Sygnus Credit Investments Limited (SCIJMD) Earnings Call Transcript & Summary

Shareholders, Directors, members of the media, ladies and gentlemen, good morning. Welcome to the Seventh Annual General Meeting of Sygnus Credit Investments Limited. My name is David Cummings, and I'm a Vice President here at the Sygnus Group. And it is an honor to stand before you today as your master of ceremonies as we gather to reflect on the achievements of the past year, and to set our sights on an even brighter future. Sygnus Credit Investments or SCI for short, has continued to thrive in a competitive and ever-changing market, thanks to the dedication, innovation and collaboration of everyone in this room and many others. Our continued success as a leader in private credit is a testament to the strength of our vision, the trust of our investors and the commitment of our team. Today's meeting is an opportunity not only to celebrate what we've accomplished, but also to engage in meaningful discussions about how we will sustain and amplify our success in the years to come. From financial performance, the future strategies, there is much to cover, and I'm confident it will be an insightful and inspiring section. Thank you for being here. And thank you for your continued trust and support in our company, Sygnus Credit Investments. Let's make this an impactful and memorable meeting. And so let's get started with the call to order by the Chairman of Sygnus Credit Investments, Mr. Linval Freeman. Thank you.

Good morning, ladies and gentlemen, those present here and those who are online. It's a time for a new day, and this is the day that the Lord has provided. My name is Linval Freeman, and I have the privilege of serving as the Chairman of the Board of Sygnus Credit Investments Limited. It is my pleasure to welcome you all to the Seventh Annual General Meeting of the shareholders of SCI. I'm advised by the company's Secretary that in accordance with the company's articles of association, a quorum is present by proxy and in person. The meeting is, therefore, properly constituted and I now declare the AGM open. So welcome. Apologies, I'm advised by the Corporate Secretary that there are 2 apologies for absence. Mr. Beris Grey, CEO of Sygnus Capital Limited and Mr. Gregory Samuels, Senior Vice President & Head of Investment Banking, Sygnus Capital Limited are both attending and participating in our conference. And I often ask myself and sometimes I ask management what time do they sleep at night that these guys always seem to be out looking for opportunity for you, the shareholders. And so Beris and Gregory are overseas pursuing opportunities as well as promoting SCI and what we do. I would like to acknowledge all the members who have joined us today whether in person or online. Your presence signifies your dedication to our company, and we value your interest and support. Each year, we look forward to this opportunity to meet with you and to share SCI's achievement over the past year. Similar to the approach taken last year, the directors have agreed to also have a hybrid meeting to ensure board participation from our shareholders -- sorry, to ensure broad participation from our shareholders, offering the flexibility to attend either in person or virtually. The meeting is in Saint Lucia and we have a satellite location in Kingston, Jamaica, where we are currently located. Shareholders will be able to view the proceedings of the AGM, vote on resolutions and submit their comments and questions by logging on to the e-platform used to facilitate the AGM. The instruction to access this e-platform was provided by the Shareholders' Advisory Notice released on the Jamaican Stock Exchange website and on various social media platform. For all members joining us online, the registration link for to accessing the AGM was circulated. Registration will remain open throughout the duration of the meeting, allowing individuals to register and admitted at any time. The notice of meeting and the proxy form were dispatched to all shareholders on record in accordance with the company's articles of association. If there is no objection, I propose that the notice of the meeting be taken as read. Before commencing today's proceeding proceedings, I will give a very brief overview of the company. Most of you already know what the company does. But for those new shareholders, I'd just like to go over a few things. So SCI is an international business company incorporated under the international business companies at IBC of St. Lucia, which is registered office at 20 Micoud Street, Castries, St. Lucia. SCI is a specialty private credit investment company dedicated to providing nontraditional financing to medium-sized firms across the wider Caribbean region. Nontraditional forms of credit are more customized and flexible than traditional financing. Consequently, the company offers an alternative channel through which medium-sized firms which are typically underserved by traditional forms of financing can access capital to drive the expansion and growth. The company target mostly portfolio companies operating across a broad range of sectors, including manufacturing, distribution, financial services, energy, real estate, transportation, infrastructure and business services. These portfolio companies typically have revenues between USD 5 million and USD 25 million. By virtue of the shares delisted on the main markets of the Jamaica Stock Exchange the company is subject to all laws applicable to issuers of securities in Jamaica and company listed at the Jamaica Stock Exchange. I would like to introduce to you our Directors of the company joining us this morning and sitting on the platform, we have a few of them. So to my immediate left, Dr. Ike Johnson, then you have Horace Messado next to him, then Mr. Ian Williams, and then Mr. Damion Chin who is also sitting there. Other directors, Hope Fisher and Peter Thompson have joined us virtually on to our line. I'd also like to mention Mr. [indiscernible] who is our Company Secretary and who is sitting in our St. Lucia office. I'd also like to recognize Ms. [indiscernible], our representative from our Secretary, also sitting in the St. Lucia office and who is serving as our recording secretary today. The Directors who're joining us virtually are able to fully participate in the meeting and to answer any questions that may be also posed to them. Also in attendance are members of the investment management executive and senior management team. Sitting on the podium with us is Jason Morris, Chief Investment Officer of Sygnus Capital Limited. Jason, welcome. Other executives include Cerilin Hudson, Chief Legal and Compliance Officer and you see Cerilin walking around making sure that things are in order. We also have David Cummings who is the Vice President and Head of Real Estate, who started the meeting as the Chair. We also have Elizabeth James who is Head of Wealth and Monique Anthony, I'm not seeing Monique, Monique is also in attendance, and she is the Chief Financial Officer. We have Yashi Hall, Vice President and Head of Risk, Mr. Gregory Hines, VP, Assets, Investments and Projects; Mr. Ryan Landey who is AVP Investment Management and Andrew Foreman, AVP Legal Counsel. Several other key members, I should say, are also present at the meeting, and so this is not exhausted. I would also like to acknowledge the presence and maybe to show your hands as I call your name, and Damion Reid, partner of KPMG, if you're here. Not here yet. Okay. [indiscernible] Okay. Welcome. He's also a partner from KPMG and also I've listed Daniel from KPMG. Okay, who is one of your audit managers. I'm also informed that representatives from our registrar and transfer agent, Jamaica Central Security Depository are also present here with us. And I have Ms. [indiscernible] as well as Ms. [indiscernible]. I'd like to also welcome members of the press and also nonshareholders who may be present with us, both in person and also online. Throughout the meeting, I will refer to Sygnus Credit Investments as the company or SCI interchangeably. You have been provided with a copy of the agenda which sets forth today's proceedings. So you may just look at the agenda and see what business we are conducting today if you haven't done so before. Minutes of the meeting. The Directors have confirmed that the minutes of -- the last AGM held on the 17th of January 2024 are true and correct recording of that meeting. Copies of the minutes of the meeting are available for viewing on the company's website. The purpose of the meeting. The purpose of the AGM, and I'm just reiterating this because I know everybody present and who are online already this, is to receive and consider the annual financial report of the company for the financial year ended June 30, 2024, together with the auditor's report. This AGM is also to consider and if thought fit, pass with respective resolution duly settled in the notice of the AGM dated 20th of October 2024 and duly signed by the Company Secretary. The issue of proxies. The Company's Secretary has advised that proxies have been lodged by 47 shareholders holding approximately 240 million ordinary shares and representing approximately 41% of the ordinary issued proxies of the company. Of the total proxies logged, 21 shareholders holding approximately 61 million shares and representing 10% of the ordinary issued share capital of the company have appointed the Chairman, meaning me as the proxy holder. For remaining proxies, the proxy holder must attend the meeting in person or virtually to represent a member. Those proxies will be deemed valid once you registrar has confirmed the attendance of the appointed proxy holders. Meeting procedures. Before we proceed with the formal business of the AGM, there are a few procedural matters that I'd like to bring to your attention. And the first one is voting. Before we move to adopt the resolution, I'd like to outline the procedures for voting, casting of voting in person for persons attending in person. Shareholders' physical attendance will vote by show of hands. Once we get to the business section of the meeting and the voting and the resolutions is taking place, I will read each resolution and therefore table that resolution for adoption. Shareholders will be asked to vote for the resolution via a show of hands. Shareholders who are for the resolution will raise the hands followed by shareholders who against the resolution. The scrutineer present will take account of the numbers of hands raised for and against the resolution. And this total will be added to the shareholders who voted virtually or by way of proxy. If a voter abstains, their votes will not be included in the count. Each shareholder or proxy present would have received either a red or a yellow wrist band. When raising your hand, to signify your vote, please ensure you show the wrist band to ensure that your vote is properly counted. Those are attending virtually. Shareholders attending virtually will vote using the e-platform that I referred to earlier. During this resolution, you should wait for the option to appear on the screen or click "Vote Now" on your screen. Once the resolution is on screen, select For or Against option, then select Submit Vote at the bottom of the screen. You will be asked to confirm your vote, select Yes to confirm your vote or No if you want to change your vote. Proxies. The Company Secretary has advised that a number of valid proxies have been received as indicated before, in relation to these resolutions. In relation to the proxies where the Chairman has been appointed to vote, I will vote all proxies in accordance to the directions provided. Where undirected proxies -- where proxies have been given without direction, I will vote the undirected proxies in favor of the resolution. For the remaining proxies, the proxy holder must attend the meeting in person or virtually to represent the member. Those proxies will be deemed valid once the registrar has confirmed the attendance of the proxy holder. Proxy holders are also permitted to cast their votes online in cases where the shareholders have not indicated their vote on the proxy form. Upon confirmation, the proxy holder identified by the registrar will be granted permission to participate online. Mr. Andrew Foreman, Andrew can you raise your hand? Yes, Andrew will act as scrutineer and will confirm the vote by the show of hands as well as the total votes for each resolution, thereafter, voting will close and I will announce the results thereafter. Question and answer. We will have 2 question and answer segments. The first segment will be prior to the adoption of Resolution #1, which is the adoption of the audited financial statements. The investment manager will make a presentation, and I think Jason is for that and the company's performance and the outlook of the company. At the end of the presentation, we will first -- we'll have the first question-and-answer segment where shareholders may ask questions. We have allotted approximately 15 minutes in this segment to address your questions. Following the votes and the remaining resolution, there will be a second question-and-answer segment where shareholders can ask questions related -- we've allotted another 15 minutes for this segment. Mr. David Cummings who started the meeting, will moderate the Q&A segment. For the shareholders attending in person, if you wish to ask questions, you should indicate by show of your hands, as said before, and our host will provide you with a microphone where you will state your name and your status as a shareholder for the minutes. For the shareholders attending virtually, if you wish to ask question you should, 1, select the Q&A option that is located on the screen, enter your first into the text box provided, select the Send button located to the right of the text box to pose a question. The question will be read aloud by one of our hosts so that the other shareholders can hear the question. Shareholders are asked to limit their questions to 2. You have some shareholders who might have a number of questions. Hopefully, the question cannot be answered or covered by other shareholders to give others an opportunity to pose questions and to ensure the AGM's agenda can be completed on time. Questions and comments from the floor should pertain to the specific matter under consideration, right? So we don't want any questions to something else and not a matter that is not on the floor at the point in time. With this background, we will move straight into the formal business of the AGM as set forth in the agenda. In order to conduct an orderly meeting, we give all shareholders an equal opportunities to participate. And so we will follow the agenda as outlined. I will now present the formal business of the meeting. We will take remaining resolutions in the order as outlined in the notice to the meeting. Audited financial statements. In accordance with Article 190 of the companies amended and restated Articles of Association, the company is obliged to lay before the meeting the audited financial statements together with the reports of the directors and auditors which are contained in the company's annual reports for the year ended 30 June 2024. The audited accounts were circulated before the meeting for discussion. Before inviting discussions, however, on the report, I would invite our audit representative to the podium and also our investment manager to make a presentation on the audited report and the company's performance, respectively. Our external auditor KPMG have given their opinion -- a clean opinion that the audited financial statements, and when I say clean opinion, there are no qualified issues, no matters -- no outstanding matters presents a true and fair view of the financial position of the company as of the 30th of June, 2024. And so can I invite now the partner from KPMG who will be presenting the report of the auditors. Can I invite you to the podium to present the report. Thank you.

Good morning, everyone. Many of us are in the room this morning. So my name is Damion Reid, Auditor from KPMG. So as you are aware, because this company is incorporated in St. Lucia, unlike the Jamaica Companies Act, there is not a requirement for the auditors to read the auditor's report. However, the auditor's report is important to the shareholders of the company. And as such, I will read the specific parts that are of importance starting from Page 47. Independent auditor's report to the members of Sygnus Credit Investments Limited. Opinion. We have audited the financial statements of Sygnus Credit Investments Limited, a company, comprising the separate financial statements of the company and consolidated financial statements of the company and its subsidiary, collectively The Group as set out on Pages 55 to 126, which comprises the company's and the Group's statement of financial position. As of June 30, 2024, the Group's and company's statement of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended and not comprising material accounting policies and other explanatory information. In our opinion, the accompanying consolidated and separate financial statements presented yearly in all material respects, the financial position of the Group and company as at June 30, 2024; and the Group's and company's financial performance and Group's and Company's cash flows for the years ended in accordance with IFRS accounting standards as issued by International Accounting Standards Board, IFRS accounting standard. I'll now turn to Page 48. Key audit matters. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated and separate financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole and informing our opinion thereon. We do not perform a separate -- provide a separate opinion on these matters. Valuation of investments. The valuation of the Group's and company's investments measured at fair value to profit or loss amounting to USD 57,439,576 (2023: USD 47,512,684) for the Group and USD 27,148,453 (2023: USD 22,628,408) for the company includes significant assumptions and judgments about the performance of the counterparties over the tenure of the investments. The more significant are those related to expected cash flows and market comparable price, book value multiples. Furthermore, the valuation methodologies rely on observable inputs such as profitability, achievement rates, risk adjusted disclosed rates and controlled premium, which have a significant impact on the results resulting in values of investments. These adjustments and assumptions could result in estimated fair value that are materially different from actual transaction values. You can refer to notes for the 26B of the financial statements. All procedures in this area in the main included the following to address the key audit matter. We tested the design and implementation of the Group, investment managers review and approval controls over determination and competition of fair values. We involve all valuation specialists to assist us in assessing the reasonableness of the valuation methodologies employed and the fair value conclusion, we consider the requirements of the financial reporting framework and tested source data and underlining assumptions utilized to value the investments and evaluate impact of any variation. We also assessed the adequacy and clarity of the disclosures, including the degree of estimation uncertainty involved in determination of fair values in line with the requirements of the financial reporting framework. Measurement of expected credit losses on financial assets. The financial reporting framework requires the Group and Company to recognize expected credit losses, ECL, on financial assets and determine nature of ECL is highly subjective and requires application of significant judgments and assumptions. The key areas required -- sorry, the key areas requiring greater management judgment includes determination of increase -- significant increase in credit risk, SICR, the probability of default, the collateral value, loss given default, exposure at default and the application of forward-looking information. The identification of a significant increase in credit risk is a key area of judgment as the criteria determined whether a 12-month or lifetime loss allowance is recorded. The incorporation of forward-looking information reflects a range of possible future economic conditions, significant management judgment is used in determining the economic scenario. Management considered the following: the qualitative factors that result in change in SICR increased uncertainty about potential future economic scenario and their impact on credit losses. The use of these judgments and assumptions increases the risk of material misstatements and is, therefore, a key audit matter. You can see more details in notes 4c, 5 and 27b of the financial statements. Our audit procedures in this area in the mean include the following: obtain an understanding of the model used by the Group and the Company for the calculation of expected credit losses through evaluating related models, documentation, inquiries and walk-throughs. This further included consideration of the governance over the determination and approval of key assumptions, judgments and assumptions, tested the design and implementation of key controls performed by the Group over the competition and approval of the expected credit losses. As said, on a sample basis, the completeness and the accuracy of the data used in the model by tracing selected significant data back to relevant source documents and through the underlying accounting transaction. Involved our financial risk modeling specialist to assist us in evaluating the appropriateness of the Group's impairment methodologies, including SICR criteria, use and independently assess the assumptions and probability of default, loss given default, exposure at default and incorporation of forward-looking information. We also assessed the adequacy and clarity of the disclosures under the key assumptions and our judgment considered the requirements of the financial reporting standards. And finally, the audit partner on the audit resulting in this independent auditor's report is Damion Reid, KPMG, Chartered Accountant Castries, St. Lucia, September 26, 2024. Thank you.

Damion, thank you. What I'd just like to interpret and summarize what Damion just said, right? Basically, what he has said, he has examined our book and all the numbers that were presented to him, he has no problems here and numbers that are presented in the financial statements are fair and accurate. That's basically what he was saying all along. Right, Damion? All right. No, for the fun part with Jason coming up to make a presentation. And I'm always happy when Jason comes up because as a Director and a shareholder myself, I feel very happy when I hear the good news because you have to consider some of the things that are -- every year, we have record performance. And I don't think this year is an exception to what we heard last year. This year, it gets bigger and bigger and better and better, Jason?

Good morning to everyone in the room, online wherever in the world you are. It's 2025, and I'm happy to be alive, and I really mean that. I hope you are as well. Okay. So just want to provide a few comments on the performance of SCI during this financial year and give some update as to what would have happened to the performance of the Company subsequent to the end of the financial year which is actually publically available information. And then finally, give some insights on the strategy and future planning. So I will start with our dashboard. First thing, [indiscernible] to spend a little bit time year but it will create a lot of context for what's to come. First and foremost, we'd like to really thank all of you shareholders and all of you who are thinking of becoming shareholders like myself. Well, I'm a shareholder already, so like to thank you in advance, right? Because without shareholders who really believe financially in the design and strategy of SCI wouldn't be here. So I mean we want to thank you, say thank you to yourselves. And you'll be talking a lot, so that's a [indiscernible], right? So the first thing I wanted to highlight is the fact is that the [indiscernible] financial year represented record performance for SCI. We have had the first time in our history exceeded $6 million in net profit. All right. And this is not just about the figure of $6 million. It's really about what I'm going to turn earnings for. And as you see throughout the presentation, what I mean in this earnings call is basically all the engines are working in the firm, our tools and [cheer], they are very solid, and what we intend to do is built upon that very solid foundation as we go forward and we'll discuss this some more. Second item I want to highlight, which was part of doing for the first is Puerto Rico investment that we did in 2022 by purchasing Acrecent Financial Corporation as the name was then and the name has changed to Acrecent Financial LLC, but as you will see throughout the presentation, this company has been transformed, thanks to the tremendous leadership and management from the team in Puerto Rico led by James Connor and assisted by our very good Dr. Ike Johnson. That company has transformed itself. We have gone through first year reorganizing that company and as you see the earnings for the company increased by almost 5.7x increase in net profit. And this is not just a one-off incident. It is a transformation of the firm and setting up that company for a tremendous future performance. Third thing I would like to say is that since I started SCI, SCI has deployed an incredible USD 529.6 million to companies across the Caribbean region, as our entire platform, including acquisition in Puerto Rico and what they have done since the acquisition date on February 28, 2022. Of that amount, right, during the financial year, which is why we are here, SCI would have deployed a record of USD 65 million in the financial year. That's the highest we have ever done. Puerto Rico would have deployed USD 87 million, the highest it has ever done. And SCI would have deployed the highest amount of money to our single investment company, which was actually a Jamaican firm of USD 22 million. So those are very substantial achievement. So once again -- so during the course of the financial year, between SCI proper and the Puerto Rico, this is the SCI-owned majority shareholding, 95.6%, we would have done USD 152.2 million in one single year deploying capital to companies across the Caribbean region for faster growth innovation. Fourth thing, and I want to refer to this as, you could call it, JC -- I could call it JSE public market private credit partnership, right, because since SCI started cumulatively, we have raised USD 130.7 million from the public markets using the Jamaica Stock Exchange to raise capital and last year, when we were standing here, we would have said that we would have raised a record USD 60 million from a public offer. And this year, again, just trying to -- just said I think yesterday, we would have raised USD 33 million in the largest perpetual preferential in the history of Jamaica Stock Exchange. So we really thank shareholders. I mean, when SCI started, it was tremendous support from institutional investors primarily, such as pension funds who continue an amazing job of supporting SCI. But now, we have taken the message to everybody on the street so to speak because we everybody to eat our food, so to speak. And so I'm participating in good cookings. And that's what we do at Sygnus. Three things that I want to highlight is that last year, we were challenged around increasing distribution to shareholders, increase the dividend to -- SCI is one of the highest paying dividend -- highest dividend paying firm on the Jamaica Stock Exchange, so I'm happy to report that we listen, so to speak, and it complies so. During the financial year, we would have done USD 3.2 million, which is annual record in terms of shareholder distribution. And just to top icing on the cake, we [indiscernible] SCI went through COVID just like everybody else. We have never ever, ever, ever missed [indiscernible] and we don't intend to, so. Lastly, but by no means least, we can talk a lot about originating transactions and declining capital, et cetera. The proof of the pudding though is in the consuming, right? So the question is of all the capital that we have deployed, how much have we left, how much shareholder capital have we left from [indiscernible]. And SCI, we have lost on an annualized basis, which [indiscernible] 7.5 years since we have been operating and planning capital and take how much total amount of money that we have lost and divide it by the number of years to get the annualized last rate for simplicity. And that lost rate is a grand 0.23%. In other words, we have only lost on average per year 0.23% of the capital that we are in this year. That's a good thing. It is very, very tiny. And if we compare that to anybody who knows anything about credit, that is incredibly a small number. So if we take the platform itself, which includes the Puerto Rico operation and take all the capital that has been deployed that's USD 529.6 million -- USD 530 million, take all the capital that has been deployed and say, well, how much money have you crystallized unless it's a brand 0.16%. All right. That's the end of my cheerleading for clapping. You will have to clap your own going forward. All right. So I'm going to go through this slide very quickly. So this slide is showing the general performance in the financial year. As you can see, there was a record net profit of 17.3% to $6.03 million. Total investment income, which is our core revenue, a record $10.1 million, up 13.6%. Net investment income $5.28 million, also up 3.9%. Earnings per share up 18.4% to a record USD 0.01. And dividends paid actually before $3.15 million to be exact, up 23.6% over last year. Now what did that drove this performance? Well, one main thing other than having a much bigger balance sheet from raising the USD 50 million last year this time was that Acrecent Financial LLC, former Acrecent Financial Cooperation has been transformed due to some changes that would have made to the firm, which were effected on July 1, 2023. So June 30, 2024, makes one year to the day that the company would have been transformed. And as you'll see on another couple of slides, the firm would have generated a record USD 4.18 million, which is real money, it's not paper money. However, despite generating that amount of capital -- that amount of profit in SCI's financial statement besides from a -- not consolidated, we have some fancy models to determine what was expected value that SCI would get from the investment, which [indiscernible] when it comes to how much capital you can get return or when that company start to pay SCI dividends, which will be some time soon. Only $1.3 million of that amount was actually reflected in SCI's audited financial statement. In other words, the company made a lot money and only a portion of it was reflected in SCI's financial statements, which means as we go through time, you should expect that more and more of that money is going to start reflecting in SCI's financial statements and so you should see the benefit on that. When I get to the Q1 results, you will see what I mean. And due to this restructuring, the Puerto Rico company would have also had a tax credit of USD 632,000 which is a very good benefit to have. And just a note, list credit is that the tax credit is part of our overall custody that the company will have access to based on US tax laws, based on Puerto Rico's tax laws over the next 13 years, and these USD 632,000 represent a small fraction of that. So if Acrecent continues to do well, we will continue to see more and more of credit, which is good for shareholders. Why? Because it needs more tax -- more [indiscernible] in these pockets of shareholders. So moving on to the next slide. I'm going to be very brief here. This slide shows you the cumulative amount of dividends that SCI has paid since inception, and yes, we did not miss any dividend payment during COVID despite -- at that time, being a company that was about 3 years old which is a very rocky road for any company that is just 3 years old, it's a 100-year event for the stock economy shut down et cetera. We are now at about point, right? [indiscernible] taking about USD 1 million about $2.25 billion [indiscernible] were checking. That's a lot of dividend to give back to shareholders. So for those of you who are not shareholders, I encourage you turn some of billions that SCI is given back to shareholders. A few comments on Acrecent. I'll spent about 2 minutes here because I want everybody to understand sometimes you read our reports, you read the financials, or you might go see a stock broker and the analysts do a report and give you the report because they are experts, but I want you to understand it directly from the [indiscernible]. So a financial in terms of -- I'm just giving you some highlights information -- we're going to start from the ground up, so starting from the bottom page, we see Acrecent Financial LLC. That company was acquired in 2022. We now own 95.6% of that company. So you can see that for the financial year ended June 2024, the company earned USD 4.18 million in net profit, right? That was the net profit the company earned. And you can see that in its previous financial year before the restructuring, it only earned USD 733.8 [thousand]. So that 5.7x multiplier came from in terms of the difference between how much a company was earning at a [indiscernible] and how much it's earning that year. And by the way, I never earn more than say USD 1 million before in the history of the company. And the company is 21 years old. So that company, when you look at the consolidated financials, the company would have generated a net profit of USD 3.69 million. And then above that company, have another company that owns those shares. Sometimes nothing to do is too much, right? They're trying to focus. So from USD 4.18 million, you consolidate as USD 3.69 million. That's where the consolidation comes. That USD 3.69 million, we have to do our fair value of that. So that company even though it made USD 3.69 million, we can hit the USD 3.69 million and take 95.58% and put it on SCI's balance sheet. We have to do our valuation of it, right? And that valuation includes looking at companies that are publicly listed globally and taking some risk market multiple ratio and then applying those multiple. We did all of that, which has been approved by the auditors by the way, we only get USD 1.3 million flowing through the income statement of SCI. And this is very important for you to hold on to that information because it will come up again. So that USD 1.3 million compared to USD 322 million that flowed through SCI's income statement the previous year. So the key takeaway here is we have our investment in Puerto Rico, that company made USD 4.8 million. When you look at on an SCI's income statement, only USD 1.3 million is what we see according to how we have to do the evaluation on this, right? So the key thing is the company in Puerto Rico is making lot of money, right? Now in terms of what's driving how this company is making money? Or why is the company making lot of money? There are 2 main things, right? The first thing is that we restructured the way other company operates. So before the company administered with our employees operating a company and generating profit and [indiscernible]. And we went in, I should say, Dr. Ike Johnson, the [indiscernible] specialist, the gene of that cooking, the innovator, basically, [indiscernible] way that we want to do this is to treat it just like how we have SCI operating, which is we have a balance sheet that are -- under balance sheet either investments in private credit instruments and we have a manager who is managing the company. And that manager paid a partner fee, 1.5% management fee, the operating company and he could make money for our shareholders. And by doing that level of restructuring, 2 things would have happened. One, again, working from the bottom to the way up, the operating expenses at the company would have been permanently reduced. So before management expenses from being internal managed company in the previous financial year, it was USD 3.48 million. After this restructuring exercise and remodeling the company to exactly like how SCI, as you know, it is operating, the cost in 2024 for the full year was $1.2 million. So effectively, we would have totaled USD 2.28 million in cost expenses for the firm and that goes -- so that money goes directly to what you probably [indiscernible] and that's the industry, that's really cash, cash that you don't want to pay, right? There is a big change in the operating cost structure of the firm, big, massive. Going further the page, the next thing what you could say is -- what are the negatives from doing restructuring and that the company is [indiscernible] that they no longer earn because of the restructuring and they would have earned USD 688.8 thousand in the previous year, which is on average that's what they would have been doing. But no, this [indiscernible], right? So the net benefit [indiscernible] cost, but to give up [indiscernible] come out way ahead again. So that is the extra [indiscernible] change. It's massive benefits to shareholders. The second part is changing from a corporation to a limited liability company and based on Puerto Rico tax laws, this meant that the company has a completely different tax structure to the effects where you for the financial year would have saved about USD 1 million in taxes. So net-net, USD 2.76 million was a net impact from those changes. And as I said before, these are permanent changes. So going forward, we always have a lower cost structure by the Puerto Rico business than we would have historically, and we will have a more optimized company. So this is what we mean when we say the earnings for the Puerto Rican business is increasing. So now I will pass through the rest of the presentation. This slide is showing you how good or bad management is doing in terms of the expenses. So for every dollar, our revenue that is generated, how much of it goes out in expenses. And we took [indiscernible] 40%, no more than 40% which is international benchmark. You can see that for the financial year, we were at 47.7%. So we need to get back in there. A couple of things would have affected that, one being the large capital that we raised which we weren't expecting to raise, which we raised and we have to pay broker fees for those to kind of [indiscernible] in capital, right? Without the deploy of that capital, the revenue based on the firm is going to be much higher, and therefore, this thing will come down. In fact, during the first quarter, it fell all the way down to 24%. And the second part of the slide is showing a management expense ratio, which is taking operating experiences and dividing it by the [indiscernible] this firm. And we think that, that should not be greater than 2.85%. It was well below the threshold at 2.4%, and that is very, very important because it means for every dollar of assets that we have on the balance sheet, only 2.4% of it in terms of expenses is going, which means the rest it remains to give you by dividends and to reinvest and go [indiscernible]. Balance sheet summary. The firm has USD 22 million in equity and of that amount, $60 million was the shareholder capital. So we have basically USD 12 million in earnings. And with the recent $33 million capital raised 40% preference share, it means that you're looking at a USD 100 million company in terms of capital base. So I think in short, SGI, I could say, has equity capital of about $100 million, which will be the first. And total asset was almost USD 198.5, a new record. In terms of balance sheet KPIs, all of the metrics are within the threshold limits in terms of debt to asset, asset coverage ratio, debt to equity and nonperforming investment ratio. So now I will give you a quick overview as to what has happened since in terms of the Q1 financial results. More of the same is recorded on every level, recorded profit USD 4.92 million or [indiscernible] hold on to a previous slide on Puerto Rico, where I said that the firm made USD 4.8 million and only USD 1.3 million flowed through SCI's income statement, right? So in this instance, for the first quarter, Acrecent actually made about USD 1.58 million in 1 quarter, which means that if you follow because [ 1.50x 4 ], if you were to just say you wanted to do some forward-looking would give you a figure that is greater than $4.2 million in the previous financial year, right? So it's making more money year-over-year than it did last year. So because of that, the same math that I showed you on those 2 slides is what resulted in the net profit of SCI jumping so massively during the first quarter because now the amount that flowed through to SCI's income statement was $2.67 million for those 1 quarter alone versus the $1.3 million that you saw for the entire financial year last year. And that's because the company continues to grow. Not sure what else to say here. Well, one thing I want to say is that -- so if you take the 5 quarters since the reorganization or restructuring of Acrecent how that could occurred, the company has generated $5.17 million in net profit. So in 5 quarters, it has generated $5.17 million. But the amount of value that are shown up on SCI's income statement is only $3.97 million. So again, we're not being overly aggressive with stating what's the value of this Puerto Rico investment, right? Because it generates way more money than what is showing coming through on our income statement. I want you to really focus on that because as we go through quarter-to-quarter to quarter, this number will move up and down a little bit, but you can see that the company continues to do what we would have done the acquisition to do which we are pretty confident of, then this is going to be a major driver for SCI's financial because it's in a $100 billion economy, which means that it can do many multiples of capital deployment versus what SCI can do in all of the English-speaking Caribbean territories. So just laying the groundwork for those of you who want -- who are not yet shareholders and thinking of becoming a shareholder. That's what you would be buying into. Now a quick summary here. I'm not going through this slide. I just want to highlight we are the first red circle, $2.672 million. That's just showing you how on SCI's income statement, the money from the Puerto Rico business is filtering through. So in terms of activity for the quarter, investment portfolio would have increased to $192.7 million, up from $152.7 million last year. The number of portfolio companies would have been 37 million versus 40 million. New investment commitment, $6.32 million versus $7.83 million. So investment deployment would have slowed down. But subsequent to the end of the September quarter, they would have speeded up. So you normally have like little fluctuations in how we deploy capital. Yield on the portfolio was 15.3% versus 14.6%. We were in a very high interest rate environment. We are now moving into a lower interest rate environment. So we expect this to come down over time. Average tenure of 1.4 years versus 1.7% and dry powder, not a lot of money at $2.38 million, which is why we did the capital raise. Important point on this slide is that we would have gotten approval for a $10 million facility from World Business Capital, which is guaranteed by the United States Development Finance Corporation, which is an arm of the U.S. government, which means SCI's first, call it [Technical Difficulty] transaction that the DFC is doing in Jamaica as constituted as DFC. So that is actually a big thing for SCI. This is Acrecent's portfolio summary. I'm not going to go through that. I want to highlight the fact that, as we said before, during the financial year, the company deployed a record $87 million. And during the first quarter, they deployed $17.3 million. So the rate at which they are deploying capital is pretty rapid. Expected credit loss, you can see very steady, still below 1%, which is exceptional for a private credit company of the size of SCI. And final slide because I'm getting the wrap-up signal from our astute compliance and turn around there. Four things I want to leave you with. First thing is that Acrecent Financial Corporation is real, it's here to stay. It's going to drive SCI's growth. How do we know this well? It has an exceptional management team of about 30 [indiscernible] with a tremendous track record in excess of two decades. And with the assistance of Dr. Dr. Ike Johnson and the rest of the Sygnus team, we are driving the scaling of this business, and we are seeing that happening in real time. They increased their revenue and their net profit almost sixfold in the last financial year at the start of the current financial year in the first quarter, net profit is up 4x already. And we expect that this will continue as we go through the quarters. They also have increased the amount of dry powder that they have access to. The dry powder that they have access to almost doubled. And so by having more dry powder and by the way, dry powder means capital to deploy into new investments if you are new to alternative investments. So by having more capital to deploy, it means that they can have a faster rate of growth. And so we expect that growth to continue, especially given rates have started to come down. The cost of financing, which is very rate will actually come down and that this will benefit them. Acrecent is going to be a major, major driver of SCI, which is why we not only did the acquisition, but we increased our stake in the company 3x since the acquisition. Second thing is our strategic growth path. So we said we wanted to participate in about $1 billion worth of private credit transactions. We are halfway there already because we have gone $500 million since we started operations in terms of involvement in private credit transactions. So only a little bit less than $500 million to go, right? Core revenues to get up over $12.5 million. That's a work in progress. As you can see by the fact that the base earnings of the firm is rising. [indiscernible](65:57) Return on equity. We need that to be in double digits because we want to pay out a lot more dividends, and we want to grow a lot faster and the share price to go much, much higher. And I'm going to have a point on the share price in a minute. So that's in progress. Earnings per share, we are targeting 20% annual growth for the financial year just concluded, we ended at 18.4%, which is almost get the A, get a B+, but we're pushing there. For the first quarter, we exceeded it by some distance. We over 20% based on the net profit for Q1. So we hope to keep that trajectory. 5% dividend yield in steady state based on the APO share price, which is the last time we did an equity offering. So based on my math, we are now at 5.2% on the APO price, and you guys can check it yourself and tell me if I'm wrong. But I also want to highlight the fact that the regular yield based on last Friday's closing price of SCI U.S. dollar shares is actually 7.7%. And I need to spend, sir if you give me 1-minute because I need to spend some time on this because I've seen a lot of reports and I see a lot of social media people doing the analysis and calculating dividend yields. And I want you as shareholders, our prospective shareholders to do the calculation for yourself, right? So SCI has paid out USD 1,307,610 dividends, meaning those who hold the U.S. dollar share class, that's the amount of dividend that you got to divide up among yourself. So the way how you know how much that yield is well, how many shares exist in U.S. dollar share class. And the number of shares is 242,599,235, give or take, which if you take the 2 numbers and divide them, you get $0.00539. So that's a dividend per share if you hold -- if you are holding, you going to buy the U.S. dollar share class. So if you take that math and divide the dividend per share by the stock price, which was USD 0.07, you are going to get 7.7% SCI U.S. dollar shares and the public market is trading at 7.7%. So if you go down at [ USD 0.07 ] is 7.7% yield we cashing on because the dividends that we are paying, right, per year. If you take the JLR share class, we paid $289,193,057 in dividends. How many shares exist? Well, 337,964,858. You do see math again, you are going to get 6.7% and this does not take into consideration the depreciation that happened between the day 31 dividend and the second dividend, right? So all I'm saying is those dividend yields are much higher than what I see people computing saying is 3% than 4%. I'm not sure what math they're using. But I want you to understand how you should compute a dividend to yourself. So you look at the stock price, just go and look in the auditing financials and check how much dividend actually paid and take the number of shares for the U.S. dollar share class or number of shares JLR share class, divide it by 2 and that's how you get a yield. So 7.7% for the public traded stock is very close to the 8% dividend that is being paid by the perpetual preference share that we just issued. So if people bought and oversubscribed so much for the perpetual preference share, why is the publicly traded U.S. dollar shares and JLR dollar shares trading at those prices. It means that people don't understand what the value is. I just gave you the value. Okay. We continue to try and raise USD 100 million, and this is a revolving -- every year, we still try to raise USD 100 million. So it's not -- we try to raise $100 million and then we stop constantly, right? So we continue with negotiation and discussion with other partners to get additional capital. Third point is new business. The one I'll focus on here is really -- so we invested USD 1.5 billion in another Puerto Rico venture, which is a business impact fund in Puerto Rico. So the company actually takes the name of Sygnus Credit Investments Business Impact Fund. Sygnus Credit Investments was a sponsor. So as this investment germinates, we will bring additional information to you on it. Second thing here, though, on the new business is that we are in the process of working with a strategic partner to build out a dedicated financing solution business, which once that gets up and running, we'll provide additional information to you. So what I'm trying to say is that think of SCI as just like any other normal company, we do private credit investments, but we can and will do investments in other private credit verticals that will generate additional profits and dividends that benefit you and also our shareholders. Bear that in mind. Finally, share buyback program. Share buyback program continues. We will buy back shares. Once we are out of blackout period and not under restrictions when we think that the shares are exceedingly cheap. And we will continue to do this on an ongoing basis. I have nothing further to add other than the fact that since inception, we have bought back 10.4 million units, which is approximately 1.8% of the float, which last time I checked, I think -- and it can be corrected if I'm wrong, maybe the largest percentage float buyback or one of the largest percentage buyback on the Jamaica Stock Exchange. Thank you very much.

Thank you Jason. I don't know if I can summarize what you just said, but I'll try. So last year, we had a profit of over $6 million, $6.03 million for the first quarter this year, our profit is over $4 million. So we are going for another record profit this year. And the record profit means, record dividends you know what it means. And he actually says that the shares are trading at a very low price. This is a good time to buy in a very profitable company. So I think that's one of the messages that he is actually trying to send to our shareholders that your investment is pretty safe, and it's a good company to still increase your investments if you so desire. All right. We're going to take some questions in this segment. David, you will moderate this section. And I already indicated how you are to ask questions by raising your hands those who are present here. And for those who are online, just to look for the question-and-answer section on your screen, okay?

Thank you, [ Lidwell ]. We have 15 minutes allocated for this section. As a housekeeping matter, we did hear some mobile phones going off during the earlier presentations. So may we ask you all to put your phones on silent, so we don't have any mobile phones interrupting the proceedings going forward. Thank you. So we have questions from the audience and questions online, 2 formats. At the back, I believe we have [ Nico Libon ]. Are there any questions online? Okay. And we have questions in the audience as well here. So can you give the gentleman a microphone, please, and we'll take the first question. So we'll do some questions in the audience first, and then we'll take some questions from the...sure.

[ Lavince Daniel ] What are your views on presentation? I have to ask one question. What are your plans going to 2026? Although we are in '25 still, Puerto Rico and Jamaica. What are your plans, please?

Sorry, the question is for the Chairman or for the Chief Investment Officer.

Thank you for that question. So good question. The plans for Jamaica is pretty much more of the same, which is we see a lot of opportunities in the Jamaican market, particularly because Jamaica's debt-to-GDP ratio is pretty close to falling below 70%, which is a far cry from when the debt-to-GDP ratio was 145% in and around 2010, 2011, 2012, right? So at 70% and below Jamaica is going to approach investment grade in the medium term. And what that means is that the cost of funding for businesses and entrepreneurship in Jamaica is going to go down. The hurdle rate to do an investment that will generate a positive return for entrepreneurs will be easier for them to meet it. And therefore, all of this translate into far more increased economic activity. Of course, you will have ups and downs, right? But if we are looking out the next 5 -- over the next 5 years, what will happen with Jamaica is that the economy, we expect to get a lot stronger. And therefore, a lot more businesses will be growing a lot faster. And for an economy to have fast-growing businesses, you need different forms of capital. And our form of capital is for companies that want to move fast and want flexibility. We provide speed up flexibility. So our plan is to deploy a lot of capital into Jamaica, which is why the United States Development Finance Corporation and $10 million loan that we have, which is our start is dedicated to Jamaican businesses solely. And we intend over time after we finished deploying that to ramp that up substantially. So that's Jamaica. And for Puerto Rico, it's a $100 billion economy. Puerto Rico has way more revolving credit lines than us. We have about $8 million, $9 million in revolving credit lines. They have about more than 10x that amount access to it. And so our plans there is simple, not just to grow the business, like I said, grow 10%, 20%, but to scale it. The scale is here and then you're doing this, right? And so that's what -- that's our plan for Puerto Rico to really scale that business so that over the medium term, that business can get to like USD 500 million portfolio on its own, which obviously SCI being the majority shareholder means that we expect great returns for shareholders.

This is not Sygnus Credit Investment. The companies will borrow the money from WBC although we do business up and down [indiscernible] make profit something you can't the money we have borrowed. Do you ask them -- run to them get back money you explanation?

Well, the way how our process works is, let's say, you own a firm and you want some financing and we do an analysis of your company. We see the financial health of your firm, look at track record, look at management, et cetera. And then once this money is with you, then every quarter, we are checking certain things, right? We're checking your financial statement, checking how the company performed. We're checking the industry that any headwinds coming up with management and we're checking your payment profile. And obviously, from time to time, you're going to have companies who meet challenges. We operate in an economy, understand that. And the reason why SCI was created is to provide flexible capital. So sometimes when firms are going through challenges, we have to help them, right? And so that's what we do. But to answer your question specifically, yes, there will be times when companies get to come to this moment right, which means that they're not paying current pay, and we have ways and mechanisms to work with them and help them because ultimately, our goal is to help these companies grow and expand. That's why we are very different from, say, a normal back, right, with a completely different business model.

Just a second [ Mr. Livingston ], we're going to take some questions online. So David, we can just point to -- you have another turn, right?

So we'll take a question online. I believe Nicole is going to read a question to us.

This question is from Michael Nicholson. I have benefited from your dividend policy. At the same time, your full investment pipeline has me wondering if it might be a good idea to retain all profits to enhance investable capital and hence growth?

Jason?

That's a comment. So that's an interesting comment, right? However, what I would say is that when SCI was started, we made a commitment to the shareholders who put their faith and trust in what was on a sheet of paper at the time to say this business model is about taking your capital, being very creative with that capital, deploy the capital, make some money and give you back very handsome dividends. Why? Well, because many investors, and we have found this across the Caribbean region, when it comes to investing, majority of investors are income focused. You have a lot of pensioners who use, for example, invest in a lot of bonds and those bonds blow, right? While with SCI, okay, it's publicly listed. So the stock price will go up and down right now the stock price is really cheap. But the fact of the matter is we are trying to create a platform where it's almost like put your part in fire kind of thing. You know that at a minimum, we're going to pay x amount of dividends. And so because of that fundamental promise and the premise that so many pension funds who were the vast majority of initial investors who came in SCI, we can that promise. That's one. Second and final point is when you look at amount dividends that we are paying out, $3.2 million that we are now is a lot of money, but to SCI is not a lot of capital because the balance sheet of SCI is $200 million, right? So $3.2 million out of $200 million, it percentage-wise is very low. So we don't see a big problem with paying out $3.2 million, $4 million, or $5 million in dividends relative to a $300 million, $400 million, $500 million balance sheet because that capital won't really impact SCI investment trajectory a lot because the capital we need to utilize to deploy, we need hundreds of millions of dollars, right? So good idea, but for the shareholders who are depending on the dividends, we want them to enjoy they want have the case on it, so to speak.

Thank you, Jason. Do we have any more online questions? We'll take one more. Sorry. If you want to go ahead, yes. We have another online question, Nicole. Yes, we'll take it, and then we'll come back to the audience here.

Okay. This one is from Brandon Thomas. The share buyback program allocated up to USD 9 million over 3 years. But on the USD 1 million was utilized to date, is it still the intention to deploy a majority or all of the remaining 8-plus million before June 2026?

So that's a very good question and one which I obviously cannot answer. Because if I answer it, so all I would say is that the share buyback program remains in place. Yes.

Thank you, Jason. So we have a question from the audience. Douglas Wilson, shareholder.

Just want to be clear. You may have answered it already. I want to know the thinking behind the share buyback program, which I think...

Very good observation and question. So when SCI was conceptualized, right? At that time, there were no start-up firms raising capital. I think maybe you had maybe one firm before. So when we came with this idea and it was just an idea on paper, obviously, we thought about it well, right, it was idea on paper. When we looked at where we would have been able to raise the capital from, we have to focus on institutional investors, meaning pension funds because if pension funds don't give us no money, when we actually raise the capital the first time, the business would not have existed. That's simple as that because individual investors would say this is way too risky. I mean you're going to go into this space where banks are and who you're going to survive, you're going to be too small and all the negative things that you would expect with a start-up, right? So to convince pension funds that we are convinced that this business model will work. We have to put some provision in place. And one of them would be, well, if a pension fund put in a lot of capital as an investor in, given how illiquid the Jamaica stock market is, if they wanted to exit, how would they exit, right? So effectively, the share buyback is a liquidity mechanism that was -- that we actually enshrined in the articles of the company. Meaning we didn't just [ laba, laba ] about it. We put it into the company, which means that once the time came, we did that to just show people that we are very, very serious people. And we're creating a company that is supposed to live on, long beyond our lifetime, right? So the idea around the share buyback was around that. And then as we got to the point to do the share buyback, obviously, we did our evaluation or analysis. We looked at the firm and we -- after analysis, decided on a $9 million figure based on where we saw the firm and what we know the firm is capable of doing, and that remains the case today. So let's see whether or not the $9 million will need to be utilized, right? I mean, one of the benefits of having the buyback is think about it, if we have give the dividend yield on the stock is 7.7% as of last Friday. And if we were to go and simple math you can do, we buy, let's say, first, we bought 50% of the stock at the price of USD 0.07. What would happen is that the next reporting period, the number of shares would have been reduced, right? So the existing shareholders, the shareholders will remain if we pay the same dollar amount of dividends, those shareholders would get a lot more dividends because it's the same amount of cash being divided amongst fewer persons, one. And two, the earnings per share of the company would actually raise because, again, the number of shares have been reduced. So the share buyback wasn't just thought about in a vacuum. It's a multiple approach mechanism to solve many different problems. So as I'm explaining to you, it means that apart from providing liquidity, it also can increase the cash in the pocket of those shareholders who buy it for the income and also can increase the return to shareholders who buy for the capital gains because obviously, the earnings per share is going to shoot up. I say no more.

So we have equal amount of shareholders online as we have in the audience. So what I'll do, we'll take one more question from the audience, and then we return. I think we have about 6 questions online. So one more and then we'll return.

You can turn to Page 11, please. Financial risk management [indiscernible]?

I am not a Chairman, sorry, apologies.

[indiscernible].

1-minute sorry I think Jason is trying to go through the page what page is it again.

Page 11.

Page 11.

I am there.

This is a group. It's a growth extra losses allowance portion of assets. No, the group upside, essential. Downside, -- upside, $13,246,937. You could explain to me in 2024, please?

Okay. This is no problem.

Next one... upside 1%, downside 1%, [indiscernible].

Okay. So what that slide is showing you, what that page is showing, you right? You have a credit portfolio, you have $100 in investments. And what you're trying to do, you're doing what you call a sensitivity analysis. So effectively, what that transitory mean is, okay, if I have $100 invested, what happens if things go bad, how much of the portfolio would I lose? And if things go good, what's the upside? So effectively, that upside, downside and that 1% is just basically saying if when you do sensitivity analysis, how much money would you lose? Are gain from movements up and down, let's say, if interest rates went up by 100 basis points, which is 1% or down 100 basis points, which is 1%. So it's not that we lost $132 million. It's basically just using that as a baseline and then saying, well, I want to know if I shock your portfolio. So just like in COVID, our portfolio got a massive shock, right? But you see that even though we shock during COVID, we kind of firm, right? Well, the same thing. Every year, when we audited the audit report, they have to do this analysis because what it does it give you additional information to see if there's anything working under that it doesn't come up the car which showing boosted profit. So outside of the boosted profit, you have to look at the portfolio itself and say, well, what if this were to happen to the portfolio? How much loss would you make? And opposite as well, if things go better than expected, how much additional gain would you make? So basically, just a way to stress test the portfolio, see how much stress the portfolio can manage. And we pass the test, by the way.

There's one more question...

We'll go back to Nicole online now. Thanks, David.

All right. This question is from [ Roger Battle ]. How quickly do you anticipate that you will deploy the new capital raise? And will this affect the dividend yield going forward?

Question. So to answer your question, when we raised $50 million last year, we deployed this now about 3 months and we recycle the money, right? I mean this time around, I could say that the money has done already, but I won't. So in other words, let me answer the question in this way. SCI doesn't have an origination problem, right? We actually have way more transactions than capital. So one of the challenges that we are trying to unlock or one of the things that we are trying to do is figure out a way how, for example, we could get a very large revolving credit line that we don't have to pay challenge raising capital when a lot of capital at one time, right? If I raise $100 today and it cost of that capital raise is 10% for simplicity. I start paying 10% and $100 today, the $100 is going to take us 4 or 5 months to deploy out. So until I have deployed out $100, I have what I call a negative carry, meaning I'm making losses -- well, not losses, I'm not making the optimized return until I actually deployed all the capital because I borrow the money at 10% and then I invest it at 15% is when the whole $100 invested at 15%, we actually start a difference between the yield and the investment at 15% versus the cost and the capital at 10%, right? And so what we want to do is to have a revolving credit line, which we mean we can call on capital at any time versus capital sitting interest expenses [Technical Difficulty] is a great challenge for us because we have approved transactions greater than $33 million to give the answer.

Thanks, Jason. We have some more questions online, Nicole.

Yes. We have another one here... [Technical Difficulty].

So we have a complicated formula that effectively we look at net profit, we strip out the things that a portion to fair value gains because we have crystallized fair value gains as is not cash. And we -- that formula basically tells us we have a set threshold limit level that we use that to pay dividends. That being said, if you notice, our dividends don't normally move up. So even though our profit will be doing this sometime, our dividend isn't really doing that and balance. And that's because even in periods when, let's say, for this quarter the 6-month period in focus. If profit is below expectation at that time, we don't go and then reduce the dividend because the formula when you use the formula, it actually says, for example, we shouldn't pay any dividend. We still pay that dividend because we are looking at it as a medium- to long-term trajectory as what's the earnings power of the firm and therefore, can the firm maintain that dividend payment. So currently, that threshold is -- gives you $3.2 million per year. And we'll see whether or not that will go up in coming periods once Puerto Rico start flowing cash back from their very nice healthy net profit into SCI that we can then just pass -- we expect it pass return to you, our shareholders. So that's the concept behind the dividend. We are -- we may, in the future, create a threshold where we have -- I don't want to call super normal. But when we make extra profit and certain things that are one-off, we will have bonus dividends that we could -- so you will know that if this year, we pay $5 million dividend, the actual dividend that you should your part at fire would still be $3.2 million and the difference between the $3.2 million and the $5 million is because we made some super normal profit answer is like gravy, right? But that's something that once we are making those adjustments, we've communicated. We always communicate everything to your shareholders. And if it's good or bad, we allow you to be the judge. But that -- we use a formula that basically focus drive down on the real earnings power a firm, and we pay that out to you. And as a firm can make more money, it means that dividends should follow suit.

Chairman, through you. So we are very conscious of time, and we're conscious of the time of our shareholders, both in-house and the persons joining us virtually. We're a little bit behind now because we have a lot of questions. So with your permission, I will continue with the question-and-answer section for 5 more minutes. We will take 2 more questions from online, and then we take one more from the audience, then we move on to the vote because we are actually out of the segment. We have another segment though. But for those who are online and want to vote, we don't want to rob them of that. So we'll take just 2 more questions, one more and then we move on to the voting. All right. Moderator?

Sure. Just also to remind everyone that there is a second Q&A session that comes up after the vote on the resolutions and before the vote of thanks. So go ahead.

Okay. This question is from [ Thomas Lamar ]. Traded price for SCI share in USD has been divided by 2 since 2022. Is this accurate? And could you explain why?

So when you say divided by 2, you mean 50%, yes. So if that's what the stock at JSE website says, then yes, it is accurate. And that's why -- so I mentioned the USD 0.07, yes, it's accurate. I think on the JSE, the record share price of SCI is actually like $28. And on the US side is like $0.18, highest ever. I think if memory so right. So yes, that's true. And that's why I was saying I am amazed at the math that is out in the willingness because I've seen lots of dividend competition, and I don't understand how those dividend competition because investors are buying -- investors who want -- if you want dividends, SCI, as the question said, half the price it was last year is a no-brainer transaction for all the reasons I outlined before. So to answer the question specifically, yes, that is true. And therefore, it's a goal and opportunity if you are interested in income and capital gains because as I said before, do not think of SCI as just a credit vehicle pure is that just like any other company, it can do acquisitions, it can set up new business underneath it. It's just that all of those businesses and acquisitions are going to focus on the private credit space. But these things as we go through time, will be done to the benefit of shareholders in the same way how we explain when we're doing the Puerto Rico acquisition. And we said at that time, it's going to take a couple of years for us to work through all the restructuring, et cetera, but now we are there. And I'll leave that with you.

Thank you. One more online question.

This one is from Jeremine Brown. I've noticed the panel lacks gender diversity as there are no women present. Could you please share Sygnus policy on diversity and inclusion?

So I wish the person could see in-house, but let me state the policy on that. Sygnus Group has a policy where we should have at least -- we have at least 20% of our Boards and our leadership that are female. Our female director, Hope Fisher, was unavoidably absent in person, but she's actually online. And as a policy, all our Boards have at least one female member. Across -- right now across the group, we have, I think, in total, 17 directors, and we have 5 females. So just to show you that diversity is enshrined in our policy. Let's take a look as well at our senior leadership. Our senior executives, we have 9 senior executives, and we have 4 females sitting at the head of the company. So I think if you should look across entities in Jamaica and even the Caribbean, I think Sygnus is one of the most diversified entities you'll see. We are strong on empowering women. We're strong in ensuring that women capital is launched and is accessible by females. As we speak now, and I think Jason mentioned that briefly, we are -- have launched an impact fund. And one of the main philosophy of that impact fund is to ensure that women-owned businesses are empowered, right? As we speak, our Head of Risk, Yashi is developing policies to ensure that the object of that entity is actually fulfilled. So I thank you for that company for that question, Jeremine. And if ever you see where we're lacking on diversity, please call us out. All right. Thank you.

I believe the fact that the question was answered by a female tells its own story as well. So thank you, [ Caroline ].

[ Kerry Berry ] from [indiscernible] , not representing the company. I'm not a shareholder. I've asked permission to ask a question. Board, can you turn with me to Page 21, please? What I'm looking at here is 2023, 2024 summary of results of operations. I noticed that the interest income has gone up a touch, but interest expense has almost doubled. I just want to know what is the reason for that. Going down the table, we're looking at foreign exchange gain dropped dramatically and impairment allowance. Is that -- am I reading it correctly, dropped from $844 million to $369 million and tax credit, what is the reason for the negative and then the positive that massive increase in the tax credit? I'm just looking for more clarification on this table and wondering if I'm reading it correctly?

Yes. Good observation, good question. So the first one, you're asking about interest expense doubled. That's very simple. SCI would have took on way more debt in 2024 than in 2023, combined with the fact that interest rates went up by about 600 basis points over a period. So that combination meant that interest expense would have gone up. So that's the first part of the question. Does that answer that part? And then what?

How are you seeking to bring that down?

Very simple interest rates have started to go down, right? So our use of debt is still going to go up. So it depends -- you're going to have a transition period between if I borrowed $10 million at 10%, right, this year. And then next year, interest rates go down from 10% to 8%, but I now borrow $30 million, even though interest rates have gone down, my interest expense is going to be higher because I'm using more debt. And so the question for us is not really whether or not the cost of debt has moved up or not moved down, markets will do what markets do. Our focus is the spread. How much spread are we generating above the cost of capital. So as I explained previously, if I borrow $100 today, I start paying interest expense on it, the whole $100 today. When I'm deploying all that capital, if it takes me 4, 5, 6 months to deploy the capital, I'm only going to start earning, let's say, the 15% on the total amount after 4, 5, 6 months. And so you're going to have what you call timing differences between when you look at interest expense, how is recorded on your balance sheet versus the interest income and how it is recorded on your balance sheet because you're not going to get the full benefit of the interest income until after you have deployed all the capital. So that will always be an issue once we are raising last half cap. Every time we raise last half capital, you're going to have that dissonance. The good thing for us is that we actually increased our net interest income. There are many firms who are in the credit business when you look at the net interest income and the net interest margin is very, very thin. But we are not worried by it. We are fine with interest rates going up or down. So that was your first question. You asked a question about FX. Well, no, you asked a question about impairment allowance and why it fell. Very simply, the impairment allowance was cut in half because the previous year would have reflected -- was it reflected the write-off of the Caribbean asset that we would have invested in the previous year. So that is why we don't have that bad asset in our balance sheet anymore. So one of the beauties about getting out of a bad transaction is that following year, your comparables look way better than they were before. In terms of FX, FX gain and loss, as I tell people, the reason why we present our results of operations in this table and don't replicate what is in the financials in the same manner is because we are trying to give you a context. So the things that fall I'm going to call them anything I see below net investment income. We don't have full control of those things and FX is one of them. We're not in the FX business, right? We don't have a foreign currency can be or anything investing in FX. FX will result from the natural course of business of the portfolio. So if we raise capital today and we convert or change that capital or we invest in a U.S. dollar company and the exchange rate move and give us a big gain, then we celebrate hala luya. If it results in a small gain with at least -- if it results in a loss, it's not a crystallized loss. We are fine, right, because we over the life of the investment, we'll make money on it. So we don't try to manage the outcome of what the FX is on our income statement is just as a result of the transactions that we will do. What we do is ensure that our balance sheet is a U.S. dollar balance sheet, meaning at all times, we are representing net U.S. dollars. So it becomes appreciate loss, we're going to book unrealized loss. If we depreciate, we are going to book unrealized gain. That's just the nature of our business. But we are not in the FX, so we don't really watch that number. For us, it doesn't mean anything. What's your other question? Tax...[indiscernible]. So that taxation charge in the previous year is as a company, we have paid tax. The reason why we have a huge gain is because of the restructuring of Puerto Rico by the innovator. That's what is the innovator, right? So we actually have 13 years to utilize a certain amount of tax credit. And this amount that you see represents the first year utilization of it and the future utilization of those tax credits depend upon the profit performance there of the Puerto Rico business. So if the Puerto Rico business made more money in the '24, '25 financial year than in the previous financial year, you're going to see another line item and so forth and so on. But we...yes.

Yes. So that concludes this first of two Q&A sessions. At this moment, I'm going to invite back the Chairman of Sygnus Credit Investments, Mr. Linval Freeman, who will take us through the next items on the agenda, which are the votes on the resolutions. Linval?

So we will having had the auditor's report and the report from management, we now ask for the resolution relating to the audited financials to be adopted. So let me read it for you and I will now formally present that resolution that the audited financial statements for the year ended 30 June and the reports of the Directors and Auditors there on circulated with the notice convening the meeting be and I here adopted. So the resolution is being asked. The issue is that we're asking that shareholders now vote on the resolution. So for shareholders attending virtually, we ask that you register your vote on the E-platform as we explained before and you'll have 2 minutes to do. So once the screen pops up and you see the facility to vote. We ask that you vote and you have 2 minutes to do to do so. For shareholders attending in person, we ask that you show your hands and then Mr. Foreman will tally the vote you know as you show your hands. At the end of voting, then I will announce what whether or not the resolution has been voted for or against. All right so shall I say then that the resolution for the adoption of the Auditors are now -- is now on the floor and we ask that shareholders show [indiscernible] Those who are voting for and those who are voting against that. So shall I have, first of all, those who are present resolution to adopt the financial statements as presented and management report as presented by the auditors. Resolution on the floor.

Please keep your hands up the red arm band.

Yes. Those. Against resolution for the adoption of the financial statement.

Those against.

Against. Those who abstain? All right. And then those who are online, we give you an additional minute now to cast your vote on the e-platform. So once that information is collected, Andrew, you will let us know what is the outcome. [Voting]

41 votes in favor and none against.

Okay. So the motion, based on that tally, the motion has carried. And so the auditors, the financial statements and the auditors and management support thereon have been accepted and approved by the AGM. Okay. Second resolution. That interim dividends per stock unit of USD 0.0026 paid in April 2024 and USD 0.0276 paid -- to be paid or paid in November, which we paid on the recommendation of the directors as a final dividend for the year ended 30 June 2024. So we have two dividend payments, 1 in April and the 1 in November, we're asking for a motion that these amounts be treated as final dividends for the year ended 30th June 2024. So the motion, the resolution is now on the floor. So can I see the show of hands for those present?

Show of hands with the red arm bands.

And for those on e-platform, remember, you have 2 minutes to cast your votes once you have the pop-up screen. I think management is taking a note of that and the directors. The other thing I need to tell you, shareholders, is that if you need additional dividend, the share price is low, buy some more shares. That's nice to know. [Voting]

There are 49 in favor and 1 against.

Okay. So again, based on the tally, the resolution has been voted in favor. And so the dividends, as stated have been approved as the final dividends for the year ended 30 June. Okay. The third resolution is the election of directors. So we have 2 directors that are to be elected. Articles 149 and 150 of the company is amended and stated Articles of Association provide that 1/3 of the Board, other than the Managing Director, if one is appointed, and directors appointed by the holder of the special share. If the number of members of the Board is not 3 or multiple of 3, then the nearest to 1/3 shall retire from office at each Annual General Meeting. The directors to retire every year shall be those who have been longest in office. The director retiring under these articles are Mr. Ian St. Ville Williams and Mr. Horace Messado, who being eligible, offer themselves for re-election. Resolution. So the resolution A is that Mr. Ian St. Ville Williams, who retires by rotation in accordance with Articles 149 and 150 of the company's amended and restated Articles of Association and who being eligible offers himself for election as the Director of the company, be hereby re-elected as a Director of the company. And Andrew will take this one first, we will vote on this one first and then we vote on the other one. So can I have a show of hands for the re-election of Mr. Williams? And of course, those who are online, the pop-up screen will be there. Any against? [Voting]

There are 51 votes in favor and 1 against.

Okay. Motion carried. So congratulations Mr. William, you have been reelected, right? And Part B of that resolution is that Mr. Horace Messado, who retires by rotation in accordance with Article 149 and 150 of the company's Article of Association and who, being eligible, offers himself for re-election as the director of the company, be hereby re-elected as a director of the company. So can we have a show of hands for the re-election of the Mr. Messado? Those who are online, the pop-up screen will be there, so can you cast your votes? [Voting]