China
We have joint ventures and provide medical equipment and supplies. This has served as MFC’s platform of business activities in China. Our primary business is the operation of technically advanced eye care centers through cooperative joint ventures with government-controlled hospitals in China. Under such cooperative joint venture agreements, the hospitals provide the necessary space and medical staff to operate the centers, and we provide the centers with specialized medical equipment and supplies, training and supervision with respect to certain surgical procedures, marketing expertise and management services. We generally retain ownership of the equipment we supply to the centers during the term of the agreements. We also sell and service specialized medical equipment and certain ophthalmic and aesthetic medical supplies.
Income Tax
MFC is a company organized under the laws of Barbados and is licensed as an “international
business company” under the Barbados International Business Companies Act, 1991 (as amended).
As an international business company MFC is subject to Barbados income tax at regressive rates
ranging from 2.5% to 1%; such rates being 2.5% on all profits and gains up to Barbados dollars
(“Bds”) $10 million, 2% on all profits and gains exceeding Bds$10 million but not exceeding
Bds$20 million, 1.5% on all profits and gains exceeding Bds$20 million but not exceeding Bds$30
million and 1% on all profits and gains in excess of Bds$30 million. Barbados does not levy any
form of tax on capital gains, nor does it subject MFC to tax on earnings of foreign corporations
in which MFC has an equity interest. As at June 30, 2008, Bds$2 approximated $1.
Objectives
Our prime objective is simply to do good business. Given our liquid resources, we are well
positioned to take advantage of opportunities arising from this global market downturn. These
are interesting times for business opportunities but we must maintain our financial discipline.
Summary
MFC should not be scrutinized in terms of its price-to-earnings multiple. The growth of our asset
base and net worth are the only true valuation measures.
In our businesses, we have found very good people who manage their respective areas most
competitively. This has always been the policy for the company, but we must admit we have
been very fortunate in the level of capability exhibited by our people. In making the company
successful, we try to award our managers and operators most generously while providing them
with the level of freedom and respect needed to fully accommodate their ambitions. Going forward,
MFC will utilize its strong foundation of financial services, resources and strategic network of
operating businesses to vigorously pursue international opportunities for future growth. We will
continue to manage our business activities for the long term, investing on the basis of our traditional disciplined approach while paying particular attention to the potential value to be realized by applying
our financial expertise.
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