AnnuAl RepoRt 2014

Transcription

AnnuAl RepoRt 2014

11th Floor, Medine Mews
4 Chaussée Street, Port Louis, Mauritius
T +230 211 6101
F +230 211 6173
E [email protected]
www.medine.com
MEDINE Limited ANNUAL REPORT 2014
Medine Limited
Annual Report 2014
Dear Shareholder,
The Board of Directors is pleased to present the Annual
Report of Medine Limited for the year ended 30 June 2014,
contents of which are listed on the next two pages.
This report was approved by the Board of Directors on
25 September 2014.
René Leclézio
Chairman
Daniel Giraud
Director and Chief Executive Officer
contentS
Chairman’s Statement 6
Chief Executive’s Review 8
Managing Director’s Report:
Agriculture Cluster 12
Leisure Cluster 18
Property Cluster 22
Board Profile 31
Senior Management Profile 32
Board of Directors 33
Corporate Sustainability Report 54
Statement of Compliance 55
Other Statutory Disclosures 56
Statements of Profit or Loss and
Statements of Changes in Equity 63
Statements of Cash Flows 65
Other Comprehensive Income 62
Chief Finance Officer’s Review 26
Group Value Added Statement 28
Corporate Information 29
Directors of Subsidiary Companies 34
Corporate Governance Report 35
Statement of Directors’ Responsibilities 51
Secretary’s Certificate 58
Independent Auditors’ Report 59
Statements of Financial Position 61
Notes to the Financial Statements 66
Notice of Annual Meetings 126
Proxy Form 127
Our Vision
To be a unique lifestyle provider through
integrated sustainable development of property,
leisure, agro-business and services
4
Medine Limited and its Subsidiaries Annual Report 2014
OUR CORE VALUES
Customer Focus
Innovation and Creativity
Responsibility
Quality
Entrepreneurship
Dedication
Proactivity
5
Chairman’s Statement
Dear Shareholder,
Medine’s chemistry probably requires some elaboration before
we can go through the figures in the annual report. The company
itself has as principal operating activity agriculture, namely sugar,
fruit and vegetable production, a small landscaping department,
and a nursery. The company also owns vast tracts of land, a great
deal of which is in highly sought, developable areas. The land is
developed in ‘build and lease/operate’ special-purpose vehicles
(SPVs), which carry limited-recourse debt obligations. These SPVs
today include a shopping centre, a hotel, a golf course, an office
park and the Casela World of Adventures. Future SPVs will include
schools, universities, medical facilities, student housing, and
sports facilities.
The SPVs are mostly capitalised to the extent that they can service
their debt obligations without recourse to Medine. Some SPVs,
such as the golf course, tolerate no debt, whereas Casela’s cash
flow is largely sufficient not only to service debt, but also to churn
out free cash flow. In time, these SPVs will pay down their debt,
and will generate surplus capital. This naturally takes time. Cash
is also generated from sale of land, via either land parcelling, or
block sales.
6
As things stand today, balance sheet debt outside the SPVs, which
has to be serviced by cash from agriculture and land sales, amounts
to approximately Rs 1.5 billion. Agriculture is a commodity industry,
and all one can do is ensure that costs are kept to a minimum,
with market prices doing the rest. The year under review was not
good as far as the sugar price is concerned, and the current year
will be no better. There is excess capacity in the world, and our
guaranteed EU price no longer provides adequate protection. On
a positive note, Medine Sugar Milling company, your company’s
80-per-cent-owned subsidiary, recently signed a Power Purchase
Agreement with the Central Electricity Board, which will ensure
the mill’s perennity.
This leaves land sales to service the debt and pay dividends. This is
a lumpy business whose timing is dependent on permit obtention.
Medine’s pipeline of land-parcelling projects is always full, and
demand has been strong and will continue to be strong in the
foreseeable future. The debt does not give us sleepless nights.
You will naturally be disappointed by the Group’s loss for the year,
but we maintain dividend payments and we have a great deal of
confidence in your company’s future.
On 8 October 2014, shareholders of the three Medine holding
companies, Black River Investments, Medine Shares Holding, and
Alma Investments, voted overwhelmingly for their respective
dissolution. At the same time, Medine’s shareholders also voted
for the conversion of the company’s preference shares into
ordinary shares. Although these actions will have no effect on your
company’s strategy and operations, the result is that the structure
has been vastly simplified and the shares will become more liquid.
While the restructuration was being discussed there was a debate
about whether to merge Medine with its sister company EUDCOS.
Although this makes a lot of sense operationally, it was felt that
EUDCOS shareholders would not be willing, at this stage, to swap
dividend yield against long-term capital growth. This may change,
however, when, in time, the full potential of Medine’s various SPVs
comes to the surface.
This year saw the departure of Mr Alain Chatel from the Board
after five years in office, due to work pressure experienced in his
homeland in Reunion Island. I wish to thank him for his valuable
contribution during his term of office. Moreover, I would like to
welcome Mrs Jocelyne Martin who has been appointed on the
Board in his place. I am certain that she will bring a positive
contribution to the development of the group.
I wish to take this opportunity to thank my fellow directors for
their continued support during the year and the CEO, Daniel Giraud,
and his team for their good work in trying times.
Yours sincerely,
René Leclézio
Chairman
25 September 2014
7
Chief Executive Officer’s Review
Dear Shareholder,
In the year under review, the Group’s turnover increased by
3,9% to reach Rs 1,373 million, with a net loss of Rs 119 million,
compared with a profit of Rs 34 million the previous year.
In June 2014 the announced lower sugar price led to the need
to revise downwards the value of the standing crop (crop 2014)
in our books, and this fair-value-accounting charge affected
the year’s results in a significant manner. Delays in our land
development activities also contributed to the above results.
In the Agriculture cluster, substantial efforts were made
throughout the operations to reduce costs and improve
productivity, especially in the landscaping, nursery and food
crops departments. These efforts were accompanied by stronger
marketing and sales initiatives based on the Garden Centre’s
ideal location in Cascavelle for the nursery activities and the
well-established Jardins de Medine brand for the foodcrop
products.
Although sugarcane yield improved (89.7 tons per hectare
compared with 83.6 tons the previous year), the crop season
was hindered by breakdowns at the sugar mill, which made
upgrading the mill’s machinery even more urgent. Also, the
abrupt fall in the price of sugar dealt a serious blow to the
Agriculture cluster’s results.
8
Amid these difficult times and gloomy prospects for the industry,
a silver lining appeared in September 2014 in the form of a Power
Purchase Agreement signed between Medine Sugar Milling and
the Central Electricity Board for the supply, by our new turbines,
of some 12 MW of electricity per year to the national grid. The
entirety of this energy will be produced from bagasse, making
it 100% green. This project will require an investment of Rs 330
million to allow us to preserve employment and maintain our
operations for a better future.
The next step would be to move up from commodity to addedvalue sugar products.
The Leisure cluster’s performance improved, with Casela
attracting some 287,000 visitors in the year despite ongoing
renovation and extension works in the park.
The occupancy rate at Tamarina Boutique Hotel was satisfactorily
maintained at 70%, with marketing efforts increasingly targeted
at emerging markets. The hotel is also planning an extension for
2015, with 30 new rooms designed for families.
The golf business is still suffering but remains a very important
asset in the context of our land development.
Even though delays in obtaining permits have adversely
affected the realisation of the various projects for land sale and
consequently our profitability, the Property cluster remains our
main source of fund.
On the mixed-use-development front, Cascavelle Shopping
Mall maintained its 90% occupancy rate while Medine Business
Park progressed at such speed that we have already initiated
a project to increase space availability with additional office
spaces to be built on the site.
The education hub has taken off with some 350 students
registered in the educational institutions located in Pierrefonds
and with the opening of the West Coast primary school in
Flic-en-Flac. We are now extending our range of faculties on
offer with an impressive array of first-rate European tertiary
institutions.
The launch of our branded spirit Penny Blue aged rum was
crowned with success and sales of Pink Pigeon progressed
satisfactorily.
On the corporate sustainability side, Fondation Medine Horizons
maintained its poverty alleviation efforts in Medine’s catchment
area, with a focus on local entrepreneurship via the LocalHands
Association.
As I mentioned in the previous year’s Annual Report, implementation of our Master Plan is requiring important longterm financing which will affect the Group’s indebtedness in
the shorter term. Most of the investments will be channelled
through SPVs dedicated to each project.
The pieces of our strategic jigsaw puzzle are falling into place
and the transformation of the west is becoming a reality.
Acknowledgements
I express my sincere appreciation to our excellent executive
team, our employees, and our Chairman and Vice-Chairman as
well as our Board members for their sense of efficiency and
dedication.
Yours faithfully,
Daniel Giraud
Chief Executive Officer
25 September 2014
9
10
11
Managing Director’s Report
Agriculture Cluster
Cane Cultivation
The 2013 crop yielded a total sugar production of 42,839
tonnes compared with 39,092 tonnes the previous year.
A total of 3,392 hectares of land was harvested, with a yield
of 89.7 tonnes per hectare, compared with 3,317 hectares
and a yield of 83.6 tonnes for crop 2012.
The estate and its planters harvested 304,130 and 90,768
tonnes of cane respectively, totalling 394,898 tonnes,
compared with 276,985 and 82,775 tonnes respectively,
totalling 359,760 tonnes, for crop 2012.
Cane delivery to Medine mill amounted to 384,956 tonnes,
as 9,942 tonnes of estate canes were sent to other mills as a
consequence of factory breakdown at Medine.
The overall extraction rate for crop 2013 was 10.9% compared
with 10.87% for crop 2012.
Milling Operations
In the crop 2013 season, Medine Sugar Milling Company
Limited (MSML) crushed some 385,000 tonnes of cane, with
extraction averaging 10.82%, compared with 10.62% for the
whole island.
Of the 41,642 tonnes of plantation white sugar (PWS)
produced, 10,000 tonnes were sent directly to Omnicane, and
the rest transited via the Bulk Sugar Terminal.
The crop season spanned from 15 July to 20 December 2013.
12
The first fortnight of the crop was impaired by the poor
state of the mill’s two old Babcock boilers, which severely
affected milling performance, with canes and sugar products
deteriorating markedly on standings.
From then onwards the crop went smoothly and the mill
made up for its bad start.
On 25 November, however, there was a dust explosion in the
stack gas ducting, resulting from admission of humid bagasse
in the boilers. The 50-ton John Thompson (JTA) boiler was
damaged and we had to finish the crop with the two Babcock
boilers only. As a result, the mill’s crushing rate was reduced
from 170 tonnes of cane per hectare (TCH) to 140 TCH.
The rains that were prevalent during the first two weeks of
December 2013 adversely affected the extraction rate, which
fell as low as 9%.
On 12th September 2014, the Company signed a Power
Purchase Agreement with the CEB for the export of an
expected 22 GWh per annum over a period of twenty years.
The agreement is based on an investment project of Rs 330
million, whereby the Company shall acquire a second hand
boiler and a turbo alternator from Union St Aubin, to replace
some of the existing equipment and upgrade its existing
Power Generation Plant through the electrification of four mill
drives and as such, will optimise its co-generation setup and
energy available for export. The new setup is expected to be
operational for the start of crop 2015.
Food Crops
Landscaping and Nursery
In the year under review, Medine rethought its strategy in
respect of food crop production. The food crop department was
restructured as from March 2014 on account of persistently
poor results. The area planted was reduced significantly from
270 ha in financial year 2012/13 to 160 ha in financial year
2013/14, with the aim of reaching 124 ha in financial year
2014/15.
The landscaping and nursery departments were restructured
in March 2014, so as to adapt to market evolution. The
restructuring required not only a complete rethinking of the
operations, but also terminating the contracts of a number of
employees – a majority of whom could be transferred to other
departments of the Group. The landscaping department will
henceforth focus primarily on internal projects undertaken
by the Property and Leisure clusters as well as on the
maintenance of internal and external sites. The area occupied
by the nursery is being substantially reduced from 43 to 9 ha
and sales of plants to the public are now strictly confined to
the Garden Centre. However, new varieties of plants will be
introduced shortly at the Garden Centre to boost sales and
respond to consumer demand.
The volume of food crops sold decreased from 5,330 tonnes
in 2012/13 to 4,250 tonnes in the year under review. For
financial year 2014/15, we intend to reduce our production of
vegetables to 2,990 tonnes.
The total area harvested decreased from 305 ha in financial
year 2012/13 to 222 ha in the year under review. The forecast
for financial year 2014/15 is to further reduce the area
harvested to 150 ha.
For financial year 2014/15, our focus is to produce betterquality vegetables and to increase sales through our brand
Jardins de Medine. This brand is distributed nationally
and listed in 50 supermarkets. The product range consists
of onions, lettuces, pommes d’amour, carrots, potatoes,
pumpkin, garlic, and ginger. In the year under review (12
months of sales), 570 tonnes of vegetables were sold under
our Jardins de Medine brand for a total value of Rs 22.5
million, compared with the previous year (9 months of sales),
when 366 tonnes were sold for a total value of Rs 14 million.
The regular feedback obtained from the trade and consumers
is positive and encouraging.
Vincent LABAT
Managing Director, Agriculture cluster
13
Agriculture Cluster
Yield
95.2
92.4
89.7
88.8
83.6
40.2
39.0
37.8
37.5
2009
2010
35.3
2011
Tonne per arpent
2012
2013
Tonne per hectare
Sugar produced
10.85
10.01
9.80
9.72
9.16
4.58
4.22
4.14
4.10
3.87
2009
2010
2011
2012
2013
Tonne per hectare
Tonne per arpent
Yield ( ‘000 tonnes) - Cane harvested
304.1
302.2
304.1
286.4
277.3
104.2
104.0
97.7
82.8
2009
2010
Planters
14
2011
2012
Company
90.8
2013
Yield ( ‘000 tonnes) - Sugar produced
27.3
26.2
25.6
24.6
23.7
8.7
9.7
9.1
10.3
8.9
8.0
2009
2010
6.9
2011
Cultivation department
3,203
2009
2010
7.7
2013
2012
Planters
Miller
Area harvested mechanically (hectare)
3,170
9.0
8.5
3,226
2011
3,383
3,308
2012
2013
10.87
10.90
2012
2013
Hectare
Sugar extraction (%)
11.40
10.83
2009
10.82
2010
2011
Percentage
15
16
17
Leisure Cluster
The Leisure cluster’s results improved on the previous year
thanks, to a large extent, to the excellent performance of
the activities within Casela. In spite of the renovation and
extension works in the park, Casela’s number of visitors on
record continued to increase.
The internal cost and budget control unit contributed to
improving the results of Tamarina Golf Club and Tamarina
Boutique Hotel as compared with the previous year.
With an improved quality of customer service, Medine Leisure
welcomes more than 350,000 guests annually, across all its
activities.
Casela “World of Adventures”
Casela registered significant growth in its turnover for the
year. The visitors mix moved from a stable 50/50 localresident/tourist mix to a 47/53 mix. The number of tourist
visitors increased to more than 156,000 from 125,000 the
previous year. Massive investment on various activities and
other outlets increased the average SPH (spend per head).
Nature Escapade, especially quad biking, performed well with
more groups of visitors from China and India. The renovation
works seem to have caused no major inconvenience to our
visitors.
The continuous increase in the number of visitors can largely
be attributed to the aggressive marketing efforts that started
in mid 2012 and the progression in trade sales. Foundations
are now being laid for sustainable growth, in spite of the drop
in the number of local visitors as compared with the previous
year. Casela has now embarked on a strong and realistic fiveyear plan aiming to achieve the target of 500,000 visitors
per year, through a well-planned marketing strategy locally
and a more vigorous drive to increase our sales in emerging
markets.
Tamarina Boutique Hotel
The hotel achieved the same average occupancy rate as in the
previous year, i.e. 70%. This rate constitutes a fair performance
in light of very difficult prevailing economic conditions, and
the high period from October 2013 to February 2014, with
a peak of 93%, was instrumental in achieving that average.
The average room rate however dropped slightly. Costs were
closely monitored and helped to reduce the loss for the year
from Rs 25 million in the previous year to Rs 21 million in the
year under review.
The current year is likely to prove very challenging, with the
difficult economic situation still prevailing in Europe and the
planned extension of Tamarina Boutique Hotel (TBH) by 30
additional rooms. However, with the new sales and marketing
strategy devised for the product, we have no doubt that the
team will succeed in increasing our market share in emerging
markets such as China.
TGE Management Services Ltd
The financial year under review was most satisfactory for TGE
Management Services Ltd (TGEMS), with the company turning
in a profit of Rs 0.1 million from a loss of Rs 1.7 million the
previous year.
Following the decision to keep TGEMS within the Leisure
cluster, a revised strategy was implemented, with some
changes made to the team. This allowed us to focus on
the Maintenance department, which achieved positive
growth, paying particular attention to villa maintenance and
estate maintenance, and providing full support to our sister
companies. There was a renewed focus on villa rentals, with
26 villas on long-term rental in the year, thus generating a
good revenue stream.
The Syndic Management unit continued to focus on the
Tamarina IRS and Villas de Tamarin RES properties and
Pierrefonds Riverside Morcellement. The project to increase
this activity is on the agenda for the coming year.
On the whole, the positive turnaround of this small company
is encouraging, with growth expected in the current year.
18
Tamarina Golf Club Limited (TGC)
Priorities for 2014/15
Tamarina Golf Club’s (TGC) turnover was higher than the
previous year thanks to the membership subscriptions sold
during the year, whereas revenue from golf rounds dropped
with a lower number of rounds sold and a drop in the
average green fee collected as a result of the mix of golfers
who played, i.e. members or non-members and local or
non-local members.
Following the restructuring of the sales & marketing team,
we aim to become more efficient on the international front.
Positive changes were made at the beginning of 2014 with
the appointment of a Mauritian green-keeper, a decision that
proved to be valuable with marked improvements noted in
the condition of the course and expressed by members and
guests. With the support of an external consultant, we are
implementing a closely monitored programme for the overall
upgrading of the course as well as of the driving range.
The Club’s restaurant, Le Dix Neuf, in its efforts to achieve
higher revenues, registered an increase in patronage and the
number of lunchtime covers as well as growing support for
the newly introduced monthly theme dinners, held with live
music providing entertainment to diners.
Our main objective will be to promote and sell all of the
cluster’s activities under the one Medine Leisure brand in
some emerging markets such as China.
Within the next six months, the works will be completed
and Casela “World of Adventures” will be fully operational as
scheduled, with a variety of new adventures and encounters
available to our visitors.
Early next year, we will start the extension of TBH with a new
family concept; and we are determined to retain our prestige
and pride by winning TripAdvisor’s Certificate of Excellence
award once again in 2014.
Put simply, Medine Leisure’s challenging objective for
2014/15 is to become the most significant tourist destination
in Mauritius.
Alain Paillusseau
Managing Director, Leisure cluster
19
20
21
Property Cluster
Our Team concentrated its efforts during the year under review
on implementing the first phase of the Flic-en-Flac mixed-use
development project, which extends over 130 ha, and on the
160-ha Wolmar/Mango projects next to Tamarina.
Although we managed to deliver the infrastructure of a
number of morcellement projects (Bassin, Roches Brunes, and
Bambous) on time, the permits required for the Deed of Sale
signature and which enable revenues to be released into the
Profit and Loss account took longer than expected for reasons
beyond our control.
The above, coupled with the delay in bulk sales, adversely
affected the cluster’s bottom line. However, having now
received the required permits, we expect these sales to
materialise in the current financial year.
Also in the current year, we have finally obtained, after a long
delay, the Letter of Intent for the 33 hectares Green Creek
Residential Estate project within the Flic-en-Flac mixed-use
development and have been able to start selling (signature of
options and deposit-taking) the 247 plots which make up the
first phase of the project.
Over 90% of the plots have been signed or reserved, which
bodes well for the second phase, which will involve the
remaining 67 plots and which we expect to launch by end
2014.
Green Creek Residential Estate will also include town houses,
flats, affordable housing units, and a sports/social complex
for its residents.
Flic-en-Flac Mixed-Use Development
Cascavelle Shopping Mall
Although the year under review was still a difficult one, we
managed to maintain a 90% occupancy rate and replaced our
anchor tenant Pick and Pay, whose franchise withdrew from
Mauritius, with Monoprix.
Clarens Fields
The current occupancy of the office park is above 95% and
the Board has decided to extend the park by an additional
1,800 m2, bringing the total GBA to 6,200 m2.
The quality of the property and with its excellent location on
the west coast have made the project a success and additional
phases will be envisaged once we reach a satisfactory
occupancy rate in the existing ones.
22
Primary and Secondary Education Component
As envisaged in our previous report, the West Coast Primary
School premises were delivered in April 2014.
The green-by-design 4,300m2 building is the first component
of our School Hub in the Flic-en-Flac mixed-use development.
Indeed, our Master Plan makes provision for a secondary
school, which we expect to start building in 2015, as well as a
pre-primary school and a crèche.
The quality and location of the primary school have already
yielded positive results for the promoters, as they currently
have a shortage of places available in the newly delivered
premises.
Our school projects are essential components of the Master
Plan and are expected to have positive effects on our
commercial, retail and residential projects in the vicinity.
Tertiary Education Component
Our vision behind our innovative Education Village project is the
provision of high-quality tertiary education by world-leading
specialist institutions in a world class integrated infrastructure
that caters for the needs of local and international students.
By collaborating with high-level consultants, we were able to
establish contact with elite universities, which have expressed
interest to start operations in Mauritius.
We believe that positioning Mauritius as a high-quality
education hub for Africa is the right path for the success of
the project. Quality is and will remain the critical factor if we
intend to compete with other regional education hubs. It is
also coherent with the high-end tourism and financial hub
Mauritius is now respected for.
In that sense, the Government’s recent initiative for a quality
audit of the tertiary education sector is essential to reassure
quality foreign operators of the intention of Mauritius to
become such a hub.
Furthermore, our objective is to offer a diversified range
of education possibilities in such fields as business, law,
engineering, architecture, IT, medicine, pharmacy, gastronomy,
and translation.
Our Pierrefonds campus is already operational, with some
350 students on site. Our intention is to use Pierrefonds as a
feeder for our Flic-en-Flac campus, where we expect to start
operations in the coming years with a number of world class
operators with whom we have signed or are in the process of
signing MOUs.
These operators, along with their projects for Mauritius, are
presented hereunder under their respective field of operation.
As they now stand, the given projects and programmes will
translate into moderate activity in 2014/15 and 2015/16, but
the important number of schools and programmes due to be
set up in 2016/17 raises considerable challenges in terms
of planning. By anticipation, our Education Unit is at present
working on recruitment operations in Mauritius and in East
and West Africa to ensure that we will have the right pool of
candidates for the right programmes.
Business
ESSEC Business School
Created in 1907, ESSEC has been developing a state-of-theart educational programme that gives the individual pride of
place in its learning model, promoting the values of freedom,
openness, innovation and responsibility.
It has three campuses – in Cergy (France), Paris-La Défense,
and Singapore – with a population of 4,400 students in
full-time undergraduate and graduate programmes, 5,000
executives in part-time programmes and 44,000 alumni
around the world.
ESSEC works with 157 partner universities from 42 countries. It
is the first non-American business school accredited by AACSB.
ESSEC started its activities in Mauritius in 2012 at our
Pierrefonds Amphitheatre facility with a high-end executive
education programme, the General Management Program,
devoted to members of executive committees of Mauritian
companies. Its intention is to launch a Global BBA programme
in September 2016 with a minimum of 40 students and
a Master in Financial Engineering degree course with a
minimum of 15 students.
ESCP EUROPE BUSINESS SCHOOL
ESCP Europe was established in 1819 and is the world’s oldest
Business School. It has campuses in Paris, London, Berlin,
Madrid, and Torino, and in February 2014 began to deliver its
MS Strategy & Organization Consulting course through Talents
in Mauritius.
ESCP Europe was ranked 2nd worldwide in the 2013 Financial
Times Master in Management Rankings, 10th European
Business School, and 4th in Spain.
ESCP Europe has over 100 academic alliances in Europe and
around the world. It is accredited by AACSB, EQUIS and AMBA.
The school’s alumni network numbers 40,000 members of
200 nationalities in 150 countries.
Law
Panthéon-Assas University
Made an autonomous university as part of the break-up of
La Sorbonne in 1968, but with origins going back to the 13th
century, Panthéon-Assas University is the best university for
law in France.
It brings together 18,000 students, mainly in law and to a
lesser extent in economics. Under the brand Sorbonne Assas,
it began its international expansion in Singapore in 2010, with
the creation of Sorbonne Assas International Law School.
The institution’s intention in Mauritius is to launch a Bachelor in
Law (LLB) and a Master in Law (LLM) degree course in October
2015, with initial student intakes of 40 and 15 respectively, to
be progressively increased to 200 per batch at the Bachelor
level and 60 per batch at the Master level.
The programme will represent a unique combination between
Common Law and Civil Law, the two main inspirations of legal
systems in Africa, which have to interact.
Engineering
The École Centrale of Nantes
The École Centrale of Nantes was established in 1829 as a
sister school of the École Centrale des Arts et Manufactures,
which was primarily established in Paris in the same year to
provide leaders for industry.
It brings together 2,000 students, primarily at graduate level,
and has world class facilities in oceanographic engineering.
The École Centrale Group is recognised as the leader in France
for industrial and general engineering.
The Group’s international outreach includes the creation of
École Centrale Pékin (2007), École Centrale Mahindra (2014)
in Hyderabad, and the École Centrale de Casablanca (2014).
The success of the École Centrale of Nantes is reflected in the
eminent positions held by its 11,000 alumni and the corporate
world’s recognition of its educational standards.
The school’s intention in Mauritius is to launch a Bachelor in
Engineering degree course of four years with a first cohort of
30 students in September 2015, increasing to 50 students per
cohort. When the first cohort reach their graduation in 2019,
Master programmes will be launched, which will be opened
to other bachelor graduates from Africa.
23
Property Cluster
Architecture
Pharmaceutical and Medical Sciences
The École Nationale Supérieure d’Architecture of Nantes
(ENSA Nantes)
Université Paris Descartes (UPD) Medical School
The École Nationale Supérieure d’Architecture of Nantes
was created in 1969 and is part of the 20 national schools
of architecture under the aegis of the French Ministry of
Culture. Its programmes include the National Degree of
Professional Architect (Master, six years) and Executive
Education programmes. It also provides, in conjunction
with the University of Nantes, other graduate courses in
the fields of naval architecture and scenography (FUPDs),
and architectural and urban environments (Master, PhD). In
2012/2013, it hosted 823 students for initial training leading
to the state diploma of architecture, and 131 students in other
programmes.
Its research is highly valued among schools of architecture,
and its first laboratories are more than 40 years old. One of
these, CERMA, specialises in energetic and climatic constraints
imposed on architecture, positioning ENSA Nantes as the most
respected in architectural sustainability challenges.
ENSA Nantes’ intention in Mauritius is to launch a Bachelor
of Architecture degree course in September 2016, with
cohorts rising progressively from 30 to 60 per year. In 2020,
the Master in Sustainable Cities, Architectures and Territories
degree course will be launched, with cohorts rising from 20
to 30.
Interpretation and Intercultural Studies
The Institut Supérieur d’Interprètes et de Traducteurs
(ISIT) Language School
Created in 1957, the Institut Supérieur d’Interprétation et de
Traduction (ISIT) is the standard-bearer in France for studies in
bi/trilingual interpretation and intercultural management and
communication.
The institute is recognised by all international institutions as a
top provider of international interpreters.
At present, ISIT boasts 830 students and an alumni community
of 4,500 from around the world. The institute works with more
than 260 partner universities across the globe.
ISIT’s intention is to launch a programme of international
interpretation in 2016, with eight then 12 students, and
an Advanced Master in China-Africa Business Development
degree course, with cohorts growing from 15 to 35. The aim
of the programme will be to facilitate cooperation between
African and Chinese environments, at a time when China is
increasingly important on the African continent.
24
Created in 1968 from La Sorbonne, Paris Descartes University
is Paris’s university of human and health sciences and
regarded as the best French university in medicine. With its
nine training and research departments (UFR) and its Institute
of Technology (IUT), Paris Descartes University encompasses
all the fields of knowledge of human and health sciences.
It is the only university of the Ile-de-France region to offer
medical, pharmaceutical and dentistry studies; and its health
department is renowned in Europe and in the whole world
for the high quality of its training and the excellence of its
research.
At present the university trains 39,000 students and offers
105 Master’s degrees and 300 university diplomas (DUs) and
inter-university diplomas (DIUs).
Its aim in Mauritius is to deliver, from September 2016, two
sets of programmes in pharmacy and medicine.
The pharmacy programmes comprise a Bachelor in Pharmacy
four-year degree course, with 40 to 60 students per batch,
a Master in Drug Quality two-year degree course, with 16
students per batch increasing gradually to 30, and, beyond
2020, other Master’s degree courses to be created.
In medicine, the aim is to bring together students of nursing,
midwifery and medical doctorate in a common first year (with
80 to 150 students in a batch), then split the promotion,
depending on preferences and talents, between the three
tracks. The nursing cohorts (1 + 2 years) would increase
progressively from 35 to 60 per batch, the midwives (1 + 3
years) from 20 to 30 per batch, and the medicine cohorts (1 +
5 + 3 years) from 15 to 25 per batch.
Information Technology
SUPINFO International University
SUPINFO International University is the international brand
of the Paris Institute of Information Technology (ESI), which
became SUPINFO in 1999. Founded in 1965, SUPINFO is
a member of SUPINFO International University, a global
education IT specialist provider based in Brussels, Belgium,
with campuses in France, the UK, the USA, Italy, Morocco,
Canada, Belgium, China, and many other places. As from
September 2014, SUPINFO International University will be
delivering both a Bachelor’s and a Master’s degree course
in computer science engineering in Mauritius. With its
network of campuses, SUPINFO is the first French engineering
establishment to offer its 6,500 students the chance to
undertake each academic year in any one of its 37 campuses
worldwide.
Future Residential Development Project
Student Housing
This project is part of the second phase of the Flic-enFlac mixed-use development and will, when completed,
contribute to increasing the locality’s population density and
provide extra custom for the region’s existing and forthcoming
non-residential facilities.
In order to accommodate the students of our Education Village,
we have started the construction of 144 units of student
housing, which are expected to be delivered by September
2015.
This first phase of the student housing project will necessitate
an investment of Rs 120 million and will be consolidated in
our property portfolio.
For this innovation project, we have sourced the services of a
French architect who has designed more than 5,400 units of
student housing.
We have initiated the process for Land Conversion under VRS
3 for some 81 ha of land since September 2012.
Thierry Sauzier
Managing Director, Property cluster
Sports Centre
We have finalised the master plan of our Sports Centre with
the renowned French architects Studio ACD Girardet, whose
realisations include Roland Garros, the stadium of the French
Tennis Open.
We are now working on the phasing of the Sports Centre over
the next five years, which will offer sports facilities not only
for students but also for the people of the vicinity.
Affordable Housing
In line with Government’s policy of filling the current gap of
40,000 residential units in the ‘affordable housing’ market
segment, our Team has been working with a French architect
with over 20,000 units’ experience in that sector to bring
about the first affordable-housing programme in Mauritius.
The first phase consists of 156 units to be built as part of the
Flic-en-Flac mixed-use development and works are expected
to start by 2015.
The units will vary between 54 m2 and 85 m2, with prices
ranging from Rs 2.25 million to Rs 4 million.
25
Chief Financial Officer’s Review
Group’s Financial Results
Turnover and Other Operating Revenues
Overall
The Group’s turnover for the year under review amounted to
Rs 1,373 million compared with Rs 1,322 million the previous
year. This represents a 3.9% growth and is mainly attributable
to the improved performance realised by the activities in the
Leisure cluster, in particular Casela, which continue to show
sustained double-digit growth year on year. It helped to
mitigate a drop in the revenues generated by the activities
of the Agriculture cluster, whereas the Group’s property rental
activities achieved a slightly lower level of turnover as in the
previous year due to difficult market conditions.
Agriculture Cluster
The Agriculture cluster realised a turnover of Rs 795 million,
which was Rs 16 million lower than the previous year and
is mainly attributable to the right-sizing of the food crop,
landscaping and nursery activities. This is more elaborately
explained in the report of the cluster’s Managing Director. The
turnover relating to these activities are expected to shrink
further in the current financial year.
Turnover of sugar-related activities, including milling
operations, amounted to Rs 665 million, slightly lower than
the previous year’s Rs 668 million. The impact of the lower
sugar price of Rs 15,830 per tonne in the year under review,
compared with Rs 17,573 per tonne the previous year, was to
a large extent compensated by the increase in the tonnage
(share of grower) achieved in the year to 26,155 tonnes,
compared with 23,690 tonnes the previous year.
Leisure Cluster
The Leisure cluster performed well, with a turnover of Rs 427
million, which is Rs 49 million higher than the previous year.
Casela’s activities delivered the larger part of that increase,
with an additional turnover of Rs 43 million realised as a result
of continued development and investment and an aggressive
marketing strategy.
The cluster’s other activities, namely the golf, hotel and syndic
management operations, all produced higher revenues when
compared with the previous year. The hotel achieved the
same occupancy level of 70% as the previous year but with a
lower average room rate resulting from the highly competitive
market conditions, characterised by lower spending by
tourists and heavy discounting of hotel rates, which continued
26
to prevail locally and internationally. The appreciation of the
rupee against the euro during the year did not help either.
The golf operation’s turnover improved as a result of the
membership subscriptions sold during the year. The potential
for revenue growth for this operation, however, remains
dependent on the evolution of the Mauritian tourism industry,
in particular on its ability to maintain a higher-spending client
segment as well as its positioning as a golf destination.
Property Cluster
The property sales value realised in the year amounted to
Rs 367 million and related mainly to the residential landparcelling project at Ruisseau Palmyre and Bassin 2 and one
agricultural land-parcelling project.
It should be noted that the property sales value realised is not
accounted as turnover in view of the capital nature of land
sale transactions. However, the profit realised after accounting
for the cost of land, as revalued in 2006, and other costs
associated with the transaction, are shown in the Income
Statement. Furthermore the revaluation surplus related to the
land sold has been treated as realised in the Statement of
Changes in Equity.
Revenues from the property rental operations, namely
Cascavelle Shopping Mall and Clarence Fields, amounted to
a total of Rs 108 million, which is slightly lower than the
previous year’s Rs 110 million. The rental income from the
shopping mall remained below expectation, mainly as a
result of the difficult economic environment affecting the
mall’s frequentation and consumer spending.
Profit/Loss after Finance Charges and Tax
Overall
The Group declared a loss of Rs 118 million, compared with a
profit of Rs 34 million the preceding year. The announced drop
in the sugar price for crop 2014 prompted the requirement to
book an estimated fair-value charge of Rs 66 million relating
to the standing crop in the year under review compared with
an estimated fair-value gain of Rs 38 million in the preceding
year, hence a total negative impact of Rs 104 million when
comparing with the preceding year. The results also booked
in a lower profit on sale of land while the improved results
from the Leisure cluster helped in part to mitigate the drop
in profitability.
Chief Financial Officer’s Review
Agriculture Cluster
Property Cluster
The cluster declared a loss of Rs 132 million (2013: loss of
Rs 9 million) and this was due largely to the estimated fairvalue charge explained above and in smaller measure to
higher operational costs and in particular, the cost of repairing
the boilers in the milling plant. The food crop production,
landscaping and nursery activities suffered another bad year
with a declared loss of Rs 43 million, down from the previous
year’s Rs 48 million. It is expected that with the restructuring
exercise initiated during the year under review, the losses will
be reduced drastically in the current financial year.
The Property cluster’s profit for the year amounted to Rs 80
million (2013: Rs 140 million) and was principally based
on the profit realised on the sale of land which has been
accounted in the Income Statement and the net results of the
cluster’s property rental activities.
Leisure Cluster
Results from the property rental activities improved slightly
with a net loss of Rs 12 million, down by Rs 2 million from the
previous year’s.
The Leisure cluster again showed improved results, with a
profit of Rs 4 million for the year (2013: loss of Rs 17 million).
All activities in the cluster contributed to the improvement,
with the golf and hotel operations both reducing their loss –
by Rs 5.2 million and Rs 3.5 million to Rs 39 million and Rs 21
million respectively. These persistent losses are attributable
on the one hand to the difficult current economic environment
and market conditions affecting the tourism industry locally
and internationally, and on the other to the disappointingly
slow response to the marketing efforts carried out and the
collaboration of associated hotels in strategic initiatives to
position Mauritius as a golf destination.
On the bright side, Casela activities realised a profit of Rs 59
million, improving on previous year’s Rs 51 million on account
of a higher number of entries, a change in the clientele mix and
a significant increase in the number of activities performed.
Aggressive marketing strategies and Management’s review of
the park’s operational processes have been key to Casela’s
sustained growth so far.
Profit on sale of land amounted to Rs 206 million, which
is lower than the previous year’s Rs 264 million, whereas
realised reserves transferred from the revaluation surplus to
retained earnings amounted to Rs 23 million, compared with
Rs 94 million the previous year.
Group Profit/Loss Attributable to Equity Shareholders, and
Shareholder Value
Group loss attributable to equity shareholders for the year
amounted to Rs 109 million, compared with a profit of Rs 39
million the previous year. Loss per equity share amounted to
Rs 1.04 (2013: Re 0.38 profit).
Based on the results declared above and total dividends paid
and payable of Rs 126 million (2013: Rs 126 million), the net
asset per share decreased from Rs 83.84 to Rs 81.74.
Lewis Ah Ching
Chief Finance Officer
The investment of over Rs 400 million in the Casela project
and the forthcoming extension of the hotel from 50 to 80
rooms are geared towards maximising the potential of these
activities and set the Leisure cluster and the Group on solid
ground for future development in the hospitality and leisure
sector in Mauritius.
27
Group Value Added Statement
Year ended 30 June 2014
%
2014
%
Rs’000
Turnover
Bought-in materials and services
1,557,121
(835,273)
Value added
721,848
847,757
524,523
501,125
2013
Rs’000
1,543,844
(696,087)
APPLIED AS FOLLOWS
EMPLOYEES
Wages, salaries, bonuses, pensions and other benefits
73
59
GOVERNMENT
Income tax
-1 (6,875)
0
(297)
126,000
164,741
(9,546)
126,000
168,222
(4,642)
281,195
289,580
PROVIDERS OF CAPITAL
Dividends
Interests and loss on exchange
Non-controlling interests
39
34
REINVESTED
Depreciation and amortisation
Retained loss
158,175
(235,170)
-11
(76,995)
100
721,848
28
143,867
(86,518)
7
57,349
100
847,757
Corporate Information
Registered Office
4 Chaussée Street
Port Louis
Mauritius
Tel: (230) 211 6101
Fax: (230) 211 6173
E-mail: [email protected]
Registrar and Transfer Agent
MCB Registry and Securities Limited
Bankers
The Mauritius Commercial Bank Ltd
Barclays Bank Mauritius Limited
State Bank of Mauritius Ltd
AfrAsia Bank Limited
Auditors
BDO & Co.
(Chartered Accountants)
29
30
Board Profile
(Photos-from left to right)
René Leclézio
Jacques Li Wan Po
Daniel Giraud
Pierre Doger de Spéville
Aged 58. Degree in Chemical
Engineering and MBA (London
Business School). Worked as a
manager at Lloyds Merchant
Bank, London. Managing Director
of Promotion and Development
Ltd and director of several public
and private companies, including
Caudan Development Ltd,
Mauritius Freeport Development
Company Ltd, The AngloMauritius Assurance Society
Ltd, and Swan Insurance Co. Ltd.
Appointed as a director of the
Company in 2001. Vice-Chairman
from 2002 to June 2011. Member
of the Corporate Governance
Committee. Chairman of the
Group since 1 July 2011.
Aged 69. Fellow Chartered
Certified Accountant (FCCA).
Executive Chairman of Food
Canners Ltd and its associated
companies and of the New
Goodwill Investment Group,
which includes International
Distillers (Mauritius) Ltd.
Director of several companies
and institutions, including the
Bank of Mauritius. Appointed
as a director of the Company
in 2004. Chairman of the Audit
Committee. Vice Chairman of the
Company since 1 July 2011.
Aged 62. Master in
Management Sciences (Paris
Dauphine). Spent 23 years in
the textile industry as CEO of
the Floreal Group (CIEL Textiles),
the largest Mauritian textile
manufacturer. Joined the
Company as Chief Executive
Officer in 2002. Director of the
Company since 2003. Member
of the Corporate Governance
Committee.
Aged 76. Notary Public from
1965 to 1997. Director of
the Company since 1978 and
Chairman of the Group from
1999 to 2011. Chairman of
the Corporate Governance
Committee since July 2011.
Director of Innodis Ltd.
Lajpati Gujadhur
Ramapatee Gujadhur
Gérald Lincoln
Jocelyne Martin
Aged 70. Attorney-at-Law.
Director of Rogers & Co. Ltd
from 1990 to 2000. Director of
the Company since 1988.
Aged 69. Formerly Senior
Manager at The Mauritius
Commercial Bank Ltd. Director
of several companies,
including Air Mauritius Ltd
and Mahanagar Telephone
(Mauritius) Ltd, a fully owned
subsidiary of MTML India.
Company in 2004.
Aged 78. Formerly Executive
Manager of The AngloMauritius Assurance Society
Ltd. Consultant to the Chief
Executive of the Swan Group
from 2002 to 2007. Director
of the Company since 1983.
Member of the Corporate
Governance and Audit
committees.
Aged 54. BSc (Econ), London
School of Economics. Member
of the Institute of Chartered
Accountants of England and
Wales. After several years
of experience in the UK,
worked at De Chazal Du Mée
before joining Promotion
and Development as Group
Financial Controller in 1995.
She is also the Company
Secretary. Director of
Promotion and Development
and Caudan Development.
Company on 18 June 2014.
Sulliman Adam Moollan
Alain de Ravel de
L’Argentière
Marc de Ravel de
L’Argentière
Thierry Sauzier
Aged 77. Promoter and
formerly manager of several
business entities involved in
salt processing and big-game
fishing in Black River. Director
of the Company since 2001.
Aged 51. Spent 19 years in
management at Grays Ltd. At
present manager and promoter
of several business entities
involved in salt processing
and property development,
and owner of agricultural land
under sugar-cane cultivation.
Director of the Company since
1 July 2008. Member of the
Audit Committee.
Aged 75. Graduate in Economics
and member of the Australian
Society of Certified Practising
Accountants (CPA Australia). Was
for some 20 years a director
(and a few times Chairman) of
The Stock Exchange of Mauritius
Ltd. Was also a director of Swan
Insurance Co. Ltd and of The
Anglo-Mauritius Assurance
Society Ltd until 2008. At present
director of Plastic Industry
(Mtius) Ltd and respectively
member and chairman of its
Audit and Corporate Governance
committees. Chairman of the
Bramer (non-banking) group
of companies. Director of the
Company since 2004. Member
of the Corporate Governance and
Audit committees.
Alain Chatel
Aged 65. Managing Director of
J. Chatel SA in Réunion Island
since 1981 and Manager of
other business entities within
the Chatel Group. Honorary
Consul of Belgium in Réunion.
Director of the Company from
13 May 2009 to 06 June 2014.
Aged 46. Holder of a Maîtrise
d’Économie Appliquée
from the University of
Paris Dauphine. Worked in
stockbroking and banking in
France and Mauritius for 12
years before joining Medine
in 2004 as Project Consultant.
Led the Tamarina Golf Estate
IRS project up to its completion
and in 2007 set up the
function that was to become
Medine Property. Managing
Director of the Property
cluster since December 2009.
Director of the Company since
December 2010 and Deputy
Chief Executive Officer since
February 2011.
31
Senior Management Profile
Daniel Giraud
Chief Executive Officer
Aged 62. Master in Management Sciences (Paris Dauphine). Spent 23 years in the
textile industry as CEO of the Floreal Group (CIEL Textiles), the largest Mauritian textile
manufacturer. Joined the Company as Chief Executive Officer in 2002. Director of the
Company since 2003. Member of the Corporate Governance Committee.
Thierry Sauzier
Deputy Chief Executive Officer and
Managing Director,
Property cluster
Aged 46. Holder of a Maîtrise d’Économie Appliquée from the University of Paris
Dauphine. Worked in stockbroking and banking in France and Mauritius for 12 years
before joining Medine in 2004 as Project Consultant. Led the Tamarina Golf Estate
IRS project up to its completion and in 2007 set up the function that was to become
Medine Property. Managing Director of the Property cluster since December 2009.
Director of the Company since December 2010 and Deputy Chief Executive Officer
since February 2011.
Patricia Goder, ACIS
Group Company Secretary
Aged 46. Chartered Secretary (UK). Worked for accounting and company-secretarial
firms before joining the Group as Deputy Secretary in 2000. Group Company Secretary
since November 2006.
Vincent Labat
Managing Director,
Agriculture cluster
Aged 52. Joined Les Gaz Industriels Ltd in July 1996 as General Manager and was the
company’s Managing Director from 2003 to 2009. Joined the Company in July 2010
as Project Development Executive. Appointed Managing Director of the Agriculture
cluster in July 2011.
Alain Paillusseau
Managing Director,
Leisure cluster
Aged 54. Spent more than 25 years in the hospitality, golf and spa industry with
ACCOR Group and privately owned hotels, as General Manager & Area Manager
in Africa, Middle East and Indian Ocean. Was more recently Regional Manager of
Operations and Development at Pierre & Vacances Group in France. Managing Director
of Medine’s Leisure cluster since October 2012.
Lewis Ah Ching, FCA
Chief Finance Officer
Aged 47. Fellow of the Institute of Chartered Accountants in England and Wales
(ICAEW). Began his career in the UK, returned to Mauritius in 1992 to work in industry,
and gained a rich experience in the manufacturing, commercial and tourism sectors.
Held a senior position in a conglomerate before joining the Company as Chief Finance
Officer in 2005.
Marc Desmarais
Group Head of Human Resources
Aged 49. MSc, Human Resources (UCD, Dublin). Has worked at HSBC, both in Mauritius
and internationally, as well as at the MCB. He has more than 15 years of experience
at senior Management level. Group Head of HR since February 2010.
32
Board of Directors
Directors in Office
The following directors held office at 30 June 2014:
Directors
Number of Other Directorships in
Listed Companies
Category
René Leclézio (Chairman)
Non-executive
3
Alain Chatel (up to 6 June 2014)
Independent non-executive
Non-executive
Daniel Giraud
Executive
Lajpati Gujadhur
Non-executive
Ramapatee Gujadhur
Non-executive
Jacques Li Wan Po (Vice-Chairman)
Gérald Lincoln
Jocelyne Martin (as from 18 June 2014)
Non-executive
2
1
Alain de Ravel de L’Argentière
Marc de Ravel de L’Argentière
Thierry Sauzier
Executive
1
1
33
Directors of Subsidiary Companies
TGE Management Services Ltd
•
•
•
•
•
•
•
•
•
•
Eric Espitalier Noël
•
Hector Espitalier Noël
•
•
•
•
•
•
•
Lajpati Gujadhur
•
Sheo Shankar Gujadhur
•
•
•
Philipp Gutsche
•
Jean Francois Koenig
•
Vincent Labat
•
Gérald Lincoln
•
Angus Mackay
34
•
•
Marc Desmarais
•
•
Florence Rungasamy
•
Thierry Sauzier
Tamarina Golf Estate Co. Ltd
•
Gansam Boodram
Daniel Giraud
Talent Solutions Ltd
Société Reufac
The Medine Sugar Milling Co. Ltd
Medine Rum Limited
•
Tamarina Golf Club Ltd
•
Clarens Fields Ltd
Casela Limited
•
Cascavelle Shopping Mall Ltd
•
Tamarina Beach Club Hotel Ltd
René Leclézio
Broll Property and Facility Management Limited
DIRECTORS
Barachois Villas Co. Ltd
as at 30 June 2014
•
•
•
•
•
Corporate Governance Report
The Board of Directors adheres to the highest principles of good governance and ensures that these are followed and applied
throughout the Group. It recognises the importance of such principles and views their application as an opportunity to critically
review the Company’s structure and processes. It believes that the adoption of the highest standards of governance is imperative
for the enhancement of stakeholder value.
The Company’s compliance with the disclosures required under the Code of Corporate Governance for Mauritius is set out below.
Shareholding Structure
Medine Limited is listed on the Development & Enterprise Market (DEM) of the Stock Exchange of Mauritius with an issued and
fully paid-up share capital of Rs 1,050,000,000 consisting of 86,940,600 ordinary shares and 18,059,400 preference shares of
Rs 10 each. Preference shareholders are entitled to a non-cumulative preference dividend but have no voting rights.
There is no ultimate holding company in the capital structure.
PAD*
29.25%
Alma Investments
Co. Ltd
0.03%
15.36%
50.10%
29.49%
1.84%
The Black River
Investments Co. Ltd
26.27%
19.46%
The Medine Shares
Holding Co. Ltd
25.29%
Medine Limited
*Promotion and Development Ltd and its 100% subsidiary, Commercial Holding Ltd
35
CORPORATE GOVERNANCE Report
Common Directors
Promotion
and
Development
Ltd
Commercial
Holding
Ltd
Alma
Investments
Co. Ltd
The Black
River
Investments
Co. Ltd
The Medine
Shares
Holding Co. Ltd
Medine Limited
•
•
•
•
•
•
•
•
•
•
Daniel Giraud
•
•
Lajpati Gujadhur
•
•
Directors
René Leclézio
Jocelyne Martin
•
•
Marc de Ravel de
L’Argentière
•
•
•
The Medine Group Restructuring
Medine Limited (“MEDINE”), Excelsior United Development Companies Limited (“EUDCOS”) and Société de Développement
Industriel et Agricole Limitée (“SODIA”), are sister companies (“the Companies”) with common shareholders, namely Alma
Investments Company Limited (“Alma”), The Black River Investments Company Limited (“BRI”) and The Medine Shares Holding
Company Limited (“MSH”) (“the Holding Companies”). The Companies and Holding Companies are thereafter collectively
referred to as the “Medine Group”.
Subject to shareholders’ approval on 8 October 2014, the boards of directors of the Medine Group have jointly decided on 18
June 2014 to restructure the Medine Group so as to eliminate the Holding Companies (“the Restructuring”). The aim of the
Restructuring is to unlock value for the existing shareholders of the Medine Group given that the Holding Companies are trading
at a discount to the value of the underlying assets, i.e. their respective holdings in MEDINE, EUDCOS and SODIA. Additionally,
such Restructuring will allow the Medine Group to save on administrative costs in the medium to long term.
The Restructuring is expected to be undertaken as follows:
• Conversion of the preference shares of MEDINE into ordinary shares of MEDINE in the ratio of 1:1
• Liquidation of MSH and distribution of its core investments (i.e. MEDINE shares, EUDCOS shares and SODIA shares) to
shareholders of MSH (the “Liquidation”)
• Liquidation of BRI and distribution of its core investments (i.e. MEDINE shares, EUDCOS shares and SODIA shares) to
shareholders of BRI
• Liquidation of Alma and distribution of its core investments (i.e. MEDINE shares, EUDCOS shares and SODIA shares) to
shareholders of Alma
The above Restructuring requires votes in several companies, which, though independent of each other, are part of a project to
achieve the delayering of the Medine Group.
Post the Restructuring, the Holding Companies will no longer hold shares in the Company and PAD’s effective shareholding
therein is expected to increase from 19.46% to 34.96%.
36
Share Ownership Spread, Shareholder Category Profile, and Major Shareholders
The Company’s share ownership spread, shareholder category profile and major shareholders as at 30 June 2014 were as
follows:
ORDINARY
SPREAD
No. of Shareholders
1 - 500
528
501 - 1,000
%
Held
No. of Shareholders
77,860
0.09
197
29,014
0.16
129
104,344
0.12
47
34,570
0.19
1,001 - 5,000
423
1,109,769
1.28
158
424,137
2.35
5,001 - 10,000
143
1,017,015
1.17
75
542,749
3.01
10,001 - 50,000
164
3,916,821
4.50
110
2,462,172
13.63
50,001 - 100,000
42
2,887,263
3.32
20
1,390,191
7.70
100,001 - 250,000
17
2,665,759
3.07
13
1,945,862
10.77
250,001 - 500,000
12
3,977,856
4.58
3
1,092,378
6.05
9
71,183,913
81.87
6
10,138,327
56.14
1,467
86,940,600
100.00
629
18,059,400
100.00
1,254
13,990,843
16.09
532
7,172,244
39.71
6
1,283,136
1.48
3
755,921
4.19
Pensions and provident funds
39
1,830,311
2.10
19
478,607
2.65
Investment and trust companies
28
27,114,832
31.19
13
1,179,280
6.53
140
42,721,478
49.14
62
8,473,348
46.92
1,467
86,940,600
100.00
629
18,059,400
100.00
The Black River Investments Co. Ltd
26,560,910
30.55
1,026,570
5.68
The Medine Shares Holding Co. Ltd
25,429,580
29.25
1,120,070
6.20
Promotion & Development Limited
13,545,523
15.58
5,631,118
31.18
1,552,000
1.79
1,051,400
5.82
Over 500,000
Shares Held
PREFERENCE
Shares Held
%
Held
CATEGORY
Individuals
Insurance and assurance companies
Other corporate bodies
SHAREHOLDINGS OVER 5%
The number of shareholders given above is indicative, having been obtained by consolidation of multiple portfolios for reporting
purposes. The total number of active shareholders as at 30 June 2014 was 2,192 i.e. 1,532 ordinary shareholders and 660
preference shareholders.
37
Dividend Policy
Whilst the Board has not determined a formal dividend policy, it endeavours to pay dividends that reflect the Company’s
financial performance after taking into account the funding requirements of the Company’s current and forthcoming projects.
Dividend per ordinary and preference share paid over the past five years:
Interim
Rs
Final
Rs
Total
Rs
30.06.10
1.00
0.50
1.50
30.06.11
0.60
0.40
1.00
30.06.12
0.60
0.40
1.00
30.06.13
0.60
0.60
1.20
30.06.14
0.60
0.60
1.20
Financial Year End
Board of Directors
The Board of Directors is the Company’s ultimate decision-making entity. It is primarily responsible for, among other things, the
review and adoption of strategic plans, the overview of business performance, the adoption of appropriate risk management
systems, and the establishment of proper internal control systems.
The Board is composed of twelve directors – five independent non-executive, five non-executive, and two executive.
The names and profiles of the Board members are set out on page 31.
Seven Board meetings were held during the year under review. The directors reviewed and adopted the Company’s and the
Group’s audited financial statements; approved the Company’s and the Group’s budget and unaudited quarterly results, and
the declaration of an interim and a final dividend; reviewed management reports pertaining to the Group’s three clusters; and
approved the Medine Group Restructuring, inter alia.
All directors receive timely information so that they may be able to participate fully in Board meetings.
To ensure a better balance of power and authority on the Board, the functions and roles of the Chairman and the Chief Executive
Officer are separate.
The Chairman is responsible for the leadership of the Board and for ensuring its effectiveness. He is also responsible for
ensuring that the directors receive accurate, timely and clear information, and he encourages the active participation of all
Board members in discussions and decisions.
The Chief Executive Officer is responsible for the executive management of the Company’s operations and for developing and
recommending the long-term strategy and vision of the Company. He also ensures effective communication with stakeholders.
Change in Directors
Mr Alain Chatel resigned as a director of the Company with effect from 6 June 2014, after five years in office.
Mrs Jocelyne Martin was appointed as a director in Mr Chatel’s place as from 18 June 2014.
Board Evaluation
An evaluation of the collective performance of the Board of Directors was carried out in October 2013. An evaluation process for
directors’ individual performance is being put in place and will be implemented during the next financial year.
38
Conflicts of Interest
Directors do their best to avoid conflicts of interest. Should any conflict or potential conflict occur, it would be the duty of the
director to make a full and timely disclosure to the Board. Any declaration of interest is entered into the Register of Interests.
However, the Constitution of the Company provides that a director who is interested would not be allowed to vote on any
matter relating to the transaction or proposed transaction in which he is interested and would not be counted in the quorum
present at the Board meeting.
Company Secretary
All Board members have access to the services of the Company Secretary, who is responsible for ensuring that Board procedures
are followed and for the monitoring of corporate-governance processes.
The Company Secretary participates in the induction process of newly appointed directors and ensures that Board members
receive appropriate training as necessary.
Directors’ Share Interests
The directors’ direct and indirect interests in the shares of the Company as at 30 June 2014 were as follows:
ORDINARY
Direct
Number
PREFERENCE
Indirect
%
%
Direct
Number
Indirect
%
%
Directors
René Leclézio
30
-
-
-
-
-
1,552,000
1.79
11.62
1,051,400
5.82
3.10
270,470
0.31
0.84
-
-
0.18
57,082
0.07
0.36
1,293
0.01
0.07
245,262
0.28
1.51
6,275
0.03
0.30
-
-
-
-
-
-
4,920
0.01
0.08
33,820
0.19
0.01
Jocelyne Martin
-
-
-
-
-
-
-
-
-
18,740
0.10
-
73,920
0.09
0.63
-
-
-
27,485
0.03
0.01
-
-
-
280
-
-
-
-
-
Daniel Giraud
Lajpati Gujadhur
Ramapatee Gujadhur
Jacques Li Wan Po
Gérald Lincoln
Thierry Sauzier
With regard to directors’ dealings in the shares of the Company, the directors confirm that they have followed the principles of
the Model Code on Securities Transactions by Directors of Listed Companies, as detailed in Appendix 6 of the Mauritius Stock
Exchange Listing Rules.
39
During the year under review, share dealings by directors were as follows:
Number of Shares Acquired/
Purchased Directly
Number of Shares Acquired/Purchased Indirectly
10,000
-
Ramapatee Gujadhur
159,331
-
Senior Officers’ Share Interests
Senior officers’ direct and indirect interests in the shares of the Company as at 30 June 2014 were as follows:
ORDINARY
Direct
Number
PREFERENCE
Indirect
%
%
Direct
Number
Indirect
%
%
Senior Officers
Lewis Ah Ching
3,000
-
-
-
-
-
Marc Desmarais
-
-
-
-
-
-
Daniel Giraud
270,470
0.31
0.84
-
-
0.18
Patricia Goder
100
-
-
-
-
-
Vincent Labat
-
-
-
-
-
-
Alain Paillusseau
-
-
-
-
-
-
280
-
-
-
-
-
Thierry Sauzier
During the year under review, there were no share dealings by senior officers.
Directors’ and Officers’ Liability Insurance
The directors and officers of the Company and of its subsidiaries benefit from an indemnity insurance cover contracted by the
Company.
Constitution
The Company was incorporated as a public company on 27 June 1913 under the name of The Medine Sugar Estates Company
Limited. It changed its name to Medine Limited on 9 September 2009.
The Company’s Constitution is in conformity with the provisions of the Companies Act 2001 and comprises the following main
clauses:
• The Company has wide objects and powers;
• Preference shareholders have no voting rights but are entitled to a non-cumulative preference dividend;
• There are no pre-emptive rights on share transfers;
• Fully paid shares are freely transferable;
• The Company is authorised to purchase or otherwise acquire its own shares;
• The quorum for a meeting of shareholders is three shareholders present or represented and holding at least 51% of the
ordinary shares of the Company;
40
• The minimum number of directors is six and the maximum number is fourteen;
• The quorum for a meeting of the Board is five;
• An additional director may be appointed by the shareholders by ordinary resolution but so that the total number of directors
shall not at any time exceed the maximum number fixed in accordance with the Constitution;
• The Board has the right to appoint any person to be a director to fill a casual vacancy. A director so appointed shall hold
office only until the next following Annual Meeting and shall then retire but shall be eligible for appointment;
• A director who is interested shall not be allowed to vote on any matter relating to the transaction or proposed transaction
in which he is interested and shall not be counted in the quorum present at the meeting;
• In case of equality of votes at either a Board meeting or a meeting of shareholders, the chairman of the meeting has a
casting vote.
A copy of the Company’s Constitution is available upon request in writing to the Company Secretary at the registered office of
the Company, 11th Floor, Medine Mews, 4 Chaussée Street, Port Louis.
Board Committees
To assist the Board in the discharge of its responsibilities, the following Board committees were established with charters
approved by the Board and which clearly define their terms of reference, composition and functionality.
Corporate Governance Committee
The Corporate Governance Committee at present consists of five members, as follows:
Chairman
Non-executive director
Member
Daniel Giraud
Executive director
Member
René Leclézio
Non-executive director
Member
Gérald Lincoln
Independent non-executive director
Member
The committee met four times during the year under review and, in accordance with its formal terms of reference, acted in its
capacity as:
• The Nomination Committee, with the role of making recommendations to the Board in respect of issues relating to the
appointment of directors and the composition, size and structure of the Board, and of ensuring that there is a clearly defined
and transparent procedure for shareholders to recommend potential candidates
• The Remuneration Committee, with the role of making recommendations to the Board on remuneration issues for executive
directors and the Company’s general policy on executive and senior-Management remuneration and packages
• The committee with the responsibility of driving the process for the implementation of the Code of Corporate Governance
for Mauritius throughout the Group and ensuring that the disclosure and reporting requirements set by the Code are
complied with.
Audit Committee
At present, the Audit Committee consists of four members, as follows:
Chairman
Jacques Li Wan Po
Member
Gérald Lincoln
Member
Member
41
The committee met five times during the year under review and satisfactorily fulfilled its role as defined by its terms of
reference, namely:
• Reviewing the financial reporting process, in particular the accuracy, reliability, integrity, and compliance with legal and
regulatory requirements of the Company’s interim and annual financial statements
• Reviewing the adequacy and effectiveness of its risk management and internal control system
• Assessing and recommending the appointment of internal and external auditors.
The Company Secretary acts as secretary to both committees.
There is transparency and full disclosure from board committees to the Board of Directors.
Risk Management
The Group’s policy is to develop a minimum framework for governance that lays the foundation for further development of
superior governance practices which are vital for growing the business. The Group recognises that transparent disclosure,
financial controls and accountability are pillars of any good system of corporate governance. It is the Group’s endeavour to attain
the highest level of governance to enhance stakeholder value.
The Group is committed to the identification, monitoring and management of the risks associated with its business activities
and has embedded in its management systems a number of management controls to that end. These include:
• Internal Audit: the Group’s internal audit function has been outsourced to Messrs Ernst & Young, who report regularly to
the Audit Committee. As part of their Internal Audit Plan, Messrs Ernst & Young perform a number of internal audit reviews
across the Group
• A Compliance and Risk Officer, with the primary role of implementing a risk management framework and to ensure each
business unit is complying with relevant policies and procedures
• Financial reporting: the Group has a comprehensive budgeting system, with an annual budget approved by the Board of
Directors. This budget is reviewed on a monthly basis and revised if necessary
• Insurance: the Group’s primary risks are covered by a number of insurance policies. The Company believes that its assets are
well protected against any foreseeable event
• Health & Safety: a Group Health & Safety committee has been set up, with the objective of minimising the health and safety
risks facing employees.
By virtue of the diverse nature of its business activities, the Group is exposed to a variety of risks, as outlined hereunder:
Business Risk
The overall revenues and operating results of the Group depend on a diversity of products and services and this diversified
strategy in itself limits the risk faced by the Group, since the markets involved differ in their structure and economic cycles.
The Group has an informal risk management process in place as an integral part of its on-going business planning processes.
Potential negative developments, such as changes in customer demand or the political framework, are dealt with in a timely
manner to avoid deviations from the business plan.
A key business risk to the Agriculture cluster is the price of sugar. Production is falling and the Group is benefitting less from
economies of scale, which adversely affects its competitiveness in the sugar industry. The Group is, however, still benefitting
from the European Union money used for the restructuring of the sugar industry. Diversification into food crops faces uncertainty
over its return as the local market for vegetables in particular is very price-sensitive and the main risks associated with sugar
and food crop production are caused by natural hazards, such as droughts, cyclones and floods, as well as by harmful factors
such as pests and diseases. The Group has insurance cover for their sugar production and furthermore, the Agriculture cluster
has invested extensively in irrigation systems to manage drought risks.
42
The Property Cluster is influenced mainly by the economic growth in the country. Commercial local businesses ability to rent
properties depends on the former’s financial performance but with the increased competition due to new shopping malls
across the country and low economic growth, these businesses may struggle to stay operational. The sale of residential and
non residential properties relies on local residents’ purchasing power but with economic growth forecast remaining relatively
low for 2014, the prospect of increase in demand remains unknown. Medine Group is also facing uncertainty over the allocation
of permits from the authorities to redevelop land for residential and non-residential projects. Delays in granting permits have
been encountered in the recent past.
The tourism industry has a direct relationship with the activities operated within the Leisure Cluster. The occupancy rate of
Tamarina Beach Club Hotel is reflected through the European economies’ performance as this is the main tourism market for
Mauritius. There is a higher demand for golf from the local population which is enhancing the competitiveness of this sector.
The Tourism Authority is helping local businesses by showcasing Mauritius as a golf destination abroad. Another area of risk is
the increase in the variety of leisure activities available to consumers, particularly the new malls opening across the country.
Therefore, the Group has implemented the Casela Master Plan to revamp the nature and leisure park’s operations to increase
its popularity.
Human Resources Risk
The Group’s future success and growth is highly dependent on its innovativeness, competence and capabilities, and the
commitment of its employees. Competition to hire the best is further intensified by the scarcity of qualified specialists in the
sectors in which we operate. Therefore, sourcing and recruiting key specialists and talents and retaining them within the Group
are priorities for the Company.
Our managers and employees, with their commitment to the Group, are of central importance to our success. To find key
personnel to fill vacancies, and to avoid losing competent employees, we position ourselves as an attractive employer and
promote the long-term retention of employees in the Group. As well as career prospects and attractive incentives, we offer
development programmes where and when needed for senior Management and training for our other employees. We consider
talent development a priority in mitigating the risks of skill mismatch. The management of human resources risk is an ongoing activity that involves careful planning and constant fluidity to enable Management to tackle any potential changes in
the human resources sector. On the basis of the controls and policy in place, we assume that the likelihood of a serious human
resources risk occurring is low.
Information Technology (IT) Risk
IT risks can affect a business’s results when information is unavailable, erroneous or unintentionally disclosed, or when the
processes to be depicted have been implemented in IT systems in a way that is too inflexible, too complex, or illegal. Security
gaps and insufficient emergency planning measures can quickly become incidents that affect the entire company.
Data protection violations due to incorrect authorisations create a negative external impression. The increasing dependency on
IT, as well as the growing interconnectivity of IT landscapes, makes it necessary for companies to invest heavily in maintenance
and enhancement. In addition, data processing is a time-consuming and costly activity. As the complexity of the IT landscape
increases, so do the potential risks and costs to the business.
The general risk situation means that more professional threats can be expected, with the trend moving towards targeted
industrial espionage and sabotage. Significant risk scenarios for the Group include the failure of its central IT systems, the
publication of classified confidential information, and the unauthorised manipulation of its IT systems.
The Group ensures the necessary availability of business-critical application systems and access to business-relevant data by
means of appropriate redundancy of systems, networks and sites, as well as suitable tested contingency measures. Security
guidelines are in place for the entire Group. They include appropriate organisational and technical precautions for access
control, access rights, virus protection, and data protection. The effectiveness of these measures is continuously monitored and
reviewed by the internal auditors as well as the external auditors. A dedicated process ensures that IT risks are evaluated and
appropriate measures taken. On the basis of the measures taken, we assume that the likelihood of a serious IT risk occurring
is low.
43
Risk Management (continued)
Health, Safety and Environmental Risks
Given the diversity of its business activities, the Group is exposed to risks of possible damage to people, goods, and its image.
We minimise the risks to people and the environment by means of auditing, advising and training in matters of environmental
protection as well as occupational health and safety. In order to ensure the continuity of plant and equipment, we monitor
these risks at all our locations. By adhering to high technical standards, our rules of conduct, and all legal requirements in
environmental protection and occupational health and safety, the Group ensures the preservation of its goods and assets.
Legal and Commercial Risks
The multiple business units within the Group minimise legal risk by consulting the Group’s own in-house Legal Counsel, who
provides sound legal advice on relevant files on a day-to-day basis, assists business units in complying with applicable laws and
regulations in force, and vets or drafts a variety of legal documents for the purpose of facilitating business transactions. Having
sound legal documents in place not only ensures quality of service through effective execution by relevant business units of
their own contractual obligations, thus avoiding any claim for damages, but also offers business units, where applicable, the
relevant safeguards and recourse with a view to reducing legal and commercial risks such as ensuring a satisfactory quality
of service from third parties or payment from debtors. The analysis of legal and commercial risks at the conception stage of
any potential project enables business units to effectively carry out due diligence exercises and adopt the most viable legal
framework.
The in-house Legal Counsel ensures effective communication between the Group and external legal advisors, so as to facilitate
the handling of any litigation files. The Group has shown itself to be active in protecting its most valuable assets – its land
resources – by taking the necessary legal measures to minimise the risk of any illegal occupation and/or encroachment and
any litigation where the issue of ownership of land can be disputed.
Market Risk
Some of the Group’s activities are adversely affected by the present economic slowdown in some of their markets in Europe,
and there is a risk that the Euro zone’s debt crisis may make matters worse for them in other markets too. By virtue of the
diverse nature of the Group’s investments, however, such events will not significantly affect the overall financial viability of
the Group.
Agricultural Risk
The risks associated with sugar and food crop production are caused by natural hazards, such as drought, cyclones and floods,
as well as by harmful factors such as pests and diseases. The risks associated with natural hazards are covered by insurance.
Financial Risk
The Group’s management of financial risk is detailed in note 3 of the financial statements.
Internal Control
The objective of the internal control system for accounting is to implement controls that provide assurance that the financial
statements are prepared in compliance with the relevant accounting laws and standards. It covers measures designed to
ensure the complete, correct and timely transfer and presentation of information that is relevant for the preparation of the
consolidated financial statements and the management report of the Group.
The internal control system is subject to continuous further development and is an integral component of the accounting and
financial reporting processes of all the Group’s relevant business units and functions. With respect to the accounting process, the
44
internal control system measures are intended to minimise the risk of material false statements in the consolidated accounting
process of the Group.
Policies, systems, processes and procedures have been put in place and their application is regularly reviewed and assessed
by the internal auditors to ensure that they are effective and are being complied with. Through the audits conducted on the
Company’s various operating units and on its subsidiaries, the external auditors also report and make recommendations to
Management and to the Audit Committee on any material weaknesses in accounting and internal control systems which come
to their notice. Their findings are discussed with Management as well as with the members of the Audit Committee.
Internal Audit
The internal audit function provides to the Audit Committee, to Management and ultimately to the Board independent
and objective assurance as to the adequacy and effectiveness of the risk management and internal control framework and
governance processes.
The internal audit function has been outsourced to Messrs Ernst & Young. As internal auditors, they have unrestricted access
to the records, Management, and employees of all operating units within the Group. They report to the Audit Committee and
maintain an open line of communication with Management.
Since their appointment in 2006, the internal auditors have carried out a number of audit assignments on the basis of an annual
audit plan approved by the Audit Committee. They regularly report their findings to the committee and also review the extent
to which their recommendations are implemented. Their intervention has contributed to the improvement and strengthening
of the internal control systems applicable in the Group’s various operating units.
During the year, the internal auditors reported their findings to the Audit Committee on revenue and credit management and
on workers’ payroll management with regard to Tamarina.
Attendance at Board and Committee Meetings
Attendance at Board and committee meetings during the year ended 30 June 2014 was as follows:
Board
Meetings
Corporate Committee
Governance Meetings
Audit Committee
Meetings
No. of meetings held
7
4
5
René Leclézio
6
4
-
Alain Chatel resigned on 6 June 2014
-
-
-
6
4
-
Daniel Giraud
7
4
-
Lajpati Gujadhur
6
-
-
Ramapatee Gujadhur
6
-
-
Jacques Li Wan Po
6
-
5
Gérald Lincoln
7
4
4
Jocelyne Martin appointed on 18 June 2014
1
-
-
6
3
5
Alain de Ravel de l’Argentière
6
-
-
Marc de Ravel de l’Argentière
7
-
5
Thierry Sauzier
7
-
-
DIRECTORS
Where Board meetings could not be held, decisions were taken by way of written resolutions signed by all directors.
45
Statement of Remuneration Philosophy
The members of the Corporate Governance Committee, in its capacity as the Remuneration Committee, have been entrusted
with determining and recommending to the Board for its approval the level of non-executive directors’ fees and a general
policy on executive and senior-Management remuneration.
The Group’s underlying philosophy is to set remuneration at an appropriate level to attract, retain and motivate high-calibre
personnel and to reward them in accordance with their individual as well as collective contribution towards the achievement of
the Company’s objectives and performance, whilst taking into account current market conditions and the Company’s financial
position.
The remuneration policy for executive directors approaching retirement is determined by the Corporate Governance Committee
on a case-by-case basis.
The remuneration of the directors for the year under review is set out on page 56.
Third Party Management Agreement
There is no third-party management agreement with regard to the Company or its subsidiaries.
Shareholders’ Agreement
There is no shareholders’ agreement with regard to the Company.
Employee Share Option Scheme
There is no share option plan in place within the Group.
Share Price Performance vs Demex over the Past Five Years
RS
200
150
100
Demex Progression
Ordinary Share
Preference Share
50
June 2010
46
June 2011
June 2012
June 2013
June 2014
Communication with Shareholders
Shareholders are kept informed, through press communiqués, of all material events affecting the Company, especially if an
event could have an effect on the share price.
During the year under review, the Group’s quarterly results, half-yearly results and audited financial statements were submitted
to the Stock Exchange of Mauritius Ltd and to the Financial Services Commission immediately after being approved by the
directors and were published accordingly.
Shareholders are encouraged to attend all meetings of shareholders, Annual or Special, in order to remain informed of the
Group’s strategy and objectives.
The Annual Report, including the notice of the Annual Meeting of shareholders, is sent to each shareholder of the Company, and
the notice of the meeting is published in two daily newspapers at least 14 days before the meeting.
At a shareholders’ meeting, the shareholders are given the opportunity to ask questions. The Chairman and the Chief Executive
Officer are normally available to answer them. All directors, including the chairmen of the two Board committees, are expected
to attend the Annual Meeting. The Chief Finance Officer and the external auditors are also present to assist the directors in
addressing queries by shareholders.
Calendar of Events
Balance Sheet Date
30 June
Last Annual Meeting of shareholders
December 2013
Interim dividend 2013/14
Declaration
Payment
12 December 2013
31 January 2014
Final dividend 2013/14
Declaration
Payment
25 June 2014
15 September 2014
Publication of first-quarter results
November
Publication of half-year results
February
Publication of third-quarter results
May
Publication of end-of-year results
September
Publication of Annual Report 2013/14
November 2014
Forthcoming Annual Meeting of shareholders
December 2014
Related Party Transactions
Details on related-party transactions are given in note 44 of the financial statements.
47
Integrated Sustainability Reporting
Code of Ethics and Business Conduct
Medine has adopted a Code of Ethics and Business Conduct, which supports its commitment to a policy of fair dealing, honesty
and integrity in the conduct of its business.
The Code of Ethics and Business Conduct lists and details the standards of behaviour that have made Medine’s reputation and
are those standards which all directors and employees are expected to uphold in conducting the Company’s business. They go
beyond the requirements of law. The Code has been actively endorsed by the Board of Directors and shared with all employees
at all levels in the Group.
Compliance by all employees with the high moral, ethical and legal standards of the Code is mandatory, and if employees
become aware of, or suspect, a contravention of the Code, they are encouraged to promptly and confidentially report it in the
prescribed manner.
Environmental Policy and Initiatives
Medine acknowledges its duty as a responsible corporate citizen to protect the natural environment for future generations. The
Company’s objective is to better understand its adverse environmental impact, to inform and educate its people about it, and
to set achievable goals for reducing it.
The Company has identified its most significant adverse environmental impacts as:
• Depletion of natural resources through the procurement and use of goods and services
• Carbon emissions into the atmosphere from the use of fossil fuel-based energy in its offices and through its business
transport requirements
• Production of waste in its offices
• Use of water resources and the discharge of wash-water to the sewer.
It has also identified its positive environmental impacts as:
• The reduction of waste through the promotion of recycling and waste management activities
• The introduction and use of a range of energy-saving devices and practices
• The implementation of practices that reduce its carbon emissions.
Medine is committed to managing its environmental impacts and continuously improving its environmental performance by:
• Complying, as a minimum requirement, with relevant legislation, regulations and other relevant requirements
• Where possible, implementing systems that meet the requirements of ISO 14001 as a certified environmental management
system (EMS) and regularly reviewing them
• Setting realistic objectives and targets for each of its most significant environmental impacts
• Minimising its energy consumption and carbon emissions and encouraging the use of less polluting forms of transport
whenever possible
• Minimising the amount of waste produced by way of reduction, recovery, re-use, and recycling
• Communicating its Environmental Statement and relevant procedures to employees and other stakeholders and promoting
environmentally sensitive behaviour
• Where possible, reporting its environmental commitment and performance.
Initiatives taken during the year under review with regard to the environment are outlined hereunder.
48
Compost Production
Quantity of Compost Produced
From July 2013 to May 2014, 12,319 tonnes of compost in total were produced and transferred to various agricultural-production
zones in Medine. That represented an increase of 17% compared with the total of 10,558 tonnes produced in the financial year
2011/12. Whereas 72% of the compost produced was used as an organic amendment in sugarcane fields, 24% was applied
in vegetable-growing areas to sustain soil fertility. Minor quantities also found a useful application in plantlet production and
for the potting and propagation of ornamentals and trees. The trend in compost distribution amongst the different agricultural
units was similar to that observed in 2011/12, although an increase in the amount of compost used was noted for sugarcane,
food crop and Nursery units.
Quality of Compost Produced
In 2012/13, filter cake remained the dominant type of compost produced, and constituted as much as 70% of the total
yearly tonnage. Poultry manure-thrash and poultry litter were produced in more conservative amounts, but still represented a
valuable source of slow-release nutrients for the crops cultivated in Medine. The trend in the production of different compost
recipes was similar to that in 2011/12. However, lower amounts of mature poultry manure-thrash and poultry feathers were
available for transfer to the fields as a result of successive breakdowns of the windrow turner. Nevertheless, a higher availability
of filter cake from Medine Milling compensated for the low amounts of poultry-based compost.
Launching of Medine Compost Bags
The commercialisation of compost in 5kg bags at the Garden Centre was launched on 6 December 2013. From December 2013
to May 2014, a total of 580 bags were sold.
General Policy on Social, Safety and Health at Work
Medine is a key player in the industrial sector in Mauritius and is always promoting proactive behaviours and practices in the
sphere of Health & Safety. As a responsible company that considers its workforce and stakeholders a unique asset, Medine
continuously seeks to ensure that Health & Safety principles are upheld in the workplace and has implemented relevant
guidelines to safeguard its employees.
Senior Management staff also monitor the enforcement of Health & Safety guidelines by:
• Promoting a safety and health culture within the organisation
• Providing employees with adequate training and equipment so as to ensure safe work practices
• Providing necessary resources to avoid employees taking any undue risks
• Undertaking necessary corrective and preventive actions when unsafe or unhealthy working conditions are identified.
The participation and involvement of employees in safety and health activities are greatly encouraged whereas their
adherence to established safety practices is mandatory.
Medine undertakes to comply with all the safety and health principles as set in the Occupational Safety and Health Act 2005,
so far as they are reasonably practical to comply with.
HIV/Aids Policy
As Medine recognises the seriousness of HIV/Aids and its possible implications in the workplace, the Company is committed
to protecting its employees and the prosperity of its businesses against the virus. An HIV/Aids policy has been formulated
following a survey and an awareness campaign carried out in the Group during the year under review. This policy, which is
integrated in Medine’s broader Human Resources policy, reiterates the Company’s commitment to non-discrimination against,
and the protection of the rights of, HIV-positive employees, as well as to the confidential treatment of any information pertaining
to that issue.
49
Corporate Sustainability
Information on the social projects initiated and/or realised by Fondation Medine Horizons is given on page 54.
Quality
Medine has embarked on a journey towards quality, which builds upon the Medine Master Plan issued in 2005.
A Group Quality Programme has been defined in order to establish a framework for improved customer satisfaction, team
collaboration, productivity, and quality service within all companies of the Group.
Human Resources
Medine believes in its people and strives for them to be motivated, engaged and committed. We like to believe that we are an
employer who cares. Our Human Resources Function is positioned as a strategic partner to the Group’s business units, where
adding value is the measure of success.
Medine firmly believes and recognises that its people are the key to its success. The people element is at the heart of every
business decision in every sector of our business.
The mission of the Human Resources Function is to contribute to the organisation’s effectiveness by engaging its people in
working collaboratively and by aligning its policies and procedures to the strategy of the business.
The Human Resources Function facilitates the enhancement of the Group’s human resources through a collective approach of
people, values and culture, and processes and policies.
The Human Resources Function ensures that Medine is able to “attract, motivate, develop and reward” its quality people.
Training
Talents Solutions Ltd, operating under the brand “Talents”, is a registered training institution and facility ideally located in the
heart of more than 15 hectares of beautiful natural landscapes in Pierrefonds. The Centre is the perfect place to hold training
sessions, fun days, conferences, and other functions. The idea behind the Talents concept is that it personifies all aspects of
human potential and places learning and continuous development at the centre of its long-term vision. With the ever-increasing
demands of the job and the changes taking place in and around the workplace, the need for a well-trained and motivated staff
and workforce becomes vital to the success of the organisation. The importance of mindset and attitude remains central to the
philosophy of the Centre and transpires in all the courses and services it offers.
Each year, operating units are required to allocate a percentage of their basic wage bill to training. This process lies in the bigger
picture of bringing a more structured approach to the way training is performed within the Group.
Patricia Goder
Secretary
25 September 2014
50
Statement of Directors’ Responsibilities
Company law requires the directors to prepare financial statements for each financial year, which present fairly the financial
position, financial performance and cash flow of the Company and of the Group. In preparing such financial statements, the
directors are required to:
• Select suitable accounting policies and then apply them consistently
• Make judgements and estimates that are reasonable and prudent
• State whether International Financial Reporting Standards have been followed and complied with, subject to any material
departures being disclosed and explained in the financial statements
• Prepare the financial statements on the going-concern basis unless it is inappropriate to presume that the Company will
continue in business.
The directors confirm that they have complied with the above requirements in preparing the financial statements.
The directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act
2001. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The directors report that:
• Adequate accounting records and an effective system of internal control and risk management have been maintained
• The Code of Corporate Governance has been adhered to and, where there has not been compliance, relevant explanations
have been provided in the Statement of Compliance
• The external auditors are responsible for reporting on whether the financial statements are fairly presented.
Signed on behalf of the Board of Directors
René Leclézio
Chairman
Daniel Giraud
25 September 2014
51
Corporate Sustainability Report
52
53
Corporate Sustainability Report
Fondation Medine Horizons (FMH)
With the CSR contributions of Medine and 28 other companies from within and outside the Group, the FMH budget for the year
under review amounted to Rs 4.6 million.
FMH provided financial support for 31 projects and actions led by non-governmental organisations (NGOs) as well as by our 49
Medine Volunteers and operating in Medine’s catchment area.
LocalHands
The LocalHands Association regroups some 70 artisans throughout the country, and is supported jointly by Fondation Medine
Horizons and Fondation Espoir et Developpement, for the improvement of local craft. During the year under review, besides its
usual collaboration with hotels and boutiques, LocalHands increased its visibility and sales to individuals via its Web site www.
localhandsmauritius.org, its Facebook page, and its shops at Ruisseau Créole and Trou aux Biches, and will soon open a shop
at Cascavelle Shopping Village.
LocalHands’ revenues on sales at December 2013 amounted to Rs 3,7 million, compared with Rs 2,5 million at December 2012.
La Promenade de Medine
La Promenade de Medine, a beautiful 10-arpent leisure park designed and maintained by Medine Landscaping, is open to the
public all year round.
Medine Entrepreneur Scheme (MES)
The MES is Medine’s microcredit scheme, created to support small entrepreneurs in the Medine catchment area. It has made
24 loans in all to date, 12 of which have already been fully reimbursed, 10 were recalled and 2 are closely followed and
accompanied towards a fruitful completion.
The MES is managed by the Medine Corporate Sustainability Department with the collaboration of The Mauritius Commercial
Bank Ltd.
Internal Corporate Sustainability Initiatives
The Medine Scholarships scheme – destined to support children of Medine employees in their secondary, technical and tertiary
studies – benefited six students and pupils in 2014 (its second year of operations).
Corporate Sustainability Networks
During the year under review, Medine took part in:
• The United Nations Development Programme’s Programme for the Sustainable Upgrading of Slums (PSUP)
• The Joint Economic Council Committee on CSR.
Sophie Desvaux de Marigny
Head of Corporate Sustainability and Communications
54
Statement of Compliance
(Section 75(3) of the Financial Reporting Act)
Name of Public Interest Entity (‘P.I.E’): Medine Limited
Reporting period: Year ended 30 June 2014
We, the directors of Medine Limited, hereby confirm that to the best of our knowledge the P.I.E has complied with all of its
obligations and requirements under the Code of Corporate Governance except for sections 2.2.6 and 2.8.2.
Reasons for non-compliance are detailed below:
Sections of the Code
Reasons for non-compliance
2.2.6
Each director is not reappointed every year at the Meeting of Shareholders as the
Company’s Constitution does not contain any provision for such a procedure.
Directors who are over the age of 70 are reappointed every year in compliance with
section 138(6) of the Companies Act 2001.
2.8.2
The emoluments of the directors have not been disclosed on an individual basis, because
of the commercial sensitivity of such information.
Signed by
René Leclézio
Chairman
Daniel Giraud
25 September 2014
55
Other Statutory Disclosures
Directors’ Names and Interests in Shares
The names of the directors of the Company and their share interests are set out on page 39.
In addition, a list of directors of subsidiary companies is given on page 34.
Directors’ Service Contracts
Messrs Daniel Giraud and Thierry Sauzier have an employment contract with the Company with no expiry date. The other
directors have no service contract with the Company.
Directors’ Remuneration and Benefits
2013/14
Rs
2012/13
Rs
19,339,780
18,529,826
2,115,000
1,625,000
20,000
20,000
130,000
130,000
-
-
59,850
56,700
Directors of the Holding Company
Remuneration and benefits paid by the holding company to:
- Executive directors
- Non-executive directors
Remuneration and benefits paid by subsidiary companies to:
Other Directors of Subsidiary Companies
Remuneration and benefits paid by the respective subsidiary companies to:
Contracts of Significance
During the year under review, there was no contract of significance to which the Company was a party and in which a director
of the Company was interested, either directly or indirectly.
Substantial Shareholders
Details of substantial shareholders are set out on page 37.
56
Other Statutory Disclosures
Donations
Group
2013/14
Rs
Donations made during the year:
- Political
- CSR
- Other donations
Company
2012/13
Rs
1,259
2,866,468
1,500,000
4,312,537
2013/14
Rs
1,259
280,927
2012/13
Rs
1,500,000
4,312,062
Auditors’ Remuneration
Group
Company
2013/14
Rs
2012/13
Rs
2013/14
Rs
2012/13
Rs
- BDO & Co.
2,260,000
2,207,500
880,000
852,500
- Other firms
-
-
-
-
- BDO & Co.
-
-
-
-
- Other firms
-
-
-
-
Audit fees paid to:
Fees paid for other services provided by:
Dividends
An interim dividend of Re 0.60 and a final dividend of Re 0.60 per ordinary and preference share and totalling Rs 126 million
(2012/13 totals: Rs 1.20 and Rs 126 million) were declared on 12 December 2013 and 25 June 2014 respectively for the year
ended 30 June 2014. These were paid on 31 January and 15 September 2014 respectively.
René Leclézio
Chairman
Daniel Giraud
25 September 2014
57
Secretary’s Certificate
June 30, 2014
In my capacity as Company Secretary of Medine Limited (the “Company”), I certify that, to the best of my knowledge and
belief, the company has filed with the Registrar of Companies for the financial year ended June 30, 2014 all such returns as are
required of the company under the Companies Act 2001.
Patricia Goder
Company Secretary
25 September 2014
58
Independent Auditors’ Report to
the Members
This report is made solely to the members of Medine Limited (the “Company”), as a body, in accordance with Section 205 of
the Companies Act 2001. Our audit work has been undertaken so that we might state to the Company’s members those matters
we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
Report on the Financial Statements
We have audited the Group financial statements of Medine Limited and its subsidiaries (the ‘’Group’’) and the Company’s
separate financial statements set out on pages 61 to 125 which comprise the statements of financial position as at June 30,
2014 and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of
cash flows for the year then ended and a summary of significant accounting policies and other explanatory notes.
Directors’ Responsibility for the Financial Statements
The directors are responsible for the preparation and fair presentation of these financial statements in accordance with
International Financial Reporting Standards and in compliance with the requirements of the Companies Act 2001, and for such
internal control as the directors determine is necessary to enable the preparation of the financial statements that are free from
material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control
relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements on pages 61 to 125 give a true and fair view of the financial position of the Group and of
the Company as at June 30, 2014 and of their financial performance and their cash flows for the year then ended in accordance
with International Financial Reporting Standards and comply with the Companies Act 2001.
59
Independent Auditors’ Report to the Members
Report on Other Legal and Regulatory Requirements
Companies Act 2001
We have no relationship with, or interests in, the Company or any of its Subsidiaries, other than in our capacity as auditors,
business advisers and dealings in the ordinary course of business.
We have obtained all information and explanations we have required.
In our opinion, proper accounting records have been kept by the Company as far as it appears from our examination of those
records.
Financial Reporting Act 2004
The directors are responsible for preparing the corporate governance report. Our responsibility is to report on the extent of
compliance with the Code of Corporate Governance as disclosed in the annual report and on whether the disclosure is consistent
with the requirements of the Code.
In our opinion, the disclosure in the annual report is consistent with the requirements of the Code.
BDO & Co
Chartered Accountants
Per Georges Chung Ming Kan, F.C.C.A
Licensed by FRC
Port Louis,
Mauritius.
September 25, 2014
60
Statements of Financial Position - June 30, 2014
The Group
The Holding Company
Note
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
5
6
7
8
9
9,238,412
1,260,880
17,140
-
33,960
9,152,598
1,190,442
9,768
-
35,186
7,730,930
547,146
16,978
820,119
21,020
7,715,097
473,965
9,528
807,352
21,020
10
11
12
13
73,627
743,096
100,353
16,325
69,203
813,409
120,706
11,498
73,619
742,117
100,353
-
69,195
811,960
120,706
-
Current assets
Biological assets
12
Inventories
14
Trade and other receivables
16
Amount due from group companies
17
Cash in hand and at bank
38
11,483,793
11,402,810
10,052,282
10,028,823
223,158
56,574
371,192
-
12,191
296,776
60,857
304,032
-
51,753
223,158
22,796
215,203
498,022
8,551
296,776
26,121
175,819
408,590
43,193
663,115
713,418
967,730
950,499
12,146,908
12,116,228
11,020,012
10,979,322
Capital and reserves
Share capital
18
Revaluation surplus and other reserves
19
Retained earnings
1,050,000
6,219,931
1,313,171
1,050,000
6,244,619
1,508,591
1,050,000
6,030,838
2,034,066
1,050,000
6,056,595
2,133,525
Owners’ interest
Non-controlling interests
8,583,102
125,872
8,803,210
148,094
9,114,904
-
9,240,120
-
Total equity
8,708,974
8,951,304
9,114,904
9,240,120
13
20
21
22
11,450
4,125
1,301,876
201,041
13,263
4,125
1,347,090
202,805
-
-
195,643
160,611
255,786
160,824
Current liabilities
Borrowings
21
Trade and other payables
23
Amount due to group companies
24
Dividends
25
1,518,492
1,567,283
356,254
416,610
916,643
939,799
-
63,000
955,646
578,995
-
63,000
675,499
805,510
4,845
63,000
794,504
456,990
8,098
63,000
1,919,442
1,597,641
1,548,854
1,322,592
Total liabilities
3,437,934
3,164,924
1,905,108
1,739,202
Total equity and liabilities
12,146,908
12,116,228
11,020,012
10,979,322
ASSETS
Non-current assets
Property, plant and equipment
Investment properties
Intangible assets
Investments in subsidiaries
Investments in associates
Investments in available-for-sale
financial assets
Deferred expenditure
Biological assets
Deferred tax assets
Total assets
EQUITY AND LIABILITIES
LIABILITIES
Non-current liabilities
Deferred tax liabilities
Other payable
Borrowings
Retirement benefit obligations
The financial statements were approved for issue by the Board of Directors on September 25, 2014.
René Leclézio
Director
Daniel Giraud
Director
The notes on pages 66 to 125 form an integral part of these financial statements.
Auditors’ report on pages 59 and 60.
61
Statements of Profit or Loss and Other Comprehensive Income - Year ended June 30, 2014
The Group
The Holding Company
Note
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
Turnover
26
Sugar insurance compensation
Other operating revenue
27
1,309,228
758
63,829
1,265,368
2,021
54,453
789,780
711
89,703
767,107
1,551
77,068
Operating expenses
28
Sugar insurance premium
Other gains - net
29
Changes in fair value of bearer biological assets
12
Changes in fair value of consumable biological
assets
12
1,373,815
(1,382,526)
(19,317)
1,028
(26,517)
1,321,842
(1,325,805)
(19,807)
1,072
(26,808)
880,194
(894,638)
(13,294)
-
(26,517)
845,726
(856,000)
(13,430)
(26,808)
(89,611)
31,341
(89,611)
31,341
Operating loss
Other income
30
(143,128)
40,957
(18,165)
29,070
(143,866)
65,344
(19,171)
47,958
Profit on sale of land
31
Amortisation of VRS costs
11 (b)
Fair value (loss)/gain of investment properties
6
Impairment of goodwill
42 (b)(iii)
Share of profit/(loss) in associates
9
(102,171)
189,333
(46,847)
(6,905)
-
6,768
10,905
224,086
(53,248)
38,708
(15,047)
(1,567)
(78,522)
189,333
(46,847)
(7,205)
-
-
28,787
264,538
(52,482)
(7,274)
-
Profit before finance costs
Finance costs - net
32
40,178
(165,769)
203,837
(169,294)
56,759
(69,743)
233,569
(79,695)
(Loss)/Profit before taxation
Income tax credit
34
36
(125,591)
6,875
34,543
297
(12,984)
-
153,874
-
(118,716)
34,840
(12,984)
153,874
6,844
(6,727)
6,844
(6,727)
8,488
6
(56,769)
-
6,924
-
(48,299)
-
(Loss)/Profit for the year
Other comprehensive income for the year
Items that may be reclassified
subsequently to profit or loss
Increase/(decrease) in fair value of availablefor-sale investments
10 & 19
Items that will not be reclassified
subsequently to profit or loss
Remeasurement of retirement benefit obligations
Share of other comprehensive income of associates
Income tax relating to component of other
comprehensive income
39
39
39
(235)
1,517
-
-
Other comprehensive income for the year, net of tax
15,103
(61,979)
13,768
Total comprehensive income for the year
(103,613)
(27,139)
784
(Loss)/Profit attributable to:
- Owners of the parent
- Non-controlling interests
(109,170)
(9,546)
39,482
(4,642)
(12,984)
-
153,874
-
(118,716)
34,840
(12,984)
153,874
Total comprehensive income attributable to:
(94,333)
(9,280)
(20,777)
(6,362)
784
-
98,848
-
(103,613)
(27,139)
784
98,848
(Loss)/Earnings per share (Re.)
37
(1.04)
62
0.38
(0.12)
(55,026)
98,848
1.47
Statements of Changes in Equity - Year ended June 30, 2014
The Group
Attributable to owners of the parent
Note
Revaluation
Surplus
and
Share
Other
Capital
Reserves
Rs’000
Rs’000
Balance at July 1, 2013
1,050,000
6,244,619
Loss for the year
Other comprehensive income
for the year
39 (a)
-
-
-
14,837
-
14,837
-
-
Total comprehensive income
for the year
Acquisition of non controlling
interest
42 (a)
Transfer - revaluation surplus
realised on disposal of land
19 (a)
Dividends to owners of the parent
25
Balance at June 30, 2014
-
-
1,050,000
(39,525)
-
6,219,931
Retained
Earnings
Rs’000
1,508,591
(109,170)
-
(109,170)
225
39,525
(126,000)
Non Controlling
Total
interests
Rs’000
Rs’000
8,803,210
(109,170)
14,837
(94,333)
225
-
(126,000)
1,313,171 8,583,102
148,094
(9,546)
266
Total
Equity
Rs’000
8,951,304
(118,716)
15,103
(9,280)
(103,613)
(12,942)
(12,717)
-
-
(126,000)
125,872
8,708,974
154,456
9,104,443
1,050,000
6,399,080
1,500,907
8,949,987
Profit for the year
Other comprehensive income
for the year
39 (a)
-
-
39,482
39,482
(4,642)
34,840
-
(60,259)
-
(60,259)
(1,720)
(61,979)
-
(60,259)
39,482
(20,777)
(6,362)
(27,139)
19 (a)
-
(94,202)
94,202
25
-
-
1,050,000
6,244,619
Total comprehensive income
for the year
Dividends to owners of
the parent
(126,000)
-
(126,000)
1,508,591 8,803,210
-
-
-
(126,000)
148,094
8,951,304
63
Statements of Changes in Equity - Year ended June 30, 2014
The Holding Company
Share
Note
Capital
Rs’000
Revaluation
Surplus and
Other Reserves
Rs’000
Retained
Earnings
Rs’000
Total
Rs’000
2,133,525
9,240,120
1,050,000
6,056,595
Loss for the year
39 (b)
-
-
-
13,768
(12,984)
-
-
13,768
(12,984)
Transfer - revaluation surplus realised
on disposal of land
Dividends
19 (b)
25
-
-
(39,525)
-
39,525
(126,000)
1,050,000
6,030,838
2,034,066
9,114,904
1,050,000
6,205,823
2,011,449
9,267,272
Profit for the year
39 (b)
-
-
-
(55,026)
153,874
-
153,874
(55,026)
-
(55,026)
153,874
98,848
Transfer - revaluation surplus realised
on disposal of land
Dividends
19 (b)
25
-
-
(94,202)
-
94,202
(126,000)
(126,000)
1,050,000
64
6,056,595
2,133,525
(12,984)
13,768
784
(126,000)
9,240,120
Statements of Cash Flows - Year ended June 30, 2014
The Group
Note
2014
Rs’000
The Holding Company
2013
Rs’000
2014
Rs’000
2013
Rs’000
Operating activities
Cash received from customers
Cash paid to suppliers and employees
1,317,646
(1,230,141)
1,268,379
(1,469,549)
834,196
(801,862)
770,365
(977,937)
Cash generated from/(absorbed by) operations
Interest paid
32
Interest received
Income tax refund/(paid)
87,505
(169,655)
13,110
26
(201,170)
(172,205)
5,349
(573)
32,334
(71,519)
33,886
-
(207,572)
(80,234)
20,976
-
(69,014)
(368,599)
(5,299)
(266,830)
319,249
(252,770)
(195,984)
(9,169)
(8,888)
406,058
(205,651)
(105,532)
(8,718)
(20,586)
319,249
(252,770)
(75,604)
(9,141)
-
448,059
(205,651)
(67,817)
(8,542)
-
(80)
(115)
(80)
(115)
Net cash outflow from operating activities
Investing activities
Net proceeds from sale of land
Expenditure in respect of land development 11 (a)
Purchase of property, plant and equipment
5
Expenditure on intangible assets
7
Purchase of investment properties
6
Purchase of investment in availablefor-sale financial assets
10
Proceeds on disposal of investment
in available-for-sale financial assets
Net cash outflow on acquisition of
subsidiaries
42 (b) (v)
Investments in associated companies
9
Proceeds on disposal of property, plant
and equipment
Other dividends received
Net cash (outflow)/inflow
from investing activities
9,352
-
-
3,892
8,658
368
(20,994)
(5,020)
9,352
(50)
-
368
(71,000)
(20)
6,641
12,313
3,467
8,658
5,772
12,313
3,081
113,367
(125,740)
58,764
Financing activities
Cash (granted to)/refunded by
group companies
Cash advanced by related company
23
Loans received
Loans repaid
Acquisition of non-controlling interests
42 (a)
Dividends paid to owners of the parent
25
-
378,126
131,200
(229,463)
(12,717)
(126,000)
-
-
630,725
(56,644)
-
(105,000)
(92,685)
378,126
-
(209,176)
(12,717)
(126,000)
58,003
415,000
(45,071)
(105,000)
141,146
469,081
(62,452)
322,932
(53,608)
159,246
(64,670)
169,469
Movement in cash and cash equivalents
At July 1,
(Decrease)/increase
(140,302)
(53,608)
(299,548)
159,246
(51,168)
(64,670)
(220,637)
169,469
At June 30,
(193,910)
(140,302)
(115,838)
(51,168)
Net cash inflow/(outflow) from financing
activities
(Decrease)/increase in cash and cash
equivalents
38
65
Notes to the Financial Statements - Year ended June 30, 2014
1 GENERAL INFORMATION
Medine Limited is a limited liability company incorporated and domiciled in Mauritius. The main activity of the company
consists principally of the planting of sugar cane for the production of sugar and by-products of sugar cane namely
molasses and bagasses and other agricultural products. The registered office of Medine Limited is situated at 11th Floor,
Medine Mews, 4 Chaussée Street, Port Louis and its place of business is at Bambous.
These financial statements will be submitted for consideration and approval at the forthcoming Annual Meeting of
Shareholders of the Company.
2 SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these financial statements are set out below:
These policies have been consistently applied to all the years presented, unless otherwise stated.
2.1
Basis of preparation
The financial statements comply with the Companies Act 2001 and have been prepared in accordance with International
Financial Reporting Standards (IFRS). The financial statements include the consolidated financial statements of the parent
company and its subsidiary companies (The Group) and the separate financial statements of the parent company (The
Company).
Where necessary comparative figures have been amended to conform with change in presentation in the current year.
The financial statements are prepared under the historical cost convention, except that:
(i) certain property, plant and equipment are carried at revalued amounts/deemed costs;
(ii) available-for-sale investments are stated at their fair value;
(iii) investment properties are stated at fair value;
(iv) biological assets are stated at fair value; and
(v) relevant financial assets and financial liabilities are stated at fair value or at amortised cost.
(a)
Standards, Amendments to published Standards and Interpretations effective in the reporting period
IFRS 10, ‘Consolidated financial statements’ builds on existing principles by identifying the concept of control as the
determining factor in whether an entity should be included within the consolidated financial statements of the parent
company. The standard provides additional guidance to assist in the determination of control where this is difficult to
assess. The standard is not expected to have any impact on the Group’s financial statements.
IAS 27, ‘Separate Financial Statements’ deals solely with separate financial statements. The standard has no impact on
the Group’s financial statements.
IFRS 11, ‘Joint arrangements’ focuses on the rights and obligations of the parties to the arrangement rather than its
legal form. There are two types of joint arrangements: joint operations and joint ventures. Joint operations arise where
the investors have rights to the assets and obligations for the liabilities of an arrangement. A joint operator accounts for
its share of the assets, liabilities, revenue and expenses. Joint ventures arise where the investors have rights to the net
assets of the arrangement; joint ventures are accounted for under the equity method. Accounting for an interest in a
joint venture using the proportionate consolidation method is not permitted under IFRS 11. The standard is not expected
to have any impact on the Group’s financial statements.
IAS 28, ‘Investments in Associates and Joint Ventures’. The scope of the revised standard covers investments in joint
ventures as well. IFRS 11 requires investments in joint ventures to be accounted for using the equity method of
accounting. The standard has no impact on the Group’s financial statements.
66
2 SIGNIFICANT ACCOUNTING POLICIES (continued)
2.1
Basis of preparation (continued)
(a)
Standards, Amendments to published Standards and Interpretations effective in the reporting period (continued)
IFRS 12, ‘Disclosures of interests in other entities’ includes the disclosure requirements for all forms of interests in other
entities, including joint arrangements, associates, structured entities and other off balance sheet vehicles. The standard
has no impact on the Group’s financial statements.
IFRS 13, ‘Fair value measurement’, aims to improve consistency and reduce complexity by providing a precise definition
of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The
requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its
use is already required or permitted by other standards within IFRSs.
IAS 19, ‘Employee benefits’ was revised in June 2011. The changes on the group’s accounting policies has been as
follows: to immediately recognise all past service costs; and to replace interest cost and expected return on plan assets
with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability (asset). See
note 22 for the impact on the financial statements.
IFRIC 20, ‘Stripping costs in the production phase of a surface mine’, has no impact on the Group’s financial statements.
Amendment to IFRS 7, ‘Financial instruments: Disclosures’, on asset and liability offsetting. This amendment includes
new disclosures and is not expected to have any impact on the Group’s financial statements.
Amendment to IFRS 1 (Government Loans) has no impact on the Group’s financial statements.
Annual Improvements to IFRSs 2009-2011 Cycle
IFRS 1 (Amendment), ‘First time adoption of IFRS’, has no impact on the Group’s operations.
IAS 1 (Amendment), ‘Presentation of financial statements’, clarifies the disclosure requirements for comparative
information when an entity provides a third balance sheet either as required by IAS 8, ‘Accounting policies, changes in
accounting estimates and errors’ or voluntarily.
IAS 16 (Amendment), ‘Property, plant and equipment’, clarifies that spare parts and servicing equipment are classified
as property, plant and equipment rather than inventory when they meet the definition of property, plant and equipment.
The amendment does not have an impact on the Group’s operations.
IAS 32 (Amendment), ‘Financial instruments: Presentation’, clarifies the treatment of income tax relating to distributions
and transaction costs. The amendment does not have an impact on the Group’s operations.
IAS 34 (Amendment), ‘Interim financial reporting’, clarifies the disclosure requirements for segment assets and liabilities
in interim financial statements.
(b)
Standards, Amendments to published Standards and Interpretations issued but not yet effective
Certain standards, amendments to published standards and interpretations have been issued that are mandatory for
accounting periods beginning on or after January 1, 2014 or later periods, but which the Group has not early adopted.
At the reporting date of these financial statements, the following were in issue but not yet effective:
IFRS 9 Financial Instruments
IAS 32 Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)
Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)
IFRIC 21: Levies
Recoverable Amount Disclosures for Non-financial Assets (Amendments to IAS 36)
Novation of Derivatives and Continuation of Hedge Accounting (Amendments to IAS 39)
IFRS 9 Financial instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39)
Defined Benefit Plans: Employee Contributions (Amendments to IAS 19)
Annual Improvements to IFRSs 2010-2012 cycle
Annual Improvements to IFRSs 2011-2013 cycle
67
2.1
Basis of preparation (continued)
(b)
Standards, Amendments to published Standards and Interpretations issued but not yet effective (continued)
IFRS 14 Regulatory Deferral Accounts
Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11)
Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38)
IFRS 15 Revenue from contracts with customers
Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41)
Where relevant, the Group is still evaluating the effect of these Standards, amendments to published Standards and
Interpretations issued but not yet effective, on the presentation of its financial statements.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The
areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant
to the financial statements, are disclosed in Note 4.
2.2
Land and buildings, held for use in the production or supply of goods or for administrative purposes, are stated at their
fair value, based on periodic valuations, by external independent valuers, less subsequent depreciation for buildings. Any
accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the
net amount is restated to the revalued amount of the asset.
Up to 2004, certain property, plant and equipment were revalued yearly on a replacement cost basis using indices
provided by the Mauritius Sugar Authority less subsequent depreciation.
Certain other property, plant and equipment, which have subsequently been shown at market value, based on valuations
made by external independent valuers, are now stated at cost less depreciation. The directors consider these revalued
amounts as the deemed cost.
All other property, plant and equipment are initially recorded at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items. Costs may also include transfers from equity of
any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. All
repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
Subsequent costs are included in the assets carrying amount or recognised as a separate asset as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can
be measured reliably.
Increases in the carrying amount arising on revaluation are credited to other comprehensive income and shown as
revaluation surplus in shareholders’ equity. Decreases that offset previous increases of the same asset are charged
against revaluation surplus, directly in equity; all other decreases are charged to profit or loss.
Properties in the course of construction for production, rental or administrative purposes or for purposes not yet
determined are carried at cost less any recognised impairment loss. Cost includes professional fees and for qualifying
assets, borrowing costs capitalised. Depreciation of these assets, on the same basis as other property assets, commences
when the assets are ready for their intended use.
Depreciation on other assets is calculated on the straight-line method to write off the cost or revalued amounts of the
assets to their residual values over their estimated useful lives as follows.
Annual rates (%)
Leasehold land
5%
Improvement to land
1% and 10%
Factory buildings and equipment
1% - 33%
Weighing equipment
2.5% - 3.6%
Cultivation equipment
3% - 20%
Transport equipment
10% and 20%
Buildings and welfare equipment
2% - 5%
Other buildings, farming equipment and structures
1% - 33%
Golf course and infrastructure
1%
68
2.2
Property, plant and equipment (continued)
Freehold Land is not depreciated.
The assets’ residual values, useful lives and depreciation method are reviewed, and adjusted prospectively, if appropriate,
at the end of each reporting period.
Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately
to its recoverable amount.
Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying amount
and are included in profit or loss. On disposal of revalued assets, amounts in revaluation surplus relating to that asset are
transferred to retained earnings.
2.3
Investment property
Investment property, held to earn rentals/or for capital appreciation or both and not occupied by the Group is carried at
fair value, representing open-market value determined annually. Changes in fair values are included in profit or loss.
Gains and losses on disposal of investment property are determined by reference to their carrying amount and are
recognised in profit or loss.
2.4
Intangible assets
(a)
Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business
less accumulated impairment losses, if any.
Goodwill is tested annually for impairment.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the gains and losses
on disposal. Goodwill is allocated to cash-generating units for the purpose of impairment testing.
(b)
Computer software
Acquired computer software licences are capitalised on the basis of costs incurred to acquire and bring to use the specific
software and are amortised over their estimated useful lives (3 - 10 years).
Costs associated with developing or maintaining computer software are recognised as an expense as incurred.
2.5
Investments in subsidiaries
Separate financial statements of the investor
Investments in subsidiaries are carried at cost. The carrying amount is reduced to recognise any impairment in the value
of individual investments.
Consolidated financial statements
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity
when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability
to affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the group. The consideration
transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the
equity interests issued by the group.
The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration
arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition
date. On an acquisition-by-acquisition basis, the group recognises any non-controlling interests in the acquiree either at
fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets.
69
2.5
Investments in subsidiaries (continued)
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisitiondate fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is
recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain
purchase, the difference is recognised directly in profit or loss as a bargain purchase gain.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated.
Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Transactions with non-controlling interests
The Group treats transactions with non-controlling interests as transactions with equity owners of the group. For
purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired
of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling
interests are also recorded in equity.
Disposal of subsidiaries
When the Group ceases to have control or significant influence, any retained interest in the entity is remeasured to its
fair value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount
for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial assets.
In additions, any amounts previously recognised in other comprehensive income in respect of that entity are accounted
for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously
recognised in other comprehensive income are reclassified to profit or loss.
2.6
Investments in associates
Separate financial statements of the investor
Investments in associated companies are carried at cost. The carrying amount is reduced to recognise any impairment in
the value of individual investments.
Consolidated financial statements
An associate is an entity over which the Group has significant influence but not control, or joint control, generally
accompanying a shareholding between 20% and 50% of the voting rights.
Investments in associates are accounted for using the equity method. Investments in associates are initially recognised
at cost as adjusted by post acquisition changes in the group’s share of the net assets of the associate less any impairment
in the value of individual investments.
Any excess of the cost of acquisition over the Group’s share of the net fair value of the associate’s identifiable assets and
liabilities recognised at the date of acquisition is recognised as goodwill, which is included in the carrying amount of
the investment. Any excess of the Group’s share of the net fair value of identifiable assets and liabilities over the cost of
acquisition, after assessment, is included as income in the determination of the Group’s share of the associate’s profit or
loss.
When the Group’s share of losses exceeds its interest in an associate, the Group discontinues recognising further losses,
unless it has incurred legal or constructive obligation or made payments on behalf of the associate.
Unrealised profits and losses are eliminated to the extent of the Group’s interest in the associate. Unrealised losses are
also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Where necessary, appropriate adjustments are made to the financial statements of associates to bring the accounting
policies used in line with those adopted by the Group.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the
amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.
Dilution gains and losses arising in investments in associates are recognised in profit or loss.
70
2.7
Financial assets
(a) Categories of financial assets
The Group classifies its financial assets as available-for-sale financial assets. The classification depends on the purpose
for which the investments were acquired.
Management determines the classification of its investments at initial recognition and re-evaluates this designation at
every reporting period.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in
any of the other categories. They are included in non-current assets unless management intends to dispose of the
investment within twelve months of the reporting period.
(b) Recognition and measurement
Initial measurement
Purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase
or sell the asset. Investments are initially measured at fair value plus transaction costs for all financial assets.
Subsequent measurement
Available-for-sale financial assets are subsequently carried at their fair values.
Investments in equity instruments that do not have a quoted market price in an active market and whose fair value
cannot be reliably measured are measured at cost.
Unrealised gains and losses arising from changes in the fair value of financial assets classified as available-for-sale are
recognised in other comprehensive income. When financial assets classified as available-for-sale are sold or impaired,
the accumulated fair value adjustments are included in profit or loss as gains and losses on financial assets.
The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and
for unlisted securities), the Group establishes fair value by considering various valuation techniques. These include the
use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash
flows analysis, option pricing models refined to reflect the issuer’s specific circumstances, cost and dividend basis.
Derecognition
Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been
transferred and the Group has transferred substantially all risks and rewards of ownership.
(c) Impairment of financial assets classified as available-for-sale
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a
group of financial assets is impaired. In the case of equity investments classified as available-for-sale, a significant or
prolonged decline in the fair value of the security below its cost is considered in determining whether the securities
are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss measured as the
difference between acquisition cost and the current fair value, less any impairment loss on that financial asset previously
recognised in equity is removed from equity and recognised in profit or loss.
Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale
are not reversed through profit or loss.
2.8
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment. A provision for impairment of trade receivables is established when
there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of
receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value
of estimated future cash flows, discounted at the effective interest rate. The amount of provision is recognised in profit
or loss.
71
2.9
Borrowings
Borrowings are recognised initially at fair value being their issue proceeds net of transaction costs incurred. Borrowings
are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the
redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least twelve months after the end of the reporting period.
2.10 Trade and other payables
Trade and other payables are stated at their fair value and subsequently measured at amortised cost using the effective
interest method.
2.11 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks and bank overdraft. Bank overdraft is
shown within borrowings in current liabilities on the statement of financial position.
2.12 Share capital
(a)
Ordinary shares
Ordinary shares are classified as equity.
(b) Preference share capital
Preference share capital is classified as equity and it is non-redeemable or redeemable only at the Company’s option,
and any dividend is discretionary. Discretionary dividends thereon are recognised as distribution within equity upon
approval by the Company’s shareholders.
2.13 Biological assets
(a)
Bearer biological assets
Sugar cane plantations
Sugar cane plantations are carried at their fair value. The fair value is measured at cost less amortisation. These relate to
cane replantation costs and are amortised over a period of 8 years.
(b)
Consumable biological assets
Standing sugar cane crop
Standing canes are measured at their fair value. The fair value of standing canes is the present value of expected net
cash flows from the standing canes discounted at the relevant market determined pre-tax rate.
Other crops and plants
Other crops and plants are measured at their fair value. The fair value of the other crops and plants is the present value
of expected net cash flows from the sale of the other crops and plants, discounted at the relevant market determined
pre-tax rate.
(c)
Changes in fair value of bearer biological assets and consumable biological assets are recognised in profit or loss.
2.14 Deferred Expenditure
(a)
Land Development and Expenditure
Land Development and Expenditure is in respect of costs incurred to prepare land in a saleable condition that is to be
sold and is released to profit or loss on disposal.
72
2.14 Deferred Expenditure (continued)
(b)
Voluntary Retirement Scheme
VRS costs (net of refunds under the Multi Annual Adaptation Scheme and pension obligations previously provided for) are
carried forward on the basis that under the Scheme, the Company acquires the right to sell land on which no conversion
taxes are payable. The VRS costs will be recouped through the sale of these lands. These amounts are amortised over
a period of 5 years. The amortisation is reviewed and reassessed yearly to ascertain the adequacy of the yearly charge
taking into account the right exercised.
2.15 Deferred income taxes
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. However, if the deferred income
tax arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the
time of the transaction affects neither accounting nor taxable profit or loss, it is not accounted for.
Deferred income tax is determined using tax rates that have been enacted or substantively enacted at the reporting date
and are expected to apply in the period when the related deferred income tax asset is realised or the deferred income
tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against
which deductible temporary differences can be utilised.
For the purposes of measuring deferred tax liabilities and deferred tax assets for investment properties that are measured
using the fair value model, the carrying amounts of such properties are presumed to be recovered entirely through sale,
unless the presumption is rebutted. The presumption is rebutted when the investment property is depreciable and is
held within a business model whose objective is to consume substantially all of the economic benefits embodies in the
investment property over time, rather than through sale.
2.16 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined by the weighted average method.
The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related
production overheads, but excludes interest expenses. Net realisable value is the estimate of the selling price in the
ordinary course of business, less the costs of completion and selling expenses.
2.17 Contracts
Contract costs are recognised when incurred.
When the outcome of a contract cannot be estimated reliably, contract revenue is recognised only to the extent of
contract costs incurred that are likely to be recoverable.
When the outcome of a contract can be estimated reliably and it is probable that the contract will be profitable, contract
revenue is recognised over the period of the contract. When it is probable that contract costs will exceed total contract
revenue, the expected loss is recognised as an expense immediately.
The company uses the ‘percentage completion method’ to determine the appropriate amount to recognise in a given
period. The stage of completion is measured by reference to the contract costs incurred up to the end of the reporting
period as a percentage of the total estimated costs for each contract. Costs incurred in the year in connection with future
activity on a contract are excluded from contract costs in determining the stage of completion. They are presented as
inventories, prepayment or other assets, depending on their nature.
The company presents as an asset the gross amount due from customers for contract work for all contracts in progress
for which costs incurred plus recognised profits (less recognised losses) exceeds progress billings. Progress billings not
yet paid by customers and retention are included within ‘trade and other receivables’.
The company presents as a liability the gross amount due to customers for contract work for all contracts in progress for
which progress billings exceed costs incurred plus recognised profits (less recognised losses).
73
2.18 Retirement benefit obligation
(a) Defined contribution plans
A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity.
The Group has not legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets
to pay all employees the benefits relating to employee service in the current and prior periods.
The Group operates a defined contribution retirement benefit plan for all qualifying employees. Payments to defined
contribution retirement plan are charged as an expense as they fall due.
(b) Defined benefit plans
A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit plans define an
amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such
as age, years of service and compensation.
The liability recognised in the statement of financial position in respect of defined benefit pension plans is the present
value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined
benefit obligation is calculated annually by independent actuaries using the projected unit credit method.
Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses arising from experience
adjustments and changes in actuarial assumptions, the return on plan assets (excluding interest) and the effect of the
asset ceiling (if any, excluding interest), is recognised immediately in other comprehensive income in the period in
which they occur. Remeasurements recognised in other comprehensive income shall not be reclassified to profit or loss
in subsequent period.
The Group determines the net interest expense/(income) on the net defined benefit liability/(asset) for the period
by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to
the net defined benefit liability/(asset), taking into account any changes in the net defined liability/(asset) during the
period as a result of contributions and benefit payments. Net interest expense/(income) is recognised in profit or loss.
Service costs comprising current service cost, past service cost, as well as gains and losses on curtailments and settlements
are recognised immediately in profit or loss.
(c) Gratuity on retirement
Artisans and labourers of sugar companies are entitled to a gratuity on death or retirement, based on years of service.
This item is not funded. The benefits accruing under this item are calculated by an actuary and have been accounted for
in the financial statements.
For employees who are not covered by the above pension plans, the net present value of gratuity on retirement payable
under the Employment Rights Act 2008 is calculated by an actuary and provided for. The obligations arising under this
item are not funded.
2.19 Foreign currencies
(a) Functional and presentation currency
Items included in the financial statements (of each of the Group’s entities) are measured using Mauritian rupees, the
currency of the primary economic environment in which the entity operates (“functional currency”).
The consolidated financial statements are presented in Mauritian rupees, which is the company’s functional and
presentation currency. All values are rounded to the nearest thousand (Rs’000) except where otherwise indicated.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing on the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in profit or loss
within ‘finance income or cost’. All other foreign exchange gains and losses are presented in profit or loss within ‘other
(losses)/gains – net’.
74
2.19 Foreign currencies (continued)
(b) Transactions and balances (continued)
Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at
the date of the transaction.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the
date the fair value was determined.
Translation differences on non-monetary items, such as equities classified as available-for-sale financial assets, are
included in the fair value reserve in equity.
2.20 Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets
that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying
amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash flows (cash-generating units).
2.21 Accounting for leases
Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as operating leases.
Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Finance leases are capitalised at the lease’s inception at the lower of the fair value of the leased property and the present
value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as
to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or
loss unless they are attributable to qualifying assets in which case, they are capitalised in accordance with the policy on
borrowing costs.
The property, plant and equipment acquired under finance leasing contracts is depreciated over the useful life of the
asset.
2.22 Operating leases
Assets leased out under operating leases are included in investment properties in the statement of financial position.
The carrying amounts of investment properties represent their fair value. Rental income is recognised in profit or loss on
a straight line basis over the lease term.
2.23 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalised
until such time as the assets are substantially ready for their intended use or sale. Other borrowing costs are expensed.
2.24 Dividend distribution
Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the period
in which the dividends are declared.
2.25 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable
for goods supplied, stated net of discounts, returns, value added taxes, rebates and other similar allowances and after
eliminating sales within the Group.
75
2.25 Revenue recognition (continued)
(a) Sales of goods
Sales of goods are recognised when the goods are delivered and titles have passed, at which time all of the following
conditions are satisfied:
•
the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
•
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor
effective control over the goods sold;
•
the amount of revenue can be measured reliably;
•
it is probable that the economic benefits associated with the transaction will flow to the Group; and
•
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
The recognition of sugar and molasses proceeds is based on total production of the crop year. Bagasse proceeds are
accounted for in the year in which it is received.
Sugar prices are based on the recommendations made to all sugar companies by the Mauritius Chamber of Agriculture
after consultation with the Mauritius Sugar Syndicate. Any differences between the recommended prices and the final
prices are reflected in profit or loss of the period in which they are established.
(b)
Rendering of services
Revenue from rendering of services are recognised in the accounting year in which the services are rendered. (by
reference to the completion of the specific transaction assessed on the basis of the actual service provided as a proportion
of total services to be provided.)
Sales of services (golf playing rights) are recognised in the accounting year in which the services are rendered (by
reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion
of total services to be provided).
Admission fee that permits only membership of the golf club is recognised as revenue when no significant uncertainty
as to its collectibility exists.
(c) Other revenues earned by the Group are recognised on the following bases:
•
Dividend income is recognised when the shareholder’s right to receive payment is established.
•
Interest income is recognised on a time-proportion basis using the effective interest method. When a receivable is
impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow
discounted at original effective interest rate, and continues unwinding the discount as interest income. Interest income
on impaired loans is recognised either as cash is collected or on a cost-recovery basis as conditions warrant.
•
Rental income and management fee are recognised on an accruals basis in accordance with the substance of the
relevant agreements.
•
Other income – on an accrual basis unless collectibility is in doubt.
2.26 Sale of land
The profit arising on sale of land is recognised in profit or loss on the date the deed of sale is signed and the corresponding
debtor accounted in the statement of financial position. All other prepayments collected in respect of sale of land are
credited to ‘’Deposit on sale of land’’ in the statement of financial position.
2.27 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is
probable that an outflow of resources that can be reliably estimated will be required to settle the obligation.
2.28 Segment reporting
76
Segment information presented relates to operating segments that engage in business activities for which revenues are
earned and expenses incurred.
3 FINANCIAL RISK MANAGEMENT
3.1
Financial Risk Factors
The Group’s activities expose it to a variety of financial risks, including:
• Foreign exchange risk;
• Credit risk;
• Interest rate risk;
• Liquidity risk;
• Equity market price risk; and
• Market risk.
A description of the significant risk factors is given below together with the risk management policies applicable.
Foreign exchange risk
The Group is exposed to foreign exchange risk arising from various currency exposures primarily with respect to US
dollars, Euros and GBP. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities.
The Group’s dealings in foreign currency purchases is managed by seeking the best rates. Fluctuations arising on purchase
transactions are partly offset by sales transactions, effected in US dollars, Euros and GBP to some extent.
The Group
At June 30, 2014, if the rupee had weakened/strengthened by 1% against the US dollar/Euro/GBP with all variables
held constant, post tax profit of the group for the year would have been Rs.447,000 (2013: Rs.506,000) higher/lower,
mainly as a result of foreign exchange gains/losses on translation of US dollar/Euro/GBP denominated assets. Profit is
less sensitive to movement in exchange rates in 2014 than 2013 because of the decreased amount of US dollar/Euro/
GBP denominated assets.
USD
Rs’000
EURO
Rs’000
GBP
Rs’000
MUR
Rs’000
Total
Rs’000
26
146
1,329
43,588
78
508
10,758
326,950
12,191
371,192
2013
USD
Rs’000
EURO
Rs’000
GBP
Rs’000
MUR
Rs’000
Total
Rs’000
Bank balances
175
10,578
4,705
41,944
1,057
1,128
45,816
250,382
51,753
304,032
The Holding Company
At June 30, 2014, if the rupee had weakened/strengthened by 1% against the US dollar/Euro/GBP with all variables
held constant, post tax profit of the company for the year would have been Rs.50,000 (2013: Rs.14,000) higher/lower,
mainly as a result of foreign exchange gains/losses on translation of US dollar/Euro/GBP denominated bank balances.
Profit is more sensitive to movement in exchange rates in 2014 than 2013 because of the increased amount of US
dollar/Euro/GBP denominated bank balances.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group’s trade receivables. The amounts presented in the
statement of financial position are net of allowances for doubtful receivables, estimated by the Group’s management
based on prior experience and the current economic environment.
The Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties and
customers. The Group has policies in place to ensure that sales of products and services are made to customers with an
appropriate credit history. Cash transactions are limited to high credit quality financial institutions. The Group has policies
that limit the amount of credit exposure to any financial institution.
2014
Bank balances
77
3 FINANCIAL RISK MANAGEMENT (continued)
3.1 Financial Risk Factors (continued)
Credit risk (continued)
The table below shows the credit concentration of the group and the company at the end of the reporting period :
Counterparties
10 major counterparties per company
Others (diversified risk)
The Group
The Holding Company
2014
%
2013
%
2014
%
2013
%
62
38
60
40
57
43
48
52
100
100
100
100
Management does not expect any losses from non-performance of these customers.
Interest rate risk
The Group’s income and operating cash flows are exposed to interest rate risk as it sometimes borrows at variable rates.
The Group has interest-bearing assets.
The Group
At June 30, 2014, if the interest rates on rupee-denominated borrowings had been 1% lower/higher with all other
variables held constant, post-tax profit for the year would have been Rs.17,564,000 (2013: Rs.20,459,000) higher/lower,
mainly as a result of lower/higher interest expense on floating rate borrowings.
The above risk is mitigated by the interest-bearing assets as follows:
At June 30, 2014, if the interest rates on rupee-denominated bank balances and interest bearing assets had been
1% lower/higher with all other variables held constant, post-tax profit for the year would have been Rs.7,583,000
(2013:Rs.3,963,000) lower/higher, mainly as a result of lower/higher interest income on bank balances.
The Holding Company
At June 30, 2014, if the interest rates on rupee-denominated borrowings had been 1% lower/higher with all other
variables held constant, post-tax profit for the year would have been Rs. 8,417,000 (2013: Rs.11,550,000) higher/ lower,
mainly as a result of lower/higher interest expense on floating rate borrowings.
The above risk is mitigated by the interest-bearing assets as follows:
At June 30, 2014, if the interest rates on rupee-denominated bank balances and interest bearing assets had been 1%
lower/higher with all other variables held constant, post-tax profit for the year would have been Rs.6,400,000 (2013:
Rs.3,962,000) lower/higher, mainly as a result of lower/higher interest income on bank balances and interest bearing
assets.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivery of cash or another financial asset.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of
funding through an adequate amount of committed credit facilities and the ability to close out market positions. The
Group aims at maintaining flexibility in funding by keeping committed credit lines available.
78
Liquidity risk (continued)
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period
at the end of the reporting period to the contractual maturity date.
The Group
Less than Between 1 Between 2
1 year and 2 years and 5 years
Rs’000
Rs’000
Rs’000
Over
5 years
Rs’000
Total
Rs’000
At June 30, 2014
Bank overdrafts
Bank loans
206,101
710,542
939,799
-
147,529
-
-
602,270
-
-
552,077
-
206,101
2,012,418
939,799
At June 30, 2013
Bank overdrafts
Bank loans
192,055
763,591
578,995
-
154,340
-
-
440,229
-
-
752,521
-
192,055
2,110,681
578,995
Less than Between 1 Between 2
1 year and 2 years and 5 years
Rs’000
Rs’000
Rs’000
Over
5 years
Rs’000
Total
Rs’000
The Holding Company
At June 30, 2014
Bank overdrafts
Bank loans
124,389
551,110
4,845
805,510
-
60,142
-
-
-
90,286
-
-
-
45,215
-
-
124,389
746,753
4,845
805,510
At June 30, 2013
Bank overdrafts
Bank loans
94,361
700,143
8,098
456,990
-
60,142
-
-
-
120,286
-
-
-
75,358
-
-
94,361
955,929
8,098
456,990
Equity market price risk
The Group is susceptible to equity market price risk arising from uncertainties about future prices of the equity securities
because of investments held by the Group and classified on the statement of financial position as available-for-sale. To
manage its price risk arising from investments in equity securities, the Group diversifies its portfolio.
Sensitivity analysis
The table below summarises the impact of increases/decreases in the fair value of the investments on equity.
The analysis is based on the assumption that the fair value has increased/decreased by 5%
Impact on equity
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
3,681
3,461
3,681
3,460
Available-for-sale
Market risk
The Group is exposed to market risk arising from changes in sugar prices and the incidence of the exchange rate. This risk
will directly impact on future crop proceeds. The risk is not hedged.
79
3.2 Fair value estimation
The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting
period. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker,
industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market
transactions on an arm’s length basis. The quoted market price used for financial assets held by the Group is the current
bid price. These instruments are included in level 1.
Instruments included in level 1 comprise primarily quoted equity investments classified as trading securities or availablefor-sale.
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques.
These valuation techniques maximise the use of observable market data where it is available and rely as little as possible
on specific estimates. If all significant inputs required to fair value an instruments are observable, the instument is
included in level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their
fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual
cashflows at the current market interest rate that is available to the Group for similar financial instruments.
3.3 Biological assets
The Group is exposed to fluctuations in the price of sugar and the incidence of exchange rate, which affect both the crop
proceeds and the fair value of biological assets. The risk is not hedged.
3.4 Capital risk management
The Group’s objectives when managing capital are:
• to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders
and benefits for other stakeholders; and
• to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.
The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments
to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to
maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares, or sell assets to reduce debt.
Consistently with others in the industry, the Group monitors capital on the basis of the debt-to-adjusted capital ratio.
This ratio is calculated as net debt to adjusted capital. Net debt is calculated as total debt (as shown in the Statement of
financial position) less cash and cash equivalents. Adjusted capital comprises all components of equity (ie share capital,
share premium, non-controlling interests, retained earnings, and revaluation surplus and other reserves).
During 2014, the Group’s strategy, which was unchanged from 2013, was to maintain the debt-to-adjusted capital ratio at
the lower end, in order to secure access to finance at a reasonable cost.
The debt-to-adjusted capital ratios at June 30, 2014 and at June 30, 2013 were as follows:
The Group
2014
Rs’000
The Holding Company
2014
Rs’000
2013
Rs’000
2013
Rs’000
Total debt (note 21)
Less: cash and cash equivalents (note 38)
2,218,519
(12,191)
2,302,736
(51,753)
871,142
(8,551)
1,050,290
(43,193)
Net debt
2,206,328
2,250,983
862,591
1,007,097
Total equity
Add: subordinated debt instruments
8,708,974
-
8,951,304
-
9,114,904
-
9,240,120
-
Adjusted capital
8,708,974
8,951,304
9,114,904
9,240,120
Debt-to-adjusted capital ratio
0.25 : 1
0.25:1
0.09:1
0.11:1
The decrease in the debt-to-adjusted capital ratio during 2014 resulted primarily from the decrease in borrowings.
There were no changes in the Group’s approach to capital risk management during the year.
80
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continuously evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
(a) Impairment of available-for-sale financial assets
The Group follows the guidance of IAS 39 on determining when an investment is other-than-temporarily impaired. This
determination requires significant judgement. In making this judgement, the Group evaluates, among other factors, the
duration and extent to which the fair value of an investment is less than its cost, and the financial health of and near-term
business outlook for the investee, including factors such as industry and sector performance, changes in technology and
operational and financing cash flow.
(b) Biological assets
(i) Bearer biological assets - Sugar cane plantations
The fair value of sugar cane plantations has been estimated based on the cost of land preparation and planting of bearer
canes.
(ii) Consumable biological assets - Standing Sugar Canes
The fair value of standing sugar canes crop has been arrived at by discounting the present value (PV) of expected net cash
flows from standing canes discounted at the relevant market determined pre-tax rate.
The expected cash flows have been computed by estimating the expected crop and the sugar extraction rate and the
forecasts of sugar prices which will prevail in the coming year. The harvesting costs and other direct expenses are based
on the yearly budgets of the company.
Other key assumptions for biological assets are disclosed in Note 12.
(c) Land
The land of the Group were valued at June 30, 2006 at fair value based on the valuation report made by JPW International
Ltd, Property Surveyor, on an open market value basis. The valuation was computed by reference to market prices for
similar properties.
(d) Investment properties
Investment properties, held to earn rentals/or for capital appreciation or both and not occupied by the Group/Company is
carried at fair value with changes in fair value being recognised in profit or loss. Investment properties consist of freehold
land and buildings. Freehold land of the group and the holding company classified as investment properties have been
valued at their open market value on June 30, 2006 by JPW International Ltd (Property Surveyor). Buildings classified
as investment properties have been valued at cost less accumulated depreciation. The directors are of opinion that the
carrying amounts of the investment properties represent their fair value.
(e) Pension benefits
The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis
using a number of assumptions. The assumptions used in determining the net cost (income) for pensions include the
discount rate. Any changes in these assumptions will impact the carrying amount of pension obligation.
The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to
determine the present value of estimated future cash outflows expected to be required to settle the pension obligations.
In determining the appropriate discount rate, the Group considers the interest rates of high- quality corporate bonds that
are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the
terms of the related pension obligation.
Other key assumptions for pension obligation are based in part on current market conditions. Additional information is
disclosed in Note 22.
81
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
(f) Limitations of sensitivity analysis
Sensitivity analysis in respect of market risk demonstrates the effect of a change in a key assumption while other
assumptions remain unchanged. In reality, there is a correlation between the assumptions and other factors. It should also
be noted that these sensitivities are non-linear and larger or smaller impacts should not be interpolated or extrapolated
from these results.
Sensitivity analysis does not take into consideration that the Group’s assets and liabilities are managed. Other limitations
include the use of hypothetical market movements to demonstrate potential risk that only represent the Group’s view of
possible near-term market changes that cannot be predicted with any certainty.
(g) Impairment of assets
Property, plant and equipment and intangible assets are considered for impairment if there is a reason to believe that
impairment may be necessary. Factors taken into consideration in reaching such a decision include the economic viability
of the asset itself and where it is a component of a larger economic unit, the viability of that unit itself.
Future cash flows expected to be generated by the assets or cash-generating units are projected, taking into account
market conditions and the expected useful lives of the assets. The present value of these cash flows, determined using an
appropriate discount rate, is compared to the current net asset value and, if lower, the assets are impaired to the present
value.
Cash flows which are utilised in these assessments are extracted from the yearly budget.
(h) Fair value of securities not quoted in an active market
The fair value of securities not quoted in an active market may be determined by the Group using valuation techniques
including third party transaction values, earnings, net asset value, cost, dividend or discounted cash flows, whichever is
considered to be appropriate. The Group would exercise judgement and estimates on the quality and quantity of pricing
sources used. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
(i) Asset lives and residual values
Property, plant and equipment are depreciated over its useful life taking into account residual values, where appropriate.
The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors.
In reassessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are
taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the
asset and projected disposal values. Consideration is also given to the extent of current profits and losses on the disposal
of similar assets.
(j) Depreciation policies
Property, plant and equipment are depreciated to their residual values over their estimated useful lives. The residual value
of an asset is the estimated net amount that the Company would currently obtain from the disposal of the asset, if the
asset were already of the age and in condition expected at the end of its useful life.
The directors therefore make estimates based on historical experience and use best judgement to assess the useful lives
of assets and to forecast the expected residual values of the asset at the end of their expected useful lives.
(k) Deferred tax on investment properties
82
For the purposes of measuring deferred tax liabilities or deferred tax assets arising from investment properties the directors
reviewed the Group’s investment property portfolio and concluded that none of the Group’s investment properties are
held under a business model whose objective is to consume substantially all of the economic benefits embodied in the
investment properties over time, rather than through sales. Therefore, in determining the Group’s deferred taxation on
investment properties, the directors have determined that the presumption that the carrying amounts of investment
properties measured using the fair value model are recovered entirely through sale is not rebutted. As a result, the Group
has not recognised any deferred taxes on changes in fair value of investment properties as the Group is not subject to any
capital gain taxes on disposal of its investment properties.
PROPERTY, PLANT AND EQUIPMENT
7,345,085
NET BOOK VALUE
At June 30, 2014
8
103
-
111
7,345,085
At June 30, 2014
111
-
82,598
7,262,487
-
111
7,345,085
At June 30, 2014
- Cost
- Valuation
-
-
(43,412)
103
-
-
-
-
-
-
-
-
-
-
-
DEPRECIATION
At July 1, 2013
Charge for the year
Adjustment for assets scrapped
Disposal adjustments
Transfer to investment
property (note 6)
111
-
-
-
7,388,497
-
-
-
Additions
Assets scrapped
Disposals
property (note 6)
Transfer from land development
and expenditure (note 11(a))
Transfer to land development
246,127
13,388
-
10,772
2,616
-
-
259,515
259,515
-
259,515
-
22,123
-
237,392
-
-
-
237,392
-
300,636
451,841
-
425,780
26,061
-
-
752,477
379,448
373,029
752,477
-
-
-
729,596
22,881
-
-
356,567
373,029
2,517
8,576
-
8,444
132
-
-
11,093
6,372
4,721
11,093
-
-
-
11,093
-
-
-
6,372
4,721
98,181
532,934
-
516,528
21,579
-
(5,173)
631,115
631,115
-
631,115
-
-
-
600,275
36,013
-
(5,173)
600,275
-
28,958
200,005
-
197,101
11,622
-
(8,718)
228,963
224,523
4,440
228,963
-
-
-
224,821
12,964
-
(8,822)
220,381
4,440
82,598
7,305,899
COST AND VALUATION
At July 1, 2013
- Cost
- Valuation
(i)
111
-
Factory
Freehold Leasehold Improvement Buildings & Weighing Cultivation Transport
Land
Land
to land Equipment Equipment Equipment Equipment
Rs’000
Rs’000
Rs’000
Rs’000
Rs’000
Rs’000
Rs’000
(a) The Group
5
45,344
50,120
-
31,623
18,573
-
(76)
95,464
95,464
-
95,464
-
-
-
83,160
12,447
-
(143)
83,160
-
873,944
531,195
(12)
457,973
74,034
(2)
(798)
1,405,139
1,383,985
21,154
1,405,139
-
68,157
(301)
1,315,259
23,494
(13)
(1,457)
1,294,105
21,154
209,427
17,916
-
16,625
1,291
-
-
227,343
227,343
-
227,343
-
-
-
227,343
-
-
-
227,343
-
3,108,304
7,709,243
Total
Rs’000
(43,412)
90,280
(301)
3,378,659
7,665,831
88,185
-
-
-
-
-
-
9,238,412
1,806,078
(12)
1,664,949
155,908
(2)
(14,765)
88,185 11,044,490
88,185
-
88,185 11,044,490
-
-
-
- 10,817,547
88,185
195,984
-
(13)
-
(15,595)
-
-
Other
Residential
Buildings,
Golf
Buildings &
Farming
Course
Work
Welfare Equipment
and
in
Equipment & StructuresInfrastructure Progress
Rs’000
Rs’000
Rs’000
Rs’000
83
84
At June 30, 2013
- Cost
- Valuation
303,816
2,649
83,747
27,720
197,101
51,537
31,623
857,286
457,973
210,718
16,625
14,894
1,731
-
-
-
-
9,152,598
1,664,949
1,578,484
141,805
(24,997)
(30,518)
175
-
Note (i): The consolidation adjustment was in respect of the increase in shareholding in Medine Rum Limited from 50% to 100% following the acquisition of 2,000,000 ordinary shares of Rs.10 each in
Medine Rum Limited during the year ended June 30, 2013. Hence, Medine Rum Limited was considered as a subsidiary company instead of an associate.
226,620
516,528
395,840
62,520
(385)
(205)
-
203
10,817,547
8
8,444
27,098
4,748
(20)
-
-
(203)
227,343
3,108,304
7,709,243
10,817,547
7,388,497
425,780
201,614
17,614
(8,399)
(13,728)
-
-
1,315,259
227,343
-
227,343
58,324
-
(141,035)
10,851,335
105,532
(26,196)
(31,369)
956
3,001,057
7,850,278
NET BOOK VALUE
At June 30, 2013
10,772
523,885
25,421
(16,193)
(16,585)
-
-
83,160
1,294,105
21,154
1,315,259
-
-
-
227,343
-
-
-
-
227,343
-
103
8,314
130
-
-
-
-
224,821
83,160
-
83,160
-
1,160
-
1,279,363
36,520
(1,553)
(231)
-
1,258,209
21,154
-
397,850
27,755
-
-
175
-
600,275
220,381
4,440
224,821
-
(1,160)
-
79,372
4,969
(21)
-
-
79,372
-
Total
Rs’000
At June 30, 2013
8,892
1,880
-
-
-
-
11,093
600,275
-
600,275
-
-
-
243,959
3,595
(8,429)
(14,304)
-
239,519
4,440
Other
Buildings,
Golf
Farming
Course
Equipment
and
& Structures Infrastructure
Rs’000
Rs’000
97
6
-
-
-
-
729,596
6,372
4,721
11,093
-
-
-
610,010
23,043
(16,193)
(16,585)
-
610,010
-
Residential
Buildings &
Cultivation Transport
Welfare
Equipment Equipment Equipment
Rs’000
Rs’000
Rs’000
-
-
-
-
-
-
237,392
356,567
373,029
729,596
-
-
-
11,080
13
-
-
-
6,359
4,721
Weighing
Equipment
Rs’000
DEPRECIATION
At July 1, 2012
Charge for the year
Consolidation adjustment (note (i))
Transfer
111
237,392
-
237,392
-
-
-
708,007
20,882
-
(249)
956
334,978
373,029
Factory
Buildings &
Equipment
Rs’000
7,388,497
111
7,388,497
111
-
58,324
-
-
-
82,598
7,305,899
-
-
7,529,532
Additions
-
Assets scrapped
-
Disposals
-
-
(141,035)
Transfer from construction
work in progress (note 15)
-
Transfer
-
162,558
16,510
-
-
-
111
-
-
-
-
82,598
7,446,934
COST AND VALUATION
At July 1, 2012
- Cost
- Valuation
(ii)
162,558
-
111
-
Freehold
Land
Rs’000
Leasehold Improvement
Land
to land
Rs’000
Rs’000
PROPERTY, PLANT AND EQUIPMENT (continued)
(a) The Group (continued)
5
5
(iii) No assets were acquired under finance leases during the financial year 2013 and 2014.
(iv) Freehold land of the Group have been valued at their open market value on June 30, 2006 by JPW International Ltd
(Property Surveyor). The valuation was computed by reference to market prices for similar properties. Certain other
property, plant and equipment of the holding company were valued in 1974. The directors consider these revalued
amounts as the deemed cost.
Factory buildings and equipment, weighing equipment and transport equipment of a subsidiary, were valued by the
directors on a replacement cost basis using indices provided by the Mauritius Sugar Authority. Revaluation of the said
assets were made on an annual basis until December 31, 2004.
Details of the Group’s property, plant and equipment measured at fair value and information about the fair value hierarchy
as at June 30, 2014 are as follows:
Level 2
Rs’000
Level 3
Rs’000
Freehold land
Factory buildings and equipment
Weighing equipment
Transport equipment
Other buildings, farming equipment and structures
7,262,487
-
-
-
-
373,029
4,721
4,440
21,154
Total
7,262,487
403,344
The revaluation surplus net of deferred income taxes was credited to revaluation surplus in shareholders’ equity.
As the land of the company has been valued using observable market data but there is no active market, it is within
level 2 of the fair value hierarchy, while the factory buildings and equipment, weighing equipment, transport equipment
and other buildings, farming equipment and structures are within level 3 of the fair value hierarchy as they are based on
unobservable inputs.
The fair value of the freehold land was derived using the sales comparison approach. Sales prices of comparable land in
close proximity are adjusted for differences in key attributes such as property size. The most significant input into this
valuation approach is price per square metre.
The fair values of the factory buildings and equipment, weighing equipment, transport equipment and other buildings,
farming equipment and structures were determined on the basis of the costs from prior transactions, as adjusted on an
annual basis up to December 31, 2004 using indices provided by the Mauritius Sugar Authority and on the basis of the
estimated useful life of each asset. The fair values reflect the cost of a market participant to construct or acquire assets of
comparable utility and age, adjusted for obsolescence.
The indices provided by the Mauritius Sugar Authority is the most significant unobservable inputs used for the above
valuation.
Significant increases/(decreases) in the above unobservable inputs in isolation would result in a significant (lower)/
higher fair value.
There were no movement in the opening balance and closing balance of the property, plant and equipment categorised
within level 3 of the fair value hierarchy during the year.
There has been no change to the valuation technique during the year.
There were no transfers between levels 2 and 3 during the year.
85
5
(v) If the property, plant and equipment were stated on the historical cost basis the amounts would be as follows:
Land
Rs’000
Factory
Buildings &
Equipment
Rs’000
At June 30, 2014
Cost
Accumulated depreciation
550,425
-
436,243
(273,915)
3,110
(1,819)
Net book value
550,425
162,328
1,291
At June 30, 2013
Cost
Accumulated depreciation
550,612
-
436,243
(251,266)
3,110
(1,742)
Net book value
550,612
184,977
1,368
Weighing
Equipment
Rs’000
Transport
Equipment
Rs’000
5,828
(5,828)
-
5,828
(5,828)
-
(vi) The above property, plant and equipment have been pledged as security for borrowings.
(vii) Depreciation charge has been charged in operating expenses.
86
Other
Buildings
Rs’000
Total
Rs’000
18,804
(14,820)
1,014,410
(296,382)
3,984
718,028
18,804
(13,855)
1,014,597
(272,691)
4,949
741,906
At June 30, 2014
- Cost
- Valuation
-
-
-
6,984,116
At June 30, 2014
NET BOOK VALUE
At June 30, 2014
11
100
100
-
-
-
-
-
111
DEPRECIATION
At July 1, 2013
Charge for the year
property (note 6)
6,984,116
111
6,984,116
111
-
-
-
39,391
6,944,725
22,123
-
166,411
12,657
-
10,777
1,880
-
179,068
201,191
-
201,191
-
-
179,068
-
-
111
-
-
7,027,528
Additions
-
Disposals
-
property (note 6)
-
Transfer from land development
-
(43,412)
179,068
-
111
-
At July 1, 2013
- Cost
- Valuation
Improvement
to land
Rs’000
39,391
6,988,137
(i) COST AND VALUATION
Freehold Leasehold
Land
Land
Rs’000
Rs’000
(b) The Holding Company
5
17,575
42,908
-
42,090
818
-
60,483
60,483
-
60,483
-
-
-
60,483
-
-
60,483
-
Factory
Equipment
Rs’000
408
911
-
879
32
-
1,319
1,319
-
1,319
-
-
-
1,319
-
-
1,319
-
Weighing
Equipment
Rs’000
102,105
530,286
-
513,880
21,579
(5,173)
632,391
632,391
-
632,391
-
-
-
601,551
36,013
(5,173)
601,551
-
Cultivation
Equipment
Rs’000
25,512
181,070
-
177,437
11,000
(7,367)
206,582
206,582
-
206,582
-
-
-
201,127
12,926
(7,471)
201,127
-
52,485
49,193
-
31,674
17,595
(76)
101,678
101,678
-
101,678
-
-
-
89,984
11,837
(143)
89,984
-
Residential
Buildings &
Transport
Welfare
Equipment Equipment
Rs’000
Rs’000
360,184
367,460
(598)
328,171
40,685
(798)
727,644
727,644
-
727,644
-
68,157
(12,818)
658,934
14,828
(1,457)
658,934
-
Other
Buildings
and
structures
Rs’000
7,730,930
1,184,585
(598)
1,105,008
93,589
(13,414)
8,915,515
1,970,790
6,944,725
8,915,515
(43,412)
90,280
(12,818)
8,820,105
75,604
(14,244)
1,831,968
6,988,137
Total
Rs’000
87
88
-
7,027,528
At June 30, 2013
NET BOOK VALUE
At June 30, 2013
11
100
94
6
-
-
-
111
7,027,528
-
-
-
-
-
111
-
39,391
6,988,137
DEPRECIATION
At July 1, 2012
Charge for the year
Transfer
111
7,027,528
At June 30, 2013
- Cost
- Valuation
-
(141,035)
111
-
111
-
-
-
-
39,391
7,129,172
7,168,563
-
-
-
-
At July 1, 2012
- Cost
- Valuation
Additions
Assets scrapped
Disposals
Transfer
(ii) COST AND VALUATION
Freehold Leasehold
Land
Land
Rs’000
Rs’000
5
168,291
10,777
8,897
1,880
-
-
-
179,068
179,068
-
179,068
-
162,558
16,510
-
-
-
162,558
-
Improvement
to land
Rs’000
18,393
42,090
41,225
865
-
-
-
60,483
60,483
-
60,483
-
60,483
-
-
-
-
60,483
-
Factory
Equipment
Rs’000
440
879
847
32
-
-
-
1,319
1,319
-
1,319
-
1,319
-
-
-
-
1,319
-
Weighing
Equipment
Rs’000
87,671
513,880
522,571
24,087
(16,193)
(16,585)
-
601,551
601,551
-
601,551
-
611,857
22,472
(16,193)
(16,585)
-
611,857
-
Cultivation
Equipment
Rs’000
23,690
177,437
181,647
15,609
(8,399)
(11,420)
-
201,127
201,127
-
201,127
-
218,106
3,446
(8,429)
(11,996)
-
218,106
-
58,310
31,674
27,149
4,748
(20)
-
(203)
89,984
89,984
-
89,984
-
86,196
4,969
(21)
-
(1,160)
86,196
-
Residential
Buildings &
Transport
Welfare
Equipment Equipment
Rs’000
Rs’000
330,763
328,171
279,728
48,665
(385)
(40)
203
658,934
658,934
-
658,934
-
638,948
20,420
(1,553)
(41)
1,160
638,948
-
Other
Buildings
and
structures
Rs’000
7,715,097
1,105,008
1,062,158
95,892
(24,997)
(28,045)
-
8,820,105
1,831,968
6,988,137
8,820,105
(141,035)
8,948,141
67,817
(26,196)
(28,622)
-
1,818,969
7,129,172
Total
Rs’000
5
(iii) No assets were acquired under finance leases during the financial year 2013 and 2014.
(iv) Freehold land of the holding company have been valued at their open market value on June 30, 2006 by JPW International
Ltd (Property Surveyor). The valuation was computed by reference to market prices for similar properties.
Details of the Company’s property, plant and equipment measured at fair value and information about the fair value
hierarchy as at June 30, 2014 are as follows:
Level 2
Rs’000
6,944,725
Freehold land
Certain other property, plant and equipment of the holding company were valued in 1974. The directors consider these
revalued amounts as the deemed cost.
As the land of the company has been valued using observable market data but there is no active market, it is within level
2 of the fair value hierarchy.
(v) If the property, plant and equipment were stated on the historical cost basis the amounts would be as follows:
Land
Net book value at June 30, 2014 and June 30, 2013
2014
Rs’000
2013
Rs’000
303,035
303,222
(vi) Above property, plant and equipment have been pledged as security for borrowings.
(vii) Depreciation charge has been charged in operating expenses.
(viii)If an item of owner-occupied property becomes an investment property because its use has changed, any difference
resulting between the carrying amount and the fair value of this item at the date of transfer is treated in the same way
as a revaluation under IAS 16. Any resulting increase in the carrying amount of the property is recognised in profit or loss
to the extent that it reverses a previous impairment loss, with any remaining increase recognised in other comprehensive
income and increase directly to equity in revaluation surplus within equity. Any resulting decrease in the carrying amount
of the property is initially charged in other comprehensive income against any previously recognised revaluation surplus,
with any remaining decrease charged to profit or loss.
6
INVESTMENT PROPERTIES
VALUATION
At July 1,
Additions
Transfer from land development and
expenditure (note 11(a))
Transfer from property, plant and
equipment (note 5 (b))
(Decrease)/increase in fair value
At June 30,
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
1,190,442
8,888
1,131,148
20,586
473,965
-
481,239
-
68,166
-
68,166
-
289
(6,905)
1,260,880
-
38,708
1,190,442
12,220
(7,205)
547,146
(7,274)
473,965
89
6
INVESTMENT PROPERTIES (continued)
(a) Investment properties, held to earn rentals/or for capital appreciation or both and not occupied by the Group are carried at
fair value. Investment properties consist of freehold land and buildings. Freehold land of the group and the holding company
classified as investment properties have been valued at their open market value on June 30,2006 by JPW International Ltd
(Property Surveyor). Buildings classified as investment properties have been valued at cost less accumulated depreciation.
The directors are of opinion that the carrying amounts of the investment properties represent their fair value.
(b) Gains and losses arising from changes in the fair value of investment properties are included in profit or loss for the period
in which they arise.
(c) Rental income from the investment properties amounted to Rs.84,269,000 (2013: Rs.97,495,000) for the group and
Rs.29,916,000 (2013: Rs.24,922,000) for the company (notes 26 & 27).
Direct operating expenses in respect of investment properties amounted to Rs.5,502,000 (2013: Rs.4,724,000) for the
group and nil for the company.
(d) The above investment properties have been pledged as security for borrowings.
(e) Details of the Group’s investment properties measured at fair value and information about the fair value hierarchy as at
June 30, 2014 are as follows:
The Group
The Holding Company
Level 2
Rs’000
Level 3
Rs’000
Level 2
Rs’000
Level 3
Rs’000
467,276
-
311,244
-
-
793,604
-
235,902
Freehold land
Buildings
The fair values of the buildings were determined on the basis of the costs from prior transactions and their respective
estimated useful lives. The fair values reflect the cost of a market participant to construct assets of comparable utility and
age, adjusted for obsolescence.
The most significant unobservable inputs used for the above valuation are as follows:
Description of
unobservable inputs
Unobservable
inputs
Depreciation rate
1%
Buildings
Significant increases/(decreases) in the above estimated range of unobservable inputs in isolation would result in a
significant (lower)/higher fair value.
The movement in fair value measurements of investment properties using significant unobservable inputs are as follows:
The Group
The Holding Company
Buildings
Rs’000
Buildings
Rs’000
At July 1, 2013
Additions
Transfer from land development and
expenditure (note 11(a))
equipment (note 5 (b))
Decrease in fair value
723,166
8,888
162,721
-
68,166
68,166
289
(6,905)
12,220
(7,205)
At June 30, 2014
793,604
There has been no change to the valuation technique during the year.
There were no transfers between levels 2 and 3 during the year.
90
235,902
7
INTANGIBLE ASSETS
(a) The Group
2014
2013
Computer
Software
Rs’000
Goodwill
Rs’000
Computer
Software
Rs’000
Total
Rs’000
Rs’000
-
-
Rs’000
13,770
8,718
Rs’000
13,770
8,718
COST
At July 1,
Additions
Addition through business
combination (note 42 (b)(ii))
Impairment charge (note 42 (b)(iii))
Assets scrapped
Rs’000
22,471
9,169
At June 30,
31,640
-
22,471
22,471
AMORTISATION
At July 1,
Charge for the year
12,703
1,797
-
-
-
-
11,118
1,592
(7)
11,118
1,592
(7)
At June 30,
14,500
-
12,703
12,703
NET BOOK VALUES
At June 30,
17,140
-
9,768
9,768
-
-
-
15,047
(15,047)
-
-
-
(17)
15,047
(15,047)
(17)
Computer software
COST
At July 1,
Additions
2014
Rs’000
2013
Rs’000
22,106
9,141
13,564
8,542
At June 30,
31,247
22,106
AMORTISATION
At July 1,
Charge for the year
12,578
1,691
11,053
1,525
At June 30,
14,269
12,578
NET BOOK VALUES
At June 30,
16,978
9,528
(c) Amortisation charge has been charged in operating expenses.
(d) Impairment charge, which is attributable to the difficult economic conditions prevailing in the export market, namely
Europe and USA, has been charged in profit or loss.
(e) The above intangible assets have been pledged as security for borrowings.
91
8 INVESTMENTS IN SUBSIDIARIES
Unquoted
The Holding Company
2014
Rs’000
2013
Rs’000
At July 1,
Transfer from investments in associated companies (notes (i) and 9)
Acquisition of non-controlling interests (note (ii))
Additions (note (ii))
807,352
-
12,717
50
715,352
21,000
71,000
At June 30,
820,119
807,352
Note (i): Medine Rum Limited, a previous associate, became a wholly owned subsidiary last year following the acquisition
of the remaining 50% shareholding for Rs.21,000,000 (note 42 (b)). Hence, the transfer of Rs.21,000,000 from investments
in associates to investments in subsidiaries.
Note (ii): During the year, additional investments of Rs.12,717,000 (note 42 (a))were made in Cascavelle Shopping
Mall Limited, Rs.25,000 in Medine Property Management Limited and Rs.25,000 in Casela Limited. Last year, additional
investments of Rs.45,000,000 and Rs.26,000,000 were made in Clarens Fields Ltd and Medine Rum Limited respectively.
92
Ordinary Shares
Ordinary Shares
Cascavelle
Ordinary Shares
Ordinary Shares
Ordinary Shares
Ordinary Shares
Ordinary Shares
Ordinary Shares
Tamarin
Barachois
Cascavelle
Cascavelle
Pierrefonds
Bambous
Cascavelle
Ordinary Shares
Ordinary Shares
Tamarin
Tamarin
Property management
services
Casela nature and leisure
park
Ordinary Shares
Ordinary Shares
Bambous
Tamarin
Sugar millers
Construction of
luxury villas for sale
Golf course services
Services of
housekeeping and
maintenance of villas
Hotel resort
Property development
Rental of office buildings
Rental of commercial buildings
Training services
Bottling services and
holding of investment
Shares
Bambous
Loading zone
25
25
180,000
175,170
95,000
214,000
4,000
47,000
100,000
25
128,102
25
3,000
The year end of all the subsidiaries, which are incorporated in Mauritius, is June 30.
Société Reufac
The Medine Sugar Milling
Company Limited
Tamarina Golf Estate Company Limited
Tamarina Golf Club Limited
TGE Management Services Limited
Tamarina Beach Club Hotel Limited
Barachois Villas Company Limited
Clarens Fields Ltd
Cascavelle Shopping Mall Limited
Talent Solutions Ltd
Medine Rum Limited
Broll Property and Facility Management
Limited (formerly known as Medine
Property Management Limited)
Casela Limited
820,119
25
25
180,000
169,447
95,000
119,931
4,000
47,000
100,000
25
102,481
25
2,160
100%
100%
100%
100%
100%
56.9%
100%
100%
100%
100%
80%
100%
72%
-
-
100%
100%
100%
50.1%
100%
100%
100%
100%
80%
100%
72%
% Direct
ownership
Place of
Class of
Stated
Cost
interest
Name of Company
Main business
business
shares held
Capital of investment
2014
2013
Rs’000
Rs’000
(a) The details of the subsidiaries and the % shareholding are as follows:
-
-
-
-
-
43.1%
-
-
-
-
20%
-
28%
-
-
49.9%
-
-
20%
-
28%
Proportion of
ownership interests
held by noncontrolling interests
2014
2013
8 INVESTMENTS IN SUBSIDIARIES (continued)
93
8 INVESTMENTS IN SUBSIDIARIES (continued)
(b) Subsidiaries with material non-controlling interests
Detail of subsidiaries that have non-controlling interests that are material to the entity:
Name of Company
2014
The Medine Sugar Milling Company Limited
Loss allocated to
non-controlling
interests during
the period
Rs’000
Accumulated
non-controlling
interests
Rs’000
3,205
6,073
42,585
82,154
1,104
5,256
45,792
101,167
2013
(c) Summarised financial information on subsidiaries with material non-controlling interests.
(i) Summarised statement of financial position and statement of profit or loss and other comprehensive income:
Non-
Non-
Current current Current
current
Name of Company
assets assets liabilities liabilities Revenue
Rs’000 Rs’000
Rs’000
Rs’000
Rs’000
2014
Company Limited
Cascavelle Shopping
Mall Limited
2013
Company Limited
Cascavelle Shopping
Mall Limited
85,405 289,131 (106,304)
Other
Total Dividend
Profit/
compre-
compre-
paid to
(Loss)
hensive
hensive
nonfor the income for income for controlling
year
the year
the year
interests
Rs’000
Rs’000
Rs’000
Rs’000
(55,295)
189,409 (17,354)
1,329
(16,025)
-
25,422 788,695 (34,798) (588,750)
86,470 (11,615)
-
(11,615)
-
(5,520)
-
(7,576)
-
66,739 298,672
(74,909)
(61,542)
190,371
3,079
29,932 782,901
(54,037) (556,612)
91,897
(7,576)
(ii) Summarised cash flow information
Name of Company
2014
Operating
activities
Rs’000
Investing
activities
Rs’000
(8,599)
-
Financing
activities
Rs’000
Net increase/
(decrease) in
cash and cash
equivalents
Rs’000
(5,273)
(6,769)
36,861
(6,961)
(3,000)
6,200
28,588
(7,530)
2013
12,715
(17,314)
(32,855)
(53,815)
(3,000)
67,307
(23,140)
(3,822)
The summarised financial information above is the amount before intra-group eliminations.
94
9 INVESTMENTS IN ASSOCIATES
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
(a)
At July 1,
Transfer to investments in
subsidiaries (note 8)
Additions (note (ii))
Share of dividends
Share of profit/(loss) net of tax
Share of reserves
35,186
33,939
21,020
42,000
-
-
-
(8,000)
6,768
6
-
5,394
5,020
(7,600)
(1,567)
-
At June 30,
33,960
35,186
Note (i): The consolidation adjustment was in respect of the increase in shareholding in Medine Rum Limited from 50% to
100% following the acquisition of 2,000,000 ordinary shares of Rs.10 each in Medine Rum Limited during the year ended
June 30, 2013. Hence, Medine Rum Limited was considered as a subsidiary company instead of an associate.
Note (ii): The Group has made an additional investment of Rs.5,000,000 in The Indian Ocean Rum Company Limited,
Rs.9,900 in Henrietta Energy Ltd and Rs.9,900 in Roches Brunes Energy Ltd last year.
-
-
-
-
-
-
21,020
(b) The associated companies are as follows:
Place of
Class of
Name of Company
Nature of business
business
shares held
Safari Adventures Limited
Leisure activities
Cascavelle
Henrietta Energy Ltd
Dormant
Henrietta
Roches Brunes Energy Ltd
Dormant Roches Brunes
The Indian Ocean Rum Production and sales
Company Limited
of premium rum
Bambous
(21,000)
20
21,020
Ownership interest
and voting power
2014
2013
Ordinary shares
Ordinary shares
Ordinary shares
40% Direct
49% Direct
49% Direct
40% Direct
49% Direct
49% Direct
Ordinary shares
50% Indirect
50% Indirect
All of the above associates are accounted using the equity method and there are no quoted market price for their shares.
The year end of all the associated companies, which are incorporated in Mauritius, is June 30.
(c) Summarised financial information in respect of each of the material associates is set out below.
Name
Non-
Current
Current
Liabilities Liabilities Revenues
Rs’000
Rs’000
Rs’000
Profit/
Other
Total Dividends
(Loss) Compre- Compre- received
for the hensive hensive
during
year income income the year
Rs’000
Rs’000 Rs’000
Rs’000
Non-
Current
Assets
Rs’000
Current
Assets
Rs’000
31,161
12,109
(13,171)
(819)
59,107
28,633
15,780
389
(6,586)
(69)
7,934
(9,370)
21,246
11,275
(11,112)
(763)
48,784
22,444
24,759
469
(6,233)
(122)
4,998
(20,593)
2014
The Indian Ocean Rum
Company Limited
2013
Company Limited
The summarised financial information above represents amounts shown in the associates’ financial statements prepared
in accordance with IFRS.
Henrietta Energy Ltd and Roches Brunes Energy Ltd are in process of liquidation.
-
12
-
28,633
8,000
(9,358)
22,444
7,600
(195) (20,788)
-
95
9 INVESTMENTS IN ASSOCIATES (continued)
(d) Reconciliation of the summarised financial information to the carrying amount recognised in the financial statements:
Name
2014
Company Limited
Opening
Total
net assets Comprehensive
Dividend
Closing Ownership Interest in Carrying
July 1,
income for the year net assets
interest associates Goodwill
Rs’000
Rs’000
Rs’000
Rs’000
%
Rs’000
Rs’000
20,647
20
20
28,633
-
-
18,873
(9,358)
39,560
19,275
Total
2013
Company Limited
17,203
20
20
22,444
-
-
39,661
(20,788)
Total
56,904
1,656
(20,000)
-
-
value
Rs’000
29,280
20
20
40%
49%
49%
11,712
10
10
17,471
-
-
29,183
10
10
9,515
50%
4,757
-
4,757
(20,000)
38,835
16,489
17,471
33,960
(19,000)
-
-
20,647
20
20
40%
49%
49%
8,259
10
10
17,471
-
-
25,730
10
10
18,873
50%
9,436
-
9,436
39,560
17,715
17,471
35,186
-
-
(19,000)
10 INVESTMENTS IN AVAILABLE-FOR-SALE FINANCIAL ASSETS
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
At July 1,
Additions
Disposals
Increase/(Decrease) in fair value
69,203
80
(2,500)
6,844
76,190
115
(375)
(6,727)
69,195
80
(2,500)
6,844
76,182
115
(375)
(6,727)
At June 30,
73,627
69,203
73,619
69,195
Current
Non current
-
73,627
-
69,203
-
73,619
69,195
73,627
69,203
73,619
69,195
(a) Available-for-sale financial assets are analysed as follows:
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
12,201
54,867
6,559
14,215
46,009
8,979
12,201
54,867
6,551
14,215
46,009
8,971
73,627
69,203
73,619
69,195
Quoted - Listed
Quoted - DEM
Unquoted
96
10 INVESTMENTS IN AVAILABLE-FOR-SALE FINANCIAL ASSETS (continued)
(b) At June 30, 2014
THE GROUP
THE HOLDING COMPANY
At June 30, 2013
THE GROUP
THE HOLDING COMPANY
Level 1
Rs’000
Level 3
Rs’000
Total
Rs’000
67,068
6,559
73,627
67,068
6,551
73,619
Level 1
Rs’000
Level 3
Rs’000
Total
Rs’000
60,224
8,979
69,203
60,224
8,971
69,195
(c) The fair value of listed or quoted available-for-sale financial assets is based on the Stock Exchange or DEM quoted prices at
the close of business at the end of the reporting period. There were no transfers between level 1 and level 3 in the period.
For fair value measurement in level 3, there were purchases of Rs.80,000 (2013: Rs.115,000) and sales of Rs.2,500,000
(2013: Rs.375,000) in the period.
In assessing the fair value of unquoted available-for-sale financial assets, the Group uses mainly the cost basis.
Analysis of unquoted investments:
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
6,559
8,979
6,551
8,971
Cost basis
The directors are of opinion that the carrying amounts of the investments in securities represent their fair value.
(d) Investment in Fondation Medine Horizons
Details of the investment are as follows:
Country of
Class of
Incorporation
shares held
Mauritius
Ordinary
Stated
Capital
Rs’000
Nominal value
of investment
Rs’000
25
25
% Holding
2014 & 2013
Fondation Medine Horizons
100%
Though Medine Limited holds 100% of the share capital of Fondation Medine Horizons, Fondation Medine Horizons is not
considered as a subsidiary company of Medine Limited, as no portion of the income, property and funds of Fondation
Medine Horizons shall be paid or transferred to Medine Limited.
(e) None of the financial assets are either past due or impaired.
(f) All investments are denominated in Rupee.
97
11 DEFERRED EXPENDITURE
Land development and expenditure (note 11(a))
Voluntary Retirement Scheme 2 (note 11(b))
Milling rights (note 11(c))
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
600,097
142,020
979
623,996
187,964
1,449
600,097
142,020
-
623,996
187,964
-
743,096
813,409
742,117
811,960
(a) Land development and expenditure
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
At July 1,
623,996
Expenditure for the year
252,770
equipment (note 5)
43,412
Transfer to profit or loss upon sale of land
(161,635)
Transfer to property, plant and equipment (note 5) (90,280)
Transfer to investment properties (note 6)
(68,166)
557,817
205,651
623,996
252,770
557,817
205,651
141,035
(280,507)
-
-
43,412
(161,635)
(90,280)
(68,166)
141,035
(280,507)
-
At June 30,
623,996
600,097
623,996
600,097
(b) Voluntary Retirement Scheme 2 & 3
The Group
2014
Rs’000
2013
Rs’000
The Holding Company
2014
Rs’000
2013
Rs’000
COST
At July 1,
Refund
Cost of land and infrastructure
357,730
-
903
362,697
(11,469)
6,502
342,972
-
903
347,939
(11,469)
6,502
At June 30,
358,633
357,730
343,875
342,972
AMORTISATION
At July 1,
Amortisation for the year
169,766
46,847
116,518
53,248
155,008
46,847
102,526
52,482
At June 30,
216,613
169,766
201,855
155,008
NET BOOK VALUE
At June 30,
142,020
187,964
142,020
187,964
Estimates regarding the costs of land and infrastructures to be distributed to the relevant employees but not yet disbursed
are carried as payables.
98
11 DEFERRED EXPENDITURE (continued)
(c) Milling Rights
The Group
2014
Rs’000
2013
Rs’000
COST
At July 1,
Additions
3,286
-
3,258
28
At June 30,
3,286
3,286
AMORTISATION
At July 1,
Amortisation for the year (note 28)
1,837
470
1,367
470
At June 30,
2,307
1,837
NET DEFERRED EXPENDITURE
At June 30,
979
1,449
The deferred expenditure relates to the compensation paid to Mon Desert Alma Sugar Milling Co. Ltd in respect of the
funding of part of the Blue Print costs of the said company, and is released to profit or loss over eight years.
12 BIOLOGICAL ASSETS
The Group and The Holding Company
2014
2013
Rs’000
Rs’000
Non-current
Bearer biological assets
88,494
100,351
11,859
20,355
100,353
120,706
213,121
10,037
278,747
18,029
223,158
296,776
323,511
417,482
Current
Total
99
12 BIOLOGICAL ASSETS (continued)
(a) The movements in biological assets are as follows:
Sugar cane
plantations
Rs’000
Standing sugar
cane crop
Rs’000
Other crops
and plants
Rs’000
Total
Rs’000
100,351
14,660
278,747
-
38,384
7,497
417,482
22,157
(26,517)
-
-
-
(278,747)
213,121
-
(31,115)
7,130
(26,517)
(309,862)
220,251
At July 1, 2013
(Decrease)/Increase in fair value
- Amortisation charge
- Due to harvest and sales
- Due to biological transformation
At June 30, 2014
88,494
213,121
21,896
323,511
Non-current
Current
88,494
-
-
213,121
11,859
10,037
100,353
223,158
Total
88,494
213,121
21,896
323,511
Sugar cane
plantations
Rs’000
Standing sugar
cane crop
Rs’000
Other crops
and plants
Rs’000
Total
Rs’000
At July 1, 2012
(Decrease)/Increase in fair value
- Amortisation charge
- Due to harvest and sales
- Due to biological transformation
112,191
14,968
240,545
-
39,023
6,222
391,759
21,190
(26,808)
-
-
-
(240,545)
278,747
-
(17,955)
11,094
(26,808)
(258,500)
289,841
At June 30, 2013
100,351
278,747
38,384
417,482
Non-current
Current
100,351
-
-
278,747
20,355
18,029
120,706
296,776
Total
100,351
278,747
38,384
417,482
2014
2013
Rs’000
Rs’000
(b) Number of hectares of sugar cane plantations at year end
Tonnage of sugar cane harvested during the year
Principal assumptions used are:
Expected price of sugar (ton)
Discount rate
Expected extraction rate (% sugar produced to sugar cane crushed)
Expected sugar cane yield (ton of sugar cane harvested per hectare)
Biological assets have been pledged as security for borrowings.
100
3,412
294,188
276,610
2014
2013
(c)
3,514
Rs.
14,000
4.90%
11.00%
86.31
16,500
4.90%
11.00%
86.54
12 BIOLOGICAL ASSETS (continued)
(d) Details of the Group’s biological assets measured at fair value and information about the fair value hierarchy as at June 30,
2014 are as follows:
Level 3
Rs’000
88,494
213,121
21,896
Total
323,511
The fair value measurements have been categorised as Level 3 fair values based on unobservable inputs used in the
valuation techniques used.
At June 30, 2014, the most significant unobservable inputs used for the valuation are as follows:
Unobservable
inputs
Description of unobservable inputs
Amortisation period
8 years
Sugar cane yield - tons of sugar
cane harvested per hectare
86.31 tons
Extraction rate - % sugar
produced to sugar cane crushed
11%
Price of sugar per ton
Rs.14,000
Discount rate
4.9%
The higher the sugar cane yield, the extraction rate and the price of sugar, the higher the fair value.
The higher the discount rate, the lower the fair value.
(e) The group is exposed to the following risks relating to its sugar cane plantations:
(i) Adverse climatic conditions such as droughts, floods and disease outbreaks as the sugar cane plantations are mainly
located in the western region of the island.
(ii) Fluctuation in the price of sugar, the movement in exchange rate and fluctuation in the volume of sugar produced and
sold. The group has short-term contract in place for supply of sugar to its major customer.
(iii) The seasonal nature of the sugar cane farming business requires a high level of cash flow during the inter crop season.
The group actively manages the working capital requirements and has secured sufficient credit facilities sufficient to meet
the cash flow requirements.
13 DEFERRED INCOME TAXES
Deferred income taxes are calculated on all temporary differences under the liability method at 15% (2013: 15%).
(a) There is a legally enforceable right to offset current tax assets against current tax liabilities and deferred income tax assets
and liabilities when the income taxes relate to the same fiscal authority on the same entity.
The following amounts are shown in the statements of financial position:
Deferred tax assets
Deferred tax liabilities
The Group
2014
Rs’000
2013
Rs’000
(16,325)
11,450
(4,875)
The Holding Company
2014
Rs’000
2013
Rs’000
(11,498)
13,263
-
-
-
1,765
-
-
101
13 DEFERRED INCOME TAXES (continued)
(b) The movement on the deferred income tax account is as follows:
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
At July 1,
Credited to profit or loss (note 36)
Credited to other comprehensive income (note 39)
1,765
(6,875)
235
3,579
(297)
(1,517)
-
-
-
-
At June 30,
(4,875)
1,765
-
-
(c) Deferred tax assets and liabilities, deferred tax charge/(credit) to profit or loss and deferred tax charge/(credit) to other
comprehensive income, without taking into consideration the offsetting of balances within the same fiscal authority on
the same entity, are attributable to the following items.
As at
July 1,
2013
The Group
Rs’000
Deferred income tax liabilities
Accelerated tax depreciation
Asset revaluations
Credited
to other
comprehensive
income
Rs’000
Credited
to profit
or loss
Rs’000
As at
June 30,
2014
Rs’000
15,030
11,666
-
-
(2,170)
-
12,860
11,666
26,696
-
(2,170)
24,526
(19,433)
(5,498)
-
235
(4,685)
(20)
(24,118)
(5,283)
(24,931)
235
(4,705)
(29,401)
1,765
235
(6,875)
(4,875)
As at
July 1,
2012
The Group
Rs’000
Credited
to other
comprehensive
income
Rs’000
Deferred income tax assets
Tax losses
Net deferred income tax liabilities
Deferred income tax liabilities
Accelerated tax depreciation
Voluntary Retirement Scheme
Asset revaluations
(Credited)/
Charged
to profit
or loss
Rs’000
As at
June 30,
2013
Rs’000
18,307
115
11,666
-
-
-
(3,277)
(115)
-
15,030
11,666
30,088
-
(3,392)
26,696
Deferred income tax assets
Tax losses
(22,551)
(3,958)
-
(1,517)
3,118
(23)
(19,433)
(5,498)
(26,509)
(1,517)
3,095
(24,931)
3,579
(1,517)
102
Net deferred income tax liabilities
(297)
1,765
13 DEFERRED INCOME TAXES (continued)
(d) Deferred income tax assets are recognised only to the extent that the related tax benefit is probable. The Group and the
Company have respectively a net deferred tax assets of Rs.139,105,000 (2013: Rs.134,557,000) and Rs.88,231,000 (2013:
Rs.80,523,000) to carry forward against future taxable income which have not been recognised in these accounts due to
uncertainty of their recoverability.
The net deferred tax assets arises as follows:
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
Tax losses not recognised
487,865
537,328
191,900
224,076
Timing differences not provided for
- Retirement benefit obligations
- Accelerated tax depreciation
163,193
276,306
162,680
197,038
160,611
235,694
160,824
151,921
439,499
359,718
396,305
312,745
Total tax losses and timing differences
927,364
897,046
588,205
536,821
Net deferred tax assets at 15%
139,105
134,557
88,231
80,523
Tax losses expire on a rolling basis over 5 years.
14 INVENTORIES
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
19,491
8,508
13,197
8,245
7,133
18,944
10,480
15,801
8,242
7,390
1,039
8,508
2,894
8,245
2,110
1,096
10,480
4,234
8,242
2,069
56,574
60,857
22,796
26,121
Spare parts (realisable value)
Fertilizers and herbicides (cost)
General goods and consumables (cost)
Aviaries (cost)
Others (realisable value)
(a) Inventories have been pledged as security for borrowings.
(b) The cost of inventories recognised as expense and included in operating expenses amounted to Rs.133,520,000 (2013:
Rs.144,770,000) for the group and Rs.58,356,000 (2013: Rs.69,278,000) for the company.
(c) Inventories are stated at net realisable value as follows:
At cost
Fall in value
At net realisable value
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
69,431
(12,857)
73,714
(12,857)
32,653
(9,857)
35,978
(9,857)
56,574
60,857
22,796
26,121
(d) In 2013, the Company reversed Rs.1,300,000 of an inventory write down made in previous years (2014: nil). The amount
reversed has been included in operating expenses in profit or loss.
103
15 CONSTRUCTION WORK IN PROGRESS
The Group
2014
Rs’000
2013
Rs’000
-
-
58,974
1,012
-
-
-
59,986
(1,662)
(58,324)
At July 1,
Costs incurred during the year
Recognised in operating expenses
Transfer to property, plant and equipment (note 5)
At June 30,
-
The Group is involved in the construction of villas, which it sells in the ordinary course of business. The transfer to property,
plant and equipment relates to expenditure incurred on infrastructure works to enhance the value of the land.
-
(a) In 2013, the aggregate amount of cost incurred to date amounted to Rs.59,986,000 (2014: nil).
(b) Amounts due from contract customers included in Trade and other receivables is nil (2013: nil).
(c) Amounts due to contract customers included in Trade and other payables is nil (2013: nil).
(d) At June 30, 2014 & June 30, 2013, there was no retention held by customers for contract work.
16 TRADE AND OTHER RECEIVABLES
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
Trade receivables - sugar and molasses
Trade receivables - others
49,824
92,116
24,596
90,733
34,422
16,723
9,982
33,365
Trade receivables - total
Provision for receivable impairment
141,940
(19,107)
115,329
(19,416)
51,145
(7,347)
43,347
(8,169)
Trade receivables - net
Debtors land transactions
Prepayments
Amount receivables from related
companies (note (d))
Dividend receivable from associate
Other receivables (note (e))
122,833
2,588
34,071
95,913
2,513
55,275
43,798
2,588
10,102
35,178
2,513
42,240
105,465
4,000
102,235
67,974
3,600
78,757
105,465
4,000
49,250
67,974
3,600
24,314
371,192
304,032
215,203
175,819
(a) The carrying amounts of trade and other receivables approximate their fair value.
(b) As at June 30, 2014, trade receivables of Rs.22,195,000 (2013: Rs.20,983,000) and Rs. 7,347,000 (2013: Rs.8,169,000)
were impaired for the Group and the Company respectively. The amount of provision for impairment for the Group and
for the Company was Rs. 19,107,000 (2013: Rs.19,416,000) and Rs.7,347,000 (2013: Rs.8,169,000) respectively. The
individually impaired receivables mainly relate to customers, which are in unexpectedly difficult economic situations. It
was assessed that a portion of these receivables is expected to be recovered.
104
16 TRADE AND OTHER RECEIVABLES (continued)
The ageing of these receivables is as follows:
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
931
21,264
-
20,983
-
7,347
8,169
22,195
20,983
7,347
8,169
3 to 6 months
Over 6 months
(c) As at June 30, 2014, trade receivables of Rs.44,474,000 (2013: Rs.24,766,000) for the Group and Rs.26,928,000 (2013:
Rs.15,708,000) for the Company were past due but not impaired.
These relate to a number of independent customers for whom there is no recent history of default. The ageing analysis of
these trade receivables is as follows:
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
13,495
30,979
10,920
13,846
9,264
17,664
8,026
7,682
44,474
24,766
26,928
15,708
3 to 6 months
Over 6 months
(d) Amount receivables from related companies is analysed as follows:
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
Other receivables - Gross
Less: provision for receivable impairment
125,465
(20,000)
67,974
-
125,465
(20,000)
67,974
-
Other receivables - Net
105,465
67,974
105,465
67,974
As at June 30, 2014, Amount receivables from related companies of Rs.20,000,000 (2013: nil) were impaired for the
Group and the Company. It was assessed that no portion of these receivables is expected to be recovered. The amount of
provision for impairment for the Group and the Company was Rs.20,000,000 (2013: nil).
(e) Other receivables is analysed as follows:
The Group
2014
Rs’000
2013
Rs’000
Other receivables - Gross
102,515
(280)
80,727
(1,970)
Other receivables - Net
102,235
78,757
As at June 30, 2014, other receivables of Rs. 280,000 (2013: Rs.1,970,000) were impaired for the Group. It was assessed
that no portion of these receivables is expected to be recovered. The amount of provision for impairment for the Group
was Rs.280,000 (2013: Rs.1,970,000).
105
16 TRADE AND OTHER RECEIVABLES (continued)
(f) The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies:
Rupee
Euro
Pound Sterling
US Dollar
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
326,950
43,588
508
146
250,382
41,944
1,128
10,578
215,203
-
-
-
175,819
-
371,192
304,032
215,203
175,819
(g) The movement on the provision for impairment of trade receivables, amount receivables from related companies and
other receivables are as follows:
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
At July 1,
Receivables written off during the
year as uncollectible
21,386
20,569
15,488
11,460
8,169
20,056
3,865
5,101
(2,568)
(5,562)
At June 30,
39,387
21,386
27,347
8,169
Analysed as follows:
Trade receivables
Amount receivables from related companies
Other receivables
19,107
20,000
280
19,416
-
1,970
7,347
20,000
-
8,169
-
39,387
21,386
27,347
8,169
(878)
(797)
(h) The other classes within trade and other receivables do not contain impaired assets.
(i) The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above
except for the deposits and bank guarantees received from tenants covering rental charges for three months. The Group
has no other collateral as security.
17 AMOUNT DUE FROM GROUP COMPANIES
The Holding Company
2014
2013
Rs’000
Rs’000
Current account with subsidiaries - Gross
513,022
(15,000)
423,590
(15,000)
Current account with subsidiaries - Net
498,022
408,590
(a) The carrying amounts of amount owed by group companies approximate their fair value.
(b) There has been no additional charge for provision for receivable impairment in 2013 and 2014.
106
18 SHARE CAPITAL
Issued and fully paid
Ordinary
shares
of Rs.10 each
Rs’000
Preference
shares
of Rs.10 each
Rs’000
Total
Rs’000
869,406
180,594
1,050,000
At July 1, 2012, June 30, 2013 & June 30, 2014
(a) At June 30, 2014 and June 30, 2013, the number of ordinary shares and preference shares in issue were 86,940,600 and
18,059,400 respectively.
(b) Ordinary shares carry one vote per share and carry a right to dividend.
(c) The preference shareholders are entitled to a non-cumulative preference dividends but have no voting rights.
(d) On June 18, 2014, the Directors have resolved that, subject to the approval of the shareholders, the 18,059,400 existing
preference shares of Rs.10.00 each in issue be converted into ordinary shares on a 1:1 basis. The new ordinary shares would
rank pari passu with the existing ordinary shares of the Company. The Company’s issued share capital which amounts to
Rs.1,050,000,000 would then be composed of 105,000,000 ordinary shares of Rs.10.00 each.
19 REVALUATION SURPLUS AND OTHER RESERVES
(a) The Group
Sugar
Modernisation
Millers
Fixed
and
Revaluation
Deve-
assets
agricultural
Reserves
surplus on lopment replacement diversification Actuarial
of
fixed assets
Fund
reserve
reserve
loss associates
Rs’000
Rs’000
Rs’000
Rs’000
Rs’000
Rs’000
20,452
6,244,619
33,415
-
-
-
-
-
6,844
6,844
-
-
-
-
-
-
7,987
-
-
6
-
-
7,987
6
-
-
-
-
-
-
(39,525)
At June 30, 2014
8,659
33,415
18,774 (146,263)
Sugar
Millers
Deve-
lopment
Fund
Rs’000
Fixed
assets
replacement
reserve
Rs’000
Modernisation
and
agricultural
diversification
reserve
Rs’000
6,411,771
Decrease in fair value of availablefor-sale investments (note 10)
-
Remeasurement of retirement
benefit obligations (note 39)
-
(94,202)
8,659
33,415
18,774
-
-
-
-
-
-
-
-
-
At June 30, 2013
8,659
33,415
18,774
-
8,659
Total
Rs’000
6,317,569
Increase in fair value of availablefor-sale investments (note 10)
-
-
Share of reserves in associates
-
(39,525)
6,278,044
18,774 (154,250)
Fair
value
reserve
Rs’000
Revaluation
surplus on
fixed assets
Rs’000
6,317,569
6
27,296 6,219,931
Actuarial
loss
Rs’000
Fair
value
reserve
Rs’000
Total
Rs’000
(100,718)
27,179
6,399,080
-
(53,532)
-
(154,250)
(6,727)
(6,727)
-
(53,532)
-
(94,202)
20,452
6,244,619
107
19 REVALUATION SURPLUS AND OTHER RESERVES (continued)
Profit
Revalua-
on
Sugar
Fixed
tion disposal
Millers
assets
surplus
of Develop- replace-
on fixed milling
ment
ment
assets
assets
Fund
reserve
Rs’000
Rs’000
Rs’000
Rs’000
Modernisation
and
agricultural
diversifi-
cation
reserve
Rs’000
Actuarial
loss
Rs’000
Total
Rs’000
6,071,496
Increase in fair value of availablefor-sale investments (note 10)
-
-
(39,525)
45,753
8,659
33,415
15,473
-
-
-
-
-
6,844
6,844
-
-
-
-
6,924
-
6,924
-
-
-
-
-
-
(39,525)
At June 30, 2014
45,753
8,659
33,415
15,473
Profit
Revalua-
on
Sugar
Fixed
tion disposal
Millers
assets
surplus
of Develop- replace-
on fixed milling
ment
ment
assets
assets
Fund
reserve
Rs’000
Rs’000
Rs’000
Rs’000
Modernisation
and
agricultural
diversifi-
cation
reserve
Rs’000
6,031,971
6,165,698
Decrease in fair value of availablefor-sale investments (note 10)
-
-
(94,202)
45,753
8,659
33,415
15,473
-
-
-
-
-
-
-
-
-
-
-
-
At June 30, 2013
45,753
8,659
33,415
15,473
6,071,496
(138,654)
Fair
value
reserve
Rs’000
20,453 6,056,595
(131,730)
27,297 6,030,838
Actuarial
loss
Rs’000
Fair
value
reserve
Rs’000
(90,355)
-
(48,299)
-
(138,654)
Total
Rs’000
27,180 6,205,823
(6,727)
(6,727)
-
(48,299)
-
(94,202)
20,453 6,056,595
(c) Revaluation surplus on fixed assets
The revaluation surplus relates to the revaluation of property, plant and equipment.
(d) Profit on disposal of milling assets
Profit on disposal of milling assets relates to profit arising on the transfer of fixed assets to a subsidiary company “The
Medine Sugar Milling Company Limited”. As the company holds 80% of the share capital of that subsidiary company, at
group level, this profit is hence not considered as realised.
(e) Sugar millers development fund
Sugar Millers Development Fund is a reserve created for specific development project.
(f) Fixed assets replacement reserve
The fixed assets replacement reserve relates to a reserve for replacement of fixed assets.
(g) Modernisation and agricultural diversification reserve
108
The Modernisation and Agricultural Diversification reserve is a statutory reserve earmarked to finance both modernisation
and agricultural diversification.
19 REVALUATION SURPLUS AND OTHER RESERVES (continued)
(h) Fair value reserve
The fair value reserve for investment comprises the cumulative net change in fair value of available-for-sale financial
assets that has been recognised in other comprehensive income until the investments are derecognised or impaired.
(i) Actuarial (loss)/gain
All actuarial gains/(losses) reserve represents the cumulative remeasurement of defined benefit obligation recognised.
(j) Reserves of associates
Reserves in associates relate to the Group’s share of the reserves of associates arising on equity accounting.
20 NON-CURRENT PAYABLE
The Group
2014
Rs’000
2013
Rs’000
1,500
2,625
1,500
2,625
4,125
4,125
1,500
2,625
1,500
2,625
4,125
4,125
Purchase of milling rights
- Planters’ funds
- Land Development Expenditure
The non current payables can be analysed as follows:
- Later than 1 year and not later than 5 years
- Other
(a) The non-current payables are interest free and unsecured.
(b) The carrying amounts of non-current payables are not materially different from their fair value.
(c ) The carrying amounts of non-current payable are denominated in rupee.
21 BORROWINGS
Current
Bank overdrafts (note (a) and 38(b))
Bank loans (note (a))
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
206,101
710,542
192,055
763,591
124,389
551,110
94,361
700,143
916,643
955,646
675,499
794,504
Non-current
Bank loans (note (b))
1,301,876
1,347,090
195,643
255,786
Total borrowings
2,218,519
2,302,736
871,142
1,050,290
(a) Borrowings are secured over the assets of the company.
The rates of interest on the bank loans vary between 5.65% and 13.35% for the Group and between 5.65% and 8.27%
for the Company.
The rates of interest on the bank overdrafts vary between 8.375 % and 8.65% for the Group and is 8.65% for the Company.
109
21 BORROWINGS (continued)
(b) Non-current bank loans can be analysed as follows:
Repayable by instalments
- after one year and before two years
- after two years and before three years
- after three years and before five years
- after five years
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
147,529
180,770
421,500
552,077
154,340
193,667
246,562
752,521
60,142
60,143
30,143
45,215
60,142
90,143
30,143
75,358
1,301,876
1,347,090
195,643
255,786
(c) The exposure of the Group’s borrowings to interest-rate changes and the contractual repricing dates are as follows:
The Group
6 months
Rs’000
6 -12
months
Rs’000
1 - 5
years
Rs’000
Over
5 years
Rs’000
Total
Rs’000
At June 30, 2014
Total borrowings
2,218,519
-
-
-
2,218,519
At June 30, 2013
Total borrowings
2,302,736
-
-
-
2,302,736
The Holding Company
6 months
or less
Rs’000
6 -12
months
Rs’000
1 - 5
years
Rs’000
Over
5 years
Rs’000
Total
Rs’000
At June 30, 2014
Total borrowings
871,142
-
-
-
871,142
At June 30, 2013
Total borrowings
1,050,290
-
-
-
1,050,290
(d) The carrying amounts of borrowings are not materially different from their fair value.
The fair values are based on cash flows discounted using a rate based on the average borrowing rate of 9.03% (2013:
7.64%) and are within level 2 of the fair value hierarchy as the borrowing rate reflects market interest rate.
(e) The carrying amounts of the Group’s borrowings are denominated in Rupee.
22 RETIREMENT BENEFIT OBLIGATIONS
Amounts recognised in the Statements of financial position as non current liabilities
- Pension benefits (note (a))
- Other post retirement benefits (note (b))
110
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
198,459
2,582
200,499
2,306
160,611
-
160,824
-
201,041
202,805
160,611
160,824
22 RETIREMENT BENEFIT OBLIGATIONS (continued)
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
Amounts charged to profit or loss (note 35)
- Pension benefits (note (a)(v))
- Other post retirement benefits (note (b))
35,137
276
27,778
564
29,880
-
23,784
-
Total included in Employee Benefit Expense
35,413
28,342
29,880
23,784
Amounts charged to other comprehensive income
recognised in other comprehensive
income (note (a) (v) and 39)
(8,488)
56,769
(6,924)
48,299
(a) Pension benefits
(i) Pension schemes
The company has a defined contribution scheme with the Sugar Industry Pension Fund for certain employees. This
contribution is topped up for certain employees with an insurance company so that the scheme operates as a defined
benefit one.
The Group operates a defined benefit pension. The plan is a final salary plan, which provides benefits to members in the
form of a guaranteed level of pension payable for life. The level of benefits provided depends on members’ length of
service and their salary in the final years leading up to retirement.
The assets of the fund are held independently and administered by The MCB Investment Management Co Ltd and Confident
Asset Management Ltd.
The most recent actuarial valuations of plan assets and the present value of the defined benefit obligations were carried
out at June 30, 2014 by AON Hewitt Ltd (Actuarial Valuer). The present value of the defined benefit obligations, and the
related current service cost and past service cost, were measured using the Projected Unit Credit Method.
(ii) The amounts recognised in the Statements of financial position are as follows:
Present value of defined benefit obligations
Fair value of plan assets
Liability in the Statements of financial position
The Group
2014
Rs’000
2013
Rs’000
The Holding Company
2014
Rs’000
2013
Rs’000
528,783
(330,324)
491,790
(291,291)
447,040
(286,429)
412,264
(251,440)
198,459
200,499
160,611
160,824
(iii) The movement in the fair value of plan assets over the year is as follows:
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
At July 1,
Interest income
Employer contributions
Employee contributions
Benefits paid
Return on plan assets excluding interest income
291,291
21,882
28,689
3,342
(23,368)
8,488
272,235
29,247
23,912
3,014
(33,176)
(3,941)
251,440
20,415
23,169
3,089
(18,608)
6,924
235,713
23,320
21,417
2,752
(29,326)
(2,436)
At June 30,
330,324
291,291
286,429
251,440
111
(iv) The movement in the present value of defined benefit obligations over the year is as follows:
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
412,099
17,434
3,014
39,591
(3,260)
(29,916)
6,981
412,264
18,044
3,089
32,251
-
(18,608)
-
345,871
13,948
2,752
33,156
(29,326)
-
At July 1,
Current service cost
Employee contributions
Interest cost
Benefits paid on settlement
Other benefits paid
Liability experience loss
Liability loss due to change in financial
assumptions
491,790
20,353
3,342
36,666
-
(23,368)
-
-
45,847
-
45,863
At June 30,
528,783
491,790
447,040
412,264
(v) The amounts recognised in profit or loss and other comprehensive income are as follows:
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
Service cost:
Current service cost
Net interest expense
20,353
14,784
17,434
10,344
18,044
11,836
13,948
9,836
Components of defined benefit costs recognised
in profit or loss
35,137
27,778
29,880
23,784
Return on plan assets excluding interest income
Liability loss due to change in financial assumptions
Liability experience loss
(8,488)
-
-
3,941
45,847
6,981
(6,924)
-
-
2,436
45,863
-
Components of defined benefit costs recognised
in other comprehensive income
(8,488)
56,769
(6,924)
48,299
Total of defined benefit cost
26,649
84,547
22,956
72,083
The past service cost, the service cost and the net interest expenses for the year is included in operating expenses in profit
or loss. The actuarial gain/(loss) on retirement benefit obligations is included in other comprehensive income.
(vi) The reconciliation of the net defined benefit liability in the statement of financial position is as follows:
The Group
2014
Rs’000
The Holding Company
2013
Rs’000
2014
Rs’000
2013
Rs’000
At July 1,
200,499
Amounts recognised in profit or loss
35,137
Amounts recognised in other comprehensive income (8,488)
Employer contribution
(28,689)
139,864
27,778
56,769
(23,912)
160,824
29,880
(6,924)
(23,169)
110,158
23,784
48,299
(21,417)
At June 30,
200,499
160,611
160,824
112
198,459
(vii) The allocation of plan assets at the end of the reporting period for each category, are as follows:
2014
%
Local equities
Local bonds
Property
Overseas bonds and equities
Other
36
19
8
24
13
Total Market value of assets
100
2013
%
39
23
12
28
(2)
100
(viii)The principal actuarial assumptions used for accounting purposes are as follows:
Discount rate
Future salary increases:
- Staff
- Artisan Labourers
Future pension increases:
- Staff
- Artisan Labourers
Rate of medical cost increase
Average retirement age (ARA)
Average life expectancy for:
- Male at ARA
- Female at ARA
The weighted average duration of the defined benefit obligation is 12 years.
2014
%
2013
%
8.00%
8.00%
6.50%
5.50%
6.50%
5.50%
1.00%
0.00%
8.00%
60
1.00%
0.00%
8.00%
60
23.2 years
26.2 years
23.2 years
26.2 years
(ix) The assets of the plan are invested in bonds, equities and properties. The expected return on plan assets was determined
by considering the expected returns available on the assets underlying the current investment policy.
Expected yields on fixed interest investments are based on gross redemption yields as at the end of the reporting period.
Expected returns on equity and property investments reflect long-term real rates of return experienced in the respective
markets.
The Group
The Holding Company
Actual return on plan assets
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
8,488
(3,941)
6,924
(2,436)
(x) Sensitivity analysis on Defined benefit obligation at the end of the reporting period
The Group
2014
Rs’000
Increase in benefit obligation at end of
period resulting from a 1% decrease in discount rate 66,631
Decrease in benefit obligation at end of
period resulting from a 1% increase in discount rate 58,685
The Holding Company
2013
Rs’000
2014
Rs’000
2013
Rs’000
86,171
58,050
78,037
74,250
51,622
67,554
An increase/decrease of 1% in other principal actuarial assumptions would not have a material impact on defined benefit
obligations at the end of the reporting period.
113
(x) The sensitivity above have been determined based on a method that extrapolates the impact on net defined benefit
obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The present
value of the defined benefit obligation has been calculated using the projected unit credit method.
The sensitivity analysis may not be representative of the actual change in the defined benefit obligation as it is unlikely
that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
(xi) The defined benefit pension plan exposes the Group to actuarial risks, such as longevity risk, currency risk, interest rate
risks and market (investment) risk.
(xii) The funding requirements are based on the pension fund’s actuarial measurement framework set out in the funding
polices of the plan.
(xiii)The funding policy is to pay contributions to an external legal entities at the rate recommended by the entity’s actuaries.
The expected contributions to post-employment benefit plans for the year ending June 30, 2015 are Rs.27,358,000 for the
Group and Rs.24,717,000 for the Company.
(b) Other post retirement benefits
Other post retirement benefits comprise mainly of retirement gratuity payable under the Employment Right Act 2008.
(i) Movements in the retirement gratuity are as follows:
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
At July 1,
Total current service cost charged in profit or loss
2,306
276
1,742
564
-
-
-
At June 30,
2,582
2,306
-
-
(ii) It has been assumed that the rate of future salary increases will be equal to the discount rate.
(iii) The total charge was included in ‘operating expenses’.
23 TRADE AND OTHER PAYABLES
Trade payables
Other payables and accruals
Provision for VRS cost of land and infrastructure
Deposit on sale of land
Amount payable to related companies
Advances from related company
114
The Group
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
79,044
196,548
93,100
99,146
93,835
378,126
84,477
151,193
93,100
130,243
119,982
-
47,040
96,363
91,000
99,146
93,835
378,126
55,612
60,153
91,000
130,243
119,982
-
939,799
578,995
805,510
456,990
The carrying amounts of trade and other payables approximate their fair value.
The Holding Company
24 AMOUNT DUE TO GROUP COMPANIES
The Holding Company
Current account with subsidiaries
The carrying amounts of amount owed to group companies approximate their fair value.
2014
Rs’000
2013
Rs’000
4,845
8,098
25 DIVIDENDS
The Holding Company
2014
Rs’000
2013
Rs’000
Amount due at July 1,
Interim
Ordinary - Re.0.60 per share proposed on December 12, 2013 and paid on
January 31, 2014 (2013: Re.0.60)
Preference - Re.0.60 per share proposed on December 12, 2013 and paid on
January 31, 2014 (2013: Re.0.60)
63,000
42,000
52,165
52,165
10,835
10,835
Final
Ordinary - Re.0.60 per share proposed on June 25, 2014 and payable on
Sept 15, 2014 (2013:Re.0.60)
Preference - Re.0.60 per share proposed on June 25, 2014 and payable on
Sept 15, 2014 (2013: Re.0.60)
52,165
52,165
10,835
10,835
126,000
126,000
(126,000)
(105,000)
63,000
63,000
Dividends paid during the year
Amount due at June 30,
26 TURNOVER
Sugar
Foodcrops and nursery
Casela
Nature Escapade
Forestry and sale of deer
Landscaping
Hotel
Golf
Rental income
Others
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
637,209
101,380
104,689
80,379
37,061
15,401
108,213
67,441
64,559
92,896
638,598
113,556
88,585
55,086
41,396
18,086
102,972
64,578
81,801
60,710
450,870
101,380
104,689
80,379
37,061
15,401
-
-
-
-
450,398
113,556
88,585
55,086
41,396
18,086
-
1,309,228
1,265,368
789,780
767,107
Except for the sale of sugar, there are no other transactions with a single external customer that accounts for 10% or more
of the Group’s total revenue.
115
27 OTHER OPERATING REVENUE
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
20,017
19,710
3,825
7,999
291
1,987
-
581
9,419
20,502
15,694
2,777
6,589
2,685
1,143
-
1,140
3,923
20,017
29,916
3,825
7,999
2,301
1,987
15,450
581
7,627
20,502
24,922
2,777
6,589
5,113
1,143
9,037
1,140
5,845
63,829
54,453
89,703
77,068
Sale of stones
Rental income
Sale of electricity
Walking with lions
IT support revenue
Rental of machinery and other services
Commission, property and assets management fees
Commission on resale of villas
Other revenues
28 EXPENSES BY NATURE
Depreciation (note 5)
Amortisation (note 7)
Amortisation of Milling rights (note 11(c))
Employee benefit expense (note 35)
Costs of inventories recognised as expense
Hiring of labour and agricultural equipment
Irrigation costs
Other expenses - sugar activities
Fertilizers
Other expenses - non sugar activities
Power station running costs
Utilities
Administrative expenses
Marketing and advertising expenses
Operating expenses
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
155,908
1,797
470
524,523
133,520
104,587
17,600
42,819
9,427
186,730
4,392
56,997
107,366
20,569
15,821
141,805
1,592
470
501,125
144,770
97,700
18,757
34,013
10,169
185,292
3,586
59,192
99,925
11,460
15,949
93,589
1,691
-
396,192
58,356
104,587
17,600
42,819
9,427
82,972
4,392
14,318
48,639
20,056
-
95,892
1,525
388,597
69,278
97,700
18,757
34,013
10,169
75,056
3,586
14,939
41,387
5,101
-
1,382,526
1,325,805
894,638
856,000
29 OTHER GAINS/(LOSSES) - NET
116
Net foreign exchange gains on
operations (note 33)
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
1,028
1,072
-
-
30 OTHER INCOME
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
1,058
13,110
1,113
5,349
9,058
33,886
8,713
20,976
3,062
12,631
6,852
4,244
5,790
12,911
-
3,907
2,637
12,631
6,852
280
5,195
12,911
163
40,957
29,070
65,344
47,958
Dividend income
Interest income
Profit on disposal of property, plant
and equipment
Corporate management fees
Profit on sale of available-for-sale investments
Sundry income
31 PROFIT ON SALE OF LAND
Revenue from sale of land
Cost of land and expenditure in
respect of land development
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
369,728
529,732
369,728
571,733
(180,395)
(305,646)
(180,395)
(307,195)
189,333
224,086
189,333
264,538
32 FINANCE COSTS - NET
Gain on exchange on financing
activities (note 33)
Interest expense
- Bank overdrafts
- Bank loans repayable by instalments
- On current account with group companies
Finance costs - net
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
3,886
2,911
1,776
539
12,262
156,659
734
33,778
132,763
5,664
4,368
67,151
-
26,857
53,377
-
169,655
172,205
71,519
80,234
(165,769)
(169,294)
(69,743)
(79,695)
33 NET FOREIGN EXCHANGE GAINS
The exchange differences credited to
profit or loss are included as follows:
Other gains - net (note 29)
Finance costs - net (note 32)
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
1,028
3,886
1,072
2,911
-
1,776
539
4,914
3,983
1,776
539
117
34 (LOSS)/PROFIT BEFORE TAXATION
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
3,062
6,852
-
5,790
-
38,708
2,637
6,852
-
5,195
-
155,908
1,797
-
6,905
-
133,520
524,523
141,805
1,592
15,047
-
7
144,770
501,125
93,589
1,691
-
7,205
-
58,356
396,192
95,892
1,525
7,274
7
69,278
388,597
(Loss)/Profit before taxation is arrived at after:
crediting:
Profit on disposal of property, plant and equipment
Profit on sale of available-for-sale investments
Increase in fair value of investment properties
and charging :
Depreciation on property, plant and equipment
- owned assets
Amortisation of intangible assets (note 7)
Impairment losses on intangible assets (note 7)
Decrease in fair value of investment properties
Loss on sale of available-for-sale investments
Costs of inventories recognised as expenses
Employee benefit expense (note 35)
There is no direct operating expenses in respect of investment property (2013: Nil).
35 EMPLOYEE BENEFIT EXPENSE
The Group
(a)
Analysis of staff costs
Wages and salaries
Social security costs and other benefits
Pension costs - defined contribution plan
Pension costs
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
445,869
42,965
276
35,413
425,506
46,728
549
28,342
326,501
39,811
-
29,880
325,568
39,245
23,784
524,523
501,125
396,192
388,597
(b) The number of employees at the end of the year was:
- Production
- Administration
118
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
693
280
570
289
403
226
317
243
973
859
629
560
36 INCOME TAX
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
-
-
-
-
Amounts shown on the statements of
profit or loss and other comprehensive
income are as follows:
Current tax on the adjusted profit for the
year at 15% (2013: 15%)
Deferred tax credit to
profit or loss (note 13)
(6,875)
(297)
-
-
Credit to profit or loss
Charge/(Credit) to other comprehensive income
(6,875)
235
(297)
(1,517)
-
-
-
Credit for the year
(6,640)
(1,814)
-
-
The tax on the group’s/company’s (loss)/profit before tax differs from the theoretical amount that would arise using the
basic tax rate of the group as follows:
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
(125,591)
34,543
(12,984)
153,874
(18,839)
(30,625)
19,023
(1,070)
16,458
5,960
10,372
(1,279)
5,181
(74,783)
18,285
(2,385)
21,250
2,108
40,079
(9,735)
(1,948)
(31,165)
12,069
(1,028)
16,876
-
5,196
-
23,081
(41,807)
11,561
(2,254)
15,359
(5,940)
2013
Rs’000
(Loss)/profit before tax
Tax calculated at the rate of 15% (2013: 15%)
Income not subject to tax
Excess of depreciation over capital allowances
Other tax allowances
Expenses not deductible for tax purposes
Tax losses carried forward
Tax losses not recognised
Utilisation of tax losses
Current tax on the adjusted profit
Deferred tax credit to profit or loss (note 13)
-
(6,875)
-
(297)
-
-
-
Credit to profit or loss
(6,875)
(297)
-
-
37 (LOSS)/EARNINGS PER SHARE
The Group
The Holding Company
2014
2013
2014
2013
(Loss)/Profit attributable to owners of the parent (109,170)
39,482
(12,984)
153,874
Number of shares in issue (‘000)
105,000
105,000
105,000
105,000
(Loss)/Earnings per share (Re.)
(1.04)
0.38
(0.12)
1.47
38 CASH AND CASH EQUIVALENTS
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
(a) Cash and bank balances
12,191
51,753
8,551
43,193
119
38 CASH AND CASH EQUIVALENTS (continued)
(b) Cash and cash equivalents and bank overdrafts include the following for the purpose of the statement of cash flows:
The Group
2014
Rs’000
Cash and bank balances
Bank overdrafts (note 21)
The Holding Company
2014
Rs’000
2013
Rs’000
2013
Rs’000
12,191
(206,101)
51,753
(192,055)
8,551
(124,389)
43,193
(94,361)
(193,910)
(140,302)
(115,838)
(51,168)
39 OTHER COMPREHENSIVE INCOME
(a) The Group
(i) 2014
Revaluation
surplus and
other reserves
Rs’000
Retirement
benefit
obligations
Rs’000
Share of
reserves in
associates
Rs’000
Total
Rs’000
6,844
-
-
6,844
-
-
8,488
-
-
6
8,488
6
6,844
8,488
6
15,338
Increase in fair value of available-for-sale investments
(note 22 (a) (v))
Share of other comprehensive income of associates
Income tax charge
Deferred tax on remeasurement of retirement benefit
obligations
Other comprehensive income for the year 2014, net of tax
6,844
8,253
6
15,103
Other comprehensive income attributable to:
6,844
-
7,987
266
6
-
14,837
266
6,844
8,253
6
15,103
-
(a) The Group
(235)
Revaluation
surplus and
other reserves
Rs’000
-
Retirement
benefit
obligations
Rs’000
(235)
Total
Rs’000
(ii) 2013
Decrease in fair value of available-for-sale investments
(note 22 (a) (v))
Income tax charge
-
(6,727)
(6,727)
(56,769)
(56,769)
(56,769)
(63,496)
1,517
1,517
(6,727)
(55,252)
(61,979)
Other comprehensive income attributable to:
(6,727)
-
(53,532)
(1,720)
(60,259)
(1,720)
(6,727)
(55,252)
(61,979)
-
-
Deferred tax on remeasurement of retirement benefit obligations
120
(6,727)
39 OTHER COMPREHENSIVE INCOME (continued)
Revaluation
surplus and
other reserves
Rs’000
Retirement
benefit
obligations
Rs’000
Total
Rs’000
(i) 2014
Increase in fair value of available-for-sale investments
Remeasurement of retirement benefits obligations (note 22 (a) (v))
6,844
-
-
6,924
6,844
6,924
6,844
6,924
13,768
(ii) 2013
Decrease in fair value of available-for-sale investments
Remeasurement of retirement benefits obligations (note 22 (a) (v))
(6,727)
-
-
(48,299)
(6,727)
(48,299)
(6,727)
(48,299)
(55,026)
40 COMMITMENTS
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
42,953
513,031
25,500
50,041
42,953
198,044
25,500
16,779
555,984
75,541
240,995
42,279
(a) Capital Commitments
Investment property
(b) Operating lease payments receivable
The future minimum lease payments receivable under non-cancellable lease which will expire on December 31, 2094 and
June 30, 2104 is as follows:
The Group
The Holding Company
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
5,000
20,000
425,000
5,000
20,000
430,000
5,429
22,039
457,184
5,429
22,039
462,613
450,000
455,000
484,652
490,081
41 CONTINGENT LIABILITIES
(a) Corporate guarantee given for
subsidiary and other companies
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
341,646
332,000
341,646
332,000
(b) It has been agreed that the Sugar Industry will allocate through the Mauritius Sugar Producers Association, ‘‘2,000 Arpents’’
of land to the Empowerment Programme for social and infrastructural projects. The quantum of land to be granted by the
Company is 131 Arpents.
(c) Claims have been made by various persons against the Company before the Truth and Justice Commission for 2 portions
of land totalling 312 Arpents situated at “La Cantine”, Albion and at “Camp Caval” between “Ligne Berthaud” and “River
Takamaka”. The Directors strongly believe that these claims are not justified and will have no impact on the financial
statements of the Company, as the land being claimed is registered in the n
ame of the company in full ownership.
121
42 BUSINESS COMBINATION
(a) Acquisition of additional interest in a subsidiary
In June 2014, the Group acquired an additional 6.8% interest in Cascavelle Shopping Mall Limited for Rs.12,717,000 in
cash, increasing its ownership from 50.1% to 56.9%. The carrying amount of Cascavelle Shopping Mall Limited’s net
assets in the consolidated financial statements on the date of the acquistion was Rs.190,569,000. The Group recognised a
decrease in non-controlling interest of Rs.12,942,000 and an increase in retained earnings of Rs.225,000.
2014
Rs’000
Cash consideration paid to non-controlling interests
Carrying amount of the additional interest
12,717
12,942
Gain recognised in retained earnings within equity
225
The following summarises the effect of changes in the Group’s (parent) ownership interest in Cascavelle Shopping Mall
Limited:
2014
Rs’000
101,573
(6,924)
Parent’s ownership interest at begining of period
Share of comprehensive income
94,649
12,942
Effect of increase in parent’s ownership
107,591
Parent’s ownership interest at end of period
(b) Acquisition of subsidiary
(i) On January 16, 2013, Medine Limited acquired a further 50% of the share capital of Medine Rum Limited for Rs.21,000,000
hence increasing its shareholding from 50% to 100% and obtaining control of Medine Rum Limited. The principal activities
of Medine Rum Limited consist of provision of bottling services and holding of investment in The Indian Ocean Rum
Company Ltd (an associate company).
The acquisition has increased the group’s market share in the production, bottling and wholesale of premium rum.
(ii) Details of identifiable net assets acquired and goodwill are as follows:
Acquisition of investment in Medine Rum Limited:
Rs’000
21,000
5,953
Purchase consideration
Fair value of equity interest previously held in Medine Rum Limited (50% of Rs.11,906,000)
Less fair value of identifiable net assets acquired
26,953
11,906
15,047
Goodwill
(iii) The goodwill arising from the acquisition is mainly attributable to the potential profitability of the acquired business in the
long term. In addition, because of the difficult economic conditions prevailing in the export market, namely Europe and
USA, the goodwill has been impaired.
(iv) The recognised amounts of identifiable assets acquired and liabilities assumed are as follows:
Carrying amount
Rs’000
Fair value
Rs’000
Plant and equipment
Investment in associate
Cash at bank
781
11,348
6
291
(520)
781
11,348
6
291
(520)
Total identifiable net assets
11,906
11,906
122
42 BUSINESS COMBINATION (continued)
(b) Acquisition of subsidiary (continued)
(v) Net cash outflow on acquisition of subsidiary
Rs’000
21,000
(6)
Consideration paid in cash
Less: cash and cash equivalents balances acquired
20,994
43 SEGMENT REPORTING
The Group’s reportable segments are strategic business units that offer different products and services. They are managed
separately because each business requires different resources and marketing strategies.
There are three main reportable segments:
- Agro - planter and miller of sugar cane for the production of sugar and by-products of sugar cane namely molasses
and bagasses, sale of electricity, production of vegetables and fruits, landscaping and nursery.
- Leisure - operates a golf course and a hotel resort, casela nature and leisure park, nature escapade and revenue from
forestry and deer farming.
- Property - land transactions, rental of office and commercial buildings and property development.
The accounting policies of the operating segments are the same as those described in the summary of significant
accounting policies. The company evaluates performance on the basis of profit or loss and account for intersegment sales
and transfers as if the sales or transfer were to third parties, that is, at current market prices.
Agro
Rs’000
Leisure
Rs’000
Property
Rs’000
Other
Rs’000
Total
Rs’000
794,615
426,900
117,400
34,900
1,373,815
June 30, 2014
Revenues
Segment result
Fair value loss of investment properties
(112,561)
-
(1,739)
-
29,300
-
-
11,651
(29,633)
189,333
(5,166)
-
(36,124)
-
-
(4,883)
(149,018)
189,333
(6,905)
6,768
(Loss)/Profit before finance costs
Finance costs
(114,300)
(20,000)
40,951
(31,700)
154,534
(83,600)
(41,007)
(30,469)
40,178
(165,769)
Income tax credit/(charge)
(134,300)
2,045
9,251
-
70,934
5,054
(71,476)
(224)
(125,591)
6,875
(132,255)
9,251
75,988
(71,700)
(118,716)
Loss attributable to:
(109,170)
(9,546)
Loss for the year
(118,716)
Segment assets
Associates
Unallocated assets
Total assets
5,930,077
-
-
1,779,529
29,204
-
2,100,691
-
-
-
4,756
2,302,651
9,810,297
33,960
2,302,651
5,930,077
1,808,733
2,100,691
2,307,407
12,146,908
Segment liabilities
Unallocated liabilities
653,299
-
512,005
-
1,076,906
-
-
1,195,724
2,242,210
1,195,724
Total liabilities
653,299
512,005
1,076,906
1,195,724
3,437,934
Other segment items
Capital expenditure
Depreciation
Amortisation
102,372
75,305
1,067
98,400
59,268
283
12,739
13,349
-
530
7,986
447
214,041
155,908
1,797
123
43 SEGMENT REPORTING (continued)
Agro
Rs’000
Leisure
Rs’000
Property
Rs’000
Other
Rs’000
Total
Rs’000
810,806
378,036
116,400
16,600
1,321,842
13,943
-
(1,743)
-
12,400
-
-
7,083
(47,273)
224,086
40,451
-
(36,460)
-
-
(8,650)
(57,390)
224,086
38,708
(1,567)
June 30, 2013
Revenues
Segment result
Fair value (loss)/gain of investment properties
Profit/(loss) before finance costs
Finance costs
12,200
(22,800)
19,483
(36,200)
217,264
(75,000)
(45,110)
(35,094)
203,837
(169,294)
Income tax credit/(charge)
(10,600)
1,700
(16,717)
-
142,264
(1,903)
(80,204)
-
34,543
297
(8,900)
(16,717)
140,361
(80,204)
34,840
Profit attributable to:
39,482
(4,642)
Profit for the year
34,840
Segment assets
Associates
Unallocated assets
Total assets
6,188,945
-
-
1,625,290
25,749
-
1,974,699
-
-
9,437
- 2,292,108
9,788,934
35,186
2,292,108
6,188,945
1,651,039
1,974,699 2,301,545
12,116,228
Segment liabilities
Unallocated liabilities
695,243
-
583,816
-
957,950
-
-
927,915
2,237,009
927,915
Total liabilities
695,243
583,816
957,950
927,915
3,164,924
Other segment items
Capital expenditure
Depreciation
Amortisation
60,083
117,142
1,525
38,616
21,671
58
30,629
2,498
-
5,508
494
9
134,836
141,805
1,592
(a) Other operations of the Group comprised mainly of holding of investment, training services and bottling services, which
are not of a sufficient size to be reported separately.
(b) There are no sales or other transactions between the business segments. Others represent unallocated costs and corporate
expenses. Segment assets consist primarily of property, plant and equipment, investment properties, intangible assets,
investments in associates, deferred expenditure, biological assets, inventories, receivables and operating cash, and
exclude investments in available-for-sale financial assets. Segment liabilities comprise mainly of payables, borrowings,
retirement benefit obligations and exclude items such as corporate borrowings and proposed dividend.
Capital expenditure comprises additions to property, plant and equipment and intangible assets.
The company operates only in Mauritius and all sales are made on the local market.
124
44 RELATED PARTY TRANSACTIONS
(a) The Group
Associated
Companies
Directors and
Companies with
Key Management Personnel Common Shareholders
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
47
-
826
600
-
4,000
-
323
14,834
-
-
1,209
1,403
437
300
-
3,000
40
646
20,533
751
-
-
-
-
-
76,058
-
-
-
-
-
-
-
-
-
-
66,280
-
-
-
-
-
-
5,466
132
7,994
18,931
-
-
12,772
5,375
79,001
105,465
378,126
25,755
1,032
7,799
19,658
4,096
4,735
99,449
67,463
-
Sales of goods or services
Purchase of goods or services
Rental income
Management fee receivable
Remuneration and benefits
Dividend receivable
Interest income
Interest expense
Amount owed to related parties
Amount owed by related parties
Advances from related parties
Sales of goods or services
Purchase of goods or services
Rental income
Management fee receivable
Remuneration and benefits
Dividend receivable
Interest income
Interest expense
Amount owed to related parties
Amount owed by related parties
Advances from related parties
Subsidiaries
Associated
Companies
Directors and
Key Management
Personnel
Companies with
Common
Shareholders
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
9,746
1,559
10,206
41,945
-
-
27,841
375
4,845
498,022
-
33,605
6,206
9,952
56,422
-
-
6,524
509
8,098
408,590
-
47
-
826
600
-
4,000
-
323
14,834
-
-
566
3
437
300
-
3,000
40
646
20,533
737
-
-
-
-
-
62,115
-
-
-
-
-
-
-
-
-
-
52,887
-
-
-
-
-
-
1,095
121
7,994
18,931
-
-
12,772
5,375
79,001
105,465
378,126
18,854
789
7,799
19,658
4,096
4,735
99,449
67,237
-
(c) The above transactions have been made at arms’ length, on normal commercial terms and in the ordinary course of
business.
The amount owed to/by related parties are unsecured, carried interest rate of 4.25% and settlement occurs in cash. There
has been no guarantees provided or received for any related party payables or receivables. For the year ended June 30,
2014, the Group and the company has recorded an impairment of receivables of Rs.20,000,000 (2013:nil) relating to
amounts owed by related parties (note 16 (d)). This assessment is undertaken each financial year through examining the
financial position of the related party and the market in which the related party operates.
(d) KEY MANAGEMENT PERSONNEL COMPENSATION
The Group
The Holding Company
2014
Rs’000
2013
Rs’000
2014
Rs’000
2013
Rs’000
68,588 7,470 59,601 6,679 56,063 6,052 47,446
5,441
76,058 66,280 62,115 52,887
Salaries and short-term employee benefits
Post-employment benefits
125
Notice of Annual Meeting of Shareholders
Notice is hereby given that the 103rd Annual Meeting of the Shareholders of the Company will be held at 11th Floor, Medine
Mews, 4 Chaussée Street, Port Louis on Thursday 11 December 2014 at 10.00 a.m.
Agenda
1.
To receive, consider and approve the audited financial statements for the year ended 30 June 2014, the directors’ annual
report and the auditors’ report thereon.
2.
To reappoint Mr. Pierre Doger de Spéville as director of the Company until the next annual meeting in compliance with
section 138 (6) of the Companies Act 2001.
3.
To reappoint Mr. Lajpati Gujadhur as director of the Company until the next annual meeting in compliance with section 138
(6) of the Companies Act 2001.
4.
To reappoint Mr. Jacques Li Wan Po as director of the Company until the next annual meeting in compliance with section
138 (6) of the Companies Act 2001.
5.
To reappoint Mr. Gérald Lincoln as director of the Company until the next annual meeting in compliance with section 138
(6) of the Companies Act 2001.
6.
To reappoint Mr. Sulliman Adam Moollan as director of the Company until the next annual meeting in compliance with
section 138 (6) of the Companies Act 2001.
7.
To reappoint Mr. Alain de Ravel de L’Argentière as director of the Company until the next annual meeting in compliance
with section 138 (6) of the Companies Act 2001.
8.
To reappoint as director Mrs. Jocelyne Martin who was appointed by the Board on 18 June 2014 in replacement of Mr. Alain
Chatel who had resigned.
9.
To reappoint Messrs. BDO & Co as auditors for the financial year ending on 30 June 2015 and authorise the Board of
Directors to fix their remuneration.
A member of the Company may appoint a proxy to attend and vote at the meeting on his behalf. The instrument appointing
the proxy must be deposited at the registered office of the Company not less than twenty-four hours before the meeting.
By Order of the Board
Patricia Goder
Company Secretary
26 November 2014
126
Proxy Form - Medine Limited
I/We (Block Capitals, please)
being a shareholder(s) of the above-named Company, hereby appoint
of
or failing him
of
as my/our proxy to vote for me/us and on my/our behalf at the Annual Meeting of the Shareholders of the Company to be
held on Thursday 11 December 2014 at 10.00 a.m. and at any adjournment thereof.
Signed this
day of
2014.
Signature
Please indicate with an X in the spaces below how you wish your votes to be cast.
FOR
RESOLUTION 1
To receive, consider and approve the audited financial statements for the year ended 30
June 2014, the directors’ annual report and the auditors’ report thereon.
RESOLUTION 2
To reappoint Mr. Pierre Doger de Spéville as director of the Company until the next annual
meeting in compliance with section 138 (6) of the Companies Act 2001.
RESOLUTION 3
To reappoint Mr. Lajpati Gujadhur as director of the Company until the next annual meeting
in compliance with section 138 (6) of the Companies Act 2001.
RESOLUTION 4
To reappoint Mr. Jacques Li Wan Po as director of the Company until the next annual meeting
in compliance with section 138 (6) of the Companies Act 2001.
RESOLUTION 5
To reappoint Mr. Gérald Lincoln as director of the Company until the next annual meeting in
compliance with section 138 (6) of the Companies Act 2001.
RESOLUTION 6
To reappoint Mr. Sulliman Adam Moollan as director of the Company until the next annual
meeting in compliance with section 138 (6) of the Companies Act 2001.
RESOLUTION 7
To reappoint Mr Alain de Ravel as director of the Company until the next annual meeting in
compliance with section 138 (6) of the Companies Act 2001.
RESOLUTION 8
To reappoint as director Mrs. Jocelyne Martin who was appointed by the Board on 18 June
2014 in replacement of Mr. Alain Chatel who had resigned.
RESOLUTION 9
To reappoint Messrs. BDO & Co as auditors for the financial year ending on 30 June 2015 and
authorise the Board of Directors to fix their remuneration.
AGAINST
Notes
1 A member may appoint a proxy of his own choice.
2 If the appointor is a corporation, this form must be under its common seal or under the hand of some officer or attorney duly authorised
in that behalf.
3 In the case of joint holders, the signature of any one holder will be sufficient, but the names of all the joint holders should be stated.
4 If this form is returned without any indication as to how the person appointed proxy shall vote, he will exercise his discretion as to how
he votes or whether he abstains from voting.
5 T o be valid, this form must be completed and deposited at the registered office of the Company not less than twenty-four hours before
the time fixed for holding the meeting or adjourned meeting.
127
128
4 Chaussée Street, Port Louis, Mauritius
T +230 211 6101
F +230 211 6173
E [email protected]
www.medine.com
MEDINE Limited ANNUAL REPORT 2014
Medine Limited
Annual Report 2014

AnnuAl RepoRt 2014

Transcription

Similar documents

magical makeup brow know

ANNUAL REPORt 2015

Ilapak Italia Spa

vitamin powered energy - Feeling

Fall 2015 Page 2 - People`s

Annual Report 2014

our mojito recipe

AVS24 2.4 GHZ Wireless Audio/Video Sender

Diabetes, Type 1

January 2014 Newsletter - Fresno Police Department Credit Union

Tamarina Beach Club Hotel Extension