Notes to the Financial Statements

Transcription

Dear Shareholder,
The Board of Directors is pleased to present the Annual Report of Compagnie des Magasins Populaires
Limitée 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 25 April 2016.
Antoine L. Harel
Chairman
Charles Harel
Director
WHAT’S
INSIDE
02 At a Glance
18 Statement of Compliance
03 Group Profile
19 Secretary’s Certificate
Corporate Information
Statement of Directors’ Responsibilities
04 Board of Directors
20 Independent Auditors’ Report
06 Senior Management Profile
21 Statements of Financial Position
Board of Directors of Subsidiary
Companies
08 Chairman’s Report
10 Corporate Governance Report
16 Statutory Disclosures
22 Statements of Profit or Loss and Other
Comprehensive Income
23 Statements of Changes in Equity
25 Statements of Cash Flows
26 Notes to the Financial Statements
An n u a l Report 2015
1
AT A
GLANCE
VISION
To be a leading player in
the Mauritian retail industry
OUR QUALITY ENGAGEMENT
At Compagnie des Magasins Populaires Limitée, we work with heart and dedication to bring exceptional value to all
stakeholders.
To put these words into action, we endeavour to:
• empower our people for optimal engagement and performance;
• advance our business practises to meet the highest standards;
• deliver innovative, sustainable and quality products and services.
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
2
Com p ag n ie de s M ag as i ns P opul a i re s Li m itée
GROUP
PROFILE
Compagnie des Magasins Populaires Limitée (CMPL),
a subsidiary of the Harel Mallac Group, operates under
the retail brand MONOPRIX in five main retail categories:
• Food and Beverages
• Fashion and Apparel
• Beauty Care and Cosmetics
• Maintenance Products
• Home and Leisure
operating since
1975
5,800 m2
retail surface area
Rs 822m (+36%)
turnover in 2015
2,449,083 (+22%)
transactions in 2015
246
employees
30,000
product references
3
stores
CORPORATE INFORMATION
REGISTERED OFFICE
18, Edith Cavell Street
Port Louis
Mauritius
Telephone: (230) 207 3000
BUSINESS REGISTRATION
NUMBER
C07002265
SECRETARY
HM Secretaries Ltd.
Port Louis
Mauritius
Telephone: (230) 207 3000
AUDITORS
BDO & Co
Chartered Accountants
10, Frère Félix de Valois Street
Port Louis
Mr André Robert
Attorney-at-Law
8, Georges Guibert Street
Port Louis
NOTARY
SUPERMARKETS
MONOPRIX
195, Royal Road
Curepipe
Mr Didier Maigrot
The Mauritius Commercial Bank Ltd Notary Public
1st Floor, Labama House
The State Bank of Mauritius Ltd
35, Sir William Newton Street
Port Louis
LEGAL ADVISERS
Mr Yves Hein
REGISTRY
Barrister-at-Law
Harel Mallac Corporate Services
Cathedral Square
Ltd.
Port Louis
Port Louis
BANKERS
MONOPRIX
Bagatelle
Mall of Mauritius
MONOPRIX
Cascavelle
3
BOARD OF
DIRECTORS
as at 31 December 2015
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) degree in Accounting and Computing. He joined
Harel Mallac & Co. Ltd. in 1987.
In 1997, he was appointed Group CEO and has been Chairman
of the Board since April 2005. He was President of the
Mauritius Chamber of Commerce and Industry in 1992/1993.
He was first appointed to the Board of Directors in August
1991 and is currently its Chairman.
Other directorships (listed companies):
The Mauritius Chemical and Fertilizer Industry Limited
(Chairman), Harel Mallac & Co. Ltd. (Chairman), Chemco
Limited (Chairman), Bychemex Limited (Chairman) and
Les Gaz Industriels Ltd. (Chairman).
Jean Marie De Marcy Chelin (59)
Managing Director (Executive Director)
In office up to 31 July 2015
Jean Marie de Marcy Chelin joined the Company in 2003 as
Commercial Manager, after having served in the beverages
and retail industries for several years. He was promoted
General Manager in 2004 and Managing Director in 2005. He
was first appointed to the Board of Directors in 2005. Jean
Marie de Marcy Chelin resigned from office on 31 July 2015.
Other directorships (listed companies): none.
4
Barthélémy Harel (53)
Non-Executive Director
Barthélémy Harel holds a Diploma in Automobile Engineering
together with a National Certificate in Design and Technology
from Northbrook College, Sussex, UK. He worked at Iframac
Limited from 1989 to November 2015 as Technical Manager
of its Agro and Heavy Vehicles Department both for Mauritius
and Madagascar. He is currently Manager – Cummins Division
of Mecom Ltd. He first joined the Board of Directors in 2012.
Charles Harel (48)
Charles Harel holds an MBA from the University of Birmingham,
UK, as well as a National Diploma in Management and Finance
from the Cape Technikon, South Africa. He joined the Harel
Mallac Group in 1995 and was nominated CEO of the Group,
effective January 2014. He first joined the Board of Directors
in 1998.
The Mauritius Chemical and Fertilizer Industry Limited, Harel
Mallac & Co. Ltd., Chemco Limited and Bychemex Limited.
Gaëtan Leclézio (81)
Mubarak Sooltangos (68)
Gaëtan Leclézio joined Harel Mallac & Co. Ltd. in 1953 where he
subsequently held senior positions. He served on the Boards
of Directors of several subsidiaries of Harel Mallac & Co Ltd.
He was first appointed to the Board of Directors in 1973.
Mubarak Sooltangos is holder of a Diplôme d’Études Supérieures
(DES) in Banking and Finance from Conservatoire National des
Arts et Métiers de Paris, lnstitut Technique de Banque. After 19
years spent in the banking sector Mubarak Sooltangos joined
Happy World Ltd. as General Manager. He was subsequently
appointed Managing Director of Happy World Foods in 1995. He
held the position of General Manager of the Trade and Commerce
Division of the British American Investment Group of Companies
from 2005 to 2007. Since then, he is acting as Management
Consultant.
Independent Director
Michel Pilot (59)
Michel Pilot was the Head of the Sales of the Agro-Industrial
Department of Harel Mallac & Co. Ltd. and was promoted
General Manager in 1980. He was Managing Director of Harel
Mallac Engineering Ltd. from September 2005 to March 2016.
He first joined the Board of Directors in 2004.
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 was a Managing
Director of The Mauritius Chemical and Fertilizer Industry
Limited from October 2006 to June 2009. Michel Rivalland is an
Executive Director of Harel Mallac & Co. Ltd. He first joined the
Board of Directors on 2 June 2010.
Alain Vallet (61)
Alain Vallet holds a Diploma in Business Studies from the City
of London Polytechnic. He joined Harel Mallac & Co. Ltd. in 1979
as Commercial Executive in the Wine and Spirits Department.
He helped in the launching of the Grays Group in the 1980’s and
was subsequently appointed as General Manager in 1988 and
member of its Board of Directors in 1993. He sat on several
Boards of Directors and was an active figure of The Mauritian
Chamber of Commerce and Industry, the Association of Mauritian
Manufacturers and of the Mauritius Employer’s Federation. He first
joined the Board of Directors in 2005.
Terra Mauricia Ltd.
Harel Mallac & Co. Ltd., The Mauritius Chemical and Fertilizer
Industry Limited, Bychemex Limited and Chemco Limited.
5
SENIOR
MANAGEMENT PROFILE
Jean-Raymond SEMAESSE
Chief Executive Officer
Jean Raymond Semaesse joined CMPL on 13 July 2015 as Chief Executive Officer. He has extensive international experience in the
retail market, having held numerous senior positions for the Casino Group and Carrefour Group. Over the course of his career, he has
managed retail brands such as Carrefour, Champion, Continent and Jumbo, in France as well as in Mauritius and Réunion Island.
Eddy BERTHELOT
Ivan RAGON
Eddy Berthelot joined the Company in December 2006 after
spending 15 years in the Tourism Industry where he held
several positions in the Human Resources field.
Ivan Ragon joined CMPL in September 2014. He has been
delegated to CMPL by MONOPRIX France with the objective
of assisting with the further upgrade of the three outlets of
MONOPRIX. He joined MONOPRIX France in 1983, and has held
several positions across the MONOPRIX group before moving to
Mauritius to assist the retail brand in the roll out and alignment of
the local stores to the international standards of the MONOPRIX
brand concepts and operational processes.
Human Resources Officer
Balsheel Beeharry-GOPAL
Marketing Manager
Balsheel Beeharry-Gopal was appointed Marketing Manager
of CMPL in August 2015. She formerly held the position of
Marketing Manager-Group within the Corporate arm of Harel
Mallac Group from 2011 to 2015. She has extensive experience
in the business-to-business and Fast Moving Consumer Goods
markets, having worked with leading brands in Mauritius and
abroad.
Yann NG YUM LOONG
Purchasing Manager
Head of Operations
Steeve YEUNG WING YEN
Financial Controller
Steeve Yeung Wing Yen joined CMPL as Financial Controller in
March 2014. Prior to joining the company, Steeve held the position
of Financial Controller for the Services arm of Harel Mallac Group
from 2004 to 2014. He is an Associate Member of the Institute of
Chartered Accountants in England and Wales (ACA).
Yann Ng Yum Loong joined CMPL as General Manager of the
Bagatelle outlet in February 2014, before taking on the challenge
of setting up and centralizing the purchasing department for
CMPL, as Purchasing Manager since January 2015. He is a
former executive of an important local group dealing in Fast
Moving Consumer Goods.
BOARD OF DIRECTORS
OF SUBSIDIARY COMPANIES
CMPL (BAGATELLE) LIMITÉE
CMPL (CASCAVELLE) LIMITÉE
Antoine L. Harel
Suie Sen Hock Meen Ah Kine (in office up to 9 November 2015)
Jean Marie de Marcy Chelin (in office up to 31 July 2015)
Charles Harel
Michel Rivalland G.O.S.K.
Christian Yong Kiang Young (in office as from 9 November 2015)
Antoine L. Harel
Suie Sen Hock Meen Ah Kine (in office up to 9 November 2015)
Jean Marie de Marcy Chelin (in office up to 31 July 2015)
Charles Harel
Michel Rivalland G.O.S.K.
Christian Yong Kiang Young (in office as from 9 November 2015)
The Directors of CMPL (Mont Choisy) Limitée are Messrs Antoine L Harel, Charles Harel, Michel Rivalland G.O.S.K. and Christian Yong
Kiang Young (in office as from 9 November 2015). Messrs Jean Marie de Marcy Chelin and Suie Sen Hock Meen Ah Kine resigned from
office on 31 July 2015 and 9 November 2015 respectively.
6
7
Dear Shareholder,
The Food Retail Industry in Mauritius is on a continuous rise
that mirrors the highly dynamic progression of food-related
expenditures in Mauritian households and the increase in the
frequency of visits to stores and shopping malls. As a result,
over the period 2000 to 2015, the number and variety of
hypermarkets, supermarkets and mini-markets has increased
significantly. Another consequence of this growing industry is
that it is becoming ever more challenging, namely due to the
growth of discounters, increasingly competitive pricing and
more discerning customers.
As a pioneer in the modern food retail industry in Mauritius,
with a first outlet opened in 1975 in Curepipe under the Prisunic
brand, MONOPRIX has further reinforced its position through the
acquisition of two additional outlets, during the course of 2014,
with the primary goal of expanding its business and grow its
market share.
The year 2015 was challenging for CMPL, which has put in
motion numerous initiatives to improve its performance and
most importantly, consolidate its operations and boost revenue.
“We will endeavour to address these
challenges by sourcing the most sought
after products at the best price for our
customers, improve the quality of service
within our stores and provide a strong
differentiated offering to our customers as
means of enhancing the overall customer
experience at the MONOPRIX stores.”
00
8
Annual
Report 2015
CHAIRMAN’S
REPORT
As part of a full review of its organisational structure to allow for
an optimised use of available human resources, the Company has
welcomed a new Chief Executive Officer since July 2015.
CMPL has also re-visited the structure of its purchasing department
with one of its core strategies of 2015 residing in the set-up of
a centralised purchasing office, following the appointment of a
Purchasing Manager since January 2015. Furthermore, to support
our expansion and development, we have formulated a fullfledged marketing plan in order to firmly position MONOPRIX
as a fun, affordable and trendy supermarket, and appointed a
Marketing Manager to oversee the smooth roll-out of the plan
since August 2015. With strengthened support from MONOPRIX
France, we have been able to gain traction with an innovative
approach to service and a review of our product offering.
Despite the challenges it faced, not excluding aggressive
competitors as well as controlled-cost containments, CMPL closed
the year with a resounding performance with a +22% growth in
the number of transactions it has registered, bringing the number
of transactions for the year to 2,449,083. Most importantly, the
Company has seen a +36% year-on-year growth of its revenue,
thus indicating that it has managed to regain significant market
share during the course of the year.
This performance bears witness to the fact that Company’s
implementation of numerous strategic measures has started to
pay off. However, these measures have not spared the Company
the losses it has borne during the year 2015, which have also
led to some rationalizing measures to be undertaken to mitigate
the extent of the current year’s losses, which the Company
acquiesces to having an impact on its overall performance.
Following this subdued performance and in view of the necessary
investments required, the Company declared no dividend for the
year. The share price as at 31 December 2015 stood at Rs 15.45.
Laying the building blocks for growth
We are now at an investment and implementation stage, which is
expected to continue throughout 2016. With various initiatives in
the pipeline, including Management’s relentless focus on effective
purchasing and thought-through product offering, dynamic
marketing, as well as the optimization of all operations through the
development of business synergies. These include the increase in
productivity and micro-management of cost centres effectively,
as well as an increased focus on inventory management. We
remain confident that CMPL will steadily progress towards
sustained strategic growth.
The way forward
The year 2016 will be kick-started by the Board of CMPL for a
Rights Issue of Rs 141 M to raise funds. These funds will cater for
the implementation of the key features of the 2016–2020 Strategic
Plan, namely expansion, re-organisation of the product offering
and a strong marketing campaign to increase brand awareness,
reinforce brand positioning, increase competitiveness and finally
contribute towards the enhancement of the three retail outlets.
The Food Retail sector looks set to remain challenging with
the expected remodelling of a number of competing shopping
centres, the expansion of our competitors’ businesses in new
locations and, more importantly, an increase in competitive pricing
as well as demanding and knowledgeable customers. We will
endeavour to address these challenges by sourcing the most
sought after products at the best price for our customers, improve
the quality of service within our stores and provide a strong
differentiated offering to our customers as means of enhancing
the overall customer experience at the MONOPRIX stores.
Acknowledgements
I would like to take this opportunity to thank the former Managing
Director of MONOPRIX, Jean Marie Chelin, for his hard work
and dedication to the Company, and especially for his valuable
contribution in the set-up and re-launch of the two additional
outlets in Bagatelle and Cascavelle, before his retirement from
the Company in July 2015.
I would also like to re-iterate my heartfelt welcome and thanks to
Jean-Raymond Semaesse who joined us since July 2015, as the
Chief Executive Officer. With his invaluable experience in the retail
market in France and Mauritius, his contribution over the second
half of 2015 already made an impact on the performance and
strategic positioning of the Company.
Furthermore, I extend my thanks to all the MONOPRIX team for
their enthusiasm, resilience and hard work during this year of
consolidation and growth. I am also grateful to my colleagues on
the Board of Directors for their continuous support and contribution
over the last year.
Finally, I would like to acknowledge with thanks the valuable
contribution of our partners and the continued support of our
shareholders and customers.
Antoine L. Harel
Chairman
9
CORPORATE GOVERNANCE
REPORT
CMPL is committed to the highest standard of business integrity, transparency and professionalism in all its activities and ensures that
the Company is managed ethically and responsibly to enhance business value for all its stakeholders.
BOARD OF DIRECTORS
The Board endeavours to exercise leadership, entrepreneurship, integrity and judgment in directing the Company, so as to achieve
continuing prosperity for the organisation whilst ensuring both performance and conformance.
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, among others, oversees the development and implementation
of the Company’s corporate strategy and reviews performance objectives. It ensures the succession plans for key individuals and
effective communication with the Company’s stakeholders, 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, major acquisitions, divestitures and material commitments. The Board also oversees compliance and risk
management, both at Company and Group levels.
At 31 December 2015, the Board of Directors consisted of eight members, of whom, five were Non-Executive and three Independent.
The Board is of the opinion that in view of its size, having the CEO, Mr. Jean Raymond Semaesse and the Accountant attending Board
meetings whenever required is in accordance with the Code’s spirit regarding executive’s presence on the Board. Non-Executive
Directors have free access to members of the management team, with whom they can interact freely.
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
Governance Committee. This Committee makes its recommendations to the Board on any required remedial action.
All Directors have access to the Company Secretary and newly appointed Directors follow an induction program. The Directors of
the Company hold office for one year but are eligible for re-appointment. Directors are elected or re-elected by separate resolutions
yearly. The Board had, at 31 December 2015, two standing Board committees (as described below), which meet regularly under the
terms of reference set by the Board.
The Board entrusts the day-to-day management of the Company to the Chief Executive Officer who ensures the smooth running of
the organisation’s and Group’s affairs.
The composition of the Board of Directors and other directorships held by the Directors in other listed companies are given on pages
4 and 5 while the composition of the Board of Directors of the Company’s wholly-owned subsidiaries is available on page 6.
BOARD MEETINGS
The Board meets regularly during the year. For the period under review, the Board met eight times. The Board meetings are conducted
in accordance with the Company’s constitution and the Companies Act 2001.
Board meetings are organised in such a way that Directors receive all required information important to their understanding of the
business to be conducted at the Board meeting so that they may make their full contribution and properly discharge their responsibilities.
At these Board meetings, the Company’s budget, performance and forecast are reviewed and approved, reports from the Chief
Executive Officer and Committees’ Chairmen are received, strategic issues discussed and statutory matters approved. The Board may
invite management or external consultants to attend Board meetings when desirable.
BOARD COMMITTEES
Corporate Governance Committee
The Corporate Governance Committee consists of Messrs Antoine L. Harel (Chairman), Gaëtan Leclézio and Charles Harel. The Company
Secretary acts as secretary to the Committee. The Chief Executive Officer attends the Committee’s meetings whenever required.
The Committee’s terms of reference include the key areas that are the remit of a Nomination and Remuneration Committee. Its main
responsibilities include establishing a formal and transparent procedure for developing policy on executive and senior management
remuneration, as well as determining specific remuneration packages for executive directors of the Company when applicable. It
oversees the process regarding recommendation of potential candidates and ensures that proposed Directors are fit and proper to act
in that capacity. It further monitors the balance and effectiveness of the Board. The Committee also makes recommendations relating
to the fees of the Company’s Non-Executive and Independent Directors.
The Corporate Governance Committee has assessed the Board and made recommendations for the election of Directors at the next
annual meeting.
10
REPORT
Audit Committee
The Audit Committee consists of Messrs Gaëtan Leclézio (Chairman), Michel Rivalland G.O.S.K. and Mubarak Sooltangos. The Company
Secretary acts as secretary to the Committee. The Chief Executive Officer and the Accountant attend the Committee’s meetings
whenever required.
The role and responsibilities of the Audit Committee are to assist the Board in discharging its duties relating to the safeguarding of
assets, the operation of adequate systems and control processes, and the preparation of accurate financial reports and statements, in
compliance with all applicable legal requirements and accounting standards. The Committee also addresses issues within the ambit
of a Risk Management Committee and as such provides a forum for discussing business risks as well as control issues and formulates
relevant recommendations for consideration by the Board. The Committee fulfilled its responsibilities for the year under review in
compliance with its terms of reference approved by the Board.
The Board is satisfied that the Audit Committee has the required skills, knowledge and financial experience to discharge its duties
effectively. The Committee reviews investment issues and submits its recommendations to the Board.
Investment Committee
Dissolved on 9 November 2015
The Investment Committee was chaired by Mr Antoine L. Harel and its members were Messrs Charles Harel and Gaëtan Leclézio. The
Company Secretary acted as secretary to the Committee. The Chief Executive Officer and the Accountant attended the Committee’s
meetings whenever required. This Committee used to review investment issues and submit its recommendation to the Board. The
Investment Committee was dissolved on 9 November 2015.
INTERNAL CONTROL
Internal control is a process designed to provide reasonable assurance regarding the achievement of the Company’s objectives
and is performed by the Board of Directors, the Management and other personnel. It is applicable to and is built into various business
processes so as to cover all significant enterprise areas.
Systems and processes have been implemented within the Company and the Group and are regularly controlled by the Internal Audit
function to ensure that they are effective and are being adhered to. Four reviews were performed by the Internal Audit during the
year. Internal Audit reports for the Company and the subsidiary companies are reviewed by the Audit Committee which makes its
recommendations for modifications or upgrading of systems and processes as and when necessary to enhance their effectiveness.
INTERNAL AUDIT
The Internal Audit is a function responsible for providing assurance to the Board regarding the implementation, operation and effectiveness
of internal control and risk management within the Company and its subsidiary companies. It reports to the Audit Committee and to the
Board of Directors. It assists in the maintenance and improvement of the process by which risks are identified and managed and in the
strengthening of the internal control framework. The Internal Audit function has been outsourced to Harel Mallac & Co. Ltd.
The Internal Audit conducts its assignments based on a yearly plan which is validated by the Audit Committee. The Internal Auditor has
unrestricted access to the Company’s and subsidiaries’ records, Management and employees. Systems reviewed in 2015 include the
sales and debtors’ cycle, the procurement and creditor’s cycle, the stock cycle, treasury management, fixed assets management and
payroll processes and thus cover all significant areas of the Company’s and Group’s internal control.
The reports produced by the Internal Audit were regularly submitted to the Audit Committee for discussion and for the follow-up of the
implementation of recommended actions.
RISK MANAGEMENT
The Board regularly addresses and evaluates business, financial, regulatory and compliance, physical, human resources and IT risks.
Although the Board is ultimately responsible for the process of risk management, the Management is accountable to the Board for the
design, implementation and detailed monitoring of the risk management process. The Board has delegated to the Audit Committee the
responsibility to supervise the monitoring and mitigation of risk exposure. The Audit Committee thus regularly reviews both internal and
external risk factors and makes its recommendations to the Board as to the policies needed to mitigate risk.
A risk management framework was adopted in 2010 and a risk register has been elaborated for better safeguard of the Group’s
interests and assets. The framework and register are reviewed on a regular basis.
The following key risks have been identified and information on financial risk management is given in note 3 to the Financial Statements
on pages 34 to 38.
11
REPORT
RISK MANAGEMENT (CONT’D)
Physical risks
Among the physical risks identified are unavoidable events such as riots, cyclones and other natural calamities. Mitigating actions
have been undertaken, such as the adoption of cyclone and fire procedures, the subscription to a relevant insurance cover, and the
identification of a business continuity plan and disaster recovery plan have been undertaken.
So as to limit the occurrence of on-site accidents, health and safety measures as well as security procedures have been implemented.
The Group also avails itself of the services of an Occupational Physician Consultant as well as those of a Health and Safety Officer.
Finally, the Group’s control procedures ensure mitigation of risks relating to fraud and theft.
Human resources risks
Loss of key personnel has been identified as a key risk factor. In view of mitigating this risk, retention policies have been adopted as
well as a formal performance assessment and reward system implemented within the Company and the Group.
Technology risks
In order to mitigate the risk of an IT crash or major breakdown, backup and restriction procedures have been set up within the Company
and the Group.
GROUP STRUCTURE
The Directors recognise that the parent entity is Harel Mallac & Co. Ltd. and that the ultimate parent entity is Société Pronema. The
Director common to the aforesaid entities is Mr Antoine L. Harel who is gérant of Société Pronema and a Director of Harel Mallac & Co.
Ltd. Messrs Charles Harel and Michel Rivalland G.O.S.K. sit on the Board of Directors of Harel Mallac & Co. Ltd.
The Company has three wholly owned subsidiaries namely CMPL (Bagatelle) Limitée, CMPL (Cascavelle) Limitée and CMPL (Mont
Choisy) Limitée.
MEMBERS’ ATTENDANCE AT BOARD AND COMMITTEE MEETINGS HELD IN 2015
Directors
Chelin de Marcy, Jean Marie
Harel, Antoine L.
Harel, Barthélémy
Harel, Charles
Leclézio, Gaëtan
Pilot, Michel
Rivalland G.O.S.K., Michel
Sooltangos, Mubarak
Vallet, Alain
Board of
Directors
Corporate
Governance
Committee
Audit
Committee
Investment
Committee
3/4
8/8
8/8
8/8
7/8
7/8
7/8
8/8
6/8
–
2/2
–
2/2
2/2
–
–
–
–
–
–
–
–
4/4
–
1/4
4/4
–
–
3/3
–
2/3
3/3
–
–
–
–
DIVIDEND POLICY
The Company tends to distribute, as far as possible, a regular dividend to its shareholders after considering the Company’s performance
and profitability, investment needs, capital expenditure requirements and growth opportunities. No dividend was declared for the year
under review.
Dividend cover
(times)
Year
2010
2011
2012
2013
2014
2015
12
1.66
1.14
–
0.30
–
–
Dividend yield
(%)
3.48
3.16
3.10
1.85
2.70
–
REPORT
SHAREHOLDERS HOLDING MORE THAN 5 PERCENT OF THE COMPANY AS AT 31 MARCH 2016
Details of shareholders directly or indirectly interested in 5 percent or more of the ordinary share capital of the Company as at 31 March
2016 are listed on page 17.
SEMDEX
CMPL (Rs)
DAILY SHARE PRICE FROM JANUARY 2015 TO DECEMBER 2015
DIRECTORS’ INTERESTS IN SHARES
The direct and indirect interests of Directors in the ordinary shares of the Company are to be found on page 16.
DIRECTORS’ DEALING IN SHARES OF THE COMPANY
The Directors follow the principles on the Model Code on Securities Transactions as detailed in Appendix 6 of the Stock Exchange
of Mauritius Listing Rules whenever they deal in the shares of the Company. During the year under review, none of the Company’s
Directors traded in the Company’s shares.
RELATED PARTY TRANSACTIONS
Related party transactions are detailed on pages 62 and 63.
COMPANY’S CONSTITUTION
The Company’s constitution does not provide any ownership restrictions or pre-emption rights. The constitution is in agreement with
the Companies Act 2001 and the Listing Rules of the Stock Exchange of Mauritius and does not contain any material clause that needs
to be disclosed.
SHAREHOLDERS’ AGREEMENT AFFECTING THE GOVERNANCE OF THE COMPANY BY THE BOARD
The Company is not aware of any such agreement pertaining to the year under review.
THIRD PARTY MANAGEMENT AGREEMENT
The Company has a management contract with Harel Mallac & Co. Ltd. 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
Non-Executive Directors may be paid directors’ fees commensurate with their responsibilities on the Board. Those serving on the
Board Committees may receive additional fees. Two of the Non-Executive Directors do not receive directors’ fees for their sitting on
the Board and the Board Committees. Executive Directors do not receive directors’ fees.
DIRECTORS’ REMUNERATION
Directors’ remuneration is given on page 16. It has been disclosed globally due to the commercial sensitivity of the information.
13
REPORT
REMUNERATION POLICY
The Company’s remuneration policy recommends that the Company provides competitive rewards for its senior executives and other
management staff, taking into account the Company’s performance and external market data from independent sources, in particular,
salary levels for similar positions in comparable companies. The remuneration package consists of base salary, fringe benefits
and individual and collective performance bonuses. The Board of Directors upon recommendations of the Corporate Governance
Committee determines the remuneration package.
EMPLOYEE SHARE OPTION PLAN
No employee share option plan is available.
CODE OF ETHICS
The Code of Ethics is extensively covered in the Company’s induction programme for all new employees and Directors.
SOCIAL, HEALTH AND SAFETY
In line with the philosophy of the Harel Mallac Group, the Company is committed to comply with Occupational Health and Safety Policy
and standards for all its customers and employees in the workplace.
In 2015, the Health and Safety Risk Assessment has been completed for all operations activities for its three MONOPRIX stores. Control
measures have been implemented through key initiatives to eliminate and or to reduce the risks as low as reasonable practicable.
The Company has recorded a total of 16 minor incidents which have been duly investigated and remedial actions taken to prevent
reoccurrence in the future.
A total number of 106 hours of Health and Safety training were facilitated for the employees in 2015 particularly on Health and Safety
Induction, Basic Food Safety, Fire Safety/Fire Warden, First Aid as well as Manual Handling.
In 2016, further initiatives will be rolled out throughout the company, to ensure safe and healthy environment for our customers and also
to enhance the Company’s health and safety culture.
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
During the course of 2015, CMPL has endeavoured to be closer to the communities within which it operates by sponsoring a number
of social projects, among which:
– a lunch to the residents of the Shelter for Women and Children in Distress, via the Group’s Employee Volunteer Programme;
– Le Vélo Vert’s public event ‘Partaz dan Zardin’, dedicated to the promotion of organic farming.
As a member of the Harel Mallac Group, CMPL endorsed the campaigns and actions led by the Fondation Harel Mallac (FHM), which
focuses on improving the lives of underprivileged and disabled children, through educational projects.
In order to optimise the reach of its initiatives and link them to the businesses’ immediate community engagement, the actions of FHM
cover three main areas: employees living with social difficulties, our surrounding communities and finally the Group’s vision for an
integrated Mauritius.
During the course of 2015, the FHM funded community-based projects which benefitted the children of École Sainte-Famille of Bois
Marchand (upcycling waste), the Étoile du Berger shelter in Albion (water conservation awareness), and the Mouvement pour le Progrès
de Roche-Bois (MPRB), which provides vocational training to street children on organic farming. Several companies within the Group
engaged in environmental projects such as cleaning of localities and planting of endemic plants.
The key Group project undertaken by the FHM was the ‘Harel Mallac Go Green’ sensitisation campaign, launched by Miss Eco Universe
2015 and the Minister of Environment. Go Green brought together over 200 Group employees to rethink and improve our 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 a recycling programme and awareness sessions by the Mission Verte NGO. The Foundation
is currently seeking to extend the recycling programme to all its business units whilst ensuring an optimal waste management system
is in place across the Group.
Furthermore, to ensure greater employee social engagement, a solidarity release of one working day during the year was granted to
employees to encourage them to provide NGOs with technical assistance, within their areas of expertise.
14
REPORT
SHAREHOLDER INFORMATION
Forthcoming Annual Meeting
A proxy form is enclosed for those shareholders unable to attend. Shareholders are requested to bring their ID cards or passports to
the meeting, as these are required for registration.
Schedule of Events
Publication of condensed Audited results for previous year
Annual meeting
Publication of condensed results for 1st quarter
Publication of condensed results for 2nd quarter
Publication of condensed results for 3rd quarter
Dividend declaration
Dividend payment
February/March 2016
May/June 2016
May 2016
August 2016
November 2016
December 2016
December 2016/January 2017
Shareholders’ Practical Guide
Issues
Action
Change of address
If shares are deposited with the CDS
Change of name
Acquisition or disposal of shares
Share transfers
Lost share certificate
Direct dividend credit
Contact the Company’s secretariat
Contact personal broker
Contact personal broker
Forward the relevant form to the Company’s secretariat
PROFILE OF COMPANY’S SHAREHOLDERS AS AT 31 MARCH 2016
Size of Shareholding
1–500
501–1,000
1,001–5,000
5,001–10,000
10,001–50,000
50,001–250,000
250,001–500,000
Over 500,000
Total
Number of Shareholders
Number of Shares Owned
% Holding
430
34
39
10
9
1
2
1
526
50,260
25,951
96,344
73,269
214,847
187,944
800,507
744,378
2,193,500
2.29
1.18
4.39
3.34
9.79
8.57
36.50
33.94
100.00
Number of Shareholders
Number of Shares Owned
% Holding
467
3
3
53
526
202,601
27,000
14,432
1,949,467
2,193,500
9.24
1.23
0.66
88.87
100.00
SUMMARY BY SHAREHOLDING CATEGORY AS AT 31 MARCH 2016
Size of Shareholding
Individual
Pension and provident funds
Investment and trust companies
Other corporate bodies
Total
15
STATUTORY
DISCLOSURES
PRINCIPAL ACTIVITY
The principal activity of the Company consisted, at 31 December 2015, of the operation of three retail stores in Curepipe, Bagatelle and
Cascavelle respectively.
DIRECTORS OF THE COMPANY
The Directors of the Company and of its subsidiaries are listed on pages 4, 5 and 6.
DIRECTORS’ REMUNERATION AND BENEFITS
Remuneration and benefits received, or due and receivable from the Company were as follows:
The Group
2015
Rs’000
Directors of the Company
Executive Director
Full-time
Part-time
Non-Executive Directors
Total
3,562
–
630
4,192
The Company
2014
Rs’000
2,910
–
578
3,488
2015
Rs’000
3,562
–
630
4,192
2014
Rs’000
2,910
–
578
3,488
Directors of subsidiaries did not receive any remuneration as Board members of the subsidiaries.
DIRECTORS’ AND OTHER OFFICERS’ INTERESTS IN SHARES
The Directors’ and other Officers’ interests in the securities of the Company as at 31 December 2015 is as follows:
Direct
interest
Directors
Harel, Antoine L.
Harel, Barthélémy
Harel, Charles
Leclézio, Gaëtan
Sooltangos, Mubarak
Pilot, Michel
Rivalland G.O.S.K, Michel
Vallet, Alain
–
303
303
–
–
–
–
–
Indirect
interest
144,390
143,194
143,195
–
–
–
–
–
None of the other Officers have direct or indirect interests in the Company’s shares.
None of the Directors or other Officers have direct interests in the Company’s subsidiaries, which are wholly-owed subsidiaries.
CONTRACT OF SIGNIFICANCE
There was no contract of significance to which the Company or its subsidiaries have been a party and in which a Director was materially
interested be it directly or indirectly.
16
STATUTORY
DISCLOSURES
SHAREHOLDING OF MORE THAN 5 PERCENT AS AT 31 MARCH 2016
At 31 March 2016, the following shareholders were directly or indirectly interested in more 5 percent of the Company’s share capital.
Shareholder
% holding
Harel Mallac & Co. Ltd.
The MCB Ltd (a/c Société Atalanta)
Terra Mauricia Ltd
Swan Life Ltd
33.93
19.43
17.05
8.56
Except for the above, no person has reported any material interest of 5 percent or more of the equity share capital of the Company.
CORPORATE SOCIAL RESPONSIBILITY
2015
Rs’000
Donations
(2015: 6 recipients; 2014: 8 recipients)
Corporate Social Responsibility contribution
(2014: 1 recipient)
2014
Rs’000
5
6
-
47
The subsidiaries did not make any donations or Corporate Social Responsibility contributions during the years 2015 and 2014.
The Company or its subsidiaries made no political donations during the years 2015 and 2014.
AUDITORS’ FEES
The fees payable to the auditors, for audit and other services, were:
THE GROUP
2015
Rs’000
Audit fees payable to:
– BDO & Co
Fees paid for other services provided by:
– BDO & Co
THE COMPANY
2015
Rs’000
2014
Rs’000
2014
Rs’000
730
730
330
330
–
320
–
–
Other services related to assistance in fixed asset count and reconciliation and inventory count at CMPL (Bagatelle) Limitée and CMPL
(Cascavelle) Limitée.
17
STATEMENT OF
COMPLIANCE
(Section 75 (3) of the Financial Reporting Act)
Name of PIE:
Reporting Period:
Compagnie Des Magasins Populaires Limitée
1 January 2015 to 31 December 2015
We, the Directors of Compagnie Des Magasins Populaires Limitée, confirm that to the best of our knowledge the PIE has complied
with all of its obligations and requirements under the Code of Corporate Governance except for sections 2.2.3 and 2.8.2. Reasons for
non-compliance are as follows:
2.2.3
The Company does not have Executive Directors.
The Board is of the opinion that in view of its size, having the CEO and the Accountant attending Board and Board Committees’
meetings, whenever required, is in accordance with the Code’s spirit regarding executive’s presence on the Board.
2.8.2
The Company does not disclose details of remuneration paid to each Director on an individual basis due to the commercial
sensitivity of the information.
Antoine L. Harel
Charles Harel
Chairman
Director
30 March 2016
STATEMENT OF
DIRECTORS’ RESPONSIBILITIES
Directors acknowledge their responsibilities for:
(i) adequate accounting records and maintenance of effective internal control systems;
(ii) the preparation of financial statements which fairly present the state of the Company as at the end of the financial year and the results
of its operations and cash flows for that period and which comply with International Financial Reporting Standards (IFRS);
(iii) the selection of appropriate policies supported by reasonable and prudent judgments.
The External Auditors are responsible for reporting on whether the Company’s financial statements are fairly presented.
The Directors report that:
(i) adequate accounting records and an effective system of internal controls and risk management have been maintained;
(ii) appropriate accounting policies supported by reasonable and prudent judgments and estimates have been used consistently;
(iii) applicable accounting standards have been adhered to. Any departure in the interest in fair presentation has been disclosed,
explained and quantified;
(iv) the Code of Corporate Governance has been adhered to. Reasons have been provided in the Statement of Compliance where
there has been non-compliance.
Approved by the Board of Directors on 30 March 2016 and signed on its behalf by:
Antoine L. Harel
Charles Harel
Chairman
Director
18
SECRETARY’S
CERTIFICATE
We certify that, to the best of our knowledge and belief, the Company has filed with the
Registrar of Companies all such returns as are required of the Company under the Companies
Act 2001.
For HM Secretaries Ltd
Company Secretary
30 March 2016
19
Independent Auditors’ Report to the Members
Year ended 31 December 2015
This report is made solely to the members of Compagnie des
Magasins Populaires Limitée, (the “Company”), as a body, in
accordance with Section 205 of the Companies Act 2001. Our
audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to
them in an auditors’ report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the Company’s members
as a body, for our audit work, for this report, or for the opinions we
have formed.
Report on the Financial Statements
We have audited the group financial statements of Compagnie
des Magasins Populaires Limitée and its subsidiaries (the “Group”)
and the Company’s separate financial statements on pages
21 to 63 which comprise the statements of financial position at
31 December 2015, the statements of profit or loss and other
comprehensive income, statements of changes in equity and
statements of cash flows for the year then ended, and a summary
of significant accounting policies and other explanatory notes.
Directors’ Responsibility for the Financial Statements
The directors are responsible for the preparation and fair
presentation of these financial statements in accordance with
International Financial Reporting Standards and in compliance
with the requirements of the Companies Act 2001, and for such
internal control as the directors determine is necessary to enable
the preparation of the financial statements that are free from
material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those
Standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance whether
the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditors’ judgement,
including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making
those risk assessments, the auditors consider internal control
relevant to the Company’s preparation and fair presentation
of the financial statements in order to design audit procedures
that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the
Company’s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the directors,
as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
20
Opinion
In our opinion, the financial statements on pages 21 to 63 give a
true and fair view of the financial position of the Group and of the
Company at 31 December 2015, and of their financial performance
and their cash flows for the year then ended in accordance with
International Financial Reporting Standards and comply with the
Companies Act 2001.
Emphasis of matter
We draw attention to note 2(b) to the financial statements
regarding the financial position of the Group and of the Company
and the measures being taken to recapitalise the Company.
Report on Other Legal and Regulatory Requirements
Companies Act 2001
We have no relationship with, or interests in, the Company or any
of its subsidiaries, other than in our capacity as auditors, business
advisers and dealings in the ordinary course of business.
We have obtained all information and explanations we have
required.
In our opinion, proper accounting records have been kept by
the Company as far as it appears from our examination of those
records.
The 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
Chartered Accountants
Port Louis,
Mauritius.
30 March 2016
Rookaya Ghanty, F.C.C.A
Licensed by FRC
.
Statements of Financial Position
THE GROUP
Notes
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Investments in subsidiary companies
Investments in financial assets
Non-current receivables
Deferred tax assets
2015
Rs
THE COMPANY
2014
Rs
2015
Rs
2014
Rs
5
6
7
8
9
13
260,729,946
909,554
1,148,481
5,678,157
268,466,138
200,493,056
1,216,692
28,140,316
2,816,042
232,666,106
182,441,625
204,850
30,005,000
1,148,481
135,342,556
349,142,512
119,931,112
407,449
30,005,000
28,140,316
40,010,000
218,493,877
10
11
25(b)
111,737,998
29,942,602
21,013,571
162,694,171
112,519,589
21,690,167
24,998,949
159,208,705
36,493,557
8,858,358
4,902,168
50,254,083
45,704,152
31,693,642
8,072,945
85,470,739
431,160,309
391,874,811
399,396,595
303,964,616
12
21,935,000
68,484
133,051,781
(1,213,973)
(2,071,060)
(125,626,205)
26,144,027
21,935,000
68,484
73,233,010
712,840
(512,484)
(42,074,116)
53,362,734
21,935,000
68,484
133,051,781
(1,213,973)
(2,531,282)
(2,203,920)
149,106,090
21,935,000
68,484
73,233,010
712,840
(512,484)
11,797,444
107,234,294
Non current liabilities
Deferred tax liabilities
Retirement benefit obligations
Borrowings
13
14
16
7,998,135
11,679,222
98,381,135
118,058,492
4,987,232
8,756,337
113,767,621
127,511,190
7,998,135
9,771,397
65,691,624
83,461,156
4,987,232
7,183,909
68,514,613
80,685,754
Current liabilities
Trade and other payables
Borrowings
Dividend payable
15
16
17
205,557,035
81,400,755
286,957,790
183,083,581
26,820,556
1,096,750
211,000,887
97,992,080
68,837,269
166,829,349
99,814,033
15,133,785
1,096,750
116,044,568
431,160,309
391,874,811
399,396,595
303,964,616
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
EQUITY AND LIABILITIES
Capital and reserves
(attributable to owners of the parent)
Stated capital
Share premium
Revaluation surplus
Fair value reserve
Actuarial reserve
(Revenue deficit)/retained earnings
Owners’ interests
Total equity and liabilities
These financial statements have been approved for issue by the Board of Directors on 30 March 2016.
Antoine L Harel
Charles Harel
Chairman
Director
The notes on pages 26 to 63 form an integral part of these financial statements.
Auditors’ report on page 20.
21
Statements of Profit or Loss and
Other Comprehensive Income
THE GROUP
THE COMPANY
Notes
2015
Rs
2014
Rs
2015
Rs
2(m)
822,741,004
606,304,306
270,290,725
261,771,796
Cost of sales
(682,111,337)
(498,334,946)
(219,159,607)
(207,821,507)
Gross profit
140,629,667
107,969,360
51,131,118
53,950,289
7,979,440
5,528,609
7,864,380
3,326,653
(203,701,901)
(153,916,965)
(61,837,754)
(59,286,763)
(22,312,209)
(21,351,707)
(6,175,326)
(6,434,325)
Turnover
Other income
Administrative expenses
18
19(a)
Depreciation and amortisation
2014
Rs
Loss before finance costs
19
(77,405,003)
(61,770,703)
(9,017,582)
(8,444,146)
Finance costs
20
(10,978,862)
(7,304,338)
(6,872,227)
(3,943,293)
(88,383,865)
(69,075,041)
(15,889,809)
(12,387,439)
3,352,328
3,322,527
408,997
506,485
(85,031,537)
(65,752,514)
(15,480,812)
(11,880,954)
24
24
(1,558,576)
61,298,219
(486,222)
-
(2,018,798)
61,298,219
(486,222)
-
24
(1,658,840)
(810,814)
(1,658,840)
(810,814)
24
(267,973)
57,812,830
1,208,137
(88,899)
(267,973)
57,352,608
1,208,137
(88,899)
Total comprehensive income for the year
(27,218,707)
(65,841,413)
41,871,796
(11,969,853)
Loss attributable to:
Owners of the parent
(85,031,537)
(65,752,514)
(15,480,812)
(11,880,954)
Total comprehensive income attributable to:
Owners of the parent
(27,218,707)
(65,841,413)
41,871,796
(11,969,853)
(38.77)
(29.98)
(7.06)
(5.42)
Loss before taxation
Taxation credit
22(b)
Loss for the year
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Remeasurement of defined benefit obligations
Gains on revaluation of land and buildings
Reclassification adjustments on disposal of available-forsale financial assets included in profit or loss
Items that may be reclassified subsequently
to profit or loss:
Change in value of available-for-sale financial assets
Other comprehensive income for the year, net of tax
Loss per share
23
22
Statements of Changes in Equity
Attributable to owners of the parent
Note
Share
capital
Rs
Share
premium
Rs
Revaluation
surplus
Rs
Fair value
reserve
Rs
(Revenue
deficit)/
retained
earnings
Rs
Actuarial
losses
Rs
Total
Rs
THE GROUP
Balance at
1 January 2015
Loss for the year
Other comprehensive
income for the year
Total comprehensive
income for the year
Release of excess
depreciation on
revalued buildings
Balance at
31 December 2015
Balance at
1 January 2014
Loss for the year
Other comprehensive
income for the year
Total comprehensive
income for the year
Release of excess
depreciation on
revalued buildings
Dividends
Balance at
31 December 2014
17
21,935,000
68,484
73,233,010
712,840
(512,484)
(42,074,116)
53,362,734
-
-
-
-
-
(85,031,537)
(85,031,537)
-
-
61,298,219
(1,926,813)
(1,558,576)
-
57,812,830
-
-
61,298,219
(1,926,813)
(1,558,576)
(85,031,537)
(27,218,707)
-
-
(1,479,448)
-
-
1,479,448
-
21,935,000
68,484
133,051,781
(1,213,973)
(2,071,060)
21,935,000
68,484
74,745,206
315,517
(26,262)
23,262,952
120,300,897
-
-
-
-
-
(65,752,514)
(65,752,514)
-
-
-
397,323
(486,222)
-
(88,899)
-
-
-
397,323
(486,222)
(65,752,514)
(65,841,413)
-
-
(1,512,196)
-
-
-
1,512,196
(1,096,750)
(1,096,750)
21,935,000
68,484
73,233,010
712,840
(512,484)
(125,626,205) 26,144,027
(42,074,116) 53,362,734
23
Statements of Changes in Equity
Note
Share
capital
Rs
Share
premium
Rs
Revaluation
surplus
Rs
Fair value
reserve
Rs
Retained
earnings/
(revenue
deficit)
Rs
Actuarial
losses
Rs
Total
Rs
THE COMPANY
Balance at 1 January 2015
Loss for the year
Other comprehensive
income for the year
Total comprehensive
income for the year
21,935,000
68,484
73,233,010
712,840
(512,484)
11,797,444
107,234,294
-
-
-
-
-
(15,480,812)
(15,480,812)
-
-
61,298,219
(1,926,813)
(2,018,798)
-
57,352,608
-
-
61,298,219
(1,926,813)
(2,018,798)
(15,480,812)
41,871,796
1,479,448
-
Release of excess
depreciation on revalued
buildings
Balance at
31 December 2015
-
-
(1,479,448)
-
-
21,935,000
68,484
133,051,781
(1,213,973)
(2,531,282)
Balance at 1 January 2014
21,935,000
68,484
74,745,206
315,517
(26,262)
23,262,952
120,300,897
-
-
-
-
-
(11,880,954)
(11,880,954)
-
-
-
397,323
(486,222)
-
(88,899)
-
-
-
397,323
(486,222)
(11,880,954)
(11,969,853)
-
-
(1,512,196)
-
-
-
1,512,196
(1,096,750)
(1,096,750)
21,935,000
68,484
73,233,010
712,840
(512,484)
Loss for the year
Other comprehensive
income for the year
Total comprehensive
income for the year
Release of excess
depreciation on revalued
buildings
Dividends
Balance at
31 December 2014
17
24
(2,203,920) 149,106,090
11,797,444 107,234,294
Statements of Cash Flows
THE GROUP
Notes
Cash flows from operating activities
Cash (used in)/generated from operations
Interest paid
Refund of tax/(tax paid)
Net cash used in operating activities
2015
Rs
THE COMPANY
2015
Rs
2014
Rs
2014
Rs
(43,297,676)
(11,125,270)
79,412
(54,343,534)
(8,234,785)
(7,295,296)
(139,715)
(15,669,796)
(3,077,008)
(7,018,631)
79,412
(10,016,227)
4,013,726
(3,934,251)
(139,715)
(60,240)
(15,658,208)
(130,552)
(4,548,137)
33,868,787
17,391
17,054
77,295
13,643,630
(31,637,058)
(1,424,527)
(20,776,963)
18,396,712
1,930,980
260,620
(33,250,236)
(2,004,624)
(25,404)
(4,548,137)
(68,958,208)
33,868,787
17,391
17,054
77,295
(41,555,846)
(1,427,738)
(472,477)
(20,776,963)
(30,000,000)
(40,010,000)
18,396,712
56,630
260,620
(73,973,216)
(1,096,750)
(11,877,922)
(2,509,163)
(15,483,835)
(1,096,750)
(8,258,128)
70,000,000
60,645,122
(1,096,750)
(191,152)
(2,509,163)
(3,797,065)
(1,096,750)
(70,708)
70,000,000
68,832,542
Net (decrease)/increase in cash and cash equivalents
(56,183,739)
11,725,090
(55,369,138)
(5,200,914)
Movement in cash and cash equivalents
At 1 January
(Decrease)/increase
Effect of foreign exchange rate changes
12,006,091
(56,183,739)
(3,614)
290,043
11,725,090
(9,042)
(4,919,913)
(55,369,138)
(3,614)
290,043
(5,200,914)
(9,042)
(44,181,262)
12,006,091
(60,292,665)
(4,919,913)
25(a)
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investments in financial assets
Purchase of investments in subsidiaries
Amount granted to subsidiary companies
Proceeds on disposal of investments in financial assets
Proceeds on disposal of property, plant and equipment
Interest received
Dividends received
Net cash generated from/(used in) investing activities
Cash flows from financing activities
Dividends paid
Finance lease principal payments
Loan repaid
Proceeds from long-term borrowings
Net cash (used in)/generated from financing activities
At 31 December
17
25(c)
25
1. GENERAL INFORMATION
Compagnie des Magasins Populaires Limitée is a limited liability company incorporated and domiciled in the Republic of Mauritius. The
address of its registered office is 18, Edith Cavell Street, Port Louis.
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.
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.
(a) Basis of preparation
The financial statements include the consolidated financial statements of the parent company and its subsidiary companies (the Group)
and the separate financial statements of the parent company (the Company).
The financial statements of Compagnie des Magasins Populaires Limitée 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 change in presentation in the current year. The financial statements are prepared under the historical cost convention,
except that:
(i) Land and buildings are carried at revalued amount.
(ii) Available-for-sale financial assets and relevant financial assets and financial liabilities are stated at fair value.
(i) Amendments to published Standards and Interpretations effective in the reporting period
Defined Benefit Plans: Employee Contributions (Amendments to IAS 19) applies to contributions from employees 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
vary with service will be required to recognise the benefit of those contributions over employee’s working lives. The amendment has
no impact on the Group’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
‘performance condition’ and ‘service condition’. The amendment had no impact on the Group’s financial statements.
IFRS 3, ‘Business combinations’ is amended to clarify that an obligation to pay contingent consideration which meets the definition
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 had no impact on the Group’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 had no impact on the Group’s financial statements.
IFRS 13 (Amendment), ‘Fair Value Measurement’ clarifies in the Basis for Conclusions that short-term receivables and payables with no
stated interest rates can be measured at invoice amounts when the effect of discounting is immaterial. The amendment had no impact
on the Group’s financial statements.
IAS 16, ‘Property, plant and equipment’ and IAS 38, ‘Intangible assets’ are amended to clarify how the gross carrying amount and the
accumulated depreciation are treated where an entity uses the revaluation model. The amendment had no impact on the Group’s
financial statements.
IAS 24,‘Related party disclosures’ is amended to include, as a related party, an entity that provides key management personnel
services to the reporting entity or to the parent of the reporting entity (the ‘management entity’). Disclosure of the amounts charged to
the reporting entity is required. The amendment had no impact on the Group’s financial statements.
IAS 38, ‘Intangible Assets’ is amended to require an entity to take into account accumulated impairment losses when adjusting the
amortisation on revaluation. The amendment had no impact on the Group’s financial statements.
26
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(a) Basis of preparation (cont’d)
(i) Amendments to published Standards and Interpretations effective in the reporting period (Cont’d)
Annual Improvements 2011-2013 Cycle
IFRS 1, ‘First-time Adoption of International Financial Reporting Standards’ is amended to clarify in the Basis for Conclusions that an
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
had no impact on the Group’s financial statements, since the Group 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 had no impact on the Group’s financial statements.
IFRS 13, ‘Fair value measurement’ is amended to clarify that the portfolio exception in IFRS 13 applies to all contracts (including nonfinancial contracts) within the scope of IAS 39 or IFRS 9. The amendment had no impact on the Group’s financial statements.
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 Group’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 Group has not early adopted.
At the reporting date of these financial statements, the following were in issue but not yet effective:
IFRS 9 Financial Instruments
Defined Benefit Plans: Employee Contributions (Amendments to IAS 19)
IFRS 14 Regulatory Deferral Accounts
Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11)
Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38)IFRS 15 Revenue from
Contract with Customers
Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41)
Equity Method in Separate Financial Statements (Amendments to IAS 27)
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28)
Annual Improvements to IFRSs 2012-2014 Cycle
Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28)
Disclosure Initiative (Amendments to IAS 1)
Where relevant, the Group is still evaluating the effect of these Standards, amendments to published Standards and Interpretations
issued but not yet effective, on the presentation of its financial statements.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree
of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in
Note 4.
(b) Going concern
At 31 December 2015, the Group and the Company had revenue deficit of Rs.125.6m and Rs.2.2m respectively, with an overall owners’
interests of Rs.26.1m and Rs.149.1m respectively. The Board of Directors has resolved to proceed with a rights issue of Rs.141m, subject
to the approval of shareholders, which will be utilised for further developments and working capital purposes with a view to enhancing
revenue. In addition, the Company is in process of restructuring its debt to a longer maturity
The Directors consider it appropriate to prepare the financial statements on a going concern basis.
27
(c) Property, plant and equipment
Land and buildings are stated at their fair value based on valuations by external independent valuers, less subsequent depreciation for
buildings. The revaluation surplus is adjusted to the cost or revalued amount of the asset. All other property, plant and equipment is
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 future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.
Increases in the carrying amount arising on revaluation are credited net of deferred tax to other comprehensive income and shown
in ‘Revaluation Surplus’ in shareholders’ equity. Decreases that offset previous increases of the same asset are charged against
revaluation surplus directly in other comprehensive income; all other decreases are charged to profit or loss.
Each year, the difference between depreciation based on the revalued carrying amount of the assets charged to profit or loss and
depreciation based on the assets’ original cost is transferred from revaluation surplus to retained earnings.
Depreciation is calculated on the straight line method to write off cost or the revalued amount of the assets to their residual values over
their estimated useful lives. The principal annual depreciation rates are as follows:
- Buildings
- Improvement to buildings
- Motor vehicles
- Plant and equipment
- Furniture and fittings
44 years
6.6 years
5 years
5-20 years
5-10 years
Land is not depreciated.
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 disposal of property, plant and equipment are determined by comparing proceeds with carrying amount and are
included in profit or loss. On disposal of revalued assets, the amounts included in “Revaluation surplus” are transferred to “Retained
Earnings”.
(d) Intangible assets
Computer software
Acquired computer software licences are capitalised on the basis of costs incurred to acquire and bring to use the specific software
and are amortised using the straight line method over 3 - 5 years.
(e) Investments in subsidiaries
Separate financial statements of the investor
In the separate financial statements of the investor, investments in subsidiary companies are carried at cost. The carrying amount is
reduced to recognise any impairment in the value of individual investments.
Consolidated financial statements
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group
is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date
that control ceases.
28
(e) Investments in subsidiaries
Consolidated financial statements (cont’d)
The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group.
The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement.
Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group
recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the
acquiree’s net assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair
value of any previous equity interest in the acquiree (if any) over the fair value of the identifiable net assets acquired is recorded as
goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference
is recognised directly in profit or loss as a bargain purchase gain.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised
losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
Transactions with non-controlling interests
The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from noncontrolling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets
of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
Disposal of subsidiaries
When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value, with the change in carrying
amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the
retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised other comprehensive
income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean
that amounts previously recognised in other comprehensive income are reclassified to profit or loss.
(f) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined by the weighted average method. Net realisable
value is the estimate of the selling price in the ordinary course of business, less selling expenses.
(g) 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
which the entity operates (“functional currency”). The financial statements are presented in Mauritian rupees, which is the Company’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 cash and cash equivalents are presented in profit or loss within finance costs. Foreign
exchange gains and losses that relate to trade payables are accounted in cost of sales. All other foreign exchange gains and losses
are presented in profit or loss within ‘other (losses)/gains - 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.
29
(g) Foreign currencies (cont’d)
(ii) Transactions and balances (Cont’d)
Translation differences on non-monetary items, such as equities held at fair value through profit or loss, are reported as part of the fair
value gain or loss. Translation differences on non-monetary items, such as equities classified as available-for-sale financial assets, are
included in the fair value reserve in equity.
(h) Current and deferred income tax
Tax expense 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, for all temporary differences arising between the tax bases of assets
and liabilities and their carrying values 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 transactions 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 of the reporting date and are
expected to apply in the period when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which deductible
temporary differences can be utilised.
(i) Retirement benefit obligations
(i) Defined benefit plan
A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit plans define an amount of
pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service
and compensation.
The liability recognised in the statement of financial position in respect of defined benefit pension plans is the present value of the
defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated
annually by independent actuaries using the projected unit credit method.
Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses arising from experience adjustments
and changes in actuarial assumptions, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding
interest), is recognised immediately in other comprehensive income in the period in which they occur. Remeasurements recognised in
other comprehensive income shall not be reclassified to profit or loss in subsequent period.
The Group determines the net interest expense/(income) on the net defined benefit liability/(asset) for the period by applying the
discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit liability/
(asset), taking into account any changes in the net defined liability/(asset) during the period as a result of contributions and benefit
payments. Net interest expense/(income) is recognised in profit or loss.
Service costs comprising current service cost, past service cost, as well as gains and losses on curtailments and settlements are
recognised immediately in profit or loss.
(ii) Gratuity on retirement
For employees who are not covered (or who are insufficiently covered by the above pension plan), the net present value of retirement
gratuity 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.
(iii) Profit sharing and bonus plans
The Company recognises a liability and an expense for bonuses and profit sharing based on a formula that takes into consideration
the profitability of the Company after certain adjustments. The Company recognises a provision where contractually obliged or where
there is a past practice that has created a constructive obligation.
30
(i) Retirement benefit obligations (cont’d)
(iv) Defined contribution plans
A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group 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.
Payments to defined contribution plans are recognised as an expense when employees have rendered service that entitle them to the
contributions.
(j) Financial instruments
Financial assets
Categories of financial assets
The Company classifies its financial assets in the following categories: loans and receivables and available-for-sale financial assets.
The classification depends on the purpose for which the investments were acquired. Management determines the classification of its
investments at initial recognition.
(i) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
They arise when the Group provides money, goods or services directly to a debtor with no intention of trading the receivable. They
are included in current assets when maturity is within twelve months after the end of the reporting period or non-current assets for
maturities greater than twelve months.
(ii) 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
after the end of the reporting period.
Initial measurement
Purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase or sell the
asset. Investments are initially measured at fair value plus transaction costs.
Derecognition
Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred
and the Group has transferred substantially all risks and rewards of ownership
Subsequent measurement
Available-for-sale financial assets are subsequently carried at their fair values. Loans and receivables are carried at amortised cost
using the effective interest method.
Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably
measured are measured at cost.
Unrealised gains and losses arising from changes in the fair value of financial assets classified as available-for-sale are recognised in
other comprehensive income. When financial assets classified as available-for-sale are sold or impaired, the accumulated fair value
adjustments are included in profit or loss as gains and losses on disposal of financial assets.
Impairment of financial assets
Financial assets classified as available-for-sale
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial
assets is impaired. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of
the security below its cost is considered in determining whether the securities are impaired. If any such evidence exists for availablefor-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 the 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.
31
(j) Financial instruments (cont’d)
(ii) Available-for-sale financial assets (cont’d)
Impairment of financial assets (cont’d)
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
the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial
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, 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, the previously recognised impairment loss is reversed through profit or loss to the
extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost
would have been had the impairment not been recognised.
(iii) Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence
that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision
is the difference between the asset’s carrying amount and the present value of estimated future cash flow. The amount of provision is
recognised in profit or loss.
(iv) Borrowings
Borrowings are recognised initially at fair value being their issue proceeds net of transaction costs incurred.
Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the
redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.
Finance charges are accounted for on an accrual basis and are added to the carrying amount of the instrument to the extent that they
are not settled in the period in which they arise.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least
twelve months after the end of the reporting period.
(v) Trade and other payables
Trade and other payables are stated at fair value and subsequently measured at amortised cost using the effective interest method.
(vi) Share capital
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.
(vii) Cash and cash equivalents
Cash and cash equivalents comprise of cash in hand, cash at bank, other short term investments with original maturities of 3 months or
less, loan at call and bank overdraft. Cash equivalents are short highly liquid investments that are readily convertible to known amounts
of cash and which are subject to any insignificant risk of change in value. Loan at call and bank overdrafts are shown within borrowings
in current liabilities in the statement of financial position.
(k) Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject
to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).
32
(l) Leases
Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards of ownership to
the lessee. All other leases are classified as operating leases. Payments made under operating leases (net of any incentives received
from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.
Accounting for leases
Finance leases are capitalised at the lease’s inception at the lower of the fair value of the leased asset and the present value of the
minimum lease payments. Each lease payment is allocated between the liability between the liability and finance charge so as to
achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss.
(m) Revenue recognition
Revenue is measured at the fair value of the consideration received and represents amounts receivable for goods supplied, stated net
of discounts, returns, value added tax and rebates.
Sales of goods are recognised when goods are delivered and title has passed, at which time all of the following conditions are satisfied:
• the Group has transferred to the buyer all the significant risks and rewards of ownership of the goods;
• the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control
over the goods sold;
• the amount of the revenue can be measured reliably;
• it is probable that economic benefits associated with the transaction will flow to the Group; and
• the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Other revenues earned by the Group are recognised on the following bases :
• Interest income - on a time-proportion basis using the effective interest method. When a receivable is impaired, the Group reduces
the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate.
• Rental income - as it accrues and in accordance with the substance of the relevant agreement unless collectability is in doubt.
• Commission - on an accruals basis.
• Dividend income- when the shareholder’s right to receive payment is established
(n) Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events and it is probable
that an 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
the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the
cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of
the time value of money is material).
(o) Segment reporting
Segment information presented relate to operating segments that engage in business activities for which revenues are earned and
expenses incurred.
(p) Alternative Minimum Tax (AMT)
Alternative Minimum Tax (AMT) is provided for, where a company which has a tax liability of less than 7.5% of its book profit pays a
dividend. AMT is calculated as the lower of 10% of the dividend paid and 7.5% of book profit.
(q) Dividend distribution
Dividend distribution to the shareholder’s is recognised as a liability in the financial statements in the period in which the dividends are
declared.
33
3. FINANCIAL RISK MANAGEMENT
3.1 Financial risk factors
The Group’s activities expose it to a variety of financial risks which have to be effectively managed so as to protect its long term
sustainability and to safeguard the interests of its stakeholders.
The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the Group’s financial performance.
A description of the significant risk factors is given below together with risk management policies applicable.
(a) Market risk (including currency risk, price risk and cash flow and fair value interest rate risk);
(b) Credit risk; and
(c) Liquidity risk
(a) Market risk
(i) Currency risk
The Group imports goods from foreign countries and is exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to the Euro and the US dollar. Foreign exchange risk arises from future commercial transactions and recognised
assets and liabilities.
The foreign exchange risk exposure is managed based on a defined policy whereby fluctuations in exchange rates are monitored by
management and best rates are negotiated with banks.
Currency profile
The currency profile of the Group’s financial assets and liabilities at the end of the reporting date is summarised below:
THE GROUP
At 31 December 2015
Assets
Investment in financial assets
MUR
Rs
USD
Rs
EURO
Rs
TOTAL
Rs
1,148,481
29,942,602
20,902,558
47,171
63,842
1,148,481
29,942,602
21,013,571
179,781,890
186,955,076
-
18,601,959
179,781,890
205,557,035
At 31 December 2014
Assets
11,326,687
21,690,167
22,464,022
16,813,629
2,491,168
43,759
28,140,316
21,690,167
24,998,949
Liabilities
Borrowings
140,588,177
157,939,783
-
25,143,798
140,588,177
183,083,581
Liabilities
Borrowings
34
3.
FINANCIAL RISK MANAGEMENT (CONT’D)
3.1 Financial risk factors (cont’d)
(a)
(i)
Market risk (cont’d)
Currency risk (cont’d)
THE COMPANY
At 31 December 2015
Assets
MUR
Rs
USD
Rs
EURO
Rs
TOTAL
Rs
1,148,481
8,858,358
4,791,155
47,171
63,842
1,148,481
8,858,358
4,902,168
134,528,893
79,390,121
-
18,601,959
134,528,893
97,992,080
At 31 December 2014
Assets
11,326,687
31,693,642
5,538,018
16,813,629
2,491,168
43,759
28,140,316
31,693,642
8,072,945
Liabilities
Borrowings
83,648,398
74,670,235
-
25,143,798
83,648,398
99,814,033
Liabilities
Borrowings
Sensitivity analysis
At 31 December 2015, if the Rupee had weakened/strengthened by 5% against the following currencies, with all other variables
held constant, result for the year would have been higher/lower, mainly as a result of foreign exchange gains/losses on translation
of the following currencies:
THE GROUP AND THE COMPANY
At 31 December 2015
Cash in hand and at bank - impact on loss for the year
USD
Rs
EURO
Rs
+/-
+/-
2,359
3,192
-
930,098
Trade and other payables - impact on loss for the year
At 31 December 2014
+/-
Investment in financial assets - impact on other comprehensive income
Cash in hand and at bank - impact on loss for the year
840,681
124,558
2,188
-
1,257,190
Trade and other payables - impact on profit for the year
+/-
35
3.
3.1 Financial risk factors (cont’d)
(a)
Market risk (cont’d)
(ii)
Price risk
The Group is exposed to price risk because of investments held by the Group and classified in the statements of financial
position as available-for-sale and which are valued at their market price.
To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification is done in
accordance with the limits set by the Group.
The table below summarises the impact of increases/decreases in the fair value of investments in financial assets on the Group’s
and the Company’s equity.
The analysis is based on the assumption that the fair value had increased/decreased by 5%.
Impact on equity
THE GROUP AND
THE COMPANY
2015
Rs
Available- for-sale financial assets
57,424
2014
Rs
1,407,016
(iii) Cash flow and fair value interest rate risk
The Group’s interest rate risk arises principally from borrowings and deposits held at bank. Borrowings issued and deposits held
at variable rates expose the Group to cash flow interest rate risk.
The Group has an interest rate policy which aims at minimising the annual interest costs using a mix of fixed and variable rate debts.
The Group’s interest rate risk arises mainly from its bank loan and loan at call.
Interest rate risk
At the end of the reporting date, if variable interest rates on Rupee denominated floating rate borrowings had been 50 basis
points higher/lower with all variables held constant, post tax results for the year would have been higher/lower as follows:
THE GROUP AND
THE COMPANY
Impact on results
(b)
2015
Rs
+/-
2014
Rs
+/-
600,922
352,720
Credit risk
Credit risk is the risk of financial loss to the Group if a customer fails to meet its contractual obligations and arises principally from
the Group’s trade receivables.
The Group has no significant concentration of credit risk as it operates in the retail sector where transactions are mostly carried
out on cash basis. The Group has policies in place to ensure that credit sales are made to customers with an appropriate credit
history.
In the Company’s separate financial statements, other receivable from one of the subsidiaries amounted to Rs.95,332,556 as at
31 December 2015. Management does not forsee any losses to arise from non-performance by the subsidiary.
36
3.
3.1 Financial Risk Factors (cont’d)
(c)
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivery of cash or another financial asset.
Prudent liquidity risk management includes maintaining sufficient cash and marketable securities, the availability of funding from
an adequate amount of committed credit facilities and the ability to close out market positions. The Group aims at maintaining
flexibility in funding by keeping committed credit lines available.
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the
end of the reporting date to the contractual maturity date.
Within
1 year
Rs
After 1 year
but before 2
years
Rs
After
2 years but
before
5 years
Rs
After
5 years
Rs
TOTAL
Rs
THE GROUP
At 31 December 2015
Borrowings
81,400,755
205,557,035
17,413,836
-
32,481,067
-
48,486,232
-
179,781,890
205,557,035
At 31 December 2014
Borrowings
26,820,556
183,083,581
15,901,674
-
44,132,472
-
53,733,475
-
140,588,177
183,083,581
THE COMPANY
At 31 December 2015
Borrowings
68,837,269
97,992,080
3,907,871
-
13,297,521
-
48,486,232
-
134,528,893
97,992,080
At 31 December 2014
Borrowings
15,133,785
99,814,033
3,338,195
-
11,442,943
-
53,733,475
-
83,648,398
99,814,033
37
3.
3.2 Capital risk management
The Group’s objective when managing capital is to safeguard the Group’s ability to continue as a going concern so that it can
continue to provide returns for shareholders and benefits for other stakeholders.
The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it
in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust
the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders or sell
assets to reduce debt.
Consistently with others in the industry, the Group monitors capital on the basis of the debt-to-adjusted capital ratio. This ratio is
calculated as net debt adjusted capital. Net debt is calculated as total debt (as shown in the statement of financial position) less
cash in hand and at bank, adjusted capital comprises all components of equity.
The debt-to-adjusted capital ratios at 31 December 2015 and at 31 December 2014 were as follows:
THE GROUP
2015
Rs
Total debt
Less: cash in hand and at bank (note 25(b))
Net debt
Adjusted capital
Debt-to-adjusted capital ratio
179,781,890
(21,013,571)
158,768,319
THE COMPANY
2014
Rs
2015
Rs
2014
Rs
140,588,177 134,528,893
(24,998,949)
(4,902,168)
115,589,228 129,626,725
83,648,398
(8,072,945)
75,575,453
26,144,027
53,362,734
149,106,090
107,234,294
6.07:1
2.17:1
0.87:1
0.7:1
There were no changes in the Group’s approach to capital risk management during the year.
3.3 Fair value estimation
The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting period.
A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry
group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions
on an arm’s length basis. The quoted market price used for financial assets held by the Group is the current bid price. These
instruments included in level 1 comprise primarily quoted equity investments classified as available-for-sale.
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These
valuation techniques maximise the use of observable market data where it is available and rely as little as possible on specific
estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
38
4. CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Group’s accounting policies. The major estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year are stated hereunder:(i) Revaluation of property, plant and equipment
The Group measures property, plant and equipment at revalued amounts with changes in fair value being recognised in other
comprehensive income. The Group appointed independent valuation specialists to determine the value of the property, plant and
equipment. As part of the revaluation process, the use of judgement to determine the fair value is necessary. Land is valued on the basis
of recently transacted properties in the region. Building is revalued using the depreciated replacement cost method.
(ii) Retirement benefit obligations
The cost of defined benefit pension plans is determined using actuarial valuations. The actuarial valuation involves making assumptions
about discount rates, expected rates of return on assets, future salary increases, mortality rates and future pension increases. Due to
the long term nature of these plans, such estimates are subject to significant uncertainty. Any changes in the assumptions will impact
the carrying amount of pension obligations. The Group determines the appropriate discount rate at the end of each year. This is the
interest rate that should be used to determine the present value of estimated future cash flows expected to be required to settle the
pension obligations. In determining the appropriate discount rate, the Group considers the interest rates of high-quality corporate bonds
that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the
related pension obligation.
(iii) Limitation of sensitivity analysis
Sensitivity analysis in respect of market risk demonstrates the effect of a change in a key assumption while other assumptions remain
unchanged. In reality, there is a correlation between the assumptions and other factors. It should also be noted that these sensitivities
are non-linear and larger or smaller impacts should not be interpolated or extrapolated from these results.
Sensitivity analysis does not take into consideration that the Group’s assets and liabilities are managed. Other limitations include the use
of hypothetical market movements to demonstrate potential risk that only represent the Group’s view of possible near-term market
changes that cannot be predicted with any certainty.
(iv) Asset lives and residual values
Property, plant and equipment are depreciated over its useful life taking into account residual values, where appropriate. The actual
lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In reassessing asset
lives, factors such as technological innovation, and maintenance programmes are taken into account. Residual value assessments
consider issues such as future market conditions, the remaining life of the asset and projected disposal values. Consideration is also
given to the extent of current profits and losses on the disposal of similar assets.
(v) 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 Group 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.
The directors therefore make estimates based on historical experience and use best judgement to assess the useful lives of assets
and to forecast the expected residual values of the assets at the end of their expected useful lives.
(vi) Impairment of available-for-sale financial assets
The Group follows the guidance of International Accounting Standards (IAS) 39 in determining when an investment is other-thantemporarily impaired. This determination requires significant judgement. In making this judgement, the Group evaluates, among other
factors, the duration and extent to which the fair value of an investment is less than its cost and the financial health of and near-term
business outlook for the investee, including factors such as industry and sector performance, and operational and financing cash flow.
39
5.
(a)
PROPERTY, PLANT AND EQUIPMENT
THE GROUP - 2015
COST/DEEMED
COST/ VALUATION
At 1 January 2015
Additions
Revaluation surplus
Transfer from
assets in progress
Disposal
At
31 December 2015
Buildings and
Improvement
to Buildings
Rs
Freehold
Land
Rs
Motor
Vehicles
Rs
Plant and
Equipment
Rs
Furniture &
Fittings
Rs
Assets in
progress
Rs
Total
Rs
65,100,000
39,900,000
81,216,415
261,307
25,174,377
5,294,612
1,615,115
-
132,115,182
3,329,573
-
37,918,025
1,317,390
-
4,926,013
10,513,647
-
326,570,247
17,037,032
65,074,377
-
15,439,660
-
(500,678)
-
-
(15,439,660)
-
(500,678)
105,000,000
122,091,759
6,409,049
135,444,755
39,235,415
-
408,180,978
-
39,294,190
3,632,316
1,632,490
942,912
57,299,486
15,171,258
27,851,025
2,128,033
-
126,077,191
21,874,519
-
-
-
(500,678)
DEPRECIATION
At 1 January 2015
Charge for the year
Disposal
adjustments
At
31 December 2015
-
-
(500,678)
-
42,926,506
2,074,724
72,470,744 29,979,058
-
147,451,032
NET BOOK VALUE
At
31 December 2015
105,000,000
79,165,253
4,334,325
62,974,011
-
260,729,946
9,256,357
Assets in progress related to renovation works carried out at one of the Group’s supermarket and which had not yet been
completed at the end of the previous reporting period.
(b)
Buildings and
Improvement
to Buildings
Rs
THE GROUP - 2014
Freehold
Land
Rs
Motor
Vehicles
Rs
Plant and
Equipment
Rs
Furniture &
Fittings
Rs
Assets in
progress
Rs
COST/DEEMED COST/
VALUATION
At 1 January 2014
Additions
Transfer from
assets in progress
65,100,000
-
80,190,538
1,025,877
1,116,337
4,178,275
53,717,987
78,243,401
28,745,486
9,116,939
209,394
4,926,013
229,079,742
97,490,505
-
-
-
153,794
55,600
(209,394)
-
At 31 December 2014
65,100,000
81,216,415
5,294,612
132,115,182
37,918,025
4,926,013
326,570,247
DEPRECIATION
At 1 January 2014
Charge for the year
-
36,790,538
2,503,652
1,116,337
516,153
42,075,963
15,223,523
25,122,833
2,728,192
-
105,105,671
20,971,520
At 31 December 2014
-
39,294,190
1,632,490
57,299,486
27,851,025
-
126,077,191
65,100,000
41,922,225
3,662,122
74,815,696
10,067,000
4,926,013
200,493,056
Total
Rs
NET BOOK VALUE
At 31 December 2014
40
5.
PROPERTY, PLANT AND EQUIPMENT (CONT’D)
(c)
Freehold
Land
Rs
Buildings and
Improvement
to Buildings
Rs
Motor
Vehicles
Rs
Plant and
Equipment
Rs
Furniture &
Fittings
Rs
Total
Rs
65,100,000
39,900,000
105,000,000
80,371,846
63,510
25,174,377
105,609,733
2,011,979
1,615,115
(500,678)
3,126,416
54,167,342
1,186,996
55,354,338
29,582,561
517,838
30,100,399
231,233,728
3,383,459
(500,678)
65,074,377
299,190,886
DEPRECIATION
At 1 January 2015
Charge for the year
Disposal adjustment
At 31 December 2015
-
39,282,972
2,512,550
41,795,522
1,224,275
293,316
(500,678)
1,016,913
44,280,798
2,185,049
46,465,847
26,514,571
956,408
27,470,979
111,302,616
5,947,323
(500,678)
116,749,261
NET BOOK VALUE
At 31 December 2015
105,000,000
63,814,211
2,109,503
8,888,491
2,629,420
182,441,625
THE COMPANY - 2015
COST/DEEMED COST/ VALUATION
At 1 January 2015
Additions
Disposals
Revaluation surplus
At 31 December 2015
(d)
(e)
THE COMPANY - 2014
Buildings and
Improvement
to Buildings
Rs
Freehold
Land
Rs
Motor
Vehicles
Rs
Plant and
Equipment
Rs
Furniture &
Fittings
Rs
Assets in
Progress
Rs
Total
Rs
COST/DEEMED COST/
VALUATION
At 1 January 2014
Additions
Transfer from assets
in progress
At 31 December 2014
65,100,000
-
80,190,538
181,308
1,116,337
895,642
53,717,987
295,561
28,745,486
781,475
65,100,000
80,371,846
2,011,979
153,794
54,167,342
55,600
29,582,561
DEPRECIATION
At 1 January 2014
Charge for the year
At 31 December 2014
-
36,790,538
2,492,434
39,282,972
1,116,337
107,938
1,224,275
42,075,963
2,204,835
44,280,798
25,122,833
1,391,738
26,514,571
-
105,105,671
6,196,945
111,302,616
NET BOOK VALUE
At 31 December 2014
65,100,000
41,088,874
787,704
9,886,544
3,067,990
-
119,931,112
209,394
-
229,079,742
2,153,986
(209,394)
- 231,233,728
Land and Buildings were revalued on 12 August 2015 by an independent valuer, Vyas M. Ramphul, M.R.I.C.S. Valuations were
made on the basis of open market value and depreciated replacement cost and 100% of the value was booked in the financial
statements. The book values of land & buildings were adjusted to the revalued amounts and the resulting surplus net of deferred
tax was credited to revaluation surplus. The fair value of the freehold land was derived using the sales comparison approach and
the fair value of the building was derived using the depreciated replacement cost.
41
5.
(f)
Details of the Group’s freehold land and buildings measured at fair value and information about the fair value hierarchy as at
31 December 2015 are as follows:
LEVEL 2
2015
Rs
2014
Rs
105,000,000
Freehold land
65,100,000
LEVEL 3
2015
Rs
2014
Rs
95,076,162
Buildings
69,901,785
There were no transfers between level 1 and level 2 during the year.
(g)
The fair value of the land was derived using the sales comparison approach. Sales prices of comparable land in proximity are adjusted
for differences in key attributes such as property size. The most significant input to this valuation approach is price per ‘toise’.
2015
Range
Significant unobservable valuations input
Price per toise
Rs 61,608 - 146,928
Significant movements in estimated price per ‘toise’ in isolation would result in a significantly higher/(lower) fair value.
The fair value of the buildings was determined using the depreciated replacement cost approach that reflects the cost of a
market participant to construct assets of comparable utility and age, adjusted for obsolescence.
The construction cost was estimated at Rs.2,000 per ft2 and the depreciated replacement cost estimated Rs.1,250 per ft2, after
allowing for depreciation and obsolescence.
(h)
Bank borrowings are secured on the assets of the Group, including property, plant and equipment.
(i)
If buildings were stated on the historical cost basis, the amounts would have been as follows:
THE GROUP
2015
Rs
Cost
Accumulated depreciation
Net book value
(i)
Assets in progress are made up of:
Improvement to building
(j)
2014
Rs
7,322,310
(3,339,862)
3,982,448
2015
Rs
7,322,310
(3,197,740)
4,124,570
2014
Rs
-
4,926,013
THE COMPANY
2015
Rs
2014
Rs
7,322,310
(3,339,862)
3,982,448
2015
Rs
2014
Rs
-
Additions include Rs1,378,835 (2014: Rs67,904,623) of assets under finance leases for the Group and Company.
42
7,322,310
(3,197,740)
4,124,570
-
5.
(k)
Leased assets included above comprise:
THE GROUP
THE COMPANY
2015
Motor
Vehicles
Rs
Plant and
Equipment
Rs
Cost - capitalised finance leases
Net book amount
3,825,725
768,018
3,057,707
59,312,876
14,905,622
44,407,254
2014
Motor
Vehicles
Rs
THE GROUP
Cost - capitalised finance leases
Net book amount
(l)
2,446,890
327,938
2,118,952
Furniture &
Fittings
Rs
6,144,856
1,473,341
4,671,515
Motor
Vehicles
Rs
2,274,477
383,018
1,891,459
THE COMPANY
Plant and
Equipment
Rs
59,332,185
10,364,335
48,967,850
Furniture &
Fittings
Rs
Motor
Vehicles
Rs
6,125,548
1,049,290
5,076,258
895,642
107,938
787,704
During 2015, the subsidiaries of the Group conducted a review of the useful lives of its fixed assets. Some of the furniture and
fittings, which the directors had previously intended to use for five years, are now expected to remain in use for eight years from
the date of purchase. As a result, the expected useful life of the furniture and fittings increased and its estimated residual value
decreased. The effect of these changes on actual and expected depreciation expense was as follows:
(Decrease)/
increase in
depreciation
Year
2015
2016
2017
2018
2019
Later
6.
(3,884,970)
(3,884,970)
(3,884,970)
(3,884,970)
6,474,950
9,064,930
INTANGIBLE ASSETS
THE GROUP
2015
Rs
THE COMPANY
2015
Rs
2014
Rs
2014
Rs
Computer software
COST
At 1 January
Additions
At 31 December
3,770,743
130,552
3,901,295
2,346,216
1,424,527
3,770,743
2,818,693
25,404
2,844,097
2,346,216
472,477
2,818,693
AMORTISATION
At 1 January
Amortisation charge
At 31 December
2,554,051
437,690
2,991,741
2,173,864
380,187
2,554,051
2,411,244
228,003
2,639,247
2,173,864
237,380
2,411,244
NET BOOK VALUE
At 31 December
909,554
1,216,692
204,850
407,449
43
7.
INVESTMENTS IN SUBSIDIARY COMPANIES
THE COMPANY
2015
Rs
30,005,000
30,005,000
At 1 January
Additions
At 31 December
(a)
8.
2014
Rs
15,000
29,990,000
30,005,000
The list of the Company’s subsidiaries is as follows:
Name
Class of
shares
held
Year end
Stated
capital
Rs
Proportion
of
ownership
interest
Direct
CMPL (Bagatelle) Limitée
CMPL (Cascavelle) Limitée
CMPL (Mont Choisy) Limitée
Ordinary
Ordinary
Ordinary
31 December
31 December
31 December
15,000,000
15,000,000
5,000
100%
100%
100%
Debt
securities
Place of
business and
country of
incorporation
Main
business
-
Mauritius
Mauritius
Mauritius
Retail
Retail
No activity
INVESTMENTS IN FINANCIAL ASSETS - AVAILABLE-FOR-SALE
Locally
Listed
Rs
At 1 January
Additions
Disposals
(Decrease)/increase in fair value
At 31 December
11,326,688
1,289,454
(11,199,688)
(267,973)
1,148,481
Overseas
Investments
2015
Rs
16,813,628
3,258,683
(20,072,311)
-
TOTAL
Rs
28,140,316
4,548,137
(31,271,999)
(267,973)
1,148,481
TOTAL
2014
Rs
23,358,216
20,776,963
(17,203,000)
1,208,137
28,140,316
The fair value of listed available-for-sale financial assets is based on the Stock Exchange quoted price at the close of business
at the reporting date. Overseas investments are valued at latest traded/bid price at year-end.
(a)
Available-for-sale financial assets are denominated in the following currencies.
THE GROUP AND
THE COMPANY
Currency
2015
Rs
1,148,481
1,148,481
MUR
USD
(b)
The table below analyses the fair value hierarchy of the Group’s and the Company’s financial assets.
(c)
Level 1
Rs
2014
Rs
11,326,687
16,813,629
28,140,316
Total
Rs
At 31 December 2015
Available-for-sale financial assets
- Equity securities
1,148,481
1,148,481
At 31 December 2014
Available-for-sale financial assets
- Equity securities
28,140,316
28,140,316
None of the financial assets are impaired.
44
9.
NON-CURRENT RECEIVABLES
THE COMPANY
2015
Rs
Subsidiary companies
40,010,000
95,332,556
135,342,556
- Loans to group companies
- Other receivable
2014
Rs
40,010,000
40,010,000
The loans are unsecured, carry interest at 7% and have no fixed terms of repayment.
Non-current receivables are not impaired.
Other receivable is unsecured, interest free and has no fixed terms of repayment.
10. INVENTORIES
THE GROUP
2015
Rs
Goods for resale
111,737,998
THE COMPANY
2015
Rs
2014
Rs
112,519,589
2014
Rs
36,493,557
45,704,152
(a)
The cost of inventories recognised as expense and included in cost of sales amounted to Rs682,111,337 for the Group
(2014: Rs498,334,946 ) and Rs219,159,607 for the Company (2014: Rs207,821,507).
(b)
The amount of impairment losses recognised as an expense in profit or loss is Rs24,185,809 for the Group (2014: Rs11,795,575)
and Rs6,329,131 for the Company (2014: Rs3,699,044).
(c)
Bank borrowings are secured on the assets of the Group including inventories.
11.
TRADE AND OTHER RECEIVABLES
THE GROUP
2015
Rs
Trade receivables
Other receivables
Group receivables:
- Amount receivable from holding company
- Amount receivable from subsidiary companies
- Amount receivable from fellow subsidiaries
THE COMPANY
2015
Rs
2014
Rs
2014
Rs
1,035,470
27,675,635
28,711,105
1,181,997
19,406,116
20,588,113
538,574
7,230,869
7,769,443
769,297
4,902,296
5,671,593
329,975
901,522
1,231,497
29,942,602
393,472
708,582
1,102,054
21,690,167
298,234
351,776
24,974,344
695,929
26,022,049
31,693,642
790,681
1,088,915
8,858,358
(a)
The carrying amounts of trade and other receivables approximate their fair values.
(b)
As at 31 December 2015, none of the Group’s trade receivables were impaired (2014: Rs Nil).
(c)
As at 31 December 2015, trade receivables of Rs317,847 (2014: Rs299,362) for the Group and Rs12,597 (2014: Rs116,003) for
the Company were past due but not impaired. These relate to certain individuals for whom there is no recent history of default.
The ageing analysis of these trade receivables is as follows:
THE GROUP
2015
Rs
Over 3 months
317,847
(d)
The Group’s trade and other receivables are denominated in Mauritian Rupees.
(e)
The other classes within trade and other receivables do not contain impaired assets.
THE COMPANY
2015
Rs
2014
Rs
299,362
12,597
2014
Rs
116,003
45
11.
TRADE AND OTHER RECEIVABLES (CONT’D)
(f)
The Group does not hold any collateral as security.
(g)
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above.
12. STATED CAPITAL
2015 & 2014
Rs
THE COMPANY
2,193,500 ordinary shares of Rs10 each
21,935,000
All issued shares are fully paid.
13. DEFERRED INCOME TAX
(a)
Deferred income taxes are calculated on all temporary differences under the liability method at 15% (2014: 15%).
There is a legally enforceable right to offset current tax assets against current tax liabilities and deferred income tax assets and
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:
THE GROUP
2015
Rs
Deferred tax assets
Deferred tax liabilities
(5,678,157)
7,998,135
2,319,978
2014
Rs
(2,816,042)
4,987,232
2,171,190
THE COMPANY
2015
Rs
7,998,135
7,998,135
2014
Rs
4,987,232
4,987,232
At the end of the reporting period, the Group had unused tax losses of Rs112,366,278 (2014: Rs45,293,928) and the Company
had unused tax losses of Rs21,427,044 (2014: Rs6,816,029) available for offset against future profits. No deferred tax asset has
been recognised in respect of these tax losses due to unpredictability of future profit streams. The tax losses expire on a rolling
basis over 5 years.
(b)
The movement on the deferred income tax account is as follows:
THE GROUP
2015
Rs
At 1 January
Credited to profit or loss (note 22(b))
Tax credited/(charged) to equity (note 24)
At 31 December
46
2,171,190
(3,352,328)
3,501,116
2,319,978
2014
Rs
5,579,521
(3,322,527)
(85,804)
2,171,190
THE COMPANY
2015
Rs
4,987,232
(408,997)
3,419,900
7,998,135
2014
Rs
5,579,521
(506,485)
(85,804)
4,987,232
13. DEFERRED INCOME TAX (CONT’D)
(c)
The movement in deferred tax assets and liabilities during the year, without taking into consideration the offsetting of balances
within the same fiscal authority on the same entity, is as follows:
THE GROUP
(i)
Accelerated
tax
depreciation
Rs
Deferred tax assets:
At 1 January 2014
Credited to equity
Credited to profit or loss
At 31 December 2014
Credited to equity
At 31 December 2015
(2,580,164)
(2,580,164)
(2,811,805)
(5,391,969)
Retirement
benefit
obligations
Rs
(860,229)
(85,804)
(367,430)
(1,313,463)
(275,042)
(163,390)
(1,751,895)
THE COMPANY
Retirement
benefit
obligations
Rs
Total
Rs
(860,229)
(85,804)
(2,947,594)
(3,893,627)
(275,042)
(2,975,195)
(7,143,864)
THE GROUP
(ii)
Deferred tax liabilities:
At 1 January 2014
At 31 December 2014
Charged to equity
At 31 December 2015
Accelerated
tax
depreciation
Rs
840,406
(158,236)
682,170
(124,718)
557,452
Revaluation
of assets
Rs
5,599,344
(216,697)
5,382,647
3,776,158
(252,415)
8,906,390
(860,229)
(85,804)
(131,552)
(1,077,585)
(356,258)
(31,866)
(1,465,709)
Total
Rs
(860,229)
(85,804)
(131,552)
(1,077,585)
(356,258)
(31,866)
(1,465,709)
THE COMPANY
Total
Rs
6,439,750
(374,933)
6,064,817
3,776,158
(377,133)
9,463,842
Accelerated
tax
depreciation
Rs
840,406
(158,236)
682,170
(124,718)
557,452
Revaluation
of assets
Rs
5,599,344
(216,697)
5,382,647
3,776,158
(252,413)
8,906,392
Total
Rs
6,439,750
(374,933)
6,064,817
3,776,158
(377,131)
9,463,844
47
14. RETIREMENT BENEFIT OBLIGATIONS
THE GROUP
2015
Rs
Amounts recognised in the statement of financial position:
Defined pension benefits (note (a)(ii))
Other post retirement benefits (note (b)(i))
Analysed as follows:
Non-current liabilities
Total expense:
- Defined pension benefits (note (a)(v))
- Other post retirement benefits (note (b)(iii))
Amount charged to other comprehensive income:
- Defined pension benefits (note (a)(vi))
- Other post retirement benefits (note (b)(iv))
(a)
2014
Rs
THE COMPANY
2015
Rs
2014
Rs
2,348,185
9,331,037
11,679,222
2,315,808
6,440,529
8,756,337
2,348,185
7,423,212
9,771,397
2,315,808
4,868,101
7,183,909
11,679,222
8,756,337
9,771,397
7,183,909
388,201
1,667,730
2,055,931
579,981
2,254,159
2,834,140
388,201
790,895
1,179,096
579,981
681,731
1,261,712
610,840
1,222,778
1,833,618
428,732
143,294
572,026
610,840
1,764,216
2,375,056
428,732
143,294
572,026
Defined pension benefits
The plan is a defined benefit arrangement with benefits based on final salary. It provides for a pension at retirement and a benefit
on death or disablement in service before retirement.
(i)
The assets of the fund are held independently and administered by an insurance company.
(ii)
The amounts recognised in the statement of financial position are as follows:
THE GROUP AND
THE COMPANY
2015
Rs
Present value of funded obligations
Fair value of plan assets
Liability in the statement of financial position
(iii)
4,911,015
(2,562,830)
2,348,185
2014
Rs
5,947,345
(3,631,537)
2,315,808
The movement in the defined benefit obligation over the year is as follows:
THE GROUP AND
THE COMPANY
2015
Rs
At 1 January
Current service cost
Interest cost
Actuarial losses
Benefits paid
At 31 December
48
5,947,345
203,603
358,007
506,601
(2,104,541)
4,911,015
2014
Rs
4,964,476
320,363
369,939
292,567
5,947,345
14. RETIREMENT BENEFIT OBLIGATIONS (CONT’D)
(a)
Defined pension benefits (cont’d)
(iv) The movement in the fair value of plan assets for the year is as follows:
THE GROUP AND
THE COMPANY
2015
Rs
At 1 January
Net interest income
Actuarial losses
Employer contributions
Cost insuring risk benefits
Benefits paid
At 31 December
(v)
(3,631,537)
(182,850)
104,239
(966,664)
9,441
2,104,541
(2,562,830)
2014
Rs
(3,277,365)
(238,239)
136,165
(380,016)
127,918
(3,631,537)
The amounts recognised in profit or loss are as follows:
THE GROUP AND
THE COMPANY
Net interest cost
Cost insuring risk benefits
Total included in employee benefit expense (note 19(b))
2015
Rs
2014
Rs
203,603
175,157
9,441
388,201
320,363
131,700
127,918
579,981
The total charge was included in ‘administrative expenses’.
(vi) The amounts recognised in other comprehensive income are as follows:
THE GROUP AND
THE COMPANY
Remeasurement on the net defined benefit liability:
Liability experience losses
Losses on pension scheme assets
Changes in assumptions underlying the present value of the scheme
2015
Rs
2014
Rs
(359,522)
(104,239)
(147,079)
(610,840)
(292,567)
(136,165)
(428,732)
(vii) The movement in liability is as follows:
THE GROUP AND
THE COMPANY
2015
Rs
At 1 January
Total expense
Actuarial losses
Employer contributions
At 31 December
2,315,808
388,201
610,840
(966,664)
2,348,185
2014
Rs
1,687,111
579,981
428,732
(380,016)
2,315,808
49
14.
RETIREMENT BENEFIT OBLIGATIONS (CONT’D)
(a)
(viii) The market value of assets is based on the reserves held for the deferred annuity policies for statutory purposes. This asset is
a notional value and does not represent the surrender value should the scheme be wound up.
(ix)
The expected return on plan assets was determined by considering the expected returns available on the assets underlying the
current investment policy.
(x)
Expected contributions to post-employment benefit plans for the year ending 31 December 2016 are Rs0.6m.
(xi)
Amounts for the current and previous years are as follows:
2015
Rs
Present value of defined benefit obligation
Fair value of plan assets
Deficit
Experience (losses)/gains on plan liabilities
Experience (losses)/gains on plan assets
(xii)
4,911,015
(2,562,830)
2,348,185
(506,601)
(104,239)
2014
Rs
5,947,345
(3,631,537)
2,315,808
(292,567)
(136,165)
2013
Rs
4,964,476
(3,277,365)
1,687,111
(151,323)
(170,727)
2012
Rs
4,136,681
(2,800,773)
1,335,908
(754,515)
(56,794)
2011
Rs
2,865,472
(2,424,770)
440,702
(49,182)
(85,008)
The principal actuarial assumptions used for accounting purposes were:
THE GROUP AND
THE COMPANY
2015
%
2014
%
7.00
7.00
5.00
Discount rate
Expected return on plan assets
Future salary increases
7.00
7.00
5.00
(xiii) The actual return on plan assets was Rs78,611 (2014: Rs102,074).
(xiv) Sensitivity analysis on defined benefit obligations to changes in the weighted principal assumptions is:
THE GROUP AND
THE COMPANY
31 December 2015
Discount rate (1% increase)
Future salary growth (1% increase)
Increase
Rs
301,748
31 December 2014
Rs
39,230
Decrease
Rs
266,244
Rs
46,245
-
The sensitivity analysis above has been determined based on sensibly possible changes of the discount rate or salary increase
rate occurring at the end of the reporting period if all other assumptions remained unchanged.
There were no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
50
14.
RETIREMENT BENEFIT OBLIGATIONS (CONT’D)
(a)
(xv)
The defined benefit pension plan exposes the company to actuarial risks, such as longevity risks, currency risks, interest rate
risk and market (investment) risk.
(xvi)
The funding requirements are based on the pension fund’s actuarial measurement framework set out in the funding policies of
the plan.
(xvii) The weighted average duration of the defined benefit obligation is 6 years at the end of the reporting period.
(b)
Other post retirement benefits
The Employment Rights Act provides for a lump sum based on years of service and final salary to be paid at retirement.
(i)
The amounts recognised in the statement of financial position are as follows:
THE GROUP
2015
Rs
Present value of plan liability
Net liability for retirement obligation recognised
(ii)
9,331,037
9,331,037
THE COMPANY
2015
Rs
2014
Rs
6,440,529
6,440,529
4,868,101
4,868,101
The movement in the defined benefit obligation over the year is as follows:
THE GROUP
2015
Rs
At 1 January
Interest cost
Actuarial losses
Benefits paid
At 31 December
(iii)
7,423,212
7,423,212
2014
Rs
6,440,529
1,156,860
510,870
1,222,778
9,331,037
THE COMPANY
2015
Rs
2014
Rs
4,106,851
1,840,103
414,056
143,294
(63,775)
6,440,529
4,868,101
420,680
370,215
1,764,216
7,423,212
2014
Rs
4,106,851
370,545
311,186
143,294
(63,775)
4,868,101
The amounts recognised in profit or loss are as follows:
THE GROUP
2015
Rs
Interest cost
Total included in employee benefit expense (note 19(b))
1,156,860
510,870
1,667,730
THE COMPANY
2014
Rs
2015
Rs
1,840,103
414,056
2,254,159
420,680
370,215
790,895
2014
Rs
370,545
311,186
681,731
Total charge of only Rs906,657 (2014:Rs681,731) for the Group was charged to profit or loss as part of the amount was offset
against funds received from the previous retailer of CMPL (Bagatelle) Limitée and CMPL (Cascavelle) Limitée.
Total charge is included in ‘administrative expenses’.
51
14. RETIREMENT BENEFIT OBLIGATIONS (CONT’D)
(b)
Other post retirement benefits (cont’d)
(iv) The amounts recognised in other comprehensive income are as follows:
THE GROUP
2015
Rs
Experience losses
Actuarial losses
(v)
(1,222,778)
(1,222,778)
THE COMPANY
2015
Rs
2014
Rs
(143,294)
(143,294)
(1,764,216)
(1,764,216)
2014
Rs
(143,294)
(143,294)
The principal actuarial assumption used for accounting purposes were:
THE GROUP
2015
%
Discount rate
Future salary increases
THE COMPANY
2015
%
2014
%
7.00
5.00
2013
%
7.00
5.00
7.00
5.00
7.00
5.00
(vi) Sensitivity analysis on defined benefit obligations to changes in the weighted principal assumptions is:
THE GROUP
31 December 2015
1,082,506
887,842
-
759,979
635,649
-
865,082
700,379
-
533,713
440,283
-
31 December 2014
Decrease
Rs
THE COMPANY
Increase
Rs
Increase
Rs
Decrease
Rs
The sensitivity analysis above has been determined based on sensibly possible changes of the discount rate or salary increase
rate occurring at the end of the reporting period if all other assumptions remained unchanged.
52
15. TRADE AND OTHER PAYABLES
THE GROUP
2015
Rs
Trade payables
Accrued expenses and other payables
Amount due to holding company
Amounts due to subsidiary companies
Amounts due to fellow subsidiaries
(a)
183,253,547
17,464,103
1,310,845
3,528,540
205,557,035
2014
Rs
160,280,927
16,614,501
466,859
5,721,294
183,083,581
THE COMPANY
2015
Rs
68,771,073
9,076,451
1,264,845
17,595,082
1,284,629
97,992,080
2014
Rs
76,276,699
6,893,019
466,859
12,079,463
4,097,993
99,814,033
The carrying amount of trade and other payables are denominated in the following currencies.
THE GROUP
2015
Rs
MUR
EURO
186,955,076
18,601,959
205,557,035
2014
Rs
157,939,783
25,143,798
183,083,581
THE COMPANY
2015
Rs
79,390,121
18,601,959
97,992,080
2014
Rs
74,670,235
25,143,798
99,814,033
16. BORROWINGS
THE GROUP
Current
Bank overdrafts
Bank loans
Amount due to holding company (See note (d))
Obligation under finance leases (see note (h) below)
Non-Current
Bank loans (note (g))
Obligation under finance leases (see note (h) below)
Total borrowings
(a)
(b)
(c)
(d)
(e)
(f)
2015
Rs
2014
Rs
THE COMPANY
2015
Rs
2014
Rs
9,194,833
3,306,407
56,000,000
12,899,515
81,400,755
12,992,858
2,012,302
11,815,396
26,820,556
9,194,833
3,306,418
56,000,000
336,018
68,837,269
12,992,858
2,012,302
128,625
15,133,785
64,184,419
34,196,716
98,381,135
67,987,698
45,779,923
113,767,621
64,184,419
1,507,205
65,691,624
67,987,698
526,915
68,514,613
179,781,890
140,588,177
134,528,893
83,648,398
Bank overdrafts and bank loans are secured on the assets of the Group including property, plant and equipment and inventories
(notes 5 and 9).
Bank loans are secured on the assets of the Company including property, plant and equipment and inventories (notes 5 and 9)
Leased assets are effectively secured as the rights to the leased assets revert to the lessor in the event of default.
The amount due to holding company is unsecured and is repayable on demand.
The carrying amounts of borrowings approximate their fair value.
The carrying amount of the Group’s borrowings are denominated in Mauritian Rupees.
53
16. BORROWINGS (CONT’D)
(f)
The exposure of the Group’s and the Company’s borrowings to interest-rate changes and the contractual repricing dates are
as follows:
After 1 year
but before
2 years
Rs
After
2 years but
before
3 years
Rs
After
3 years but
before
5 years
Rs
68,501,240
3,545,449
3,788,541
15,005,160
3,199,585
68,501,251
15,005,160
Within
1 year
Rs
THE GROUP
At 31 December 2015
Total borrowings
At 31 December 2014
Total borrowings
THE COMPANY
At 31 December 2015
Total borrowings
At 31 December 2014
Total borrowings
(g)
After
5 years
Rs
TOTAL
Rs
8,364,197
48,486,232
132,685,659
3,430,884
7,623,754
53,733,475
82,992,858
3,545,449
3,788,541
8,364,197
48,486,232
132,685,670
3,199,585
3,430,884
7,623,754
53,733,475
82,992,858
The maturity of non-current bank loan is as follows:
THE GROUP
2015
Rs
After one year and before two years
After two years and before three years
After three years and before five years
After 5 years
54
3,545,449
3,788,541
8,364,197
48,486,232
64,184,419
2014
Rs
3,199,585
3,430,884
7,623,754
53,733,475
67,987,698
THE COMPANY
2015
Rs
3,545,449
3,788,541
8,364,197
48,486,232
64,184,419
2014
Rs
3,199,585
3,430,884
7,623,754
53,733,475
67,987,698
16. BORROWINGS (CONT’D)
(h)
Finance lease liabilities - minimum lease payments:
THE GROUP
2015
Rs
THE COMPANY
2015
Rs
2014
Rs
2014
Rs
Future finance charges on finance leases
15,899,337
15,899,337
18,099,669
3,347,857
53,246,200
(6,149,969)
15,608,051
15,608,051
15,608,051
20,414,497
67,238,650
(9,643,331)
464,709
464,709
464,709
816,483
2,210,610
(367,387)
173,429
173,429
173,429
252,952
773,239
(117,699)
Present value of finance lease liabilities
47,096,231
57,595,319
1,843,223
655,540
12,899,515
13,868,387
17,079,045
3,249,284
47,096,231
11,815,396
12,702,089
13,655,329
19,422,505
57,595,319
336,018
362,422
390,901
753,882
1,843,223
128,625
138,610
149,371
238,934
655,540
Not later than 1 year
Later than 1 year and not later than 2 years
Later than 2 years and not later than 3 years
The present value of finance lease liabilities
may be analysed as follows:
Not later than 1 year
The Group leases motor vehicles, plant and equipment and furniture and fittings under finance leases. The leases have purchase
options and renewal rights. Renewals are at the specific entity that holds the lease.
There are no restrictions imposed on the Group by lease arrangements other than in respect of the specific assets being leased.
(i)
The effective interest rates at the end of the reporting period were as follows:
THE GROUP
2015
%
Bank overdrafts
Bank loan
Finance lease
Other loan
6.50-8.65
6.65
7.50-7.65
7.40
THE COMPANY
2015
%
2014
%
7.50-9.00
7.00
7.25-7.50
-
2014
%
8.65
6.65
7.50-7.65
7.40
9.00
7.00
7.25
-
17. DIVIDENDS
THE COMPANY
2015
Rs
At 1 January
Final dividend of Re0.50 per share (2014: Re0.50 per share)
Paid during the year
At 31 December
1,096,750
(1,096,750)
-
2014
Rs
1,096,750
1,096,750
(1,096,750)
1,096,750
55
18. OTHER INCOME
THE GROUP
2015
Rs
Rental income
Profit on disposal of investments in financial assets
Profit on disposal of property, plant and equipment
Commissions
Income from advertisement
Interest income
Dividend income - listed
Others
697,008
4,255,628
17,391
449,380
2,163,585
17,050
77,295
302,103
7,979,440
2014
Rs
1,004,877
2,004,526
327,606
1,930,980
260,620
5,528,609
THE COMPANY
2015
Rs
697,008
4,255,628
17,391
2,817,058
77,295
7,864,380
2014
Rs
1,004,877
2,004,526
56,630
260,620
3,326,653
19. LOSS BEFORE FINANCE COSTS
THE GROUP
2015
Rs
Loss before finance costs is arrived at after:
Charging:
Depreciation on property, plant and equipment
- owned assets
- leased assets under finance leases
Amortisation of intangible assets
Employee benefit expense (note 19(b))
and crediting:
Profit on sale of property, plant & equipment
(a)
ADMINISTRATIVE EXPENSES
(b)
EMPLOYEE BENEFIT EXPENSE
56
2014
Rs
6,624,051
14,347,469
380,187
54,984,495
5,672,243
275,080
228,003
30,466,205
6,089,007
107,938
237,380
25,486,002
17,391
4,255,628
2,004,526
17,391
4,255,628
2,004,526
THE GROUP
72,428,309
8,464,857
21,778,578
30,742,229
3,683,914
14,276,612
36,041,004
16,286,398
203,701,901
2014
Rs
54,984,495
6,532,184
13,409,424
27,792,619
4,058,650
14,797,193
14,777,081
17,565,319
153,916,965
THE GROUP
2015
Rs
Salaries
Social security costs
Pension costs
- defined benefit plans (note 14(a)(v))
- Other post-retirement benefits (note 14(b)(iii))
- Defined contribution plan
2015
Rs
11,458,279
10,416,240
437,690
72,428,309
2015
Rs
Employee benefit expense
Travelling
Operating expenses
Light and heat
Professional fees
Advertising
Rental expenses
Other expenses
2014
Rs
THE COMPANY
2014
Rs
THE COMPANY
2015
Rs
30,466,205
2,623,956
5,929,552
7,052,420
2,387,893
4,346,270
1,599,375
7,432,083
61,837,754
2014
Rs
25,486,002
2,573,527
5,973,606
7,245,441
2,404,020
5,093,146
1,554,375
8,956,646
59,286,763
THE COMPANY
2015
Rs
2014
Rs
67,456,771
3,747,564
49,923,571
2,838,939
27,633,693
1,578,716
22,856,694
1,298,020
388,201
761,073
74,700
72,428,309
579,981
1,572,428
69,576
54,984,495
388,201
790,895
74,700
30,466,205
579,981
681,731
69,576
25,486,002
20. FINANCE COSTS
THE GROUP
2015
Rs
Interest expense:
- Bank overdrafts
- Bank loan
- Loan from holding company
- Finance lease
- Net foreign exchange financing gains/(losses)
THE COMPANY
2015
Rs
2014
Rs
(687,495)
(4,769,872)
(1,840,684)
(3,827,216)
(11,125,267)
146,405
(10,978,862)
(327,395)
(3,570,132)
(36,562)
(3,361,207)
(7,295,296)
(9,042)
(7,304,338)
2014
Rs
(463,829)
(4,769,872)
(1,705,562)
(79,369)
(7,018,632)
146,405
(6,872,227)
(297,098)
(3,570,132)
(36,562)
(30,459)
(3,934,251)
(9,042)
(3,943,293)
21. NET FOREIGN EXCHANGE GAINS/(LOSSES)
THE GROUP
The exchange differences credited to profit or loss are included
as follows:
Finance cost (note 20)
Cost of sales
THE COMPANY
2015
Rs
2014
Rs
2015
Rs
2014
Rs
146,405
308,384
(9,042)
1,487,100
146,405
308,384
(9,042)
1,487,100
22. CURRENT TAX LIABILITIES
THE GROUP
2015
Rs
(a)
(b)
(c)
Statement of financial position
At 1 January
Current tax on the adjusted results for the year at 15%
Tax paid
Tax paid during the year under ‘Advance Payment System’
Transfer to other receivables
Statement of profit or loss
Current tax on the adjusted results for the year at 15%
(2014: 15%)
Deferred tax (note 13(b))
Taxation credit for the year
THE COMPANY
2015
Rs
2014
Rs
2014
Rs
-
60,303
(60,303)
(79,412)
79,412
-
-
60,303
(60,303)
(79,412)
79,412
-
(3,352,328)
(3,352,328)
(3,322,527)
(3,322,527)
(408,997)
(408,997)
(506,485)
(506,485)
The tax on the Group’s and the Company’s (loss)/profit before taxation differs from the theoretical amount that would arise using
the basic tax rate of the Group and the Company as follows:
THE GROUP
2015
Rs
Loss before tax
Tax calculated at 15% (2014: 15%)
Income not subject to tax
Expenses not deductible for tax purposes
Adjustment on retirement benefit obligations
Tax losses for which no deferred income tax asset was
recognised
Taxation credit
THE COMPANY
2015
Rs
2014
Rs
2014
Rs
(88,383,865)
(69,075,041)
(15,889,809)
(12,387,439)
(13,257,579)
(649,939)
465,444
(125,300)
(10,361,256)
(339,772)
50,607
(235,151)
(2,383,471)
(649,939)
434,094
-
(1,858,116)
(339,772)
50,325
-
10,215,046
(3,352,328)
7,563,045
(3,322,527)
2,190,319
(408,997)
1,641,078
(506,485)
57
23. LOSS PER SHARE
THE GROUP
2015
Net loss attributable to owners of the company
Rs
Number of shares in issue
Basic loss per share
THE COMPANY
2014
2015
2014
(85,031,537)
(65,752,514)
(15,480,812)
(11,880,954)
2,193,500
2,193,500
2,193,500
2,193,500
(38.77)
(29.98)
(7.06)
(5.42)
Rs
24. OTHER COMPREHENSIVE INCOME
THE GROUP
Note
2015
Revaluation of land and buildings
Decrease in fair value of available-for-sale financial assets
5
8
Revaluation
surplus
(267,973)
(1,658,840)
Income tax relating to components of other comprehensive income
Other comprehensive income for year 2015
(3,776,158)
61,298,219
5
8
(267,973)
(1,658,840)
(3,776,158)
61,298,219
Note
2014
Increase in fair value of available-for-sale financial assets
Reclassification adjustments on disposal of available-for-sale financial assets
included in profit or loss
(1,926,813)
(1,833,618)
275,042
(1,558,576)
65,074,377
Reclassification adjustments on disposal of available-for-sale financial assets included in profit or loss
Actuarial
(losses)/
gains
Rs
65,074,377
Reclassification adjustments on disposal of available-for-sale financial assets included in profit or loss
THE COMPANY
2015
Revaluation of land and buildings
Decrease in fair value of available-for-sale financial assets
Availablefor-sale
fair value
reserve
Rs
8
(1,926,813)
(2,375,056)
356,258
(2,018,798)
Availablefor-sale
fair value
reserve
Actuarial
gains/
(losses)
1,208,137
-
(810,814)
-
-
(572,026)
85,804
397,323
(486,222)
Available-for-sale fair value reserve
Available-for-sale fair value reserve comprises 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.
58
25. NOTES TO STATEMENT OF CASH FLOWS
THE GROUP
Notes
(a)
Cash (used in)/generated from operations
Adjustments for:
Depreciation on property, plant and equipment
Amortisation of intangible assets
Profit on sale of property, plant & equipment
Increase in provision for retirement benefit obligations
Dividend income
Interest income
Interest expense
Unrealised gains on exchange
Changes in working capital:
Inventories
Cash (used in)/generated from operating activities
(b)
5
6
18
18
18
20
2015
Rs
2014
Rs
(69,075,041)
(15,889,809)
(12,387,439)
21,874,519
437,690
(4,255,628)
(17,391)
328,159
(77,295)
(17,050)
11,125,267
(74,225)
(59,059,819)
20,971,520
380,187
(2,004,526)
817,921
(260,620)
(1,930,980)
7,295,296
(702,131)
(44,508,374)
5,947,323
228,003
(4,255,628)
(17,391)
212,432
(77,295)
(2,817,058)
7,018,631
(74,225)
(9,725,017)
6,196,945
237,380
(2,004,526)
817,921
(260,620)
(56,630)
3,934,251
(702,131)
(4,224,849)
781,591
(7,964,957)
22,945,509
(43,297,676)
(69,800,078)
(15,749,252)
121,822,919
(8,234,785)
9,210,595
(2,218,476)
(344,110)
(3,077,008)
(2,984,641)
(25,752,726)
36,975,942
4,013,726
THE GROUP
2015
Rs
(c)
2015
Rs
2014
Rs
(88,383,865)
Cash in hand and at bank
Loan at call receivable
Short term deposit
THE COMPANY
21,013,571
21,013,571
THE COMPANY
2015
Rs
2014
Rs
2014
Rs
4,902,168
4,902,168
12,392,001
10,153,651
2,453,297
24,998,949
5,619,648
2,453,297
8,072,945
Cash and cash equivalents and bank overdrafts include the following for the purpose of the statement of cash flows:
THE GROUP
2015
Rs
Bank overdrafts
Loan payable at call
21,013,571
(9,194,833)
(56,000,000)
(44,181,262)
THE COMPANY
2015
Rs
2014
Rs
24,998,949
(12,992,858)
12,006,091
4,902,168
(9,194,833)
(56,000,000)
(60,292,665)
2014
Rs
8,072,945
(12,992,858)
(4,919,913)
25. NOTES TO STATEMENT OF CASH FLOWS (CONT’D)
(d)
The carrying amounts of the cash and cash equivalents are denominated in the following currencies:
THE GROUP
2015
Rs
MUR
USD
EURO
(e)
(44,292,275)
47,171
63,842
(44,181,262)
2014
Rs
9,471,164
2,491,168
43,759
12,006,091
THE COMPANY
2015
Rs
(60,403,678)
47,171
63,842
(60,292,665)
2014
Rs
(7,454,840)
2,491,168
43,759
(4,919,913)
Non cash transactions
The principal non cash transactions are the acquisition of property, plant and equipment using finance leases.
59
26. SEGMENT INFORMATION
The Group derives its revenue from a single business activity, the retail sector, which it considers as its only segment.
The accounting policies of the operating segment are the same as those described in the summary of significant accounting
policies. Compagnie Des Magasins Populaires Limitée evaluates performance on the basis of profit or loss from operations
before tax expense.
Retail
31 December
2015
Rs
Total
31 December
2015
Rs
Retail
31 December
2014
Rs
Total
31 December
2014
Rs
Revenue from external customers
822,741,004
822,741,004
606,304,306
606,304,306
Segment result
Other income
Finance charges
Taxation
Loss for the year
(85,384,443)
(85,384,443)
7,979,440
(10,978,862)
(88,383,865)
3,352,328
(85,031,537)
(67,299,312)
(67,299,312)
5,528,609
(7,304,338)
(69,075,041)
3,322,527
(65,752,514)
Retail
31 December
2015
Rs
Total
31 December
2015
Rs
17,054
(11,125,267)
17,167,584
431,160,309
405,016,282
(22,312,209)
17,054
(11,125,267)
17,167,584
431,160,309
405,016,282
(22,312,209)
Interest income
Interest expense
Additions to non-current assets and intangible assets
Segment assets
Segment liabilities
Depreciation and amortisation
Retail
31 December
2014
Rs
1,930,980
(7,295,296)
98,915,032
391,874,811
338,512,077
(21,351,707)
Total
31 December
2014
Rs
1,930,980
(7,295,296)
98,915,032
391,874,811
338,512,077
(21,351,707)
The Group does not derive revenues from foreign countries and its customer base is highly diversified, with no individually
significant customer.
27. THREE YEAR FINANCIAL SUMMARY
THE GROUP
Turnover
(Loss)/profit before taxation
Taxation credit
(Loss)/profit for the year
2015
Rs
822,741,004 606,304,306
(88,383,865)
(69,075,041)
3,352,328
3,322,527
(85,031,537)
(65,752,514)
2014
Rs
2013
Rs
270,290,725
(15,889,809)
408,997
(15,480,812)
261,771,796
(12,387,439)
506,485
(11,880,954)
269,481,727
173,329
155,759
329,088
0.50
-
0.50
0.50
(38.77)
(29.98)
(7.00)
(5.42)
0.15
2,193,500
2,193,500
2,193,500
2,193,500
2,193,500
(Loss)/earnings per share
60
2015
Rs
-
Dividend per share
Number of shares at Rs10 each
THE COMPANY
2014
Rs
27. THREE YEAR FINANCIAL SUMMARY (CONT’D)
THE GROUP
2015
Rs
Statement of profit or loss and other
comprehensive income
(Loss)/profit for the year
Other comprehensive income for the year,
net of tax
Total comprehensive income for the year
2014
Rs
THE COMPANY
2015
Rs
2014
Rs
2013
Rs
(85,031,537)
(65,752,514)
(15,480,812)
(11,880,954)
329,088
57,812,830
(27,218,707)
(88,899)
(65,841,413)
57,352,608
41,871,796
(88,899)
(11,969,853)
28,895,115
29,224,203
THE GROUP
THE COMPANY
2015
Rs
2014
Rs
2015
Rs
2014
Rs
2013
Rs
Non-current assets
Current assets
Total assets
268,466,138
162,694,171
431,160,309
232,666,106
159,208,705
391,874,811
349,142,512
50,254,083
399,396,595
218,493,877
85,470,739
303,964,616
147,519,639
56,436,660
203,956,299
Capital and reserves
Non-current liabilities
Current liabilities
Total equity and liabilities
26,144,027
118,058,492
286,957,790
431,160,309
53,362,734
127,511,190
211,000,887
391,874,811
149,106,090
83,461,156
166,829,349
399,396,595
107,234,294
80,685,754
116,044,568
303,964,616
120,300,897
11,373,483
72,281,919
203,956,299
28. OTHER RESERVES
Revaluation surplus
The revaluation arises on the revaluation of property, plant and equipment.
Fair value reserve
Fair value reserve comprises 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.
Actuarial gains/(losses)
The actuarial gains/(losses) reserve represents the cumulative remeasurement of defined benefit obligation recognised.
29. OPERATING LEASE COMMITMENTS
The Group leases premises under non-cancellable operating lease agreements. The future aggregate minimum lease payments
under these operating leases are as follows:
THE GROUP AND
THE COMPANY
2015
Rs
Not later than one year
Later than one year and not later than 5 years
Later than 5 years
36,300,992
164,284,905
102,931,660
303,517,557
2014
Rs
34,572,374
156,461,815
147,055,743
338,089,932
The leases have varying terms, escalation clauses and renewal rights. Renewals are at the specific entity that holds the lease.
There are no restrictions imposed on the Group by lease arrangements other than in respect of the specific premises being leased.
30. CONTINGENCIES
At 31 December 2015, the Group had contingent liabilities in respect of bank and other matters arising in the ordinary course of
business from which it is anticipated that no material liabilities would arise.
61
31. EVENTS AFTER THE REPORTING PERIOD
On 22 February 2016, the Board of Directors of the company has resolved to proceed with rights issue of Rs.141m which is
subject to the approval of shareholders.
32. RELATED PARTY TRANSACTIONS
THE GROUP
2015
Remuneration and benefits
Purchase of goods
Sales of goods
Management fees
Interest expense
Amount owed by related parties
Amount owed to related parties
Short term loan owed to related parties
THE GROUP
2014
Purchase of goods
Sales of goods
Short term loan owed from related parties
Interest payable
THE COMPANY
2015
Purchase of goods
Sales of goods
Short term loan owed to related parties
Long term loan owed from related parties
62
Holding
company
Subsidiary
companies
Directors
and key
Fellow
management
subsidiaries
personnel
Associated
companies
3,960,137
270,450
900,000
1,840,684
-
14,018,456
2,123,505
877,071
-
6,343,518
-
460,308
-
329,975
1,310,845
56,000,000
-
901,522
3,528,540
-
-
80,125
-
Directors
and key
Fellow
management
subsidiaries
personnel
Associated
companies
Holding
company
Subsidiary
companies
2,660,430
2,164,301
-
12,315,838
1,136,408
839,723
3,487,946
-
711,194
-
393,472
466,859
10,153,651
36,562
-
708,582
5,721,294
-
-
60,085
-
Directors
and key
Fellow
management
subsidiaries
personnel
Associated
companies
Holding
company
Subsidiary
companies
2,865,859
271,043
-
7,357,089
1,136,408
722,852
4,910,131
-
711,194
-
298,234
1,264,845
56,000,000
-
95,332,556
17,595,082
40,010,000
790,681
1,284,629
-
-
80,125
-
32. RELATED PARTY TRANSACTIONS (CONT’D)
THE COMPANY
2014
Purchase of goods
Sales of goods
Management fees
Interest income
Interest expense
Long term loan owed from related parties
Interest payable
Holding
company
Subsidiary
companies
Directors
and key
Fellow
management
subsidiaries
personnel
Associated
companies
3,960,137
207,963
1,705,562
2,800,008
-
1,937,006
821,365
626,087
-
3,487,946
-
460,308
-
351,776
466,859
36,562
24,974,344
12,079,463
40,010,000
-
695,929
4,097,993
-
-
60,085
-
(a)
The sales and purchases from related parties are made in the normal course of business. Outstanding trade balances at yearend are unsecured, (interest free with exception of loans) and settlement occurs in cash. Short term loan receivable/payable is
unsecured, is repayable on demand and bears interest at 7.40% (2014: 7 - 7.15%) per annum.
(b)
There have been no guarantees provided or received for any related party receivables or payables. For the year ended
31 December 2015, the Group has not recorded any impairment of receivables relating to amounts owed by related parties
(2014: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the
market in which the related party operates.
(c)
Key management personnel compensation
THE GROUP
2015
Rs
Salaries and short-term employee benefits
Post-employment benefits
6,052,853
290,665
6,343,518
THE COMPANY
2015
Rs
2014
Rs
2,969,686
518,260
3,487,946
4,619,466
290,665
4,910,131
2014
Rs
2,969,686
518,260
3,487,946
63

Notes to the Financial Statements

Transcription

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