- Harel Mallac Group

Transcription

Dear Shareholder,
The Board of Directors is pleased to present the Annual Report of Chemco Limited for the year ended 31 December 2015,
the contents of which are listed below.
This report was approved by the Board of Directors at its meeting held on 27 April 2016.
Antoine L. Harel
Chairman
Shemboosingh Cheekhooree
Managing Director
WHAT’S
INSIDE
02 Vision - Mission - Values
04 Company Profile/Corporate Information
05 Business Segments
06 Chairman’s Report
08 Managing Director’s Report
22 Statement of Compliance
10
Board of Directors/Senior Management Profile
23 Certificate by Secretary
12
19
Corporate Governance Report
24 Independent Auditors’ Report
Statutory Disclosures
25 Statement of Financial Position
21
Statement of Directors’ Responsibilities
26 Statement of Profit or Loss and Other Comprehensive Income
27 Statement of Changes in Equity
28 Statement of Cash Flows
29 Notes to the Financial Statements
An n u a l Report 2015
1
GROUP
STRUCTURE
VISION
To be the leader in the
chemical business in the
region and to diversify
through new ventures.
2
C hemc o L i m ited
MISSION
• Todevelopastrongandcompetitiveorganisationwhichdeliversonits
targets and maximise shareholder’s value.
• Toprovideawiderrangeofeco-friendlyproductstothetextilesector.
• Tofosteraqualitycultureandsustainabledevelopment.
• Toprovideitsemployeeswithaworkenvironmentwhichpromotes
participation, innovation and customer service.
VALUES
Passion
Generate desire for success
Relationship
Build a strong bond with our partners and with the community
Integrity
Be honest and ethical in our dealings
Development
Promote a learning culture and embrace change
Excellence
Nurture creativity, share best practices and deliver on promises
3
GROUP
COMPANY
STRUCTURE
PROFILE
Chemco Limited was incorporated in 1984. It is a public company
listed on the Development and Enterprise Market (DEM) since
2007 and is a subsidiary of Harel Mallac & Co. Ltd. The Company is
involved in the distribution of industrial chemicals as well as a range
ofconsumergoodsinthelocalandregionalmarkets.
OPERATING
SINCE
TURNOVER
(Rs’M)
BUSINESS
SEGMENTS
PROFIT AFTER
TAXATION (Rs’M)
NO OF
EMPLOYEES
DIVIDEND
PER SHARE (Rs)
1984
7
89
CORPORATE
INFORMATION
COMPANY SECRETARY
HM Secretaries Ltd.
18 Edith Cavell Street
Port Louis
AUDITORS
BDO & Co
BANKERS
TheMauritiusCommercialBankLtd.
MauBankLtd.
LEGAL ADVISERS
Ivan Collendavelloo Chambers
Étude Georges Robert
4
C hemc o L i m ited
344
4.1
1.10
NOTARY
Mr Didier Maigrot
Notary Public
REGISTERED OFFICE
Chaussée Tromelin
Fort George
Port Louis
REGISTRY
Harel Mallac Corporate Services Ltd.
18 Edith Cavell Street
Port Louis
BUSINESS REGISTRATION NUMBER
C07004261
BUSINESS
SEGMENTS
15%
46%
7%
16%
Sugar Chemicals
Industrial Chemicals
Tyres
Refrigeration
Products
Products
Brands
Products
Coagulants
Flocculants
Biocides
Lime
Phosphoric Acid
Sulphur
Caustic Soda
Hydrochloric Acid
Hydrogen Peroxide
Calcium Carbonate
Sodium Sulphate
Sodium Chloride
Sulphuric Acid
Food Chemicals
GT Radial
CEAT
Superhawk
Ketter
Air Conditioners
Galanz Supreme
(9,000-24,000btu)
Midea(9,000-60,000btu)
Ammonia Gas and
Freon Gases R22,
R407C and R410
End Uses
Complete range of
process chemicals for
the sugar industry
4%
End Uses
Range of chemicals for
textile, food and beverages
and detergents industry
End Uses
Variety of radial
tyres for
passenger cars to fit
12 to 15 inch rims
and tyres for light
trucks,lorriesand
buses
10%
2%
Water
Treatment
Chemicals
Laboratory
Services*
Products
Products
Products
Cyanuric Acid
Calcium Hypochlorite
ChempoolAcid&Alkali
Pool Accessories
Pumps & Filters
Desalination Equipment
Reverse Osmosis
Systems
Water Purifiers
Coagulants
Flocculants
Polymers
Lime
Calcium Hypochlorite
Chlorine Dioxide
Water & Wastewater
Analysis
Microbiological Testing
Soil and Sand Analytical
Services
Swimming Pool
Chemicals
and Equipments
End Uses
Wide range of
chemicals and
equipmentstokeep
swimming pool water
crystal clear
End Uses
Air conditioners suitable
for domestic and
industrial purposes
End Uses
End Uses
Boiler water treatment
Cooling tower/chiller
Process water treatment
Water Treatment:
Demineralised System
Softeners Plant
Reverse Osmosis
Membrane System
Environmental monitoring
services provided with
high tech laboratory
equipment
Technical support to
Customers
* The Laboratory is ISO 17025 certified
5
Despite the low growth in the
manufacturing sector, Chemco
managedtomaintainitsmarket
share as a leading operator in the
chemicals business.
6
C hemc o L i m ited
CHAIRMAN’S
REPORT
Dear Shareholder,
The manufacturing sector grew marginally by 1.5% in the year 2015 compared to 2.2% the previous year. The
contribution of the manufacturing sector to the country’s GDP dropped slightly from 16.5% in 2014 to 16.3% in
2015. The sugar milling sector contracted by 7.6%, after a growth of 0.6% in 2014 while the textile and apparel
sector contracted by 1 %.
Despitethelowgrowthinthemanufacturingsector,Chemcomanagedtomaintainitsmarketshareasaleading
operatorinthechemicalsbusiness.TheCompanyconsolidateditsmarketshareinmostdivisionswhereit
operated. The Company’s turnover grew by 6 percent over the previous year to reach Rs344 million. Profits
were down compared to 2014. The Company’s resilience enabled it to declare the same level of dividend as
the previous year.
In line with its sustainability strategy, the Company will persevere to replace less environment-friendly chemicals
with greener alternatives. It will continue to support and guide its customers towards more environment-friendly
chemicals and processes.
Acknowledgements
TheBoardwouldliketoextenditsgratitudetotheManagementandstaffofChemcofortheircommitment,
professionalismandhardwork.WeareconfidentthattheCompany’sstrategicorientation,dedicatedemployees
and customer-centric approach will help the Company deliver on its targets next year.
Antoine L. Harel
Chairman
7
The Company started the year with
ahighernetworkingcapitalwhich
it successfully reduced during Q3
and Q4.
8
C hemc o L i m ited
MANAGING DIRECTOR’S
REPORT
From an operational point of view, the Company continued
to advance along the path of business excellence. 2015 was
marked by the re-certification of Chemco to ISO 9001 and
OHSAS 18001. These initiatives and our focus on health, safety
and the environment have reinforced Chemco’s competitive
edge. The Company continued to improve its efficiency and
productivity across its various divisions.
Air Conditioning and Refrigeration Division
Chemco consolidated its position in the market against an
increasing number of players. The Company introduced more
environment-friendly technology for its range of individual air
conditioning units.
Laboratory Division
Overall turnover grew by 6%. Growth were mainly in the
water management services and sugar chemicals divisions.
The Company missed its bottom-line target as a result of
exceptional items in terms of finance costs and doubtful
debts. The events of early 2015 where a large conglomerate
defaulted on payments heavily impacted the company’s
financial performance.
The Company started the year with a higher net working
capital which it successfully reduced during Q3 and Q4.
Industrial Chemical Division
With the contraction of the Mauritian textile and lower growth
in the manufacturing sector in 2015, the industrial division’s
turnover decreased by 4.6% compared to 2014. To secure
competitive advantage, Chemco increased its bulk buying
strategy for basic industrial chemicals which enabled the
company to mitigate margin erosion on some high volume
liquid chemicals.
Sugar Chemicals Division
Turnover in the laboratory services division grew by 7% over
2014asaresultofafocusedmarketingcampaignandnew
services offering.
Water Treatment Division
The water treatment division continued its progress in 2015.
Turnover grew by 59% over 2014. The Company continued
to build on its expertise in sea water and brackish water
desalination plants. The construction of the first brackish
water desalination plant started in 2015 and is expected to be
commissioned in the first half of 2016. Its expertise in water
management technology enabled the Company to increase
marketshareacrossthehotelindustry.
Way Forward
Chemco will continue its strategy to replace aggressive
chemicals with more sustainable and eco-friendly alternatives.
Collaboration with principals offering sustainable chemicals
and processes will be pursued, namely in water purification
and manufacturing operations.
The ongoing challenges faced by the sugar sector in 2014
continued in 2015. Despite a contraction of 7.6% in the sugar
sector, Chemco managed to increase turnover in the sugar
chemicals division by 80% over previous year through the
introduction of high quality and performance chemicals.
Tyre Division
The tyre division registered lower sales in 2015. Turnover
dropped substantially compared to 2014. The sale of its
flagship GT Radial brand was affected by cheaper tyre
importsfromChina.Competitionreacheditspeakduringthe
year with over 80 brands of tyres being imported of which
80% were sourced from China. Customers with large fleets
of vehicles imported their own brands of tyres.
Managing Director
9
BOARD OF
DIRECTORS
ANTOINE L. HAREL (58)
Chairman(Non-Executive)
Antoine L. Harel is a Fellow Member of the Institute of
Chartered Accountants in England and Wales and holds a
BA(Hons)degreeinAccountingandComputing.Hejoined
Harel Mallac & Co. Ltd. in 1987. In 1997, he was appointed
Group CEO and is Chairman of the Board since April 2005.
He was President of the Mauritius Chamber of Commerce
and Industry in 1992/1993. He was appointed to the Board of
Directors of Chemco Limited on 30 November 1999.
OtherDirectorships(listedCompanies):
HarelMallac&Co.Ltd.(Chairman),Compagnie des Magasins
Populaires Limitée(Chairman),TheMauritiusChemicaland
FertilizerIndustryLimited(Chairman),BychemexLimited
(Chairman)andLes Gaz Industriels Ltd(Chairman).
CHRISTIAN AHKINE (54) CHARLES HAREL (48)
Executive Director
In office as from 6 November 2015
ChristianAhkineisanAssociateMemberoftheInstitute
of Chartered Accountants in England and Wales and
holderofaBSc(Hons)ManagementSciencefromthe
University of Ottawa. He joined Harel Mallac in 2005 as
Financial Controller of Harel Mallac Bureautique Ltd and
was appointed Group Financial Controller in February 2007.
Since 15 November 2015, he holds the position of Finance
Director of Harel Mallac’s Chemical Arm.
Bychemex Limited and The Mauritius Chemical and Fertilizer
Industry Limited.
Non-Executive Director
Charles Harel holds an MBA from the University of Birmingham,
UK, as well as a National Diploma in Management and Finance
fromCapeTechnikon,SouthAfrica.HejoinedtheHarelMallac
Group in 1993 and was nominated CEO of the Group effective
January 2014. He was appointed to the Board of Directors of
Chemco Limited on 29 May 2013.
Harel Mallac & Co. Ltd., Compagnie des Magasins Populaires
Limitée, The Mauritius Chemical and Fertilizer Industry Limited
and Bychemex Limited.
SHEMBOOSINGH CHEEKHOOREE (54) GUY HAREL (67)
Executive Director
ShemboosinghCheekhooreeholdsaBachelor’sdegreeinChemical
Engineering from the North East London Polytechnic, United
Kingdom. He has over 25 years’ experience in textile and apparel
sector and occupied various senior management positions during
the last 15 years in the textile industry, in Mauritius and in India, before
joining the Harel Mallac Group in 2012 as Managing Director of Harel
Mallac Export Ltd, a company forming part of the Chemical Arm of
Harel Mallac and has occupied this position up to now. In October
2013, he was appointed General Manager of MCFI Ltd. Group of
Companies. Since October 2014, he is the Managing Director of
HarelMallacExportLtd.,HarelMallac(Tanzania)LimitedandMCFI
Group of companies. He was appointed to the Board of Directors of
Chemco Limited on 31 October 2014.
Bychemex Limited and The Mauritius Chemical and Fertilizer Industry
Limited.
10
C hemc o L i m ited
Aged 67, Guy Harel joined Harel Mallac Group in 1981 as
ManagingDirectorofFapcomLtd.In1983,hecreatedHenkel
Chemicals(Mauritius)LimitedandbecameitsManaging
Director in 1996. He was, since the acquisition of the former
by the Harel Mallac Group in 2007, the Managing Director of
Archemics Ltd. up to 31 December 2012. He was appointed
to the Board of Chemco Limited on 29 May 2013.
Bychemex Limited and The Mauritius Chemical and Fertilizer
Industry Limited.
SENIOR MANAGEMENT
PROFILE
SHEMBOOSINGH CHEEKHOOREE
Managing Director
ShemboosinghCheekhooreeholdsaBachelor’sdegreeinChemicalEngineeringfromtheNorthEastLondonPolytechnic,
United Kingdom. He has over 25 years’ experience in textile and apparel sector and occupied various senior management
positions during the last 15 years in the textile industry, in Mauritius and in India, before joining the Harel Mallac Group
in 2012 as Managing Director of Harel Mallac Export Ltd, a company forming part of the Chemical Arm of Harel Mallac
and has occupied this position up to now. In October 2013, he was appointed General Manager of MCFI Ltd. Group of
Companies.SinceOctober2014,heistheManagingDirectorofHarelMallacExportLtd.,HarelMallac(Tanzania)Limited
and MCFI Group of companies.
CHRISTIAN AHKINE
Finance Director
ChristianAhkineisanAssociateMemberoftheInstituteofCharteredAccountantsinEnglandandWalesandholderofa
BSc(Hons)ManagementSciencefromtheUniversityofOttawa.HejoinedHarelMallacin2005asFinancialControllerof
Harel Mallac Bureautique Ltd and was appointed Group Financial Controller in February 2007. Since 15 November 2015,
he holds the position of Finance Director of Harel Mallac’s Chemical Arm.
AJAY LUXIMUN
Operations Manager
Ajay Luximun holds a BSc (Hons) in Business Studies and a Masters in International Business Management. He
joined Chemco Limited in May 1993, and assumed various positions within the Company, started as Technical Sales
Representative,SalesExecutive(1999),SeniorSalesExecutive(2004),andProductManager(2005).FromJanuary2012
toDecember2014,heworkedasGeneralManager–Export,forHarelMallacExport.AsfromJanuary2015,Ajaywas
appointed as Operations Manager for Chemco Limited and Bychemex Limited.
VINCENT LABAT (53)
Independent Director
Vincent Labat graduated as a Chemical Engineer.
From 1996 to 2009, he was the Managing Director
of Les Gaz Industriels Ltd, a listed company.
In 2010, he joined Medine Limited as Project
Development Executive. In July 2011, he was
appointed as Managing Director of the Agriculture
Cluster. He was appointed to the Board of Directors
of Chemco Limited on 12 August 2010.
Bychemex Limited and The Mauritius Chemical and
Fertilizer Industry Limited.
MICHEL RIVALLAND G.O.S.K. (62)
Michel Rivalland G.O.S.K. is a Fellow Member of the Chartered
Association of Certified Accountants. He joined the Board of
Directors of The Mauritius Chemical and Fertilizer Industry Limited on
1 June 2006 and served as Managing Director from October 2006 to
30 June 2009. He is currently an Executive Director of Harel Mallac
& Co. Ltd. He was appointed to the Board of Directors of Chemco
Limited on 21 December 2006.
Compagnie des Magasins Populaires Limitée, Harel Mallac & Co. Ltd.,
Bychemex Limited and The Mauritius Chemical and Fertilizer Industry
Limited.
11
CORPORATE GOVERNANCE
REPORT
ChemcoLimited(the‘Company’)iscommittedtothehigheststandardsofbusinessintegrity,transparencyandprofessionalisminall
its activities to ensure that the activities within the Company are managed ethically and responsibly to enhance business value for all
stakeholders.
THE BOARD OF DIRECTORS
The Board endeavours to exercise leadership, entrepreneurship, integrity and judgement in directing the Company, so as to achieve
continuing prosperity for the organisation whilst ensuring both performance and compliance.
The Board also ensures that the activities of the Company comply with all legal and regulatory requirements as well as with its
constitution from which the Board derives its authority to act.
The Board inter alia oversees the development and implementation of the Company’s corporate strategy and reviews performance
objectives.Itprovidesforsuccessionplansforkeyindividuals,ensureseffectivecommunicationwiththeCompany’sstakeholders,
promotes the Company’s Code of Ethics, and oversees financial and capital management. As such, it reviews and approves quarterly
and annual financial reports, monitors financial results and approves major capital expenditure, acquisitions, divestitures and material
commitments.TheBoardfinallyoverseescomplianceandriskmanagement.
At 31 December 2015, the Board of Directors consisted of seven members, of whom one is an independent director and two are
executive directors. In view of its size, the Board is of the view that having one independent director is in line with the Code’s spirit.
Non-executive Directors have free access to members of the senior management team. All Directors have access to the Company
Secretary. The Directors are elected as per the provisions of the Company’s constitution that do not provide for a definite term of office.
With a view to enhancing the Board’s effectiveness, a Board performance review is carried out yearly to assess the directors’
appreciation of the Board’s performance, its procedures and practices. The results of the assessment are examined by the Corporate
GovernanceCommittee.ThisCommitteemakesitsrecommendationstotheBoardonanyrequiredremedialaction.
Since the Company has a management contract with The Mauritius Chemical and Fertilizer Industry Limited (MCFI), the Board has
delegated authority to MCFI’s Audit Committee and Corporate Governance Committee to provide it with assistance in discharging
its duties and responsibilities. This is done through a more comprehensive evaluation of specific issues that are the remit of such
committees.TheBoardregularlyreceivesthereportsandrecommendationsofthesecommitteesandtakesappropriateaction.
The Board entrusts the day-to-day management of the Company to MCFI through its Managing Director who ensures the smooth
running of the organisation. The composition of the Board of Directors and other directorships held by the Directors in other listed
companies are given on pages 10 and 11.
BOARD MEETINGS
The Board meets regularly during the year. For the period under review, the Board met seven times. Board meetings are conducted in
accordance with the Company’s constitution and the Companies Act. Board meetings are organised in such a way as to allow Directors
to receive all relevant information critical to their understanding of the business to be conducted at the Board meeting, and therefore to
participatefullyinthedecisionmakingprocess.TheBoardmayinvitemanagementorexternalconsultantstoattendBoardmeetings
whenever required.
RESPONSIBILITIES ENTRUSTED TO MCFI’S CORPORATE GOVERNANCE COMMITTEE
TheBoardhasentrustedtoMCFI’sCorporateGovernanceCommitteethekeyareasthataretheremitofanominationandremuneration
committee. The Committee’s main responsibilities include establishing a formal and transparent procedure for developing policy on
senior management remuneration. The Committee also fixes the fees of the Company’s non-executive and independent non-executive
Directors. It oversees the process regarding recommendation of potential candidates as Directors, ensures that proposed Directors
are not disqualified from holding that position, and monitors the balance and effectiveness of the Board. The Committee met three
times in 2015.
RESPONSIBILITIES ENTRUSTED TO MCFI’S AUDIT COMMITTEE
TheBoardhasentrustedtoMCFI’sAuditCommitteethekeyareasthataretheremitofanAuditCommitteeasdetailedintheformal
terms of reference approved by the Board. The Committee thus assists the Board in discharging its duties relating to the safeguarding
12
C hemc o L i m ited
REPORT
of assets, the operation of adequate systems and control processes, and the preparation of accurate financial reports and statements,
incompliancewithallapplicablelegalrequirementsandaccountingstandards.TheCommitteealsoaddressesissuesrelatingtorisk
managementandprovidesaforumfordiscussingbusinessrisksandcontrolissues,andforformulatingrelevantrecommendationsfor
consideration by the Board. During the period under review, the Committee met four times.
ATTENDANCE AT BOARD MEETINGS HELD IN 2015
Directors
Antoine L. Harel
Attendance
7/7
Charles Harel
7/7
Guy Harel
6/7
Vincent Labat
7/7
Michel Rivalland G.O.S.K
7/7
ShemboosinghCheekhooree
7/7
SuieSenHockMeenAhKine
2/2
RISK MANAGEMENT
The Board regularly addresses and evaluates physical, human resources, IT, business, financial, reputational as well as regulatory
andcompliancerisks.Inthecourseof2015,theinternalauditfunctionexaminedandevaluatedtheadequacyandeffectivenessof
control systems in place within the Company. Reports were subsequently produced and submitted to the Audit Committee. The Audit
Committeereviewedthereportsand,whenapplicable,maderelevantrecommendationstotheBoard.Since2010,ariskmanagement
framework for the Company was adopted followed by implementation of a continuous and dynamic system of risk assessment
throughcompliancechecksanddiscussionswiththemanagementforenhancedriskmitigationstrategies.Someoftheriskareasand
relevant control procedures have been identified as follows:
Physical Risks
Amongthephysicalrisksidentifiedareunavoidableeventssuchasriots,cyclonesandothernaturalcalamities.Mitigatingactionssuch
as the adoption of cyclone and fire procedures, the subscription to a relevant insurance cover, and the identification of a business
continuityplananddisasterrecoveryplanhavebeentaken.
To limit the occurrence of on-site accidents, health and safety as well as security procedures have been implemented. The Company
also draws upon the expertise of both an Occupational Physician Consultant and a full-time Health and Safety Officer.
TheCompany’scontrolproceduresensuremitigationofrisksrelatingtofraudandtheft.
Human Resources Risks
Lossofkeypersonnelhasbeenidentifiedasamajorriskfactor.Inviewofmitigatingthisrisk,retentionpolicieshavebeenadopted
as well as a formal performance assessment and reward system implemented within the Company. Furthermore, a Code of Ethics
hasbeenadopted,soastolimitreputationalrisks.Healthsurveillanceisperformedatregularintervalsonemployeesinhighriskjobs
in line with the Company’s Health and Safety policy.
Technology Risks
In order to mitigate the risk of an IT crash or major breakdown, back-up and restriction procedures have been set up within the
Company.
13
REPORT
Internal Control
Internal control is a process designed to provide reasonable assurance regarding the achievement of organisational objectives with
respect to:
•
Effectivenessandefficiencyofoperations
•
Safeguardingofassetsanddataoftheorganization
•
Reliabilityoffinancialandotherreporting
•
Preventionoffraudandirregularities
•
Acceptanceandmanagementofrisk
•
Conformitywiththecodesofpracticeandethicsadoptedbytheorganization
•
Compliancewithapplicablelawsandregulations
•
Supportingbusinesssustainabilityundernormalaswellasadverseoperatingconditions.
Internal Control is applicable to and is built into various business processes so as to cover all significant enterprise areas.
During the year, the Internal Audit performed one review of internal control.
The Board has set appropriate policies to ensure that the above control measures are implemented.
Internal Audit
Internal audit is an objective assurance function reporting to the Board of Directors and Management. The Internal Audit function is
performed by the Harel Mallac Group Internal Auditor.
Internalauditprovidesassuranceastotheadequacyandeffectivenessoftheriskmanagementandinternalcontrolframeworkofan
organisation.InternalauditassiststheBoardandManagementtomaintainandimprovetheprocessbywhichrisksareidentifiedand
managed,andhelpstheBoarddischargeitsresponsibilitiestomaintainandstrengthentheinternalcontrolframework.
TheInternalAuditorhasexaminedthecurrentcontrolsystemstochecktheirsuitabilityandtoensurethattheyarebeingadheredto.
The Internal Auditor conducts its assignments based on a yearly plan, which is validated by the Audit Committee and has unrestricted
access to the Company’s records, Management and employees. Systems reviewed in 2015 at Company level include the sales,
debtors’andcashcycle,fixedasset,expensesaswellasthestockcycleandcoverallsignificantareasoftheCompany’sinternal
control.
In 2015, the Internal Auditor has regularly submitted to the Audit Committee reports for discussion and follow-up of the implementation
of recommended actions.
GROUP STRUCTURE
The Directors recognise that the parent entity is Harel Mallac & Co. Ltd. and that the ultimate parent entity is Société Pronema.
The Directors common to the aforesaid entities are Mr Antoine L. Harel who is gérant of Société Pronema and Director of Harel Mallac
& Co. Ltd. and Messrs Charles Harel and Michel Rivalland G.O.S.K. who sit on the Board of Directors of Harel Mallac & Co. Ltd.
SHAREHOLDERS HOLDING MORE THAN 5 PERCENT OF THE COMPANY
Shareholders directly or indirectly interested in 5 percent or more of the ordinary share capital of the Company are detailed on page 20.
DIVIDEND POLICY
Year
2011
2012
2013
2014
2015
14
C hemc o L i m ited
Dividend per share
(Rs)
1.0
1.0
1.0
1.1
1.1
Dividend Cover
(Times)
4.1
1.8
1.3
1.3
0.6
Dividend Yield
(%)
3.1
4.0
4.4
4.8
5.8
REPORT
SHARE PRICE INDEX FROM JANUARY 2015 TO MARCH 2016
Chemco Share Price V/S Demex from January 2015 to March 2016
DIRECTORS’ INTEREST IN SHARES
The direct and indirect interests of Directors in the ordinary shares of the Company are to be found on page 19.
DIRECTORS’ DEALING IN SHARES OF THE COMPANY
The direct and indirect interests of Directors in the ordinary shares of the Company are to be found on page 19. The Directors are
awareofAppendix6oftheListingRulesoftheStockExchangeofMauritiusLtd,whichprovidesforrestrictionsondealingsduringa
close period as well as the provisions of the Companies Act 2001 on disclosure and restrictions on share dealings by Directors. All the
disclosures made by the Directors are entered into an Interest Register. During the year under review, none of the Directors bought
or sold any of the Company’s shares.
RELATED PARTY TRANSACTIONS
Related party transactions are detailed on page 54.
SENIOR MANAGEMENT PROFILE
The profile of the senior management members is given on page 11.
COMPANY’S CONSTITUTION
The constitution of the Company does not provide any ownership restrictions or pre-emption rights. It is in agreement with the
Companies Act 2001 and the DEM rules, and does not contain any material clause that needs to be disclosed.
15
REPORT
SHAREHOLDERS AGREEMENT AFFECTING THE GOVERNANCE OF THE COMPANY BY THE BOARD
The Company is not aware of any such agreement during the period under review.
THIRD PARTY MANAGEMENT AGREEMENT
The Company has a management agreement with The Mauritius Chemical and Fertilizer Industry Limited for management support
services including but not limited to financial, accounting, legal, internal audit and human resources fields. The agreement is renewable
on a yearly basis.
DIRECTORS’ FEES
Directors are paid directors’ fees with the exception of the executive Directors and two of the non-executive directors.
DIRECTORS’ REMUNERATION
Directors’ remuneration is given on page 19. It has been disclosed globally due to sensitivity of the information.
REMUNERATION POLICY
The Company’s remuneration policy recommends that the Company provides competitive rewards for its senior management staff,
takingintoaccounttheCompany’sperformanceandexternalmarketdatafromindependentsources,inparticular,whereavailable
salarylevelsforsimilarpositionsincomparablecompanies.Theremunerationpackageconsistsofbasesalary,fringebenefitsandan
annualindividualperformancebonus.TheremunerationpackageisdeterminedbytheBoardofDirectorsuponrecommendationsof
the Corporate Governance Committee.
EMPLOYEE SHARE OPTION PLAN
No employee share option plan is available within the Company.
CODE OF ETHICS
The Board has adopted a Code of Ethics reflecting the Company’s values and corporate culture.
PROFILE OF COMPANY’S SHAREHOLDERS AS AT 31 MARCH 2016
Size of Shareholding
Number of Shareholders
1-500
871
Number of Shares Owned
75,941
% Holding
1.22
501-1,000
156
104,605
1.68
1,001-5,000
104
208,573
3.36
5,001-10,000
21
156,272
2.52
10,001-50,000
21
415,840
6.69
50,001-100,000
4
273,804
4.41
100,001-250,000
3
413,560
6.66
250,001-500,000
3
1,165,420
18.78
Over 500,000
1
3,394,707
54.68
1,184
6,208,722
100.00
Total
16
C hemc o L i m ited
REPORT
SUMMARY OF SHAREHOLDING CATEGORY AS AT 31 MARCH 2016
Category of Shareholders
Number of Shareholders
Individual
% Holding
1,112
695,533
11.20
2
87,000
1.40
70
5,426,189
87.40
1,184
6,208,722
100.00
Insurance and assurance companies
Other corporate bodies
Total
Number of Shares Owned
SHAREHOLDER INFORMATION
Forthcoming Annual Meeting
A proxy form is enclosed for those shareholders unable to attend. Shareholders are requested to bring their identity cards or passports
to the meeting, as these are required for registration.
Schedule of Events
Publication of condensed audited results for previous year
March 2016
Annual Meeting
May/June 2016
Publication of condensed results for the 1st quarter
May 2016
Publication of condensed results for the 2nd quarter
August 2016
Publication of condensed results for the 3rd quarter
November 2016
Dividend declaration & payment
December 2016/January 2017
Shareholders’ Practical Guide
Issues
Action
Change of address
Contact the Company’s secretariat
If shares are deposited with CDS
Contactpersonalbroker
Change of name
Acquisition or disposal of shares
Contactpersonalbroker
Share transfers
Lost share certificate
Direct dividend credit
Forward the relevant form to the Company’s secretariat
17
REPORT
SOCIAL, HEALTH AND SAFETY
MaintainingahighstandardofHealth&SafetyatworkisakeyobjectivefortheCompanyinensuringthewelfareofitsemployees.Thus
theCompanystrivestocontinuouslyimprovetheworkplaceenvironmentwhilstdrivinginjuries,occupationalillnessesandoperational
incidentsasclosetozeroaspossible.Ithasinplaceon-goinghazardandriskassessmentprocesses,controlsystemsandpreventive
measures against any occupational diseases in compliance with OSHA 2005.
In2016,theworkenvironmentwillbefurtherenhancedbyinstigatingasustainablechangeinemployees’safety-orientedbehaviours
attheworkplace.
The Company also ensures that its recruitment and promotion policies are fair and that procedures adopted are both transparent as
well as competency and merit based. We also promote honest and transparent business practices.
CORPORATE, SOCIAL AND ENVIRONMENTAL RESPONSIBILITY
As a member of the Harel Mallac Group, Chemco fully supports the causes espoused by the Fondation Harel Mallac through action-led
campaigns.
In existence since 2009, the Fondation Harel Mallac (FHM) is the CSR arm of the Harel Mallac Group, supporting initiatives for a
sustainable and inclusive Mauritius. It focuses on improving the living conditions of disadvantaged children, in particular in the localities
where the Group companies operate.
In 2015, the FMH’s action was three-fold, focusing on employees, the businesses’ deprived neighbourhoods and the Group’s vision for
an integrated Mauritius.
The FHM supported environmental initiatives benefitting the children of École Sainte Famille of Bois Marchand (Upcycling Waste),
the Étoile du BergershelterinAlbion(WaterConservationAwareness),andtheMouvement pour le Progrès de Roche Bois(MPRB),
which provides vocational training to street children on organic farming. The funding of these projects was enhanced by the support of
volunteering employees throughout the group, who engaged in the cleaning of localities and planting of endemic plants.
ThekeyGroupprojectundertakenbytheFHMthisyearwasthe‘HarelMallacGoGreen’sensitisationcampaign,launchedbyMissEco
Universe2015andtheMinisterofEnvironment.GoGreenbroughttogetherover200groupemployeestorethinkandimprovetheir
daily impact on the natural environment. Major highlights of the campaign included, inter-alia, the creation of an organic roof garden
on the Harel Mallac Building in Port Louis, the launch of the recycling programme, awareness sessions by Mission Verte, exhibition of
“upcycled”items.TheFHMiscurrentlyseekingtoextendtherecyclingprogrammetoallitsbusinessunitswhilstensuringanoptimal
waste management system is in place across the Group.
Furthermore,toensuregreaterparticipationinitsCSRactivities,asolidarityreleaseofoneworkdayduringtheyearhasbeengranted
to each employee. Many NGOs have benefited from technical advice in areas in which our staff have particular interests and expertise.
18
C hemc o L i m ited
STATUTORY
DISCLOSURES
PRINCIPAL ACTIVITIES
The principal activities of the Company during the year have remained unchanged and consist of the trading of specialised chemical
products for the textile industry and general goods.
DIRECTORS
The Directors of the Company as at 31 December 2015 are listed on pages 10 and 11.
DIRECTORS’ SERVICE CONTRACTS
There are no service contracts between the Company and its Directors.
DIRECTORS’ REMUNERATION AND BENEFITS
Executive Directors
Non-executive Directors
Total
2015
Rs’000
426
426
2014
Rs’000
477
477
Direct Interest
-
Indirect Interest
196,085
194,920
DIRECTORS’ INTERESTS IN SHARES
The interests of the Directors in the shares of the Company as at 31 December 2015 were:
Directors
Antoine L. Harel
Charles Harel
The other Directors have no shares either directly or indirectly in the Company.
CONTRACTS OF SIGNIFICANCE
There was no contract of significance to which the Company has been a party and in which a Director of the Company was materially
interested, be it directly or indirectly.
THIRD PARTY MANAGEMENT AGREEMENT
The Company has a management contract with The Mauritius Chemical and Fertilizer Industry Limited.
19
STATUTORY
DISCLOSURES
SHAREHOLDERS
At 31 March 2016, the following shareholders were directly or indirectly interested in more than 5 percent of the Company’s share
capital.
Shareholders
Harel Mallac & Co. Ltd.
Alteo Limited
The Mauritius Chemical and Fertilizer Industry Ltd
Interest %
54.68
7.38
6.53
CORPORATE SOCIAL RESPONSIBILITY
Donations
Political
Others
Corporate Social Responsibility
2015
Rs’000
225
2014
Rs’000
219
2015
Rs’000
2014
Rs’000
140
130
10
-
AUDITORS’ FEES
The fees payable to the auditors, for the audit and other services were:
Audit fees payable:
-BDO & Co
Fees paid for other services provided by:
-BDO & Co
OtherservicesprovidedbytheauditorsoftheCompanyrelatetotheissueofcertificateforstockitemsinthebondedwarehouse.
20
C hemc o L i m ited
STATEMENT OF
DIRECTORS’ RESPONSIBILITIES
TheDirectorsacknowledgetheirresponsibilitiesfor:
1.
Adequate accounting records and maintenance of effective internal control systems.
2.
The preparation of financial statements which fairly present the state of affairs of the
Company as at the end of the financial year, the results of its operations, and cash flow
forthatyearandcomplywithInternationalFinancialReportingStandards(IFRS).
3.
The selection of appropriate accounting policies supported by reasonable and prudent
judgements.
The External Auditors are responsible for reporting on whether the Company’s financial
statements are fairly presented.
The Directors report that:
1.
Adequate accounting records and an effective system of internal controls and risk
management have been maintained.
2.
Appropriate accounting policies supported by reasonable and prudent judgements and
estimates have been used consistently.
3.
International Financial Reporting Standards have been adhered to. Any departure in the
fair presentation has been disclosed, explained and quantified.
4.
The Code of Corporate Governance has been adhered to. Reasons have been provided
where there has not been compliance.
Signed on behalf of the Board of Directors on 21 March 2016.
Antoine L. Harel
Chairman
Managing Director
21
STATEMENT OF
COMPLIANCE
(Section75(3)oftheFinancialReportingAct)
Name of PIE:
CHEMCO LIMITED
Reporting Period:
Year ended 31 December 2015
We,theDirectorsofChemcoLimited,confirmtothebestofourknowledgethatthePIEhasnotcomplied
with sections 2.2.2. and 2.8.2 of the Code of Corporate Governance. The reasons for non-compliance are
detailed on pages 12 and 16 of the Corporate Governance Report.
Antoine L. Harel
Chairman
Managing Director
21 March 2016
22
C hemc o L i m ited
CERTIFICATE BY
SECRETARY
Wecertifytothebestofourknowledge
and belief, that the Company has filed
with the Registrar of Companies all such
returns as are required of the Company
under the Companies Act 2001.
HM Secretaries Ltd.
Secretary
21 March 2016
23
Independent Auditors’ Report to the Members
For the year ended 31 December 2015
This report is made solely to the members of Chemco Limited
(the“Company”),asabody,inaccordancewithSection205of
theCompaniesAct2001.Ourauditworkhasbeenundertakenso
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.
Opinion
In our opinion, the financial statements on pages 25 to 55 give a
true and fair view of the financial position of the Company as at
31 December 2015 and of its financial performance and its cash
flows for the year then ended in accordance with International
Financial Reporting Standards and comply with the Companies
Act 2001.
Report on Other Legal and Regulatory Requirements
Report on the Financial Statements
Companies Act 2001
We have audited the financial statements of Chemco Limited
on pages 25 to 55 which comprise the statement of financial
position as at 31 December 2015 and the statement of profit or
loss, statement of profit or loss and other comprehensive income,
statement of changes in equity and statement 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,
includingtheassessmentoftherisksofmaterialmisstatementof
thefinancialstatements,whetherduetofraudorerror.Inmaking
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.
Report on the Financial Statements
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
24
C hemc o L i m ited
We have no relationship with, or interests in, the Company, other
than in our capacity as auditors 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 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
Rookaya Ghanty, FCCA
Chartered Accountants
Licensed by FRC
Port Louis,
Mauritius.
21 March 2016
Statement of Financial Position
As at 31 December 2015
2015
Rs
Notes
2014
Rs
ASSETS
Non-current assets
8,300,567
1,173,312
39,217
879,351
10,392,447
8,991,180
50,800
878,742
9,920,722
56,263,523
100,177,309
14,007,766
170,448,598
77,344,007
118,288,353
2,851,921
198,484,281
180,841,045
208,405,003
12
6,208,722
5,518,864
(4,664,082)
88,703,333
95,766,837
6,208,722
5,518,864
(4,082,462)
91,408,407
99,053,531
14
9
16
477,391
5,862,326
1,081,206
7,420,923
416,856
5,858,269
6,275,125
56,455,603
1,576,862
6,829,594
12,791,226
77,653,285
95,646,215
600,538
6,829,594
103,076,347
Total liabilities
85,074,208
109,351,472
Total equity and liabilities
180,841,045
208,405,003
Property, plant and equipment
Intangible asset
Investment in financial asset
Deferred tax assets
5
7
8
14
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
10
11
28(b)
Total assets
EQUITY AND LIABILITIES
Capital and reserves
Share capital
Share premium
Other reserves
Retained earnings
Owners’ interest
LIABILITIES
Non-current liabilities
Deferred tax liability
Retirement benefit obligations
Borrowings
Current liabilities
Trade and other payables
Current tax liabilities
Dividends
Borrowings
15
17(a)
18
16
These financial statements have been approved for issue by the Board of Directors on 21 March 2016.
Antoine L. Harel
Chairman
Managing Director
The notes on pages 29 to 55 form an integral part of these financial statements.
Auditors’ report on page 24.
25
Statement of Profit or Loss and
Other Comprehensive Income
Revenue
Cost of sales
Notes
2015
Rs
2.17, 19
343,626,168
324,326,860
25
(271,155,910)
(254,315,057)
72,470,258
70,011,803
Gross profit
2014
Rs
Other income
20
1,355,046
1,456,510
Other gains - net
21
4,792,334
955,142
Operating expenses
25
(70,680,037)
(63,435,281)
7,937,601
8,988,174
Finance(costs)/income
22
(1,100,715)
1,442,651
Profit before taxation
24
6,836,886
10,430,825
Income tax expense
17(b)
(2,712,366)
(1,660,767)
4,124,520
8,770,058
13
(570,037)
(2,662,792)
13
(11,583)
(581,620)
3,542,900
2,032
(2,660,760)
6,109,298
Profit attributable to owners of the parent
4,124,520
8,770,058
Total comprehensive income attributable to owners of the parent
3,542,900
6,109,298
0.66
1.41
Profit for the year
Other comprehensive income for the year:
Items that will not be reclassified to profit or loss:
Remeasurement of post employment benefit obligations
Items that may be reclassified subsequently to profit or loss:
(Decrease)/increaseinfairvalueofavailable-for-salefinancialassets
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Earningspershare(Rs/share)
26
C hemc o L i m ited
27
Statement of Changes in Equity
Notes
At 1 January 2015
Profit for the year
Other comprehensive income
for the year
Total comprehensive income
for the year
Dividends
Total transactions with owners
of the parent
13
18
Balance at 31 December 2015
At 1 January 2014
Profit for the year
Other comprehensive income
for the year
Total comprehensive income
for the year
Dividends
Total transactions with owners
of the parent
Balance at 31 December 2014
13
18
Share
capital
Rs
Share
premium
Rs
Fair value
reserve
Rs
Actuarial
losses
Rs
Retained
earnings
Rs
Total
Rs
6,208,722
5,518,864
30,480
(4,112,942)
91,408,407
99,053,531
-
-
-
-
4,124,520
4,124,520
-
-
(11,583)
(570,037)
-
(581,620)
-
-
(11,583)
(570,037)
4,124,520
3,542,900
-
-
-
-
(6,829,594)
(6,829,594)
-
-
-
-
(6,829,594)
(6,829,594)
6,208,722
5,518,864
18,897
(4,682,979) 88,703,333
95,766,837
6,208,722
5,518,864
28,448
(1,450,150)
89,467,943
99,773,827
-
-
-
-
8,770,058
8,770,058
-
-
2,032
(2,662,792)
-
(2,660,760)
-
-
2,032
(2,662,792)
8,770,058
6,109,298
-
-
-
-
(6,829,594)
(6,829,594)
-
-
-
-
(6,829,594)
(6,829,594)
6,208,722
5,518,864
30,480
(4,112,942) 91,408,407
99,053,531
27
Statement of Cash Flows
Notes
Cash flows from operating activities
Cash generated from operations
Interest paid
Tax paid
Net cash generated from operating activities
2015
Rs
2014
Rs
28(a)
10,096,486
(3,062,274)
(1,575,521)
5,458,691
2,751,609
(450,115)
(1,868,432)
433,062
5
(824,021)
133,269
(1,279,965)
1,422
(1,969,295)
(2,230,803)
248,913
1,829
(1,980,061)
(6,829,594)
48,786,404
(36,200,000)
(51,920)
5,704,890
(6,208,722)
(6,208,722)
Net increase/(decrease) in cash and cash equivalents
9,194,286
(7,755,721)
Movement in cash and cash equivalents
At 1 January
Increase/(decrease)
Effect of foreign exchange rate changes
2,851,921
9,194,286
1,961,559
10,429,353
(7,755,721)
178,289
14,007,766
2,851,921
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible asset
Dividend received
Net cash used in investing activities
Cash flows from financing activities
Dividends paid
Loan granted from related company
Loan repaid to related company
Finance lease principal payments
Netcashgeneratedfrom/(usedin)financingactivities
At 31 December
28
C hemc o L i m ited
7
18
28(b)
Notes to the Financial Statements
1. GENERAL INFORMATION
Chemco Limited is a public company incorporated and domiciled in Mauritius. The address of its registered office is Chaussée Tromelin,
Fort George, Port Louis. Its main activity is the trading of chemicals and general goods.
TheCompanyislistedontheDevelopment&EnterpriseMarket(DEM)oftheStockExchangeofMauritius.
The directors consider Harel Mallac & Co. Ltd., incorporated in the Republic of Mauritius as the holding company and Société Pronema,
an entity registered in the Republic of Mauritius as the ultimate parent entity.
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 of Chemco Limited comply with the Companies Act 2001 and have been prepared in accordance with
International Financial Reporting Standards (IFRS). Where necessary, comparative figures have been amended to conform with
changes in presentation in the current year.
These financial statements are that of an individual entity. The financial statements are presented in Mauritian Rupees.
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)investmentsinfinancialassetarestatedattheirfairvalue;
(ii)relevantfinancialassetsandfinancialliabilitiesarecarriedatamortisedcost.
Amendments to published Standards and Interpretations effective in the reporting period
DefinedBenefitPlans:EmployeeContributions(AmendmentstoIAS19)appliestocontributionsfromemployees or third parties to
defined benefit plans and clarifies the treatment of such contributions. The amendment distinguishes between contributions that are
linked to service only in the period in which they arise and those linked to service in more than one period. The objective of the
amendment is to simplify the accounting for contributions that are independent of the number of years of employee service, for example
employee contributions that are calculated according to a fixed percentage of salary. Entities with plans that require contributions that
varywithservicewillberequiredtorecognisethebenefitofthosecontributionsoveremployee’sworkinglives.
The amendment has no impact on the Company’s financial statements.
Annual Improvements 2010-2012 Cycle
IFRS 2, ‘Share based payments’ amendment is amended to clarify the definition of a ‘vesting condition’ and separately defines
‘performancecondition’and‘servicecondition’.TheamendmenthasnoimpactontheCompany’sfinancialstatements.
IFRS3,‘Businesscombinations’isamendedtoclarifythatanobligationtopaycontingentconsiderationwhichmeetsthedefinition
of a financial instrument is classified as a financial liability or equity, on the basis of the definitions in IAS 32, ‘Financial instruments:
Presentation’. It also clarifies that all non-equity contingent consideration is measured at fair value at each reporting date, with
changes in value recognised in profit and loss. The amendment has no impact on the Company’s financial statements.
IFRS 8, ‘Operating segments’ is amended to require disclosure of the judgements made by management in aggregating operating
segments. It is also amended to require a reconciliation of segment assets to the entity’s assets when segment assets are reported.
The amendment has no impact on the Company’s financial statements.
IFRS13(Amendment),‘FairValueMeasurement’clarifiesintheBasisforConclusionsthatshort-termreceivables and payables with
no stated interest rates can be measured at invoice amounts when the effect of discounting is immaterial. The amendment has no
impact on the Company’s financial statements.
IAS16,‘Property,plantandequipment’andIAS38,‘IntangibleAssets’areamendedtoclarifyhowthegrosscarryingamountandthe
accumulated depreciation are treated where an entity uses the revaluation model. The amendment has no impact on the Company’s
financial statements.
29
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.1 Basis of preparation (cont’d)
Amendments to published Standards and Interpretations effective in the reporting period (cont’d)
Annual Improvements 2010-2012 Cycle (cont’d)
IAS 24, ‘Related party disclosures’ is amended to include, as a related party, an entity that provides key management personnel
servicestothereportingentityortotheparentofthereportingentity(the‘managemententity’).Disclosureoftheamountschargedto
the reporting entity is required. The amendment has no impact on the Company’s financial statements.
IAS38,‘IntangibleAssets’isamendedtorequireanentitytotakeintoaccountaccumulatedimpairmentlosseswhenadjustingthe
amortisation on revaluation. The amendment has no impact on the Company’s financial statements.
Annual Improvements 2011-2013 Cycle
IFRS1,‘First-timeAdoptionofInternationalFinancialReportingStandards’isamendedtoclarifyintheBasisforConclusionsthatan
entity may choose to apply either a current standard or a new standard that is not yet mandatory, but permits early application, provided
either standard is applied consistently throughout the periods presented in the entity’s first IFRS financial statements. The amendment
has no impact on the Company’s financial statements, since the Company is an existing IFRS preparer.
IFRS 3,’Business combinations’ is amended to clarify that IFRS 3 does not apply to the accounting for the formation of any joint venture
under IFRS 11. The amendment has no impact on the Company’s financial statements.
IFRS13,’Fairvaluemeasurement’isamendedtoclarifythattheportfolioexceptioninIFRS13appliestoallcontracts(includingnonfinancialcontracts)withinthescopeofIAS39orIFRS9.TheamendmenthasnoimpactontheCompany’sfinancialstatements.
IAS 40,’Investment property’ is amended to clarify that IAS 40 and IFRS 3 are not mutually exclusive.
IAS 40 assists users to distinguish between investment property and owner-occupied property.
Preparers also need to consider the guidance in IFRS 3 to determine whether the acquisition of an investment property is a business
combination. The amendment has no impact on the Company’s financial statements.
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, 2016 or later periods, but which the Company 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
DefinedBenefitPlans:EmployeeContributions(AmendmentstoIAS19) IFRS 14 Regulatory Deferral Accounts
AccountingforAcquisitionsofInterestsinJointOperations(AmendmentstoIFRS11)
ClarificationofAcceptableMethodsofDepreciationandAmortisation(AmendmentstoIAS16andIAS38)
IFRS 15 Revenue from Contract with Customers
Agriculture:BearerPlants(AmendmentstoIAS16andIAS41) EquityMethodinSeparateFinancialStatements(AmendmentstoIAS27)
SaleorContributionofAssetsbetweenanInvestoranditsAssociateorJointVenture(AmendmentstoIFRS10andIAS28)
Annual Improvements to IFRSs 2012-2014 Cycle
InvestmentEntities:ApplyingtheConsolidationException(AmendmentstoIFRS10,IFRS12andIAS28)
DisclosureInitiative(AmendmentstoIAS1) Where relevant, the Company 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.
30
C hemc o L i m ited
2.2 Property, plant and equipment
All property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the assets’ carrying amount or recognised as a separate asset as appropriate, only when it is
probable that the future economic benefits associated with the item will flow to the Company and the cost of the item can be measured
reliably.
Depreciation is calculated on the straight line method at annual rates to write off the cost of the assets over their estimated useful lives
as follows:
Years
Plant and machinery
10
Furniture, fittings and office equipment
3 - 10
Motor vehicles
5
Forklift
5
The assets’ residual values and useful lives are reviewed, and adjusted 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 disposals of property, plant and equipment are determined by comparing proceeds with carrying amount and are
included in profit or loss.
2.3 Inventories
Inventories are stated at lower of cost and net realisable value. Cost is determined on a weighted average basis. The cost of finished
goodsandworkinprogresscomprisesofpurchasecostorrawmaterials,directlabour,otherdirectcostsandrelatedproduction
overheads(basedonnormaloperatingcapacity)butexcludesborrowingcosts.Netrealisablevalueistheestimatedsellingpriceinthe
ordinary course of business, less the costs of completion and applicable variable selling expenses.
2.4 Foreign currencies
(i) Functional and presentation currency
Items included in the financial statements are measured using Mauritian rupees, the currency of the primary economic environment in
whichtheentityoperates(“functionalcurrency”).ThefinancialstatementsarepresentedinMauritianrupees,whichistheCompany’s
functional and presentation currency.
(ii) 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
‘financeincome/(costs)’.Foreignexchangegainsandlossesthatrelatetotradepayablesandpurchasesarepresentedinprofitorloss
within‘costofsales’.Allotherforeignexchangegainsandlossesarepresentedinprofitorlosswithin‘othergains/(losses)-net’.
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.
31
2.5 Current and deferred income tax
The tax expense for the period comprises of current and deferred tax. Tax is recognised in profit or loss, except to the extent that it
relates to items recognised in other comprehensive income or directly in equity.
Current tax
The current income tax charge is based on taxable income for the year calculated on the basis of tax laws enacted or substantively
enacted by the end of the reporting period.
Deferred tax
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 amounts will be available against which deductible
temporary differences can be utilised.
2.6 Alternative Minimum Tax (AMT)
AlternativeMinimumTax(AMT)isprovidedfor,wheretheCompany,whichhasataxliabilityoflessthan7.5%ofitsbookprofit,paysa
dividend.AMTiscalculatedasthelowerof10%ofthedividendpaidand7.5%ofbookprofit.
2.7 Intangible assets
Computer software
Costs incurred to acquire and bring to use computer software are capitalised and are amortised using the straight line method over its
estimatedusefullife(3years).
2.8 Retirement benefit obligations
(i) Defined contribution plans
A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. The Company
has no 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 Company operates a defined contribution retirement benefit plan for all qualifying employees.
Payments to deferred contribution retirement plans are recognised as an expense when employees have rendered service that entitle
them to the contributions.
(ii) 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
andchangesinactuarialassumptions,thereturnonplanassets(excludinginterest)andtheeffectoftheassetceiling(ifany,excluding
interest),isrecognisedimmediatelyinothercomprehensiveincomeintheperiodinwhichtheyoccur.Remeasurementsrecognisedin
other comprehensive income shall not be reclassified to profit or loss in subsequent period.
32
C hemc o L i m ited
2.8 Retirement benefit obligations (cont’d)
(ii) Defined benefit plans (cont’d)
TheCompanydeterminesthenetinterestexpense/(income)onthenetdefinedbenefitliability/(asset)fortheperiodbyapplyingthe
discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit liability/
(asset),takingintoaccountany changes in the net defined liability/(asset) during the period as a result of contributions and benefit
payments.Netinterestexpense/(income)isrecognisedinprofitorloss. 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.
(iii) Gratuity on retirement
Foremployeeswhoarenotcoveredbythepensionplan(orwhoareinsufficientlycoveredbytheabovepensionplans),thenetpresent
value of gratuity on retirement payable under the Employment Rights Act 2008 is calculated by a qualified actuary and provided for.
The obligations arising under this item are not funded.
(iv) Profit sharing and bonus plans
TheCompanyrecognisesaliabilityandanexpenseforbonusesandprofitsharing,basedonaformulathattakesintoconsiderationthe
profit attributable to the Company’s shareholders after certain adjustments. The Company recognises a provision where contractually
obliged or where there is a past practice that has created a constructive obligation.
2.9 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 or value in use. For the purposes of assessing
impairment,assetsaregroupedatthelowestlevelforwhichthereareseparatelyidentifiablecashflows(cash-generatingunits).
2.10 Leases
(a)Leasesareclassifiedasfinanceleaseswherethetermsoftheleasetransfersubstantiallyallrisksandrewardsofownershipto
thelessee.Allotherleasesareclassifiedasoperatingleases.Paymentsmadeunderoperatingleases(netofanyincentivesreceived
fromthelessor)arechargedtoprofitorlossonastraight-linebasisovertheperiodofthelease.
(b)Financeleasesarecapitalisedatthelease’sinceptionatthelowerofthefairvalueoftheleasedpropertyandthepresentvalueof
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.
2.11 Financial assets
(a) Categories of financial assets
The Company classifies its financial assets in the following categories: available-for-sale financial assets and loans and receivables.
The classification depends on the purpose for which the investments were acquired. Management determines the classification of its
financial assets at initial recognition.
(i) 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 end of the reporting period.
(ii) Loans and receivables
Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.
They are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and
receivables are measured at amortised cost less any impairment.
The Company’s loans and receivables comprise of cash and cash equivalents, and trade and other receivables.
33
2.11 Financial assets (cont’d)
(b) Recognition and measurement
Purchasesandsalesoffinancialassetsarerecognisedontrade-date(orsettlementdate),thedateonwhichtheCompanycommitsto
purchase or sell the asset. Investments are initially measured at fair value plus transaction costs.
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.
Thefairvaluesofquotedinvestmentsarebasedoncurrentbidprices.Ifthemarketforafinancialassetisnotactive(andforunlisted
securities),theCompanyestablishesfairvaluebyusingvaluationtechniques.Theseincludetheuseofrecentarm’slengthtransactions,
reference to other instruments that are substantially the same and capitalised earnings method.
(c) Impairment of financial assets
(i) Financial assets classified as available-for-sale
The Company 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 profit or loss - 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.
(ii) Financial assets carried at amortised cost
For loans and receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount and
thepresentvalueofestimatedfuturecashflows(excludingfuturecreditlossesthathavenotbeenincurred)discountedatthefinancial
asset’s original effective interest rate. The carrying amount of the asset is reduced and, the amount of the loss is recognised in profit
or loss. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate
determined under the contract.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the previously recognised
impairment loss is reversed through profit or loss to the extent that the carrying amount of the financial asset at the date the impairment
is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
2.12 Trade and other receivables
Trade and other 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 Company 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.
2.13 Borrowings
Borrowings are recognised initially at fair value being their issue proceeds net of transaction costs incurred.
Borrowingsaresubsequentlystatedatamortisedcost;anydifferencebetweentheproceeds(netoftransactioncosts)andthe
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 Company has an unconditional right to defer settlement of the liability for at
least twelve months after the end of the reporting period.
34
C hemc o L i m ited
2.14 Trade and other payables
Trade and other payables are stated at fair value and subsequently measured at amortised cost using the effective interest method.
2.15 Cash and cash equivalents
Cashandcashequivalentsincludecashinhand,depositsheldatcallwithbanks,othershort-termhighlyliquidinvestmentswithoriginal
maturitiesof3monthsorlessandbankoverdrafts.Bankoverdraftsareshownwithinborrowingsincurrentliabilitiesinthestatement
of financial position.
2.16 Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as
deduction, net of tax, from proceeds.
2.17 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.
(a) Sale 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:
-theCompanyhastransferredtothebuyerthesignificantrisksandrewardsofownershipofthegoods;
- the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control
overthegoodssold;
-theamountofrevenuecanbemeasuredreliably;
-itisprobablethattheeconomicbenefitsassociatedwiththetransactionwillflowtotheCompany;and
- the costs incurred or to be incurred in respect of the transaction can be measured reliably.
(b) Rendering of services
Revenue from rendering of services 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).
(c) Other revenues earned by the Company are recognised on the following bases:
- Interest income - on a time-proportion basis using the effective interest method.
- Dividend income - when the shareholder’s right to receive payment is established.
2.18 Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s financial statements in the period in
which the dividends are declared.
2.19 Provisions
ProvisionsarerecognisedwhentheCompanyhasapresentorconstructiveobligationasaresultofpastevents;itisprobablethatan
outflow of resources that can be reliably estimated will be required to settle the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of
thereportingperiod,takingintoaccounttherisksanduncertaintiessurroundingtheobligation.Whenaprovisionismeasuredusingthe
cashflowsestimatedtosettlethepresentobligation,itscarryingamountisthepresentvalueofthosecashflows(whentheeffectof
thetimevalueofmoneyismaterial). 2.20 Related parties
Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the party
makingfinancialoroperatingdecisions.
35
3. FINANCIAL RISK MANAGEMENT
3.1 Financial Risk Factors
TheCompany’sactivitiesexposeittoavarietyoffinancialrisks,namelymarketrisk(includingcurrencyrisk,fairvalueinterestrisk,cash
flowinterestriskandpricerisk),creditriskandliquidityrisk.
The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the Company’s financial performance.
Adescriptionofthesignificantriskfactorsisgivenbelowtogetherwiththeriskmanagementpoliciesapplicable.
(a) Market risk
(i) Currency risk
TheCompanyoperatesinternationallyandisexposedtoforeignexchangeriskarisingfromvariouscurrencyexposuresprimarilywith
respecttoUSdollar,EuroandSouthAfricanRand.Foreignexchangeriskarisesfromfuturecommercialtransactionsandrecognised
assets and liabilities.
ManagementhassetupapolicytorequiretheCompanytomanageitsforeignexchangeriskexposurewithtreasury. Currency profile
The currency profile of the Company’s financial assets and liabilities is summarised below:
2015
Mauritian rupee
US Dollar
Euro
South African Rand
2014
Financial
assets
Rs
Financial
liabilities
Rs
85,181,950
28,205,555
113,387,505
34,695,141
36,450,637
71,145,778
Financial
assets
Rs
Financial
liabilities
Rs
78,436,818
32,198,752
450,146
111,085,716
18,252,693
71,504,266
2,003,829
91,760,788
The table above excludes prepayments and accruals.
At31December2015,iftherupeehadweakened/strengthenedby5%againstthefollowingcurrencieswithallothervariablesheld
constant, post tax profit would have been as shown in the table, mainly as a foreign exchange gains/losses on translation of foreign
currency denominated financial assets and liabilities.
2015
Impact on post-tax results:
US Dollar
Euro
South African Rand
36
C hemc o L i m ited
Financial
assets
Rs
+/1,198,736
1,198,736
2014
Financial
liabilities
Rs
+/1,549,152
1,549,152
Financial
assets
Rs
+/1,368,447
19,131
1,387,578
Financial
liabilities
Rs
+/3,038,931
85,163
3,124,094
3. FINANCIAL RISK MANAGEMENT (CONT’D)
3.1 Financial Risk Factors (cont’d)
(a) Market risk (cont’d)
(ii) Price risk
ThemarketpricesoftheCompany’savailable-for-salequotedinvestmentsecuritiesaresusceptibletofuturefluctuations.
Sensitivity analysis
The table below summarises the impact of increases/decreases in the fair value of the investments on the Company’s equity.
The analysis is based on the assumption that the fair value has increased/decreased by 5%.
Impact on equity
2015
2014
Rs
Rs
1,961
Available-for-sale financial assets
2,540
(iii) Cash flow and fair value interest rate risk
TheCompany’sinterestrateriskarisesfromshort-termborrowings.BorrowingsissuedatvariableratesexposetheCompanytocash
flowinterest-raterisk.BorrowingsissuedatfixedratesexposetheCompanytofairvalueinterest-raterisk.Thecompany’spolicyisto
maintainborrowings,otherthanfinanceleaseobligations,atfloatingrate.Theimpactonthecompany’sinterestrateriskwouldmainly
be on variable rate borrowings.
(b) Credit risk
CreditriskistheriskoffinanciallosstotheCompanyifacustomerorcounterpartytoafinancialinstrumentfailstomeetitscontractual
obligations, and arises principally from the Company’s trade receivables. The amounts presented in the statement of financial position
are net of allowances for doubtful receivables, estimated by the Company’s management based on prior experience and the current
economic environment. The Company has policies in place to ensure that sales of products and services are made to customers with
an appropriate credit history.
TheCompanyhasnosignificantconcentrationofcreditrisk,withexposurespreadoveralargenumberofcounterpartiesandcustomers.
The Company has policies that limit the amount of credit exposure to any company.
(c) Liquidity risk
LiquidityriskistheriskthattheCompanywillencounterdifficultyinmeetingtheobligationsassociatedwithitsfinancialliabilitiesthatare
settled by delivery of cash or another financial asset.
Prudentliquidityriskmanagementimpliesmaintainingsufficientcash,theavailabilityoffundingthroughanadequateamountofcommitted
creditfacilities.TheCompanyaimsatmaintainingflexibilityinfundingbykeepingcommittedcreditlinesavailable.
Management monitors rolling forecasts of the Company’s liquidity reserve on the basis of expected cash flows.
The table below analyses the Company’s non-derivative financial liabilities based on the remaining period at the end of the reporting
period:
Less than 1
year
Rs
Between 1
and 2 years
Rs
Between 2
and 3 years
Rs
Between 3
and 5 years
Rs
At 31 December 2015
Obligations under finance lease
Loan payable to related companies
295,524
56,455,603
12,586,404
295,524
-
295,524
-
780,521
-
At 31 December 2014
95,646,215
-
-
-
37
3. FINANCIAL RISK MANAGEMENT (CONT’D)
3.2 Capital risk management
The Company’s objectives when managing capital are:
- to safeguard the Company’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and
benefitsforotherstakeholders, -toprovideanadequatereturntoshareholdersbypricingproductsandservicescommensuratelywiththelevelofrisk.
The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the
riskcharacteristicsoftheunderlyingassets.Inordertomaintainoradjustthecapitalstructure,theCompanymayadjusttheamount
of dividends paid to shareholders, or sell assets to reduce debt.
TherewerenochangesintheCompany’sapproachtocapitalrisksmanagementduringtheyear.
3.3 Fair value estimation
Thefairvalueoffinancialinstrumentstradedinactivemarketsisbasedonquotedmarketpricesattheendofthereportingperiod.
Amarketisregardedasactiveifquotedpricesarereadilyandregularlyavailablefromanexchange,dealer,broker,industrygroup,
pricingservice,orregulatoryagency,andthosepricesrepresentactualandregularlyoccurringmarkettransactionsonanarm’slength
basis.ThequotedmarketpriceusedforfinancialassetsheldbytheCompanyisthecurrentbidprice.Theseinstrumentsareincluded
in level 1. Instruments included in level 1 comprise primarily of quoted equity investments classified as trading securities or availablefor-sale.
Thefairvalueoffinancialinstrumentsthatarenottradedinanactivemarketisdeterminedbyusingvaluationtechniques.Thesevaluation
techniquesmaximisetheuseofobservablemarketdatawhereitisavailableandrelyaslittleaspossibleonspecificestimates.
If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Ifoneormoreofthesignificantinputsisnotbasedonobservablemarketdata,theinstrumentisincludedinlevel3.
Specific valuation techniques used to value financial instruments include:
-Quotedmarketpricesordealerquotesforsimilarinstruments.
- The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield
curves.
- The fair value of forward foreign exchange contracts is determined using forward exchange rates at the end of the reporting period,
withtheresultingvaluediscountedbacktopresentvalue.
- Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments.
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
marketinterestratethatisavailabletotheCompanyforsimilarfinancialinstruments.
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.
4.1 Critical accounting estimates and assumptions
TheCompanymakesestimatesandassumptionsconcerningthefuture.Theresultingaccountingestimateswill,bydefinition,seldom
equaltherelatedactualresults. Theestimatesandassumptionsthathaveasignificantriskofcausingamaterialadjustmenttothe
carrying amounts of assets and liabilities within the next financial year are disclosed below.
(a) 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 disposal of the asset, if the asset were already of the age
and in condition expected at the end of its useful life.
Thedirectorsthereforemakeestimatesbasedonhistoricalexperienceandusebestjudgementtoassesstheusefullivesofassetsat
the end of their expected useful lives.
38
C hemc o L i m ited
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D)
4.1 Critical accounting estimates and assumptions (cont’d)
(b) Limitation of sensitivity analysis
Sensitivityanalysisinrespectofmarketriskdemonstratestheeffectofachangeinakeyassumptionwhileotherassumptionsremain
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.
SensitivityanalysisdoesnottakeintoconsiderationthattheCompany’sassetsandliabilitiesaremanaged.Otherlimitationsincludethe
useofhypotheticalmarketmovementstodemonstratepotentialriskthatonlyrepresenttheCompany’sviewofpossiblenear-term
marketchangesthatcannotbepredictedwithanycertainty.
(c) Asset lives and residual values
Property,plantandequipmentaredepreciatedoveritsusefullifetakingintoaccountresidualvalues,whereappropriate.Theactual
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 and maintenance programmes are taken into account. Residual value assessments
considerissuessuchasfuturemarketconditions,theremaininglifeoftheassetandprojecteddisposalvalues.Considerationisalso
given to the extent of current profits and losses on the disposal of similar assets.
(d) 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
ofassumptions.Theassumptionsusedindeterminingthenetcosts/(income)forpensionsincludethediscountrate.Anychangesin
these assumptions will impact the carrying amount of pension obligations.
The Company 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 Company considers the interest rates of long-term government 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.
Otherkeyassumptionsforpensionobligationsarebasedinpartoncurrentmarketconditions.Additionalinformationisdisclosedin
note 8.
(e) Impairment of available-for-sale financial assets
The Company follows the guidance of IAS 39 on determining when an investment is other-than-temporarily impaired. This determination
requiressignificantjudgement.Inmakingthisjudgement,theCompanyevaluates,amongotherfactors,thedurationandextenttowhich
thefairvalueofaninvestmentislessthanitscost,andthefinancialhealthofandnear-termbusinessoutlookfortheinvestee,including
factors such as industry and sector performance, changes in technology and operational and financing cash flow.
(f) Impairment of financial assets
The Company follows the guidance of IAS 39 on determining when an investment is other-than-temporarily impaired. This determination
requiressignificantjudgement.Inmakingthisjudgement,theCompanyevaluates,amongotherfactors,thedurationandextentto
whichthefairvalueofaninvestmentislessthanitscost,andthefinancialhealthofandnear-termbusinessoutlookfortheinvestee,
including factors such as industry and sector performance, changes in technology and operational and financing cash flow.
(g) Fair value of securities not quoted in an active market
ThefairvalueofsecuritiesnotquotedinanactivemarketmaybedeterminedbytheCompanyusingvaluationtechniquesincluding
third party transaction values, earnings, net asset value or discounted cash flows, whichever is considered to be appropriate. The
Company would exercise judgement and estimates on the quantity and quality of pricing sources used. Changes in assumptions about
these factors could affect the reported fair value of financial instruments.
39
5. PROPERTY, PLANT AND EQUIPMENT
Plant and
Machinery
Rs
Furniture,
Fittings
and Office
equipment
Rs
Motor
vehicles
Rs
Forklift
Rs
Total
Rs
(a) COST
At 1 January 2015
Additions
Disposals
At 31 December 2015
9,805,505
393,215
10,198,720
8,706,603
192,806
8,899,409
16,456,638
1,575,949
(591,761)
17,440,826
1,300,000
1,300,000
36,268,746
2,161,970
(591,761)
37,838,955
DEPRECIATION
At 1 January 2015
Charge for the year
Disposal adjustment
At 31 December 2015
6,855,068
471,956
7,327,024
5,809,560
578,152
6,387,712
13,312,938
1,758,329
(547,615)
14,523,652
1,300,000
1,300,000
27,277,566
2,808,437
(547,615)
29,538,388
NET BOOK VALUES
At 31 December 2015
2,871,696
2,511,697
2,917,174
-
8,300,567
Plant and
Machinery
Rs
Furniture,
Fittings
and Office
equipment
Rs
Motor
vehicles
Rs
Forklift
Rs
Total
Rs
(b) COST
At 1 January 2014
Additions
Disposals
At 31 December 2014
8,691,322
1,114,183
9,805,505
8,444,509
262,094
8,706,603
17,046,322
854,526
(1,444,210)
16,456,638
1,300,000
1,300,000
35,482,153
2,230,803
(1,444,210)
36,268,746
DEPRECIATION
At 1 January 2014
Charge for the year
Disposal adjustment
At 31 December 2014
6,429,553
425,515
6,855,068
5,242,658
566,902
5,809,560
12,735,219
2,021,929
(1,444,210)
13,312,938
1,257,667
42,333
1,300,000
25,665,097
3,056,679
(1,444,210)
27,277,566
NET BOOK VALUES
At 31 December 2014
2,950,437
2,897,043
3,143,700
-
8,991,180
(c)AdditionsincludeRs1,415,948(2014:Nil)ofassetsleasedunderfinanceleases.
(d)Leasedassetsincludedabovecompriseofmotorvehicles:
2015
Rs
Cost-capitalised finance leases
Accumulated depreciation
(e)DepreciationexpenseofRs2,808,437(2014:Rs3,056,679)hasbeenchargedtooperatingexpenses.
40
C hemc o L i m ited
1,415,948
(98,072)
1,317,876
2014
Rs
-
6. INVESTMENTS IN SUBSIDIARY COMPANIES
Year ended
Holding
Direct %
Denominated
currency
Stated
capital
Country of
operation &
incorporation
Main
business
Ordinary
31 December 2015
100
MGA
600,000
Madagascar
Trading
Ordinary
31 December 2014
100
MGA
600,000
Madagascar
Trading
Name of companies
Class of
shares held
31 December 2015
Chemco SARL
31 December 2014
Chemco SARL
The Board has decided to wind up the subsidiary, hence it has not been consolidated in the financial statements.
7. INTANGIBLE ASSETS
Computer software
2015
2014
Rs
Rs
(a) COST
At 1 January,
Addition
At 31 December,
1,279,965
1,279,965
-
AMORTISATION
At 1 January,
Charge for the year
At 31 December,
106,653
106,653
-
NET BOOK VALUE
At 31 December,
1,173,312
-
(b)AmortisationchargeofRs106,653(2014:Nil)hasbeenchargedtooperatingexpenses.
8. INVESTMENT IN FINANCIAL ASSET
(a)Themovementininvestmentsinfinancialassetmaybesummarisedasfollows:
2015
Rs
Available-for-sale financial asset
At 1 January
(Decrease)/increaseinfairvalue
At 31 December
50,800
(11,583)
39,217
2014
Rs
48,768
2,032
50,800
Level 1
Rs
(b) At 31 December 2015
39,217
Level 1
Rs
At 31 December 2014
50,800
(c)Available-for-salesecuritiescompriseofquotedinvestments.ThefairvalueoflistedsecuritiesisbasedonTheStockExchange
of Mauritius Ltd’s share prices at the close of business at the end of the date.
(d)Available-for-salefinancialassetsaredenominatedinMauritianrupees.
(e)Themaximumexposuretocreditriskatthereportingdateisthefairvalueofdebtsecuritiesclassifiedasavailable-for-sale.
41
9. RETIREMENT BENEFIT OBLIGATIONS
2015
Rs
Amounts recognised in the statement of financial position:
-Definedpensionbenefits(note9(a)(i))
-Otherpost-retirementbenefits(note9(b)(ii))
Analysed as follows:
Amount charged to profit or loss:
-Definedpensionbenefits(note9(a)(v))
-Otherpost-retirementbenefits(note9(b)(v))
Amount charged to other comprehensive income:
-Definedpensionbenefits(note9(a)(vi))
-Otherpost-retirementbenefits(note9(b)(vi))
2014
Rs
1,670,561
4,191,765
5,862,326
2,671,549
3,186,720
5,858,269
5,862,326
5,858,269
930,847
391,882
1,322,729
557,107
227,731
784,838
57,469
613,163
670,632
2,026,751
1,105,946
3,132,697
(a) Defined pension benefits
The Company contributes to 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 and a benefit on death or disablement in service before retirement. 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 plan are independently administered by The Anglo Mauritius Assurance Society Ltd.
The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligations were carried out at 31
December 2015 by The Anglo Mauritius Assurance Society Ltd. 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.
The assets of the plan in respect of staff members are invested in Anglo Mauritius’ deposit administration fund. The latter is expected
to produce a smooth progression of returns from one year to the next without regular fluctuations associated with asset-linked
investments such as Equity Funds.
(i)Theamountsrecognisedinthestatementoffinancialpositionareasfollows:
Present value of funded obligations
Fair value of plan assets
Liability in the statement of financial position
2015
Rs
13,976,700
(12,306,139)
1,670,561
2014
Rs
13,016,584
(10,345,035)
2,671,549
(ii)Thereconciliationoftheopeningbalancestotheclosingbalancesforthenetdefinedbenefitliabilityisasfollows:
2015
Rs
At 1 January
Chargedtoprofitorloss(note9(a)(v))
Chargedtoothercomprehensiveincome(note9(a)(vi))
Contributions paid
At 31 December
42
C hemc o L i m ited
2,671,549
930,847
57,469
(1,989,304)
1,670,561
2014
Rs
938,534
557,107
2,026,751
(850,843)
2,671,549
9. RETIREMENT BENEFIT OBLIGATIONS (CONT’D)
(a) Defined pension benefits (cont’d)
(iii)Themovementinthedefinedbenefitobligationovertheyearisasfollows:
2015
Rs
At 1 January
Current service cost
Interest cost
Remeasurements:
-actuarial(gains)/lossesarisingfrom:
- financial assumptions
- experience adjustment
Benefits paid
At 31 December
2014
Rs
13,016,584
505,458
928,613
10,288,175
353,518
743,242
699,529
(833,962)
(339,522)
13,976,700
1,818,790
(187,141)
13,016,584
(iv)Themovementinthefairvalueofplanassetsoftheyearisasfollows:
2015
Rs
At 1 January
Expected return on plan assets
Return on plan assets, excluding amounts included in interest expense
Employer contributions
Scheme expenses
Costofinsuringriskbenefits
Benefits paid
At 31 December
10,345,035
772,471
(191,902)
1,989,304
(68,171)
(201,076)
(339,522)
12,306,139
2014
Rs
9,349,641
672,949
(207,961)
850,843
(28,000)
(105,296)
(187,141)
10,345,035
The fair value of the plan assets at 31 December 2015 and 31 December 2014 are categorised as qualifying insurance policies.
(v)Theamountsrecognisedinprofitorlossareasfollows:
Interest cost
Expected return on plan assets
Scheme expenses
Costofinsuringrisksbenefits
Totalincludedinemployeebenefitexpense(note26)
2015
Rs
2014
Rs
505,458
928,613
(772,471)
68,171
201,076
930,847
353,518
743,242
(672,949)
28,000
105,296
557,107
2015
Rs
2014
Rs
The total above is included in operating expenses in the statement of profit or loss.
Actual return on plan assets
580,569
467,550
43
(a) Defined pension benefits (cont’d)
(vi)Theamountsrecognisedinothercomprehensiveincomeareasfollows:
2015
Rs
Remeasurement on the net defined benefit liability:
Liabilityexperiencegains/(losses)
Actuarial losses arising from changes in financial assumptions
Actuarialgains/(losses)
Return on plan assets, excluding interest income
2014
Rs
833,962
(699,529)
134,433
(191,902)
(57,469)
(1,818,790)
(1,818,790)
(207,961)
(2,026,751)
(vii)Theprincipalactuarialassumptionsusedforthepurposesoftheactuarialvaluationswere:
2015
%
2014
%
7.00
5.00
Discount rate
Future salary increases
7.00
5.00
(viii)Sensitivityanalysisondefinedbenefitobligationsattheendofthereportingperiod:
2015
Increase
Rs
Discountrate(1%increase)
Futuresalarygrowth(1%increase)
885,506
2014
Decrease
Rs
884,109
-
Increase
Rs
963,134
Decrease
Rs
1,018,707
-
An increase/decrease of 1% in other principal actuarial assumptions would not have a material impact on defined benefit obligations at
The sensitivity above have been determined based on a method that extrapolates the impact on net defined benefit obligation as a
resultofreasonablechangesinkeyassumptionsoccurringattheendofthereportingperiod.
Thesensitivityanalysismaynotberepresentativeoftheactualchangeinthedefinedbenefitobligationasitisunlikelythatthechange
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.
(ix)ThedefinedbenefitpensionplanexposestheCompanytoactuarialrisks,suchaslongevityrisk,currencyrisk,interestrateriskand
market(investment)risk.
(x)Thefundingrequirementsarebasedonthepensionfund’sactuarialmeasurementframeworksetoutinthefundingpoliciesofthe
plan.
(xi)TheCompanyexpectstopayRs0.7mincontributionstoitspost-employmentbenefitplansfortheyearending31December2015.
(xii)Theweightedaveragedurationofthedefinedbenefitobligationsasat31December2015is6years(2014:8years).
44
C hemc o L i m ited
(b) Other post-retirement benefits
(i)Otherpost-retirementbenefitscompriseofretirementgratuitypayableundertheEmploymentRightsAct2008.
(ii)Theamountsrecognisedinthestatementoffinancialpositionareasfollows:
2015
Rs
2014
Rs
4,191,765
Liability in the statement of financial position
3,186,720
(iii)Thereconciliationoftheopeningbalancestotheclosingbalancesforthenetdefinedbenefitliabilityisasfollows:
2015
Rs
2014
Rs
3,186,720
391,882
613,163
4,191,765
At 1 January
Chargedtoprofitorloss(note9(b)(v))
Chargedtoothercomprehensiveincome(note9(b)(vi))
At 31 December
1,853,043
227,731
1,105,946
3,186,720
(iv)Themovementintheunfundedobligationovertheyearisasfollows:
2015
Rs
2014
Rs
3,186,720
157,768
234,114
613,163
4,191,765
At 1 January
Interest cost
Actuarial losses
At 31 December,
1,853,043
91,606
136,125
1,105,946
3,186,720
(v)Theamountsrecognisedinprofitorlossareasfollows:
2015
Rs
2014
Rs
157,768
234,114
391,882
Interest cost
Totalincludedinemployeebenefitexpense(note26)
91,606
136,125
227,731
The total above is included in operating expenses in the statement of profit or loss.
(vi)Theamountsrecognisedinothercomprehensiveincomeareasfollows:
2015
Rs
Remeasurement on the net defined benefit liability:
Liability experience losses
2014
Rs
(613,163)
(1,105,946)
(vii)Sensitivityanalysisonunfundedobligationsattheendofthereportingperiod:
2015
Increase
Rs
Discountrate(1%increase)
Futuresalarygrowth(1%increase)
785,649
2014
Decrease
Rs
632,747
-
Increase
Rs
Decrease
Rs
647,222
503,993
-
45
(b) Other post-retirement benefits (cont’d)
(vii)Sensitivityanalysisonunfundedobligationsattheendofthereportingperiod:(cont’d)
An increase/decrease of 1% in other principal actuarial assumptions would not have a material impact on unfunded obligations at
The sensitivity above have been determined based on a method that extrapolates the impact on net unfunded obligation as a result of
reasonablechangesinkeyassumptionsoccurringattheendofthereportingperiod.
Thesensitivityanalysismaynotberepresentativeoftheactualchangeintheunfundedobligationasitisunlikelythatthechangein
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.
(viii)Theweightedaveragedurationoftheunfundedobligationis14yearsasat31December2015(2014:15years).
10. INVENTORIES
2015
Rs
Finished goods
Containers and tools
Goods in transit
53,383,627
1,130,532
1,749,364
56,263,523
2014
Rs
73,372,781
1,306,493
2,664,733
77,344,007
(a)ThecostofinventoriesrecognisedasexpenseandincludedincostofsalesamountedtoRs271,155,910(2014:Rs254,315,057).
46
C hemc o L i m ited
11. TRADE AND OTHER RECEIVABLES
2015
Rs
Trade receivables
Less: provision for impairment
Receivables from related companies
Prepayments
Other receivables
96,318,690
(10,506,918)
85,811,772
11,463,205
578,680
2,323,652
100,177,309
2014
Rs
89,505,042
(939,624)
88,565,418
19,007,564
7,202,637
3,512,734
118,288,353
The carrying amount of trade and other receivables approximate their fair value.
At31December2015,tradereceivablesofRs10,506,918wereimpaired(2014:Rs939,624).TheamountofprovisionwasRs10,506,918
asat31December2015(2014:Rs939,624).
2015
Rs
Over 6 months
2014
Rs
10,506,918
939,624
At 31 December 2015, trade receivables of Rs20,768,040 (2014: Rs8,293,318) were past due but not impaired. These relate to
independent customers for whom there is no recent history of default.
The ageing analysis of these trade receivables is as follows:
2015
2014
Rs
Rs
3 to 6 months
Over 6 months
14,587,955
6,180,085
20,768,040
8,293,318
8,293,318
The carrying amount of trade and other receivables are denominated in the following currencies:
2015
Rs
Rupee
US Dollar
79,537,287
20,640,022
100,177,309
2014
Rs
86,943,499
31,344,854
118,288,353
Movements on the provision for impairment of trade receivables are as follows:
2015
Rs
At 1 January
Provision for receivable impairment
Receivables written off during the year as uncollectible
At 31 December
939,624
9,567,294
10,506,918
2014
Rs
220,868
835,624
(116,868)
939,624
The other classes within trade and other receivables do not contain impaired assets.
Themaximumexposuretocreditriskatthereportingdateisthefairvalueofeachclassofreceivablementionedabove.
The Company does not hold any collateral as security.
47
12. SHARE CAPITAL
2015
Rs
2014
Rs
Authorised
12,417,444 ordinary shares of Rs1 each
12,417,444
12,417,444
Issued and fully paid
6,208,722 ordinary shares of Rs1 each
6,208,722
6,208,722
Fully paid ordinary shares carry one vote per share and carry a right to dividends.
13. OTHER COMPREHENSIVE INCOME
Notes
2015
Decrease in fair value of available-for-sale financial assets
Remeasurement of defined benefit obligations
Income tax relating to components of other comprehensive income
Other comprehensive income for the year 2015
2014
Increase in fair value of available-for-sale financial assets
Remeasurement of defined benefit obligations
Income tax relating to components of other comprehensive income
Other comprehensive income for the year 2014
Actuarial
losses
Rs
Fair value
reserve
Rs
8
-
(11,583)
9
14
(670,632)
100,595
(570,037)
(11,583)
8
-
2,032
9
14
(3,132,697)
469,905
(2,662,792)
2,032
Actuarial losses
The actuarial losses reserve represents the cumulative remeasurement of defined benefit obligation recognised.
Fair value reserve
The fair value reserve comprises of the cumulative net change in the fair value of available-for-sale financial assets that has been
recognised in other comprehensive income until the investments are derecognised or impaired.
48
C hemc o L i m ited
14. DEFERRED INCOME TAX
Deferredincometaxiscalculatedonalltemporarydifferencesundertheliabilitymethodat15%(2014:15%).
(a)Thereisalegallyenforceablerighttooffsetcurrenttaxassetsagainstcurrenttaxliabilitiesanddeferredincometaxassetsand
liabilities when the deferred income taxes relate to the same fiscal authority on the same entity. The following amounts are shown
in the statement of financial position:
2015
2014
Rs
Rs
Deferred tax assets
Deferred tax liabilities
(879,351)
477,391
(401,960)
(878,742)
416,856
(461,886)
2015
Rs
2014
Rs
(461,886)
160,521
(100,595)
(401,960)
9,423
(1,404)
(469,905)
(461,886)
(b)Themovementonthedeferredtaxaccountisasfollows:
At 1 January
Charged/(credited)toprofitorloss
Credited to other comprehensive income
At 31 December
(c)Themovementindeferredtaxassetsandliabilitiesduringtheyear,withouttakingintoconsiderationtheoffsettingofbalances
within the same fiscal authority on the same entity, is as follows:
Deferred tax
liabilities
Accelerated
tax
depreciation
Rs
At 1 January 2014
(Credited)/chargedtostatementofprofitorloss
At 31 December 2014
Charged to statement of profit or loss
At 31 December 2015
428,160
(11,304)
416,856
60,535
477,391
Deferred tax
assets
Retirement
benefit
obligations
Rs
(418,737)
9,900
(469,905)
(878,742)
99,986
(100,595)
(879,351)
Total
Rs
9,423
(1,404)
(469,905)
(461,886)
160,521
(100,595)
(401,960)
49
15. TRADE AND OTHER PAYABLES
2015
Rs
40,407,279
3,975,181
6,011,849
6,061,294
56,455,603
Trade payables
Payabletorelatedparties(note30)
Accruals
Other payables
2014
Rs
86,048,257
3,162,661
1,778,895
4,656,402
95,646,215
The carrying amounts of trade and other payables approximate their fair value.
16. BORROWINGS
2015
Rs
Non-current
Obligationsunderfinancelease(seenote(c))
Current
Loanatcallfromholdingcompany(seenote(e))
Obligationsunderfinancelease(seenote(c))
Total borrowings
2014
Rs
1,081,206
-
12,586,404
204,822
12,791,226
-
13,872,432
-
(a)Securedliabilitiesinborrowingscompriseofleases.Leaseliabilitiesareeffectivelysecuredastherightstotheleasedassetrevert
to the lessor in the event of default. The rate of interest on the lease is 7.5% per annum.
(b)TheexposureoftheCompany’sborrowingstointerestratechangesandthecontractualrepricingdatesareasfollows:
6 months
or less
At 31 December 2015
Total borrowings
100,474
6 - 12
months
104,348
1-5
years
1,081,206
Total
1,286,028
(c)Financeleaseliabilities-minimumleasepayments
2015
Rs
Not later than one year
Later than one year and not later than two years
Later than two years and not later than three years
Later than three years and not later than five years
Future finance charges on finance lease
Present value of finance lease liabilities
2014
Rs
295,524
295,524
295,524
780,521
1,667,093
(381,065)
1,286,028
-
The present value of finance lease liabilities may be analysed as follows:
2015
Rs
Not later than one year
Later than one year and not later than two years
Later than two years and not later than three years
Later than three years and not later than five years
2014
Rs
204,822
220,921
238,285
622,000
1,286,028
-
(d)TheCompanyleasesamotorvehicleunderfinancelease.Theleasehaspurchaseoptionsontermination.Therearenorestrictions
imposed on the Company by lease arrangements.
(e)Therateofinterestonloanfromholdingcompanyis6.65%.Theloanisatcallandhasnofixedtermofrepayment.
(f)ThecarryingamountsofborrowingsaredenominatedinMauritianRupeesandarenotmateriallydifferentfromtheirfairvalue.
50
C hemc o L i m ited
17. CURRENT TAX LIABILITIES
2015
Rs
(a) Current tax liabilities
At 1 January
Currenttaxonadjustedprofitfortheyearat15%(2014:15%)
Tax paid during the year
Payment under Advance Payment System
Tax deduction at source
Under/(over)provisioninpreviousyear
At 31 December
(b) Income tax expense
Currenttaxontheadjustedprofitfortheyearat15%(2014:15%)
Deferredtax(note14)
Under/(over)provisioninrespectoflastyear
Tax charge
600,538
2,546,584
(605,799)
(957,907)
(11,815)
5,261
1,576,862
2014
Rs
806,799
1,669,202
(799,768)
(1,068,664)
(7,031)
600,538
2015
Rs
2014
Rs
2,546,584
160,521
5,261
2,712,366
1,669,202
(1,404)
(7,031)
1,660,767
The tax on the Company’s profit before tax differs from the theoretical amount that would arise using the basic tax rate of the
Company as follows:
2015
2014
Rs
Rs
6,836,886
10,430,825
Tax calculated at 15%
Expenses not deductible for tax purposes
Income not subject to tax
Under/(over)provisioninpreviousyear
Other difference
Tax charge
1,025,533
1,699,025
5,261
(17,453)
2,712,366
1,564,624
203,622
(100,448)
(7,031)
1,660,767
18. DIVIDENDS PER SHARE
2015
Rs
At 1 January
ProposeddividendpershareRs1.10(2014:Rs1.10pershare)
Dividend paid
At 31 December
6,829,594
6,829,594
(6,829,594)
6,829,594
2014
Rs
6,208,722
6,829,594
(6,208,722)
6,829,594
19. REVENUE
2015
Rs
Revenue from the sale of goods
Revenue from the rendering of services
342,808,524
817,644
343,626,168
2014
Rs
324,326,860
324,326,860
20. OTHER INCOME
2015
Rs
Investment income
Profit on disposal of property, plant and equipment
Management fees receivable
Sundry income
1,422
89,124
1,080,000
184,500
1,355,046
2014
Rs
1,829
248,913
1,080,000
125,768
1,456,510
51
21. OTHER GAINS - NET
2015
Rs
Netforeignexchangegains(note23)
4,792,334
2014
Rs
955,142
22. FINANCE (COSTS)/INCOME
2015
Rs
Interest expense
-Bankoverdraft
- Current accounts
- Finance lease
Total interest expense
Netforeignexchangegains(note23)
(1,596,449)
(1,440,581)
(25,244)
(3,062,274)
1,961,559
(1,100,715)
2014
Rs
(273,761)
(176,354)
(450,115)
1,892,766
1,442,651
23. NET FOREIGN EXCHANGE GAINS/(LOSSES)
2015
Rs
2014
Rs
Theexchangedifferences(charged)/creditedtoprofitorlossareincludedasfollows:
Cost of sales
Othergains-net(note21)
Financeincome(note22)
(4,618,299)
4,792,334
1,961,559
(50,029)
955,142
1,892,766
24. PROFIT BEFORE TAXATION
2015
Rs
Profit before taxation is arrived at after:
Crediting:
and charging:
Depreciationonproperty,plantandequipment(note5)
- owned assets
- leased assets under finance lease
Amortisationofintangibleassets(note7)
Employeebenefitexpense(note26)
2014
Rs
89,124
248,913
2,710,365
98,072
106,653
36,597,122
3,056,679
32,665,196
25. EXPENSES BY NATURE
2015
Rs
Depreciation on property, plant and equipment
Amortisation
Employeebenefitexpense(note26)
Repairs and maintenance
Rent and rates
Management fees
Changes in inventories of finished goods
Raw materials and consumables used
Provision for doubtful debts
Other expenses
Total cost of sales and operating expenses
52
C hemc o L i m ited
2,808,437
106,653
36,597,122
1,146,509
4,658,520
3,880,000
20,165,117
250,990,793
9,567,294
11,915,502
341,835,947
2014
Rs
3,056,679
32,665,196
4,979,267
5,068,520
4,780,000
(9,513,544)
263,828,601
840,127
12,045,492
317,750,338
26. EMPLOYEE BENEFIT EXPENSE
2015
Rs
33,172,393
1,395,052
706,948
930,847
391,882
36,597,122
Wages and salaries
Social security costs
Pension costs - defined contribution plans
Pensioncosts-definedbenefitplans(note9(a)(v))
Otherpost-retirementbenefits(note9(b)(v))
2014
Rs
29,801,014
1,332,911
746,433
557,107
227,731
32,665,196
27. EARNINGS PER SHARE
2015
Profit for the year
Rs
Number of ordinary shares in issue
Earnings per share
Rs
2014
4,124,520
8,770,058
6,208,722
6,208,722
0.66
1.41
28. NOTES TO THE STATEMENT OF CASH FLOWS
2015
Rs
(a) Cash generated from operations
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Retirement benefit obligations
Interest expense
Investment income
Netforeignexchangelosses/(gains)
Changesinworkingcapital:
- inventories
- trade and other receivables
- trade and other payables
Cash generated from operations
2014
Rs
6,836,886
10,430,825
2,808,437
106,653
(666,575)
3,062,274
(89,124)
(1,422)
(767,750)
3,056,679
(66,005)
450,115
(248,913)
(1,829)
386,548
21,080,484
21,758,713
(44,032,090)
10,096,486
(8,589,805)
(35,921,278)
33,255,272
2,751,609
(b) Cash and cash equivalents
Cashandcashequivalentsandbankoverdraftsincludethefollowingforthepurposeofthestatementofcashflows.
2015
Rs
Cash and cash equivalents
14,007,766
2014
Rs
2,851,921
29. CONTINGENT LIABILITIES
At31December2015,theCompanyhadcontingentliabilitiesinrespectofbankandotherguaranteesandothermattersarisinginthe
ordinary course of business from which it is anticipated that no material liabilities would arise.
53
30. RELATED PARTY TRANSACTIONS
Transactions
(i)
2015
Interest
paid
Rs
Rs
Rs
Balances
Sales of
goods and
services
Management
services and
fees paid
Rs
Rs
Management
fees
received
Loan at
call owed
to related
party
Amount
owed by
related
party
Amount
owed to
related
party
Rs
Rs
Rs
Rs
Holding
company
-
1,327,304
-
-
-
-
12,586,404
20,000
376,581
Fellow
subsidiaries
-
-
7,903,292
27,286,724
3,880,000
1,080,000
-
11,443,205
3,598,600
426,360
-
-
-
-
-
-
-
-
2014
Holding
company
-
-
-
-
-
-
-
-
15,893
Fellow
subsidiaries
-
176,354
3,816,132
3,216,778
4,780,000
1,080,000
-
19,007,564
3,146,768
477,565
-
-
-
-
-
-
-
-
Directors
andkey
management
personnel
(ii)
Remuneration
and benefits
Purchase
of goods
and
services
Directors
andkey
management
personnel
The sales to and purchases from related parties are made in the normal course of business. Outstanding trade balances at the yearendareunsecured,interestfree(withtheexceptionofloanatcall)andsettlementoccursincash. There has been no guarantees provided or received for any related party receivables or payables. For the year ended 31 December
2015, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (2014: Nil). This
assessmentisundertakeneachfinancialyearthroughexaminingthefinancialpositionoftherelatedpartyandthemarketinwhichthe
related party operates.
Remunerationandbenefitsfordirectorsandkeymanagementpersonnelrelatestodirectorfees.
31. SEGMENTAL INFORMATION
Duetothetypeofproducts,therisksandrewardsfortherangeofproductscannotbeseparatelyidentified.Noseparatereporting
segment is therefore identifiable.
32. EVENTS AFTER THE REPORTING DATE
There are no event after the end of the reporting period which the directors consider may materially affect the financial statements for
the year ended 31 December 2015.
33. HOLDING COMPANY
The Company is controlled by Harel Mallac & Co. Ltd, incorporated in Mauritius which owns 55% of the Company’s shares. The
remaining 45% of the shares is widely held.
54
C hemc o L i m ited
34. CAPITAL COMMITMENTS
2015
Rs
Capital expenditure contracted for at the end of the reporting period but not yet incurred is as follows:
Plant and machinery
2014
Rs
5,320,000
7,000,000
35. THREE-YEAR SUMMARY OF PUBLISHED RESULTS AND ASSETS AND LIABILITIES
(a) Statement of profit or loss
Continuing operations
Revenue
2015
Rs
2014
Rs
2013
Rs
343,626,168
324,326,860
306,263,328
6,836,886
(2,712,366)
4,124,520
10,430,825
(1,660,767)
8,770,058
9,368,751
(1,546,931)
7,821,820
4,124,520
8,770,058
7,821,820
Profit for the year from continuing operations
Other comprehensive income for the year
Total comprehensive income for the year
4,124,520
(581,620)
3,542,900
8,770,058
(2,660,760)
6,109,298
7,821,820
381,286
8,203,106
Total comprehensive income attributable to:
- Owners of the parent
3,542,900
6,109,298
8,203,106
1.10
0.66
1.10
1.41
1.00
1.26
Income tax expense
Profit for the year from continuing operations
Profit attributable to:
- Owners of the parent
(b) Statement of profit or loss and other comprehensive income
Dividendpershare(Rs)
Earningspersharefromcontinuingoperations(Rs/share)
(c) Statement of financial position
ASSETS
Non-current assets
Current assets
Total assets
2015
Rs
2014
Rs
2013
Rs
10,392,447
170,448,598
180,841,045
9,920,722
198,484,281
208,405,003
9,865,824
161,791,599
171,657,423
EQUITY AND LIABILITIES
Capital and reserves
95,766,837
99,053,531
99,773,827
LIABILITIES
Current liabilities
Total liabilities
7,420,923
77,653,285
85,074,208
6,275,125
103,076,347
109,351,472
2,801,000
69,082,596
71,883,596
Total equity and liabilities
180,841,045
208,405,003
171,657,423
55
Notes
56
C hemc o L i m ited

- Harel Mallac Group

Transcription

Similar documents

2015 Agriculture Federal Credit Union (AgFed) Board of Directors

PDF

January 2014 Newsletter - Fresno Police Department Credit Union

Notes to the Financial Statements

financial statements for the year ended

Step by Step Guide: New Company Registration

sanbonani holiday spa share block limited

PDF - Blandford Ski Area

Inland Empire Water Leader Joins Metropolitan Water District Board

1.eps - Moneycontrol

- Harel Mallac Group