the next six months.  The Bank has had some success in increasing its net interest and other income but the major contributors to the increased profitability have been the Bank’s ability to contain non-interest expenses and the lower effective tax rate.

After considering all these factors, we have reaffirmed our earnings estimate of $1.85 per share. At the current price of $22.75, the share is trading at a PE of 12.29.  Thus there is still room for capital appreciation given that the bank has traditionally traded at a higher PE. The Directors have declared a second interim dividend of 17 cents to be paid on July 1, 2003 to all shareholders on the record as at June 9, 2003.

The devaluation of the Jamaican dollar has had both positive and negative spin-offs for companies within the Grace, Kennedy and Company group, one of the more encouraging being a substantial increase in its market capitalisation.

Although Douglas Orane, Grace Kennedy’s chief executive officer, has not discussed the negative effects of the devaluation, he said the group was, overall, now in an increasingly strong foreign exchange surplus position. In addition, individual businesses were demonstrating greater sustainable competitive advantage, manifested in the group’s growing value. The chief executive’s statements are contained in a report to stockholders on the results of the group for the first quarter ended March 2003. As a tangible demonstration of the growing value of the company, Orane said, Grace Kennedy’s market capitalisation at the end of March 2003 was US$243.7 million, calculated at an exchange rate of $56.08 to US$1, compared with US$32.5 million at the end of 1995, when the exchange rate was $39.80. In the report, to be discussed at the upcoming annual general meeting of Grace Kennedy at its Harbour Street, downtown Kingston office, Orane said: “The operations and structure of the group are now substantially different than that of the last decade, and have put us in a stronger position to weather periods of currency movement similar to the one that we are now experiencing.”

The Jamaican dollar has been depreciating rapidly, especially during the past three months, reaching an average high of almost $61.  Orane has also reported that the Grace, Kennedy group earned $5.2 billion in revenues for the first quarter, $702.8 million or 15.5 per cent more than the corresponding period last year.  Net profit increased by $45.7 million, moving from almost $290 million to $335.5 million, an increase of almost 16 percent. According to the report, the Food Trading, Retail and Trading, Financial Services and the Information Services divisions all showed improvements during the period under review. Grace Foods and Services Company has started the production of the Capri Sun range of juice drinks under licence from Wild GmhB of Germany for sale throughout the Caribbean and selected countries in Latin America. Tropical Rhythms and Grace Coconut Water have been receiving increased acceptance within the markets and Grace Zesti carbonated fruit drinks have been successfully launched in Jamaica. In Retail and Trading, Hi-Lo Food Stores has bought Home Town Supermarket in Montego Bay and renamed it Hi-Lo Basix. A contract for a new information system for the division has been signed and is estimated to cost about US$2.4 million.

In Financial Services, First Global and George and Branday continue to display record growth in assets under management and profitability, Orane said. He also said the Trinidad and Tobago Exchange Commission has given approval for Grace Caribbean Fixed Income Fund to be distributed in that country, the official launch for which will take place at the end of the second quarter. Jamaica International Insurance Company, the company’s general insurance company, also “had an exceptional quarter, producing revenues and profits above expectations.” Mr Orane said the results for Maritime Division were mixed. The performance of Kingston Wharves was affected by legal expenses incurred in defending litigation brought by three independent stevedores against the company. Additional expenses were also incurred in preparing for an extraordinary general meeting, which was requested by some shareholders in February and subsequently postponed. The trial arising from the litigation ended on March 13, but judement has been reserved for a later date.

However, the company’s shipping agencies and stevedoring company, Port Services, were all profitable for the quartet. The Information Services Division “had good results,” with increases of between seven and 19 percent in money transfer transactions across its Caribbean locations. Grace Kennedy has forecast a 12 percent increase in after-tax profits this year, but that will be reviewed after the release of its mid-year results. “It’s a difficult thing to say I’m going to save a billion here or there, because some of the recommendations have consequences, which I’m not sure the society would be able to deal with,” Davies told the business executives. Executive agencies like the Registrar of Companies and the Registrar General’s Department, he said, have made a difference, but the more significant savings in the report will come at a much slower rate “than just saying here’s 20 billion, we must can knock off five,” said the Minister. “You could have real chaos within the society.” The Orane Report, which resulted from a task force appointed by the Government in 1999 to examine waste in the public sector, was headed by then Independent Senator Douglas Orane. The Report had suggested seven main areas for chopping waste in the public sector — cutting back on rental for government agencies and ministries, rationalisation of overseas missions, rationalisation of public sector allowances, rationalisation of domestic travelling, rationalisation of overseas travelling, implementation of an advance card system for petrol purchase and implementation of energy audits.

In an article on Greed and the Shareholder Model, Dr Rolph Balgobin made mention of the Sarbanes-Oxley Act (the Act) of 2002 as a piece of legislation meant to effect corporate governance, financial disclosure and the practice of public accounting. The Act was passed by the United States Congress on July 30, 2002 in order to increase fiduciary accountability at publicly-held firms.

This summary highlights some of the main conditions of the Act. Clearly, there is much in the spirit and letter of the Act, which might prove useful to us here in Trinidad and Tobago. It would be interesting to see whether our regulators, legislators and the audit profession take the cue. The Act is intended to hold corporate executives and auditors more accountable to the shareholders of public companies. Most observers would agree that it is the single most important piece of US legislation meant to pull the reins on the operations of many audit firms.  The Act is indeed a very far-reaching and comprehensive policy and this article attempts to summarise four of its main provisions:
Directors & Senior Executives of Public Companies
The Act imposes obligations and restrictions on directors and senior executives of public companies. It requires CEO’s & CFO’s to make extensive certifications with respect to each annual and quarterly report filed with the Securities and Exchange Commission (SEC). A CEO or CFO who knows that a certification is wrong may be fined up to $5 million (USD) and imprisonment of up to 20 years. Other significant provisions are:
*Forfeitures by CEO’s and CFO’s of incentive pay and securities trading profits when there are accounting restatements based on misconduct
* Ban on trading by directors and executives in a public company stock pension during pension fund blackout periods
* Prohibition of “improper influence” by directors and executives in the conduct of audits
* Authority for barring persons from serving as directors and executives of public companies
*Acceleration of reporting deadlines for trades of company stock by directors and executives and 10% equity holders to as short as two days.
Audit Process & Oversight

The Act establishes the Public Company Accounting Oversight Board to oversee independent auditing firms of public companies both in the United States and abroad. Specific independence provisions prevent firms from engaging in non-audit services. The Act requires audit committee members to be independent and to engage independent counsel and advisors. Audit committees are also required to establish procedures to protect “whistle blowers”. The SEC must direct national securities exchanges to prohibit listing of any security of a public company that fails to comply with these provisions. Under the Act the SEC must require annual “internal control reports” subject to management assessment and outside auditor attestation. CEO’s and CFO’s will have to certify as to the effectiveness of internal controls on a quarterly basis.
Public Company Disclosures
The Act authorises the SEC to require public companies to disclose on a rapid and current basis, material changes in financial condition or operations. The SEC must review disclosures made by public companies at least once every three years. Other disclosures will consider:
* Off-balance sheet transactions
* Audit committees financial expertise
*Code of ethics for senior financial officers
*Pro forma financial disclosures
 Enforcement & Penalties

On the criminal side, the Act creates new penalties aimed at corporate disclosures and individual wrongdoers. CEO’s & CFO’s who must now certify financial reports of their companies may suffer severe fines and prison sentences of up to 20 years for failing to comply. The Act mandates that auditors of public companies retain their records for five years after an audit or face possible imprisonment. It subject individuals who alter or destroy records in order to impede an official investigation, fines and up to 20 years of imprisonment. The Act also imposes or increases penalties for other white-collar crimes such as securities, mail and wire fraud. On the civil side the Act contains provisions designed to assist securities plaintiffs. Civil plaintiffs now have an expanded statute of limitations for securities fraud claims – they may bring a securities fraud lawsuit within two years of the discovery of the violation, or five years after the violation has occurred, whichever is earlier. Under the Act “Fair Funds” requirement, any ill-gotten gains and fines paid by corporate wrongdoers will be put into a disgorgement fund to benefit injured investors. Finally, a company will no longer be permitted to discharge in bankruptcy any order or settlement arising from a securities-related action.

THE EDITOR: Over the past weeks, I have been closely observing the reactions and responses of Trinidad and Tobago and especially our community and national leaders to the so-called ‘Condom Giveaway’ conducted by the Advocates for Youth Sexual and Reproductive Health Rights (AYSHR) outside of the Woodbrook Government Secondary School and The National Library.

I thank the group’s detractors for having allowed me some weeks of much laugher as a result of the hypocrisy and lack of basic intelligence that they have quite openly displayed. Do we really believe that our young people are silly? And that if we give them condoms that they will all scamper off to find a partner to engage in sexual intercourse? Please, I beg of you to give young people a break and the benefit of your better judgement. Yes, although, we as parents have abdicated our roles as chief educators on sexuality, we as religious leaders run from the topic of sexuality because it seems as though it is in essence a sin to discuss it and, we as educators having completely omitted the aspects of social development and sexuality education in our students lives, our young people are trying, doing their best to deal with the extremely challenging world of sexuality in which we all live.

It is with this in mind that we as a national community should recognise where we have faltered and not throw stones at AYSHR but embrace the group’s brilliance and innovative approach which has started the ball rolling. I do hope that we do not allow our Trinidadian mentality of the nine day wonder to let this topic die a sweet soft death. Instead, I wish that we heed AYSHR’s call and continue to struggle and lobby the government and those in critical decision making positions to implement Health and Family Life Education (HFLE) with solid components dealing with sex, sexuality and sexual and reproductive health. So grow up my lovely TnT and say thanks to AYSHR for taking the giant step forward for young people in this country and, as good shepherds let us guide and protect them, our dear sheep, the youth of TT.

GABRIELLE  SCOTT
Chaguanas