Welcome to the 4^th and final edition of the Compass Chronicle for 2008. This year has been an intriguing one to say the least! We have experienced a fuel crisis, where oil prices soared to almost $150 a barrel. We then experienced a food crisis, with rioting and export controls as wheat and rice prices tripled.  Then came the burst of the housing bubble and the unravelling of the sub-prime mortgage market, which in turn brought on the financial crisis. Starting with sharp falls in asset values, doubts were raised as to the solvency of major banks.  This provoked a liquidity crisis as banks almost stopped lending to one another, which in turn led to a credit crunch as banks cut lending to usually reliable borrowers in the manufacturing and service industries.  Moreover, we have witnessed abnormal government intervention, through bail outs of so-called market driven economies, this all topped off by the America’s first black President and most recently the Mumbai terrorism attacks.  What a year so far!!!

Out of these uncertainties, the Inter-Ocean group has managed to weather the storm successfully. Apart from a new group look with our rebranding exercise which was launched at the beginning of 2008, there have been a number of changes in the various group companies.

Inter-Ocean Management limited has undergone some major re-engineering. These changes have included the restructuring of the business, process and procedure re-engineering, portfolio allocations, the recruitment of a number of new staff to meet our customers’ expectations and a revamp of our offices. We believe we are well positioned to continue our current growth and we will also be unveiling a number of new initiatives in the new year, with specific focus on our customer requirements.

Inter-Ocean Aviation Finance continues to expand; it seems that the worsening humanitarian crises which have been occurring, particularly in central Africa, has continued to push the demand for our service offering of a fully fledged aviation support product.

Our newest area, Inter-Ocean Venture Capital has finally been formalised. Due to the investment climate at present not being overly conducive to new business, we have undergone some consolidation of our existing portfolio. We expect this area of the business to expand from the 1^st quarter 2009 after assessing the investing climate in the new year.

We have an interesting mix of articles in this edition, but would like to highlight three items which are of particular importance:

Office closure:

Please note that Inter-Ocean offices will be closed from the 29^th December 2008 until the 5^th January 2009. Of course this does not mean that we will not be able to assist you with your queries/business over this period. Please see the contact details of the necessary people under “Other News”

Annual Billing and Audit:

As mentioned in our last newsletter, we will be sending out our annual billing invoices for the year 2008 – 2009. We would be grateful if you could please action payment as soon as possible and for those clients with balances on their accounts, please can you simply provide us with the authorisation to settle the outstanding amounts.

In addition to following up with clients, the client administrators have also been doing their annual audit of client files, to ensure that we adhere to our licence requirements. As a result, you may be asked to provide up to date “Know your client” information, in order to ensure completeness of your existing files. We thanks you in advance for your cooperation in this regard.

Daylight Saving:

We have now entered the 2^nd month of daylight saving in Mauritius, which was aimed at trying to reduce the amount of electricity usage on the island. So far the impact of the initiative has been relatively small in respect of business, however please be reminded that we are now situated at a GMT +5 time zone. This effectively means 3 hours ahead of South Africa and 5 hours ahead of UK time.

Other articles in the newsletter include:

-          What are Acceptable levels of Risk?

-          International Tax Developments.

-          Infrastructure and Trade Services Department – a more detailed service offering.

-          Paying Taxes in 2009 – Further Burdens?

-          South Africa – Revenue Laws Amendment Bill.

-          The Stop “Tax Haven” Act.

-          General News and updates.

Lastly, from all the Inter-Ocean team, we would like to wish you a very happy Christmas and a prosperous new year. We look forward to continuing and building on relationships formed in the past year, as well as creating new ones.

We hope you enjoy reading the newsletter, feel free to distribute to friends and colleagues and if you have any comments or feedback or would like us to cover anything in our next issue, please address them to brendon.jones@inter-oceanmgt.com.  Please also note that in the event you missed any of our previous editions, these can be found at the following link: http://www.inter-oceanholdings.com/A08-newsletter-latest.htm

International Tax Developments

Please see a very high level overview of the most recent tax developments in a select number of countries.

The Stop “Tax Haven” Abuse Act – The Death of Offshore Secrecy?

In a recent article published in the Observer on the 9^th November 2008, one of the first initiatives that the newly elected US President Obama will adopt, will be to crack down on international “tax havens” early in January 2009.

Paying Taxes in 2009 – Further burdens on income earned?

With ever increasing restraints on personal income, increased job losses and continued price increases in consumer goods – the word taxes is once again fast becoming a dirty word.

South Africa - Revenue Laws Amendment Bill

The Revenue Laws Amendment Bill has been introduced before the South African parliament on the 21^st October 2008 by the Minister of Finance.  Among others, the said bill is meant to address the following ...

Infrastructure and Trade Services Department – a more detailed service offering

With the recent reorganization and restructuring of the management business, we once again wish to provide an overview of the accounting and infrastructure service offering.

Treasury Payments                                                                                             

Acceptable levels of risk

The “rules” of doing business has changed since the credit crisis began in July 2007 and the extent of that change is still unknown.  One of the key aspects which have so far been unstated by most of the commentators remains the issue of Risk.

Other News