06 - Leal · PDF fileVirginie Quevauvilliers COO – Marketing ... The Mauritius Post and Cooperative Bank Ltd Bank of Baroda ... background. He holds a Doctorate

Leal & Co. Ltd | Annual Report 2011 1

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Contents

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18

36

06

21

35

10

31

37

14

33

39

41Notes to the Consolidated

Financial Statements

Corporate Data

Annual Report

ConsolidatedStatements ofComprehensive

Income

Directors’ Profile

Corporate Governance Report

Consolidated Statement of

Financial Position

Senior Management Team Profile

Certificate fromCompany Secretary

Consolidated Statement of

Changes in Equity

Chairman’sStatement

IndependentAuditors’ Report

Consolidated Statement of Cash Flows

Leal & Co. Ltd | Annual Report 20112

39%Group Contribution from the Automobile Segment


About Us

The Leal Group is a diverse group of companies contributing to the economic development of Mauritius.

During the last nine decades, the Leal Group has expanded into a wide range of industries including medical, consumer goods, automotive, information technology, engineering and tourism.

Committed to Excellence


Corporate Data

Directors: Date Appointed

Michael Joseph Clency Leal, C.B.E(Chairman)

29 January 1976

Eric Georges Michel Leal(Chief Executive Officer)(Alternate to Michael Joseph Clency Leal)

01 July 1998

Joseph Jacques Vivian Collet Serret(Deputy Chief Executive Officer)

20 October 1995

Bernard Aimé Jacques Rochecouste Collet 27 November 1995

Gérald Edgar Raymond Joseph Lincoln 30 December 1997

Virrsing Ramdeny 30 December 1997

Marie Louis Désiré René France Ducasse(Alternate to Jean Marie Eugène Grégoire)

31 January 2007

Louis Désiré Christian Ferrière 31 January 2007

Jean Marie Eugène Grégoire 04 May 2007

Clency Michael Arnaud Leal(Alternate to Eric Georges Michel Leal)

08 January 2008

Senior management team: Position

Eric Leal Chief Executive Officer

Vivian Serret Deputy Chief Executive Officer

Yousouf Rehmally Chief Finance Officer

Noel Marion COO – Car Rental

Michael Carey COO – BMW Sales

Christian Ferrière COO – After Sales Service

Louis – Philippe Guého COO – Renault Sales

Francois Gellé COO – Parts and Distribution

Yousouf Elahee Doomun Chief Information Officer

Virginie Quevauvilliers COO – Marketing

Suresh Seegobin COO – Vehicle D’occasion (VO)

Didier Jauffret Executive Director

Neemalen Gopal IT Cluster Director

Company secretary:

Navitas Corporate Services Ltd13, St Clément StreetCurepipeRepublic of Mauritius


Corporate Data (cont’d)

Registered office:

Motorway M1PaillesRepublic of Mauritius

Legal advisers:

Me Gavin Glover6, River CourtSt Denis StreetPort LouisRepublic of Mauritius

Me Maxime Sauzier5th Floor, Chancery HouseLislet Geoffroy StreetPort LouisRepublic of Mauritius

Me Danielle LagesseChancery HouseLislet Geoffroy StreetPort LouisRepublic of Mauritius

Etude Mungroo3rd Floor, 304 Sterling HouseLislet Geoffroy StreetPort LouisRepublic of Mauritius

Auditors:

Grant ThorntonEbene Tower52 Cybercity EbeneRepublic of Mauritius

Bankers:

The Mauritius Commercial Bank Limited

The State Bank of Mauritius Limited

Barclays Bank Plc

Bank One Ltd

AfrAsia Bank Limited

The Mauritius Post and Cooperative Bank Ltd

Bank of Baroda (Mauritius Branch)


BOARD OFDirectors

1 092009 Annual Report

Mr Clency Leal C.B.E - Chairman

Mr Virrsingh Ramdeny

Mr Bernard Rochecouste Collet

Mr Gérald Lincoln

Mr Eric Leal

Directors’ Profile

10

7

4

9

6

3

8

5

1

2


Mr Eric Leal

Mr Gérald Lincoln



Mr Jean-Marie Grégoire

Mr France Ducasse

Mr Arnaud Leal

Mr Vivian Collet Serret

Mr Christian Ferrière

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10


Directors’ Profile (cont’d)

M. J. Clency LEAL (C.B.E)Group Chairman

M. J. Clency LEAL holds an MBA from Harvard Business School, U.S.A. He started his career as Assistant Pharmacist in 1957. In 1977, he founded Leal & Co Ltd and founded COMANU Ltee in 1982. He also co-founded United Motors Ltd in 1985. He was decorated as Commander of the British Empire – C.B.E. by her majesty, Queen Elizabeth II. He is also the Chairman of the Pharmacie Nouvelle Group.

Eric M. G. LEALChief Executive Officer

Eric M. G. LEAL holds a bachelor degree in Arts & Science from the Boston College, U.S.A, where he specialized in Business Administration. He started his career as Service Director at Leal & Co Ltd in 1993 and is also the Chief Executive Officer of the Pharmacie Nouvelle Group.

J. J. Vivian COLLET-SERRETDeputy Chief Executive Officer

J. J. Vivian SERRET joined the Mauritius Commercial Bank Ltd in 1977 and pursued banking studies with the London Institute of Bankers. He joined the Beachcomber group as Financial Controller of the Paradis Hotel in 1988 and joined the Leal Group as Deputy Chief Executive Officer in 1995 to date.

L. D. Christian FERRIEREChief Operating Officer -After sales department

L. D. Christian FERRIERE is a fellow member of the Mauritius Institute of Directors. He has accumulated 20 years experience in management position and has followed training courses in motors and electrics as well as in management and in marketing. He was appointed as director of the parts department of Leal & Co Ltd in 1996 and appointed as Chief Operating Officer of the after sales department of Leal & Co Ltd in 2000.

C. M. Arnaud LEALMarket & Product Research Manager

C. M. Arnaud LEAL holds a degree in Business and E-Commerce from the International University of Monaco. He has been employed as new projects manager for Pharmacie Nouvelle Limited and thereafter as manager for Ocean Indien Distribution Ltee before joining Leal & Co Ltd as Market & Product Research Manager since June 2010.

Virrsing RAMDENYIndependent Non-Executive Director, Chairman of the Audit Committee

Virrsing RAMDENY is a Fellow of the Association of Chartered Certified Accountants, Member of the Institute of Chartered Accountants of England and Wales and holder of a Master’s Degree in Management. He has more than 20 years post qualification experience and is presently the Managing Partner of De Chazal & Associates, a firm of Chartered Accountants and Business Advisers. Mr. Ramdeny has also worked for the Mauritius Tax Authorities occupying various senior positions and the Mauritius Port Authority as Finance Manager.

Bernard A.J. ROCHECOUSTE COLLETIndependent Non-Executive Director

Bernard A.J. ROCHECOUSTE COLLET has joined Leal & Co Ltd in 1972. He has occupied the position of Sales Director of Leal & Co Ltd for years until his retirement. He has also assisted in the setting-up of United Motors Ltd. He is presently one of the directors of Leal & Co Ltd and United Motors Ltd. He is also the owner and Director of Zazou Ltee and Albazazou Ltee. Jean Marie E. GREGOIREIndependent Non-Executive Director, Chairman of the Corporate Governance Committee

Jean Marie E. GREGOIRE followed a marketing course at La Chambre de Commerce de Paris and a technical one at L’Ecole des Arts et Métiers Paris. He has accumulated 30 years experience as director of various companies in France and in other countries. He has also provided consultancy services during 5 years to companies specialised in hydrocarbures.

M. L. D. René-France DUCASSEIndependent Non-Executive Director

M. L. D. R. France DUCASSE joined Pharmacie Nouvelle Limited at the age of 20 and has been working for several departments before retiring as Deputy Managing Director after 40 years of service in 2000. He was thereafter appointed as Consultant of Pharmacie Nouvelle Limited.

Gérald E. R. J. LINCOLN Independent Non-Executive Director

Gérald E. R. J. LINCOLN joined the Anglo-Mauritius Assurance Society Limited in December 1971 after having worked in the sugar industry for 12 years as accountant/secretary. On retirement, he held the post of Executive Manager. In 2002, he was appointed as Consultant for the Group Chief Executive of the Swan Group up to the end of 2007. He is also a Director of a number of companies involved in various economic activities and quoted on the D.E.M market.


Directors of Subsidiaries

The profile of M.J. Clency Leal, M. G. Eric Leal, J. J. Vivian Collet-Serret, Jean Marie Gregoire and Gérald E.R.J Lincoln appear in the Directors’ profile section.

Dr. Ashveen Kumar KISSOONAHChairman of Distripc Ltd [Elytis], Director of Solar-Ernte-Technik Ltd

Dr. Ashveen Kumar KISSOONAH is an industrious, dynamic and thorough professional with strong ICT and business management background. He holds a Doctorate in Computer Networks and Information Security and a Master of Science in User Interface Design. He is also a Fellow member of The British Computer Society (UK) – FBCS also a Chartered Practitioner CITP and a full member of The Institute for the Management of Information Systems (UK) – MIMIS, The Association of Computer Professionals (UK) – MACP, The Chartered Institute of Marketing (UK) – MCIM and the Institute of Commercial Management (UK) – Minst.CM. He is currently the Chairperson of State Informatics Limited (SIL), SILNAM –Subsidiary of SIL in Namibia, SILBOTS – Subsidiary of SIL in Botswana and ELYTIS – Subsidiary of SIL in Mauritius. He is also a freelance IT consultant, a MQA registered trainer and a visiting lecturer at the Mauritius Institute of Education.

Neemalen GOPALIT Cluster Director- Director of Distripc Ltd and LCI

Neemalen GOPAL holds a MaÎtrise Informatique Appliquée Gestion (MIAG) and a Diplôme Etudes Approfondies (DEA) Informatique from the University of Grenoble, France. He has accumulated 23 years working experience in the Information Technology field and is the IT Cluster director of Leal Group since July 2008. Kemraz MOHEEDirector of Distripc Ltd

Kemraz MOHEE is presently the General Manager of the State Informatics Ltd. He has over 21 years of experience in the field of ICT. Before joining the State Informatics Ltd, he was the Executive Director of the National Computer Board. Kemraz Mohee holds a degree in Computer Science from the University of Grenoble in France and a master’s degree in Artificial Intelligence from the University of Savoie in France.

Didier JAUFFRET Director of LEC

Didier JAUFFRET followed a BTS Action Commerciale course from the University of Reunion and has accumulated 21 years working experience in the BTP sector (Batiments Travaux Publics). He has been appointed as Director of LEC since 2003.

Marie Noël MARIONDirector of Supreme Refinement (EU) Ltd, (Chief Operation Officer, Car Hire [Europcar]

Marie Noel MARION followed a tourism management course at the Centre D’Etudes de promotion du Tourisme, Paris, France. He

has accumulated 35 years service in the Car Hire department (Europcar) of Leal & Co Ltd and has been promoted as Chief Operation Officer since 2007.

M. Yousouf REHMALLY (FCCA)Chief Finance Officer of Leal & Co, Director of Supreme Refinement (EU) Ltd and Solar-Ernte-Technik Ltd

M. Yousouf REHMALLY is a Fellow of the Association of Chartered Certified Accountants. He is also a member of the Certified Accounting Technician of the Association of Chartered Certified Accountant and has more than 20 years working experience. He joined Leal & Co Ltd in 1998 as Finance Manager and is presently occupying the post of Chief Finance Officer.

Devendra MAULLOODirector and General Manager of Solar-Ernte-Technik Ltd

Multi-disciplinary entrepreneur, Mr. MAULLOO has started his professional career as a secondary and primary school teacher back in 1978. His passion for technology and audio-visual communications prompted him to read through several university programmes: he holds a Diploma in Social Work (Mauritius), a BA in Communications Studies (UK) and a ‘Brevet Technique Communications Audio-Visuelles’ (France). After heading the Mauritius Film Development Corporation over a decade, Mr Maulloo diversified his portfolio of activities in ICT, Digital Education, Technology and Renewable Energy, in Mauritius and overseas. He is now a full-fledged professional in ‘renewable energy’ with extensive expert-training in Solar Photovoltaic in Germany. He is today General Manager of the ‘energy cluster’ of the group.

Naraindath RAMNAWAZDirector of Solar-Ernte-Technik Ltd

M. Narainduth RAMNAWAZ is the holder of an Advanced Certificate in Business Management from the Mauritius Institute of Management. He has accumulated more than 20 years working experience in the Human Resource Department of Mauritius Telecom.

Daniel DE LABAUVE D’ARIFATDirector of Pharmacie Nouvelle Limited

Daniel De Labauve D’Arifat holds a Diploma in Commercial Management and a Brevet de technicien de l’Ecole des Cadres. He has significant experience of the whole chain of marketing, sales and distribution. He was employed as regional manager for The Coca-Cola Company for the Mid African and Islands region and for the last 4 years was the Commercial & Marketing Director at Brasseries STAR Madagascar.

Guy Paul Jean Marie GUERANDEL Director of Pharmacie Nouvelle Limited

Guy Paul Jean Marie Guerandel holds an advanced Certificate in Business Management (MEF). He has worked for various departments within the Group during several years before being appointed as director of Comanu Ltée and Pharmacie Nouvelle Limited. He is currently a fellow member of MIOD.


Directors of Subsidiaries (cont’d)

Georges LEUNG SHINGDirector of Pharmacie Nouvelle Limited

Georges Leung Shing holds a Bachelor’s degree in Economics and is a Chartered Tax Adviser and a Fellow of the Institute of Chartered Accountants of England and Wales. He was the Senior Economist of The Mauritius Chamber of Agriculture (MCA), Executive Chairman of Lonrho and Ilovo Mauritius, and Managing Director of Omnicane Ltd. He was also a member of the Joint Economic Council, Mauritius Employers’ Federation and Stock Exchange of Mauritius Ltd, and Chairman of MCA in 1998/99 and 2002/03 and the Mauritius Sugar Producers’ Association in 2001. He is presently the Chairman of the Mauritius Institute of Directors and The Mauritius Development Investment Trust Co Ltd and a Director of Mauritius Molasses Co Ltd, Mauritius Stationery Manufacturers Ltd, Omnicane Ltd and Standard Bank Mauritius Ltd. He is also a member of the Financial Reporting Council, Financial Reporting Monitoring Panel and Sugar Insurance Fund Board.

Marie Joseph Jean Paul CHASTEAU DE BALYONDirector of Pharmacie Nouvelle Limited

Marie Joseph Jean Paul Chasteau De Balyon is member of the Chartered Insurance Institute (C.I.I.), U.K, of the Association of Company Secretaries of Mauritius and a Fellow of Mauritius Institute of Directors (M.I.o.D). He joined the Swan Insurance in 1969 and is currently Director and Company Secretary of Swan Group Corporate Services Limited. He is Council Member of the Mauritius Chamber of Commerce and Industry (Member of its Nomination and Remuneration Committee and of the Board of Governors, Centre D’Etudes Commerciales), member of the SEM Consultative Committee, as well as the Chairperson of the sub-committee of the Insurer’s Association on issues linked to the World Trade Organisation (WTO). He acts as director of a number of companies in the commercial and hotel sectors.

Marie Octave Regis NICOLINDirector of Pharmacie Nouvelle Limited

Marie Octave Regis Nicolin worked for the British Admiralty for 5 years. He worked for Pfizer and Boehringer Ingelheim in East Africa for 3 years and then worked for Boehringer Ingelheim at Pharmacie Nouvelle Limited until his retirement.


Senior Management Profile

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1. Mr Yousuf Elahee Doomun2. Mr François Gellé3. Mr Eric Leal4. Mrs Virginie Quevauvilliers5. Mr Vivian Collet Serret6. Mr Noël Marion7. Mr Christian Ferrière8. Mr Neemalen Gopal

9. Mr Suresh Seegobin 10. Mr Yousouf Rehmally11. Mr Didier Jauffret12. Mr Michael Carey13. Mr Louis-Philippe Guého


12

13

5

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8


The profile of M. G. Eric Leal, J. J. Vivian Collet-Serret, L. D. Christian Ferrière, Neemalen Gopal, Didier Jauffret, M. Noël Marion and M. Yousouf Rehmally appears in the Directors’ profile section.

Michael CAREYChief Operating Officer, Sales BMW/Mini

Michael CAREY holds an advance certificate in business management. He joined Leal & Co Ltd in 1987 as Sales Manager (BMW-Daihatsu-Iveco-Piaggio). He was promoted as Sales Director (BMW) in 1995 and thereafter as Chief Operating Officer BMW/Mini in 2007.

Louis-Philippe GUÉHOChief Operating Officer, Renault Sales

Louis-Philippe GUÉHO has accumulated 20 years experience in the automobile sector. In 1995, he was nominated as sales representative for Renault trucks and was promoted as Sales Manager for Renault and Renault trucks in December 1998. In September 2004, he was promoted as Sales Director of Renault at Leal & Co Ltd and since August 2008 as Chief Operating Officer of UML sales.

François GELLÉChief Operating Officer, Parts and Distribution

François GELLÉ holds a degree in Business Administration / Marketing / Finance from the University of Natal Durban South Africa and followed various training courses in vehicle mechanics and in service/warranty administration and accounting. He was promoted as Parts Manager of Leal & Co Ltd in 1994 and as Chief operating officer of the Parts and Distribution department since 2000.

Yousuf Elahee DOOMUNChief Information Officer

Yousuf Elahee Doomun holds a Maîtrise en Informatique from The University of Bordeaux. He also holds the ITIL V3 Foundation Certificate. He joined Leal & Co Ltd in 1987 and has more than 21 years working experience in Information Technology, ranging from networking to ERP implementations. He is currently occupying the post of Chief Information Officer, overseeing IT operations and delivering technology resources to development projects.

Virginie QUEVAUVILLIERSChief Operating Officer, Marketing Department

Virginie QUEVAUVILLIERS holds a licence de lettres Modernes from University of Sorbonne, Paris, a Diploma de l’ Ecole Sup de Pub (Groupe Inseec) and a Master in Advertising and Marketing. She was employed as Marketing Manager in 1994 for Leal & Co Ltd and then promoted to Chief Operations Officer of the Marketing department in 2009.

Suresh SEEGOBINChief Operating Officer, Vehicle D’occasion

After occupying senior posts in marketing and sales in two international airlines, he joined Air Mauritius in 1979 as Assistant to Chairman and Managing Director and became Commercial Director of the National Airline in 1983. Retired in 2001, he served as director on several boards and was also Chairman of the Mauritius Tourism Promotion Authority. He joined Leal & Co. Ltd in November 2007.

Senior Management Profile


28%Group Contribution from Pharmaceutical and Consumer GoodsSegment


Chairman’s Statement

Dear Shareholders,

The financial year 2010/2011 has seen the Group grow to its strongest financial position ever. Group turnover has grown by 32.8% thanks to good growth in the main subsidiaries, very strong growth in the automobile activities and the increase of our ownership of Pharmacie Nouvelle Limited from 33.4% to 49.5%.

At the same time Group profit after tax increased from fifty million rupees to one hundred and eighteen million rupees. Total assets grew in the period to a record high of two point five billion rupees.

Our suppliers also shown again their appreciation for the way we develop their brands by rewarding us with several international awards.

In early 2011 in line with the ambition of the Group to set the example as ‘eco citizens’ we created a new subsidiary company: Solar Ernte Technik Ltd (SETL). In the first month of operation SETL has been able to secure orders of more than 2 megawatt peak of photovoltaic equipment. We believe our German partners and us will help to quickly expand the production of clean electricity in Mauritius.

Overall our turnover was generated by a well balanced mix coming from our selected core activities.

% Contribution by each segment

2%

39%

22%

9%

28%

Automotive

IT

Heavy Engineering

Pharmaceutical and Consumer Goods

Others

Group profit after tax increased from fifty million rupees to one hundred and eighteen million rupees. Total assets grew in the period to a record high of two point five billion rupees.

“ “

BOARD OFDirectors

1 092009 Annual Report




Mr Gérald Lincoln

Mr Eric Leal


Overview IT Cluster

While the contribution to GDP of the ICT sector has grown from 5.8% to 6.4% at national level, the IT Cluster of the Group has also experienced an improved performance during 2010/2011. The turnover of our ICT Cluster for that period reached Rs 892,692,259, an increase of 25% over the previous financial year. This figure excludes CiSolve International Ltd, since the latter’s financial year is based on the calendar year.

Leal Communications & Informatics Ltd (LCI), our first IT company in the Group, has performed well with an increase in its turnover of some 6% but with 33% increase in its profit before tax.

LCI has obtained in July 2011, at the annual Microsoft Worldwide partner event in Los Angeles, the Microsoft Education Partner of the Year 2011 Award for the whole region of West, East, Central Africa and Indian Ocean Islands. In addition, LCI has obtained two Gold Certifications for competencies acquired in Microsoft Server Platform and Desktop Deployment.

With the recruitment of an expatriate to act as Apple Business Manager, we have seen a substantial increase of our Apple business (Apple products and accessories). We foresee that the Apple business will contribute to some 25% of our turnover in 2011/2012 compared to 20% in 2010/2011. We have plans to open two more Ishops in Mauritius during 2011/2012.

With a full team of qualified/experienced engineers, LCI is now reckoned as a key player in the corporate business sector for ICT solutions. In addition to our existing HP platform competencies, we now have the skills to perform complex Microsoft and CISCO solution implementations. LCI has also a strong commercial and technical team capable of undertaking major computerization projects.

The distribution arm of our IT Cluster, Elytis Ltd, has remarkably well performed in 2010/2011. The full operation of our Software Distribution, both Microsoft and Symantec, on the whole of the Indian Ocean Islands (including the French Pacific Islands) coupled with an increase of 70% of our hardware products in distribution, has resulted in an overall growth of 39% of our turnover compared to 2009/2010. Our profit before tax has more than doubled for the same period compared to the preceding one.

Elytis Ltd has won the Microsoft Distribution Partner of the Year 2011 Award for the second year in a row for the regions of West, East, Central Africa and Indian Ocean Islands.

It should be noted that the recent installations of new hardware distributors in Mauritius, namely Tarsus and Inspiron from South Africa, will bring fiercer competition in this segment.

Our operation in Reunion Island, SOLINFO SARL, has made a major turnaround. This company is now dedicated to Apple business with our two Ishops in St Denis and St Gilles respectively. Our global market share for Apple in Reunion Island grew from less than 9% in 2009/2010 to some 23% in 2010/2011. Our turnover

for 2010/2011 has increased by 57.7% from the previous financial year. We are now well on track to achieve a positive net result in 2012.

CiSolve International Ltd, our associated company specialized in the Software Business, has faced a challenging year with no major IT projects awarded at national level. We have had one more Microsoft Navision project implementation at the Sugar Insurance Fund Board. This further increases our position as a main MS Navision solution partner for Mauritius. We have also continued providing some of our high level competencies to major international players like Satyam Computers for projects implementation in Africa.

Overview of our Engineering Cluster

The regional activities remained very slow but some positive signals were noted at the end of our financial year. Leal Equipements Compagnie (Seychelles) Ltd has been incorporated to provide a better after-sales support to our customers and confirm our leading position on this market. Madagascar has much potential with many pending projects, but the political unstability is a very negative factor for investors. On our local market, we renewed our excellent performance in the “transport sector’ and in the “civil & construction sector”.

With our committed teams, we have realised, once again, better results than expected.

We are very optimist for the future as some important contracts will be awarded soon. Our new agreements which have been signed with Merlo and Haulotte, both specialised in handling equipment like telescopic handlers and platforms, shall also prove interesting in the future, increasing our products portfolio.

Pharmacie Nouvelle Ltd

Our Group has strongly increased its role as main shareholder of Pharmacie Nouvelle Limited (PNL) during the financial year. Policies and strategies in PNL and Leal Group are being streamlined so as to form a closer knit and stronger Group.

Since its creation in 1912 PNL has grown steadily. The retail pharmacy of Port-Louis has grown into a structured organisation employing nearly 350 people, and managing deliveries to more than 3,000 retail outlets.

The last financial year has been crucial for the future of PNL as there was a complete re-thinking of its strategy followed by a refocusing on its core skills. At the same time Group policies and resources were better utilised.

There have also been major changes in the way subsidiaries of PNL operate. The organisational structure of Comanu, our cosmetics manufacturing arm, has been revamped to ensure increased efficiency. The manufacturing of furniture by Ocean Indien Distribution Ltée, another subsidiary of PNL, has been stopped, so that the PNL can better focus on its core activities.

Chairman’s Statement (cont’d)


Overview of our Automobile Sector Activities

In the 2010 calendar year the sales of brand new vehicles progressed by 16%. Korean, European, Indian and Chinese brands that are all imported in US Dollar and Euro were the biggest winners, while Japanese brands grew slower due to the high Japanese Yen.

The latest designs, improved quality and long warranties of the competition, has hurt deeply new and second hand Japanese imports. Stronger regulations at import, lost consumer confidence and a reduced price differential has made the second hand imports less attractive and boosted the new car market.

It is hoped that in 2011 the new car market will be fully back to its pre-2001 market share of vehicle imports. We indeed believe that growing Eco consciousness will make new vehicles the favoured choice of Mauritian.

Sales of Passenger Cars by Dealer - Calendar year 2009/2010

Sales of Passenger Cars by Brand - Calendar year 2010

Sales of Passenger Cars & Goods Vehicle by Brand - Calendar Year 2010

Sales of Passenger Cars & Goods Vehicle by Group - January to September

BMW – New products

Our sales reached a record 304 units, an increase of 26% thanks to the very successful introduction of the new 5 Series. Such volumes are possible thanks to the wide range now consisting of 12 different Sedans/Coupes and 4 SUVs.

On the international scene, BMW remained the market leader in the premium market for the 6th year in a row. The arrival of the new X3 and 1 Series will help BMW sales reach record levels in Mauritius and in the world again in 2011.

2009 2010Number Number

1. IFRAMAC 691 7492. AXESS LTD 436 5973. ABC MOTORS LTD 481 5874. LEAL & CO. LTD 386 4835. IMC LTD 209 3716. EAL MAN HIN & SONS LTD 302 3357. TOYOTA MTIUS LTD 308 3058. ELDOMOTORS LTD 119 261

Number

1. NISSAN 5872. MITSUBISHI 4033. HYUNDAI 3714. HONDA 3355. BMW 3046. TOYOTA 3017. MERCEDES 2858. CHEVROLET 2619. SUZUKI/MARUTI 24110. RENAULT 16211. PROTON 15112. FORD 13413. KIA 12914. GWM 12715. CITROEN 9616. MAZDA 8017. PEUGEOT 5818. JAGUAR 2519. LAND ROVER 2120. FIAT 20

Number

1. NISSAN 11572. TOYOTA 8403. MITSUBISHI 8124. HYUNDAI 4145. GWM 3796. FORD 3657. HONDA 3358. BMW 3049. MERCEDES 28610. SUZUKI/MARUTI 26711. CHEVROLET 26112. RENAULT 19613. KIA 18814. VOLKSWAGEN 17815. PROTON 15116. CITROEN 13417. MAZDA 8018. CHEVROLET/ISUZU 7919. AUDI 6820. TATA 64

1200

LEAL

GRO

UP

1110

ABC

GRO

UP

887

IFRA

MAC

GRO

UP

865

AXES

S80

7

CFAO

GRO

UP

733

TOYO

TA M

TIU

S67

4

EAL

MAN

HIN

& S

ON

S LT

D21

1

ALLI

ED M

OTO

RS16

1

RAO

UF

DUSM

OH

AMU

D87

SAM

MO

TORS

LTD

38

1000

400

800

200

600

0

2010 2011



RENAULT – Successful new models

Sales of Renault grew by 9% following the introduction of many new models. The Megane, Megane Coupe and Fluence, all competing in the largest segment of our market, are enjoying great success.

The 5 year/120,000 kms warranty offered on the vehicles contributed to our success by cementing consumer confidence.

Our staff and Company were also very proud to win the Renault “Global Quality Award” for the third time, this time Leal and Co Ltd being actually second in the world for customer satisfaction.

We must also record the excellent quality of the Renault vehicles now, as a result of the Plan D’Excellence Renault launched in 2006. We are glad to report substantial reduction as a result of this, in respect of warranty claims and issues.

GWM- Successful in passenger cars too

The Florid was very successful in 2010, it even became the best selling 1.5l hatch back in its first full year of sales.

Sales of GWM pick ups remained strong enabling total GWM sales to grow by 15% in 2010. Our pick up was the second best selling 4 x 2 pick up in 2010, and we hope to grow sales of 4 x 4 pick ups with the arrival of the more powerful 150 Bhp Diesel Steed 5.

The team of United Motors Ltd was very honoured to receive from GWM management the prizes for the “Manager of the Year” and “Marketing Promotion Award”.

Since the delivery of our first customer vehicles in September 2008 our fleet of GWM vehicles has grown to over 1,100 vehicles by November 2011. These vehicles have covered over 33,221,010 km on Mauritian roads with good reliability.

Kia – our latest brand introduction

Our team launched Kia with great success in January 2011.The large Kia range consisting of eleven different body styles, of which six were all new to our market, was an instant sales success.

The 7 year warranty combined well with the strong after sales quality image of our Group, to bring renewed credibility to the brand.

In 2010 the Kia brand was the 13th best selling passenger car brand in Mauritius. We are confident that although sales only started in February 2011, we will be able to make Kia one of the top 3 selling passenger car brands in Mauritius this year. Tourism Cluster

Once again our Car Hire Business remained a top performer. In a difficult market we were able to increase sales by 12.1% by remaining a very reliable partner. The quality of our staff and fleet was a key differentiator during this crisis period.

Our associated company, Exclusive Island Ltd, managed to increase its turnover by 15.1%, but unfortunately with a negative overall profitability.

Unfortunately Halcyon Days remained a very weak performer despite new partnerships and a great product offer.

Group Strategy

Partnerships, service and products of high quality remain the core strength of our Group. By steadily and reliably increasing these core strengths we believe our Group will continue having a strong image locally and abroad.

In a little over 40 years we have created great and long lasting partnerships with our principals and a loyal customer base.

Our well trained and motivated staff is the key to this success. We are very thankful to our staff and management who give their best everyday to make our Group progress.

We thank the Directors of the Group for all the support and guidance across the years. The strong support of our shareholders is a good sign of trust in our staff and management, we thank them for their support.

Michael Joseph Clency LEAL, C.B.EChairman

29 November 2011



Annual Report

The Board of Directors of Leal & Co. Ltd, the “Company”, is pleased to present the annual report together with the consolidated financial statements for the year ended 30 June 2011. The Company and its subsidiaries are collectively referred to as the “Group”.

Incorporation

The Company was incorporated in the Republic of Mauritius on 29 January 1976 as a private company with liability limited by shares. The status of the Company was subsequently changed to a public company with liability limited by shares on 14 April 1981.

Principal activities

The principal activities of the Group are:

(i) to deal in motor vehicles, spare parts and rental of cars; (ii) to deal in all kinds of mechanical engineering and agricultural equipment and spares; (iii) to deal in computer hardware and software;(iv) to deal in computer accessories, systems and peripherals;(v) to engage in the tourism industry;(vi) to engage in the distribution of pharmaceutical products, consumer goods and products for the textile industry;(vii) to manufacture cosmetics;(viii) to engage in the manufacture and retailing of imported flat packed furniture; and(ix) to provide renewable energy services.

Results and dividends

The results for the year are as shown on page 35.

The directors have recommended the payment of a dividend of Rs 27,102,668 for the year under review (2010: Rs 20,498,080).

Directors

The present membership of the Board is set out on page 6 - 7.

Statement of directors’ responsibilities in respect of the consolidated financial statements

Company law requires the directors to prepare consolidated financial statements for each financial year which present fairly the financial position, financial performance and the cash flows of the Group and the Company. The directors are also responsible for keeping accounting records which:

• correctly record and explain the transactions of the Group and the Company;• disclose with reasonable accuracy at any time the financial position of the Group and the Company; and• would enable them to ensure that the consolidated financial statements comply with the Mauritius Companies Act 2001.

The directors confirm that they have complied with the above requirements in preparing the consolidated financial statements.

Internal Control

The directors are responsible for the Group’s systems of internal control. The systems have been designed to provide the directors with reasonable assurance that assets are safeguarded, that transactions are authorised and properly recorded and that there are no material errors and irregularities. An internal audit system is in place to assist management in the effective discharge of its responsibilities, and it is independent of management and reports to the Audit Committee.

Risk Management

The Board of Directors has overall responsibility for risk management. Through the Audit Committee, the directors are made aware of the risk areas which affect the Group and ensure that management has taken appropriate measures to mitigate these risks.


Contracts of significance

There was no contract of significance to which the Company or its subsidiaries was a party and in which a director had a material interest either directly or indirectly.

Directors’ share interests

The directors’ direct and indirect interests in the share capital of the Company or its subsidiaries are provided in the Corporate Governance Report.

Directors’ remuneration

Total emoluments and other benefits paid to the directors were as follows:

Donations

Donations made by the Group are provided in the Corporate Governance Report.

Auditors

The auditors, Grant Thornton, have indicated their willingness to continue in office and a resolution concerning their re-appointment will be proposed at the Annual Meeting.

On behalf of the Board of Directors

M. G. Eric Leal J. J. Vivian Collet SerretChief Executive Officer Deputy Chief Executive Officer

29 November 2011

2011 2010Rs Rs

Full time executive directors - Company 27,986,317 19,144,774

- Group 39,312,459 30,473,433

Non-executive directors- Company 4,586,090 3,160,650

- Group 5,415,470 3,160,650

The Group The Company2011 2010 2011 2010Rs Rs Rs Rs

Fees for:- Audit services (VAT exclusive) 2,120,000 1,045,000 525,000 440,000

Annual Report (cont’d)


22%Group Contribution from the IT Segment


Corporate Governance Report

Statement of compliance

The Board of Directors of Leal & Co. Ltd, the “Company”, considers good governance practices to be essential in developing and sustaining any successful business. The Company and its subsidiaries are collectively referred to as the “Group”. The Board also ensures the proper running of the Group and at the same time enhances the interaction between Senior Management, its Board of Directors, its shareholders and all other stakeholders.

For the year under review, the Board is of the view that the Group complies with the principles of the Code of Corporate Governance for Mauritius (the “Code”). Regarding areas of non-compliance with the Code, reasons and alternate practice which has been adopted, have been disclosed.

Substantial shareholders as at 30 June 2011

The share capital of the Company as at 30 June 2011 consisted of 2,277,390 ordinary shares of par value Rs 100 each held by 49 shareholders. The issue of shares with respect to the Rights Issue 2011 will be done in the 2011/2012 financial year. As at 30 June 2011, the following shareholders held more than 5% of the share capital of the Company:

Shareholders agreement affecting the governance of the Company by the board

Leal & Co. Ltd has not entered into such agreement with its shareholders during the year under review.

Cascade Holding Structure

Name of shareholder No. of ordinary shares % HoldingThe Anglo-Mauritius Assurance Society Ltd 114,988 5.05Valorous Holdings Ltd 252,544 11.09Michael Leal Ltd 251,806 11.06Eric M.G. Leal 511,690 22.47Société Clency Leal 997,868 43.82

AbbreviationsCisolve : Cisolve International Ltd Distripc : Distripc Ltd (Elytis) EI Ltd : Exclusive Island Ltd FD : Flexi Drive Ltd LCI : Leal Communications & Informatics Ltd LEC : Leal Equipements Compagnie Ltée LEC Seychelles : Leal Equipements Compagnie (Seychelles) Ltd Luxury Cars : Luxury Cars & Co Ltd LA Co Ltd : Luxury Automobiles Co Ltd Leal Logistics : Leal Logistics & Shipping Ltd PNL : Pharmacie Nouvelle Limited SCPL : Société Clency and Patrick Leal SETL : Solar-Ernte-Technik Ltd SR : Supreme Refinement (EU) Ltd UML : United Motors Ltd


Corporate Governance Report (cont’d)

Dividend policy

The Company has adopted a formal policy for the declaration and payment of dividend on the 12 November 2010 whereby dividend declared and payable annually to shareholders amount to a minimum of 10% of the par value of the shares, payable in 2 instalments (i.e. on 30 June and 31 December). Payment of dividends is approved by the Board of Directors. The aim of the Board of Directors is to provide to its shareholders a fair return on their investment.

In line with sound management principles, dividend declaration is subject to positive results and solvency test. For the year under review, the Company declared an interim dividend of Rs 11.00 per share to the shareholders of the Company registered at the close of business on the 9 December 2010 and a final dividend of Rs 2.00 per share to all shareholders of the Company registered as shareholders as at 15 June 2011.

Constitution

The directors consider Sections 10.1(b), (d) and (f) of the Company’s Constitution as material clauses and these sections provide for the following pre-emption rights:

1. Unless otherwise approved by Ordinary Resolution or where the terms of issue of any class of shares specifically provide otherwise, when the Board of Directors issues shares which rank equally with, or in priority to existing shares as to voting or distribution rights, those shares shall first be offered to the holders of existing shares in a manner which would, if the offer was accepted, maintain the relative voting and distribution rights of those shareholders.

2. The balance of any shares offered, but not taken up, shall be offered for subscription to shareholders who have accepted all the shares to which they are entitled to and who shall, if more than one, be entitled to subscribe for such balance of shares in the proportion as nearly as the circumstances will permit to the number of shares held by each of them.

3. In case there still remain shares that have not been taken up by the existing shareholders, the Board of Directors may allot such remaining shares to any person and in such numbers and on such terms as it may deem fit.

The board of directors

The Company is headed by a unitary Board which is comprised of ten directors under the Chairmanship of Mr. Michael Joseph Clency Leal, C.B.E, who has no executive responsibilities. Four board members are executive and five board members are independent non-executive. The names of all directors, their profile and their categorisation as well as their directorship details in listed companies are set out in the following sections of this corporate governance report.

There is a clear separation of the roles and functions of (i) the Chairman and (ii) the Chief Executive Officer and the Deputy Chief Executive Officer. The Chairman leads the Board whereas the Chief Executive Officer and Deputy Chief Executive Officer have the day-to-day management responsibility of the Group’s operations, implementing the strategies and policies approved by the Board. The position of the Chief Executive Officer and Deputy Chief Executive Officer are held by 2 executive directors.

The Board is of the view that this composition is adequately balanced and that current directors have the range of skills, expertise and experience to carry out their duties properly.

Directors who have attained or are over the age of 70 years are re-elected by separate resolution at the Annual Meeting of the Company. As per Section 23.6 of the Company’s Constitution, one third of the non-executive directors shall also stand for re-election at Annual Meeting of the Company as from the financial year 2011/2012.

An induction program is in place for newly appointed directors. The induction program meets the specific needs of both the Company and the newly appointed director and enables any new director to make the maximum contribution as quickly as possible.

Board meetings

The Board meetings are held at least once each quarter. For the year under review the Board met 6 times. The Board meetings are conducted in accordance with the Company’s Constitution and the Mauritius Companies Act 2001.

Board meetings are organised in such a way that directors receive all the information important to their understanding of the business to be conducted at the meeting. Furthermore, the directors have the right to request independent professional advice at the expense of the Company.


Assessment of directors

For the year under review, no evaluation of the Board or its committees was carried out. The directors forming part of the Board of the Company, especially those who are members of Board committees, have been appointed in the light of their wide range of skills and competence acquired through several years of working experience and professional background.

Company secretary

Directors have direct access to the advice and services of officials of the company acting as Company Secretary, namely Navitas Corporate Services Ltd, represented by qualified company secretaries.

The Company Secretary is responsible for the proper coordination and conduct of the Board of Directors and shareholders meetings and recording of proceedings. The Company Secretary also advises the Board on corporate governance policies and practices, application of the Mauritius Companies Act 2001 and other legal matters.

Director’s service contract

Executive directors of the Company and of its subsidiaries have a service contract with the Company or with its subsidiaries.

Board attendance

The following table gives the record of attendance at Board meetings of the Company and at meetings of Board committees for the year under review. The Board has reviewed the classification of its directors for the year under review under the three headings namely ED, NED and INED.

Board Committees

Directors Category Board meetings Audit CommitteeCorporate Governance

Committee

M.J. Clency LEAL, CBE (Group Chairman) NED 5/6 N/A 2/2Eric M.G. LEAL (Chief Executive Officer and alternate to M.J. Clency LEAL) ED 6/6 N/A N/AJ. J. Vivian COLLET-SERRET(Deputy Chief Executive Officer) ED 5/6 N/A N/AL. D. Christian FERRIERE(Chief Operating Officer, After sales department) ED 5/6 N/A N/AC. M. Arnaud LEAL(Market & Product Research Manager and alternate to Eric M.G. LEAL) ED 4/6 N/A N/AVirrsing RAMDENY(Chairman of the Audit Committee) INED 5/6 3 / 3 N/ABernard A.J. ROCHECOUSTE COLLET INED 5/6 N/A N/AJean Marie E. GREGOIRE(Chairman of the Corporate Governance Committee) INED 5/6 3 / 3 2/2M. L. D. René-France DUCASSE(Alternate to Jean Marie E. GREGOIRE) INED 5/6 3 / 3 0/2Gérald E. R. J. LINCOLN INED 4/6 N/A 2/2

ED: Executive Director NED: Non-Executive Director INED: Independent Non-Executive Director



Directors of the company’s subsidiaries

The directors of the Company’s subsidiaries for the year under review are as follows:

* Eric Leal is the alternate director of Mr. Clency Leal, C.B.E on LCI, LEC, Supreme Refinement and UML.* Eric Leal is the Chairman of Solar Ernte Technik Ltd.** Dr. Ashveen Kumar KISSOONAH is the Chairman of Distripc Ltd [Elytis].*** Mr. Gerald Lincoln is the alternate director of Mr. Jean Marie Grégoire on UML.

Directors Distripc LCI LEC Leal Logistics SETL SR UML PNL

M.J. Clency LEAL, CBE (Group Chairman) N/A √ √ N/A N/A √ √ √Eric M.G. LEAL *(Chief Executive Officer) √ √ √ √ √ √ √ √J. J. Vivian COLLET-SERRET(Deputy Chief Executive Officer) √ √ √ √ √ √ √ N/AL. D. Christian FERRIERE(Chief Operating Officer -after sales department) N/A N/A N/A N/A N/A N/A N/A N/ABernard A.J. ROCHECOUSTE COLLET N/A N/A N/A N/A N/A N/A √ √Jean Marie E. GREGOIRE √ √ √ N/A N/A N/A √ √Gérald E. R. J. LINCOLN*** √ √ √ N/A √ N/A N/A N/ADr. Ashveen Kumar KISSOONAH** √ N/A N/A N/A √ N/A N/A N/ANeemalen GOPAL √ √ N/A N/A N/A N/A N/A N/AKemraz MOHEE √ N/A N/A N/A N/A N/A N/A N/ADidier JAUFFRET N/A N/A √ N/A N/A N/A N/A N/AM. Yousouf REHMALLY, FCCA(Chief Finance Officer) N/A N/A N/A N/A √ √ N/A N/AMarie Noel MARION(Chief Operation Officer, Car Hire [Europcar]) N/A N/A N/A N/A N/A √ N/A N/AHimmunt Kumar JUGDUTH N/A N/A N/A √ N/A N/A N/A N/ADevendra MAULLOO N/A N/A N/A N/A √ N/A N/A N/ADr. Mukund Krishna OOLUN N/A N/A N/A N/A √ N/A N/A N/ANaraindath RAMNAWAZ N/A N/A N/A N/A √ N/A N/A N/ADaniel DE LABAUVE D’ARIFAT N/A N/A N/A N/A N/A N/A N/A √Guy Paul Jean Marie GUERANDEL N/A N/A N/A N/A N/A N/A N/A √Georges LEUNG SHING N/A N/A N/A N/A N/A N/A N/A √Marie Joseph Jean Paul CHASTEAU DE BALYON N/A N/A N/A N/A N/A N/A N/A √Virrsing RAMDENY N/A N/A N/A N/A N/A N/A N/A √M. L. D. René-France DUCASSE N/A N/A N/A N/A N/A N/A N/A √Marie Octave Regis NICOLIN N/A N/A N/A N/A N/A N/A N/A √




Interest of directors in the shares of the company

The following table gives the direct and indirect interests of the Directors in the shares of the Company as well as details of other directorship in listed companies for the year under review:

*Percentages rounded to 2 decimal places.

Board committees

1. Board Committees

In accordance with the Code, the Board has set up two committees to assist it in the execution of its responsibilities, namely the Corporate Governance Committee and the Risk and Audit Committee.

The 2 Board committees have access to expert advice at the expense of the Company as and when required.

2. The Corporate Governance Committee

Chairman- Jean-Marie E. GREGOIRE Members- M.J. Clency LEAL,C.B.E, M. L. D. René-France DUCASSE and Gérald E. R. J. LINCOLN

The Corporate Governance Committee is chaired by an independent non-executive Director and is composed of 1 non-executive Director, 2 independent non-executive Directors. The Corporate Governance committee met 2 times during the financial year under review.

The Group has revoked its Corporate Governance Charter and has adopted a new one on 11 February 2011 which is more in line with the provisions of the Code of Corporate Governance. The Corporate Governance Committee is responsible to provide guidance to the Board on aspects of corporate governance and for recommending the adoption of policies and best practices as appropriate for the Company.

The Corporate Governance Committee also performs the duties of the Nomination and Remuneration Committee.

DirectorsDirect Interest

%*Indirect Interest

%*No. of other Directorship

in listed Companies

M.J. Clency LEAL, CBE (Group Chairman) N/A 1.53 N/AEric M.G. LEAL (Chief Executive Officer and alternate to M.J. Clency LEAL) 22.47 13.34 N/AJ. J. Vivian COLLET-SERRET(Deputy Chief Executive Officer) 0.29 N/A N/AL. D. Christian FERRIERE(Chief Operating Officer, After sales department) N/A 13.43 N/AC. M. Arnaud LEAL(Market & Product Research Manager and alternate to Eric M.G. LEAL) 0.11 13.34 N/AVirrsing RAMDENY(Chairman of the Audit Committee) N/A 1.85 N/ABernard A. J. ROCHECOUSTE COLLET 0.13 0.02 N/AJean-Marie E. GREGOIRE(Chairman of the Corporate Governance Committee) 0.29 N/A N/AM. L. D. René-France DUCASSE(Alternate to Jean-Marie E. GREGOIRE) 0.18 N/A N/AGérald E. R. J. LINCOLN N/A N/A 3



Board committees (cont’d)

3. The Audit Committee

Chairman- Virrsing RAMDENYMembers- Jean-Marie E. GREGOIRE and M. L. D. René-France DUCASSE

The Risk and Audit Committee is chaired by an independent non-executive Director and is composed of 2 independent directors. Mr. Virrsing Ramdeny is a member of the Institute of Chartered Accountants of England and Wales and a Fellow of the Association of Chartered Certified Accountants and has substantial accounting and financial experience and background. The Audit Committee members are subject to re-appointment at each financial year end. The Group has revoked its audit Charter and adopted a new one on 12 May 2011 which is more in line with the provisions of the Code of Corporate Governance. The Audit Committee is responsible for the review and assessment of the internal and external audit work and for the appointment of external auditors. The Audit Committee met 3 times during the financial year under review.

Directors’ fees

Since January 2011, the Chief Executive Officer is wholly paid by the Company and a management fee is paid by PNL to Leal & Co Ltd.

All non-executive and independent Directors receive a Board remuneration consisting of a fixed fee, as well as an additional fee for each Board and Committee attended.

The Board is of the opinion that the individual remuneration of its directors is a sensitive information and has resolved not to disclose such information in the annual report.

Remuneration philosophy

The Board is responsible for the remuneration strategy of the Company and duties are delegated to the Corporate Governance committee.

Remuneration is reviewed regularly after taking cognizance of market norms and practices as well as additional responsibilities placed on directors. The remuneration package of Executive Directors consists of base salary, fringe benefits and performance bonuses. There is no formal policy for Executive Directors approaching retirement and the remuneration for the Executive Directors approaching retirement is at the discretion of the Board of Directors.

However the Board believes that it is a prerequisite that the Executive Directors and all other staff members be regularly assessed on their performance and deliverables, that salaries and pay packages be in line with best practices and be encouraging enough to promote total dedication of its people. Also the Board follows closely the carreer path of top management and ensures planning of future retirements and replacements.

Share option

The Group has no share option plan.

Related party transactions

Please refer to Note 30 to the consolidated financial statements.


Corporate social responsibility (CSR)

In line with our policy where human beings are at the centre of our development, the Company has also maintained its strong commitment to CSR support towards the community.

The Board gives its full support to such projects and ensures a human management style is in place and understood by everyone.

• Promoting education and development

In its continuous quest to help the NGOs contributing to childhood development, this year again the Group has maintained its financial support to:• APEIM - The Group has contributed to this NGO’s budget• ANFEN - We have maintained our contribution to support children in distress needing specialized education and support• LORETO INSTITUTE - This year again the Group and many of its executives have continued their financial support sponsoring many

children attending this valuable institution

• IT Education for poverty alleviation

Through our E-Inclusion Foundation we have continued our distribution of IT tools to many NGOs and families in this respect.

During the year under review, over and above our planned provision of PCs to students and NGOs, we have donated 2 Macintosh / Apple computers to La Pointe Tamarin amounting to Rs 89,052. for the setting up of an Art School for poor children in Tamarin.

Furthermore, we have contributed more than Rs 850,000. to the Foundation and more than 1,000 PCs have been made available to various institutions engaged in the alleviation of poverty.

We are also working closely with the Institut Cardinal Jean Margéot for the setting up of a Learning IT platform for the dispensing of courses on “Valeurs Humaines” as prescribed by UNESCO throughout the country.

• Environment

SETL was launched in December 2010 after two years of research and study of the renewable energy sector.Our subsidiary today represents major brands in the renewable energy sector.In the next financial year, the Group shall lay greater emphasis on its environmental impact. Indeed, we have seen with satisfaction the introduction of the CO2 levy and rebate in the motor trade as from the 13 July 2011.This new legislation for which we have been actively involved in via the MVDA, shall greatly contribute to a greener Mauritius.

Pursuing further our efforts, we have already approved the installation of a 150KW Photovoltaic plant on our premises and as from beginning of December 2011, our Group shall be producing up to 240,000 KWh of electricity annually for our own use. Of course, we shall also sell part of it to the CEB under the SSDG scheme.

We are still however awaiting Government decision for the introduction of water paints in our Workshop.

Through SETL, we are also working actively on Waste Recycling and Energy Production for our own consumption from Micro Hydro and Wind. These projects should come live in the next financial year.

Internal audit function

Internal Control and Risk Management

The Board of Directors recognises that a risk management programme integrated across the Group and embedded in its culture is not just a protective tool but is capable of creating a competitive edge in a dynamic environment.

The management of risk is therefore vital to the Group’s strategy and to achieving its long-term goal. The Board of Directors is responsible for the establishment and oversight of the Group’s risks management programme which incorporates internal control and risks management procedures.



Internal audit function (cont’d)

Internal Control and Risk Management (cont’d)

The Board of Directors has delegated to the Audit Committee (AC) its overall responsibility to translate its vision on risks management. The AC is reviewing the risks philosophy, strategy and policies recommended by management. Compliance with policies and procedures is constantly monitored .

Management is accountable to the Board of Directors to establish processes and procedures for identifying, evaluating and managing the significant risks faced by the Group. The Chief Executive Officer is responsible to report such risks as and when identified.

Internal Control

The system of internal control is primarily designed to manage rather than eliminate the risk of failure in the achievement of business objectives. Internal control can provide only reasonable assurance against material misstatement or loss. A hierarchical reporting has been established to provide a documented and auditable trail of accountability.

An independent and objective opinion is provided to the AC and management to ensure that appropriate procedures and control are in place to protect the Group’s income and assets.

The audit department operates within the framework of the Charter of the AC and in line with its approved audit plan, and all departments and subsidiaries are audited at least once annually.

Given its commitment to enhance value, the audit department aims at providing a high quality audit service by adopting up to date audit and business international standards. A follow up mechanism is in place so as to ensure that all the international standards are adopted in a pragmatic way and within a reasonable time frame.

Every month the Audit Committee is being remitted detailed audit reports with follow up actions and these reports shall be shortly available online to all directors of the Board via our Intranet.

Risk Management

The Group has clearly identified its risks areas and has decided to put in place a clear framework geared at achieving the Group’s risk controls which are classified in four categories namely operational, financial, customer, people and system.

It is the responsibility of management to assess the full array of risks and capture them in the business risks register with mitigating actions, ownership and completion dates. These registers will be tabled at the Board of Directors of each respective company of the Group and the key risks reported to the AC .

Risks are managed within an established two lines of defence:

- Internal Audit independently reviews, monitors and tests business units compliance with policies and procedures, as well as Quality Standards; and

- AC operates within a formal charter and is chaired by an independent non-executive director.

The current economic and financial crisis has created a significant decline in economic activities. The businesses within the Group are not immune to the prevailing economic climate and some key revenue sectors have been affected. The Group has reviewed the risks in line with its strategic objectives through control assessment workshops in order to better absorb exogenous shocks and to seize opportunities.

Management monitors risks in the day-to-day operations and the most important ones are listed hereunder:

Financial risks

The Group is exposed to various risks namely cash liquidity, interest rate, obsolescence, credit, and foreign exchange.



Internal audit function (cont’d)

Operational risk

The Group is continuously updating its policies and control procedures to minimise its exposure to operational risks. Such risks materialises into losses when, for instance, internal processes are inadequate or fail, or when external events cause damage or disruption to the business. Those risks are mitigated by ensuring that clear guidelines are provided through documented policies and procedures, which have been communicated, distributed and assessed by the Internal Auditor.

All our procedures, processes and job descriptions are fully accessible to all our personnel via our Intranet.

Information systems and information security

The Group’s businesses may be severely impacted by a failure in the confidentiality, integrity or availability of the information system resulting from an intentional or accidental event. A Code of conduct concerning the handling of information has been enforced and priority is placed on maintaining a high level of security. Appropriate firewalls, security guidelines and extensive back up facilities are in place to counter potential threats. Again the IT procedural manual is accessible via our Intranet.

Human capital

The risk that personnel will not be sufficient to attain the organisation’s objectives are real. Specific risks elements would include quality and quantity of personnel, competitive pay packages to retain best employees etc.

Donations

Donations made by the Company and its subsidiaries for the years ended 30 June 2010 and 2011 are as follows:

Ethics

The Board of Directors has not adopted a Code of Conduct for its Directors and employees but is mindful of its interest for other stakeholders such as suppliers, clients and the public at large when running its operations. However it is deeply impregnated in the philosophy of Leal Group to be committed to very high standards of integrity and ethical conduct in dealing with all stakeholders, shareholders, and employees.

The Board of Directors will adopt a Code of Conduct and will report accordingly next financial year.

Safety, health and environment

The Board is extremely conscious of the importance of a sound and safe environment for our employees and our surroundings.

For this reason, our Health and Safety Officer has conducted during the year numerous seminars, trainings and inspections of our premises. Our staff has been given the opportunity to be trained on these issues.

Energy savings

Apart from producing part of our own electricity from green sources, we have also embarked on a project to reduce drastically our energy needs by implementing various energy saving methods in the Group.

In the year to come, many energy monitoring meters shall be installed on our premises to monitor permanently and on the spot our consumption of electricity.


Category 2011 (Rs) 2010 (Rs)Charitable 1,191,068 1,421, 600Non-Charitable 1,171,925 2,050, 000



Governance

As an equal opportunity employer, we have great satisfaction in giving anyone of our employees equal chances of success.

Salaries within our Group, make no distinction of gender, race etc., and more and more women are reaching high profile post in our Group much to our pride. We strongly believe in their capacity to manage and in their human approach to problems.

During the year under review, the Hardship Fund has been called upon to help many employees facing some medical, financial or personal problems. Furthermore, in the case of one employee who lost her house in a fire break, we were proud to see the fantastic move of every single employee of the Group who generously contributed to the repairs of our employee’s house.

The Hardship Committee met on many occasions during this year. 11 cases were reviewed in line with the criteria set by the Committee and the funds have provided financial support in case of medical, personal and financial problems to many of our vulnerable employees. Besides individual hardship cases mentioned above, the fund has also granted Rs 122,000 and Rs 11,550 respectively as participation in the Computer Loan scheme launched by the Group in favour of employees who met established criteria.

The Group, confident of the need to add value to its workforce, has spent more than Rs 2,252,830 on local and overseas training over this financial year. To our pride, many mechanics have had the chance to undergo training overseas and thanks to their commitment towards the Company, once again we have won major awards this financial year.

Shareholder relations

Our website is continuously updated to provide maximum information both to our business partners as well as our shareholders.

Time table of important forthcoming events

Navitas Corporate Services LtdCompany Secretary

29 November 2011

December 2011 Interim dividend for financial year 2011/2012December 2011 Annual meetingJune 2012 Financial year endJune 2012 Final dividend for financial year 2011/2012


We certify, to the best of our knowledge and belief, that we have filed with the Registrar of Companies all such returns as are required of Leal & Co. Ltd, under the Mauritius Companies Act 2001, in terms of Section 166 (d), during the financial year ended 30 June 2011.

Navitas Corporate Services LtdCompany Secretary

Registered office:13, St Clément StreetCurepipeRepublic of Mauritius

29 November 2011

Certificate from the Secretary


9%Group Contribution from the Heavy Engineering Segment


Independent Auditors’ Report to the Members of Leal & Co. Ltd

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of Leal & Co. Ltd, “the Company”, and its subsidiaries, together referred to as “the Group”, which comprise the consolidated statement of financial position as at 30 June 2011, and the consolidated statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory information.

Directors’ Responsibilities for the Consolidated Financial Statements

The directors are responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards and in compliance with the requirements of the Mauritius Companies Act 2001 and for such control as the directors determine is necessary to enable the preparation of consolidated 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 consolidated 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 consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation and fair presentation of the consolidated 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 entity’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 consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements on pages 35 to 89 give a true and fair view of the financial position of the Group and the Company as at 30 June 2011, and of their financial performance and cash flows for the year then ended in

accordance with International Financial Reporting Standards and the requirements of the Mauritius Companies Act 2001.

Report on Other Legal and Regulatory Requirements

(a) Mauritius Companies Act 2001

In accordance with the requirements of Mauritius Companies Act 2001, we report as follows:

• we have no relationship with, or any interests in, the Company and its subsidiaries other than in our capacity as auditors and tax advisors;

• we have obtained all the information and explanations that we have required; and

• in our opinion, proper accounting records have been kept by the Company as far as appears from our examination of those records.

(b) Financial Reporting Act 2004

The directors are responsible for preparing the Corporate Governance Report and making the disclosures required by Section 8.4 of the Code of Corporate Governance, (the “Code”). Our responsibility is to report on these disclosures.

In our opinion, the disclosures in the Corporate Governance Report comply with the requirements of the Code except that individual directors’ remuneration has not been disclosed for reasons given in the Corporate Governance Report.

Other Matters

This report is made solely to the members of the Company as a body, in accordance with Section 205 of the Mauritius 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 opinion we have formed.

Grant Thornton Y NUBEE, FCCAChartered Accountants Licensed by FRC

29 November 2011

Ebène, Republic of Mauritius


FinancialStatements

ConsolidatedYear Ended 30 June 2011


Consolidated Statement of Financial Position as at 30 June 2011

The Group The CompanyNotes 2011 2010 2011 2010

Rs Rs Rs RsASSETSNon-current assetsGoodwill 6 265,240 - - -Property, plant and equipment 7 832,495,667 497,939,382 475,263,950 413,032,454Investment property 8 70,300,000 - 47,755,605 -Intangible assets 9 9,818,578 10,029,025 2,949,340 3,759,847Investments in subsidiaries 10 - - 135,579,072 64,753,868Investments in associates 11 3,064,818 91,397,952 7,961,000 40,064,444Available-for-sale investments 12 1,580,088 3,880,088 65,000 2,365,000Loan 13 2,159,696 2,159,696 - -Deferred tax assets 27 6,924,796 36,330 - -Non-current assets 926,608,883 605,442,473 669,573,967 523,975,613

Current assetsInventories 14 804,837,002 399,286,922 258,635,399 205,601,291Trade and other receivables 15 756,730,882 382,817,566 222,368,490 207,861,097Current tax asset 27 266,019 - - -Cash and cash equivalents 16 22,557,812 31,163,439 2,480,199 20,644,323Current assets 1,584,391,715 813,267,927 483,484,088 434,106,711

Assets classified as held for sale 17 - 42,235,000 - -Total assets 2,511,000,598 1,460,945,400 1,153,058,055 958,082,324

EQUITY AND LIABILITIESCapital and reservesShare capital 18 227,739,000 204,980,800 227,739,000 204,980,800Share premium 18 12,610,260 5,782,800 12,610,260 5,782,800Share application monies 18 22,271,650 - 22,271,650 -Other components of equity 18 156,799,625 91,481,254 71,959,102 13,333,968Retained earnings 229,467,258 145,861,192 199,234,851 133,022,059Equity attributable to owners of the parent 648,887,793 448,106,046 533,814,863 357,119,627Non-controlling interest 160,946,806 19,562,922 - -Total equity 809,834,599 467,668,968 533,814,863 357,119,627

Non-current liabilitiesRetirement benefit obligations 19 39,539,934 19,411,328 21,482,255 19,411,328Borrowings 20 188,331,758 180,984,009 132,186,059 148,229,209Deferred tax liabilities 27 15,408,218 13,167,833 11,207,282 10,914,472Non-current liabilities 243,279,910 213,563,170 164,875,596 178,555,009

Current liabilitiesTrade and other payables 21 752,138,210 570,572,080 298,123,177 304,727,891Borrowings 20 690,330,875 192,539,727 156,168,880 115,506,817Current tax liabilities 27 6,102,004 7,774,023 75,539 2,172,980Dividends 22 9,315,000 8,827,432 - -Current liabilities 1,457,886,089 779,713,262 454,367,596 422,407,688

Total liabilities 1,701,165,999 993,276,432 619,243,192 600,962,697Total equity and liabilities 2,511,000,598 1,460,945,400 1,153,058,055 958,082,324

Approved by the Board of Directors on 29 November 2011 and signed on its behalf by:The notes on pages 41 to 84 form an integral part of these consolidated financial statements.

M. G. Eric Leal J. J. Vivian Collet SerretChief Executive Officer Deputy Chief Executive Officer


The notes on pages 41 to 84 form an integral part of these consolidated financial statements.

Consolidated Statement of Comprehensive Income for the year ended 30 June 2011

The Group The CompanyNotes 2011 2010 2011 2010

Rs Rs Rs Rs

Revenue 23 3,179,523,522 2,393,503,850 1,302,697,363 1,013,652,650Cost of sales (2,585,642,278) (1,952,529,293) (1,039,927,935) (808,230,101)Gross profit 593,881,244 440,974,557 262,769,428 205,422,549Other income 25 29,654,659 12,081,713 77,975,898 63,039,714Selling expenses (107,865,368) (69,400,840) (49,228,197) (37,206,543)Administrative expenses (383,845,415) (307,998,577) (174,568,375) (148,919,601)Impairment loss - - - (5,000,000)Operating profit 131,825,120 75,656,853 116,948,754 77,336,119Net foreign exchange gains 47,315,977 40,487,485 19,112,417 17,975,477Finance income 26 400,871 145,270 165,784 294,993Finance costs 26 (60,806,760) (50,805,517) (32,598,422) (35,819,105)Share of profit of associates 11 3,268,469 2,050,004 - -Negative goodwill 29 59,198,326 - - -Loss on derecognition of investment in associate 11 (39,975,716) - - -Profit before tax 24 141,226,287 67,534,095 103,628,533 59,787,484Tax expense 27 (22,837,416) (17,402,043) (10,313,073) (5,916,904)Profit for the year 118,388,871 50,132,052 93,315,460 53,870,580

Other comprehensive income:Share of other comprehensive income of associates 11 - 4,348,743 - -Revaluation of land and building 7 68,414,728 - 58,625,134 -Retranslation of foreign operation (17,550) 3,992,248 - -Other comprehensive income for the year, net of tax 68,397,178 8,340,991 58,625,134 -Total comprehensive income for the year 186,786,049 58,473,043 151,940,594 53,870,580

Profit for the year attributable to:Owners of the parent 110,708,734 47,129,028 93,315,460 53,870,580Non-controlling interest 7,680,137 3,003,024 - -

118,388,871 50,132,052 93,315,460 53,870,580Total comprehensive income for the year attributable to:Owners of the parent 176,027,104 55,205,297 151,940,594 53,870,580Non-controlling interest 10,758,945 3,267,746 - -

186,786,049 58,473,043 151,940,594 53,870,580

Earnings per share 28 54.01 22.99 45.52 26.28


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Consolidated Statement of Cash Flows for the year ended 30 June 2011


Operating activitiesProfit before tax 141,226,287 67,534,095 103,628,533 59,787,484

Adjustment for:Depreciation 67,038,198 62,414,110 48,590,664 46,514,717Amortisation 1,084,037 1,082,507 810,507 810,507Profit on disposal of property, plant and equipment (6,307,886) (1,246,347) (3,495,863) (234,064)Impairment loss - - - 5,000,000Share of profit of associates (3,268,469) (2,050,004) - -Negative goodwill (59,198,326) - - -Investment written off - - - 1,089,500Exchange differences 1,857,938 972,759 - -Loss on derecognition of investment in associate 39,975,716 - - -Provisions 780,000 4,500,000 - 4,500,000Bad debts written off 463,208 - - -Dividend income (4,675) (1,925) (92,449,712) (45,711,962)Interest expense 53,055,496 44,174,383 30,680,337 33,671,792Interest income (400,871) (145,270) (165,784) (294,993)Movements in retirement benefit obligations 2,070,927 2,800,845 2,070,927 2,800,845Total adjustments 97,145,293 112,501,058 (13,958,924) 48,146,342

Net changes in working capital:Changes in inventories (95,058,452) (110,006,622) (53,034,108) (40,875,436)Changes in trade and other receivables (58,563,798) (76,093,858) 25,585,218 7,384,074Changes in trade and other payables 43,858,704 149,552,510 (6,604,713) 44,950,659Total changes in working capital (109,763,546) (36,547,970) (34,053,603) 11,459,297

Tax paid (23,452,232) (17,104,929) (11,507,908) (3,359,347)Net cash from operating activities 105,155,802 126,382,254 44,108,098 116,033,776

Investing activitiesPurchase of property, plant and equipment (75,878,210) (35,248,693) (37,350,216) (22,855,713)Purchase of investments (250,000) (200,000) (14,185,080) (13,876,000)Purchase of intangible assets (402,161) (277,901) - (277,901)Acquisition of subsidiary, net of cash acquired (205,320,275) - - -Proceeds from disposal of property, plant and equipment 27,879,149 20,193,586 21,111,655 17,559,772Purchase of investment property - - (27,455,605) -Dividend received 4,675 1,925 31,447,304 4,514,658Interest received 400,871 145,270 165,784 294,993Net cash used in investing activities (253,565,951) (15,385,813) (26,266,158) (14,640,191)


Consolidated Statement of Cash Flows for the year ended 30 June 2011 (cont’d)


Financing activitiesProceeds from bank loans 167,214,554 15,000,000 165,000,000 15,000,000Repayment of bank loans (144,888,383) (24,278,415) (140,120,768) (46,972,385)Repayment of finance leases (42,287,830) (58,031,366) (27,152,333) (19,969,073)Proceeds from issue of shares 29,585,660 - 29,585,660 -Share application monies 34,970 - 34,970 -Interest paid (53,055,495) (44,174,383) (30,680,337) (33,671,792)Dividend paid (35,930,100) (20,498,080) (27,102,668) (20,498,080)Net cash used in financing activities (79,326,624) (131,982,244) (30,435,476) (106,111,330)

Net change in cash and cash equivalents (227,736,773) (20,985,803) (12,593,536) (4,717,745)

Movement in cash and cash equivalents:At 01 July (51,172,877) (34,179,322) (1,726,295) 2,991,450Exchange differences (17,550) 3,992,248 - -Net change in cash and cash equivalents (227,736,773) (20,985,803) (12,593,536) (4,717,745)At 30 June (278,927,200) (51,172,877) (14,319,831) (1,726,295)

(a) Cash and cash equivalents made up of:Cash in hand and at bank 22,557,812 31,163,439 2,480,199 20,644,323Bank overdrafts (301,485,012) (82,336,316) (16,800,030) (22,370,618)

(278,927,200) (51,172,877) (14,319,831) (1,726,295)

(b) Acquisition of subsidiaryNet assets:-Share capital 137,676,614 - - -Retained earnings 56,187,429 - - -Revaluation reserves 81,264,549 - - -

275,128,592 - - -

% of net assets acquired (49.50%) 136,188,653 - - -

(c) Net cash outflow on acquisition of subsidiary:Purchase consideration settled in cash (2,835,080) - - -Cash and cash equivalents of subsidiary - - - -Cash in hand and at bank 7,612,646 - - -Bank overdrafts (210,097,841) - - -

(205,320,275) - - -

The notes on pages 41 to 84 form an integral part of these consolidated financial statements.

Notes to the Consolidated Financial Statements for the year ended 30 June 2011


1. General information and statement of compliance with IFRS

Leal & Co. Ltd, the “Company”, was incorporated in the Republic of Mauritius on 29 January 1976 as a private company with liability limited by shares. The status of the Company was subsequently changed to a public company with liability limited by shares on 14 April 1981. The Company’s registered office is Motorway M1, Les Pailles, Republic of Mauritius.

The Company and its subsidiaries are together referred as “the Group”.

The principal activities of the Group are:

(i) to deal in motor vehicles, spare parts and rental of cars; (ii) to deal in all kinds of mechanical engineering and agricultural equipment and spares; (iii) to deal in computer hardware and software;(iv) to deal in computer accessories, systems and peripherals;(v) to engage in the tourism industry;(vi) to engage in the distribution of pharmaceutical products, consumer goods and products for the textile industry;(vii) to manufacture cosmetics;(viii) to engage in the manufacture and retailing of imported flat packed furniture; and(ix) to provide renewable energy services.

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by International Accounting Standards Board (IASB).

2. Changes in accounting policies

2.1 Adoption of improvements to IFRS 2010

The Improvements to IFRSs 2010 made several minor amendments to a number of IFRSs. The only amendment relevant to the Group relates to IAS 1 Presentation of Financial Statements. The Group previously presented the reconciliations of each component of other comprehensive income in the statement of changes in equity. The Group now presents these reconciliations in the notes to the consolidated financial statements, as permitted by the amendment. This reduces duplicated disclosures and presents more clearly the overall changes in equity.

2.2 Property, plant and equipment

One of the Company’s subsidiaries has changed its accounting policy in respect of land as a result of a change in measurement basis in order to provide reliable information about the effects of transactions, events and conditions on its financial position, financial performance and/or cash flows.

In the prior years its land was measured using the cost method and now the fair value model has been adopted.

The change in accounting policy could not be accounted retrospectively as the fair value of the land was unknown at 30 June 2010.

A third consolidated statement of financial position is not presented as the information is unchanged from the previously published consolidated financial statements which are readily available for financial analysis. 2.3 Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early

by the Group

At the date of authorisation of these consolidated financial statements, certain new standards, amendments and interpretations to existing standards have been published by the IASB but not yet effective, and have not been adopted early by the Group.

Management anticipates that all of the relevant pronouncements will be adopted in the Group’s accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Group’s financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Group’s financial statements.



2. Changes in accounting policies (Cont’d)

2.3 Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by the Group (Cont’d)

IFRS 13 Fair Value MeasurementIFRS 12 Disclosure of Interests in Other EntitiesIFRS 11 Joint ArrangementsIFRS 10 Consolidated Financial Statements IAS 27 Separate Financial StatementsIAS 28 Investments in Associates and Joint VenturesIAS 19 Employee Benefits (Revised 2011)IFRS 9 Financial InstrumentsIAS 1 Presentation of Items of Other Comprehensive Income (Amendments to IAS 1)IAS 12 Deferred Tax: Recovery of Underlying Assets (Amendments to IAS 12)IFRS 1 Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters (Amendments to IFRS 1)IFRS 7 Disclosures - Transfers of Financial Assets (Amendments to IFRS 7)IFRIC 14 Prepayments of a Minimum Funding Requirement (Amendments to IFRIC 14)IAS 24 Related Party Disclosures

3. Summary of accounting policies

3.1 Overall considerations

The consolidated financial statements have been prepared using the significant accounting policies and measurement bases summarised below.

3.2 Basis of consolidation

The Group financial statements consolidate those of the parent company and of its subsidiaries as of 30 June 2011. Subsidiaries are all entities over which the Group has the power to control the financial and operating policies. The Group obtains and exercises control through more than half of the voting rights. All subsidiaries have a reporting date of 30 June.

All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses on transactions between Group companies. Where unrealised losses/gains on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts reported in the consolidated financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.

Profit or loss and other comprehensive income of subsidiary acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.

Non-controlling interests, if any, presented as part of equity, represent the portion of a subsidiary’s profit or loss and net assets that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-controlling interests based on their respective ownership interests.

3.3 Business combinations

The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.

The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree’s financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.



3. Summary of accounting policies (Cont’d)

3.3 Business combinations (Cont’d)

Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of a) fair value of consideration transferred, b) the recognised amount of any non-controlling interest in the acquiree and c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (ie gain on a bargain purchase) is recognised in profit or loss immediately.

3.4 Investments in subsidiaries

Investments in subsidiaries are shown at cost less impairment in the separate financial statements. Where the carrying amount of the investment is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount and the difference is charged to the statement of comprehensive income. On disposal of the investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the statement of comprehensive income.

3.5 Investments in associates

Associates are those entities over which the Group is able to exert significant influence but which are neither subsidiaries nor joint ventures.

Investments in associates are initially recognised at cost and subsequently accounted for using the equity method. Any goodwill or fair value adjustment attributable to the Group’s share in the associate is not recognised separately and is included in the amount recognised as investment in associates.

The carrying amount of the investment in associates is increased or decreased to recognise the Group’s share of the profit or loss and other comprehensive income of the associate, adjusted where necessary to ensure consistency with the accounting policies of the Group. However, when the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. If the associate subsequently reports profits, the investor resumes recognising its share of those profits only after its share of the profits exceeds the accumulated share of losses that has previously not been recognised.

Unrealised gains and losses on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s interest in those entities. Where unrealised losses are eliminated, the underlying asset is also tested for impairment.

3.6 Goodwill

Goodwill represents the future economic benefits arising from a business combination that are not individually identified and separately recognised. See note 3.3 for information on how goodwill is initially determined. Goodwill is carried at cost less accumulated impairment losses.

3.7 Foreign currency translation

Functional and presentation currency

The consolidated financial statements are presented in currency MUR, which is also the functional currency of the Company.

Foreign currency transactions and balances

Foreign currency transactions are translated into the functional currency of the Group, using the exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from the remeasurement of monetary items denominated in foreign currency at year-end exchange rates are recognised in profit or loss.




3.7 Foreign currency translation (Cont’d)

Foreign currency transactions and balances (Cont’d)

Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the exchange rates at the transaction date), except for non-monetary items measured at fair value which are translated using the exchange rates at the date when fair value was determined.

Foreign operations

In the Group’s financial statements, all assets, liabilities and transactions of the Group entities with a functional currency other than the MUR are translated into MUR upon consolidation. The functional currency of the entities in the Group has remained unchanged during the reporting period.

On consolidation, assets and liabilities have been translated into MUR at the closing rate at the reporting date. Goodwill and fair value adjustments arising on the acquisition of a foreign entity have been treated as assets and liabilities of the foreign entity and translated into MUR at the closing rate. Income and expenses have been translated into MUR at the average rate over the reporting rate.

Exchange differences are charged/credited to other comprehensive income and recognized in the currency translation reserve in equity. On disposal of a foreign operation, the related cumulative translation differences recognised in equity are reclassified to profit or loss and are recognised as part of the gain or loss on disposal.

The average exchange rates for the year ended 30 June 2011 were as follows:

Rs

EURO/MUR 40.29

SCR/MUR 2.14 3.8 Revenue

Revenue arises from the sale of goods and the rendering of services. It is measured by reference to the fair value of consideration received or receivable, excluding value added tax, rebates, and trade discounts.

Revenue is recognised when the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transactions will flow to the Group, the costs incurred can be measured reliably and the Group has transferred to the buyer the significant risks and rewards of ownership. In determining risks and rewards of ownership, the Group also considers ‘Bill and hold sales’, in which delivery is delayed at the buyer’s request but the buyer takes title and accepts billing.

Interest income is reported on an accrual basis using effective interest method.

Rental income is recognised on a straight-line basis over the term of the lease.

Dividend income is recognised when the right to receive payment is established.

Management fees and commission earned are recognised on an accrual basis.

3.9 Operating expenses

Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin. Expenditure for warranties is recognised and charged against the associated provision when the related revenue is recognised.




3.10 Borrowing costs

Borrowing costs are expensed in the period in which they are incurred and reported in finance costs.

3.11 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined by the weighted average cost method. The cost of finished goods and work-in-progress comprises raw materials, direct labour, other direct costs and related production overheads, but exclude interest expenses. Net realisable value is the estimate of the selling price in the ordinary course of business less any applicable selling expenses. Where necessary provision is made for obsolete, slow moving inventories.

3.12 Property, plant and equipment

Land and building

Property, plant and equipment are initially recorded at cost. Land and buildings are subsequently shown at market value, based on periodic valuations by external independent valuers, less subsequent depreciation for buildings. Any revaluation surplus is recognised in other comprehensive income and credited to the revaluation reserve in equity. To the extent that any revaluation decrease or impairment loss has previously been recognised in profit or loss, a revaluation increase is credited to profit or loss with the remaining part of the increase recognised in other comprehensive income. Downward revaluations of land are recognised upon appraisal or impairment testing, with the decrease being charged to other comprehensive income to the extent of any revaluation surplus in equity relating to this asset and any remaining decrease recognised in profit or loss. Any revaluation surplus remaining in equity on disposal of the asset is transferred to retained earnings. As no finite useful life for land can be determined, related carrying amounts are not depreciated.

Other property, plant and equipment

Property, plant and equipment are initially recognised at acquisition cost or manufacturing cost, including any costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by the Group’s management. Property, plant and equipment are subsequently measured using the cost model, cost less subsequent depreciation and impairment losses.

Depreciation is recognised on a straight-line basis to write down the cost less estimated residual values. The following useful lives are as follows:

Building - 2%Building on leasehold land - 2%Furniture and equipment - 10-33¹/3%Computer equipment - 10-33¹/3%Motor vehicles - 15-30%Tools and other equipment - 10-33¹/3%

No depreciation is provided on freehold land and on assets under the course of construction.

All acquisitions not exceeding Rs 3,000 are expensed in the same period of acquisition.

Where the carrying amount of an asset is greater than its estimated amount, it is written down immediately to its recoverable amount.

Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised in profit or loss within other income or other expenses.

The assets’ residual values, useful lives and methods of depreciation are reviewed and adjusted, if appropriate, at each reporting date. Repairs and maintenance costs are expensed as incurred.




3.13 Non-current assets classified as held for sale

When the Group intends to sell a non-current asset or a group of assets (a disposal group), and if sale within 12 months is highly probable, the asset or disposal group is classified as held for sale and presented separately in the consolidated statement of financial position.

Assets classified as held for sale are measured at the lower of their carrying amounts immediately prior to their classification as held for sale and their fair value less costs to sell. No assets classified as held for sale are subject to depreciation or amortisation subsequent to their classification as held for sale.

Any profit or loss arising from the sale of assets classified as held for sale is presented in other income/other expenses.

3.14 Leased assets

Finance leases

The economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all the risks and rewards of ownership of the leased asset. Where the Group is a lessee in this type of arrangement, the related asset is recognised at the inception of the lease at the fair value of the leased asset or, if lower, the present value of the lease payments plus incidental payments, if any. A corresponding amount is recognised as a finance lease liability.

The corresponding finance lease liability is reduced by lease payments net of finance charges. The interest element of lease payments represents a constant proportion of the outstanding capital balance and is charged to statement of comprehensive income, as finance costs over the period of the lease.

Operating leases

All other leases are treated as operating leases. Where the Group is a lessee, payments on operating lease agreements are recognised as an expense on a straight-line basis over the lease term. Associated costs, such as maintenance and insurance, are expensed as incurred. Where the Group is a lessor, rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

3.15 Intangible assets

Intangible assets comprise of brand names, computer software and website costs. Website costs are included within computer software.

The intangible assets are amortised over a period of 3 to 10 years.

The method of amortisation reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up and where such pattern cannot be reliably determined, a straight line amortisation method is used.

3.16 Impairment of assets

At each reporting date, the Group reviews the carrying amount of its assets to determine whether there is any indication that these assets have suffered an impairment loss. When an indication of impairment loss exists, the carrying amount of the asset is assessed and written down to its recoverable amount.




3.17 Investment property

Investment properties are properties held to earn rentals and/or for capital appreciation, and are accounted for using the fair value model.

Investment properties are revalued every two years and are included in the consolidated statement of financial position at their open market values. These values are supported by market evidence and are determined by external professional valuers with sufficient experience with respect to both the location and the nature of the investment property.

Any gain or loss resulting from either a change in the fair value or the sale of an investment property is immediately recognised in profit or loss within change in fair value of investment property.

Rental income and operating expenses from investment property are reported within other income and administrative expenses.

3.18 Financial instruments

Recognition, initial measurement and derecognition

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value through profit or loss which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities are described below.

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expired.

Classification and subsequent measurement of financial assets

For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments, are classified into loans and receivables and available-for-sale financial assets.

All financial assets except for those at fair value through profit or loss are subject to review for impairment at least at each reporting date to identify whether there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets.

The category determines subsequent measurement and whether any resulting income and expense is recognised in profit or loss or in other comprehensive income.

All income and expenses relating to financial assets that are recognised in statement of comprehensive income are presented within finance costs, finance income or other financial items, except for impairment of trade receivables which is presented within administrative expenses.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other receivables fall into this category of financial instruments.

An allowance for credit losses is established if there is objective evidence that the Group will be unable to collect all amounts due.




3.18 Financial instruments (Cont’d)

Classification and subsequent measurement of financial assets (Cont’d)

Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default. Receivables that are not considered to be individually impaired are reviewed for impairment in groups, which are determined by reference to the industry and region of a counterparty and other shared credit risk characteristics. The impairment loss estimate is then based on recent historical counterparty default rates for each identified group.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that do not qualify for inclusion in any of the other categories.

The Group’s available-for-sale financial assets are stated at cost which is a reflection of the fair value.

Classification and subsequent measurement of financial liabilities

The Group’s financial liabilities include borrowings and trade and other payables.

Financial liabilities are measured subsequently at amortised cost using the effective interest method.

All interest-related charges on financial liabilities are included within finance costs or finance income.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

3.19 Derivative financial instruments

The Group enters into derivative financial instruments to manage its exposure of foreign exchange risks. The derivative financial instruments used are mainly forward exchange rate contracts. Derivatives are initially measured at fair value at the date the derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss.

3.20 Post employment benefits

Defined benefit plan

The Group provides post employment benefits through defined plans.

A defined contribution plan is a pension plan under which the Group pays fixed contributions into an independent entity. The Group has no legal or constructive obligations to pay further contributions after its payment of the fixed contribution. Contributions to this plan are recognised as an expense in the period that relevant employee services are received.

Plans that do not meet the definition of a defined contribution plan are defined benefit plans. The defined benefit plan sponsored by the Group defines the amount of pension benefit that an employee will receive on retirement by reference to length of service and final salary. The legal obligation for any benefits remains with the Group, even if plan assets for funding the defined benefit plan have been set aside. Plan assets may include assets specifically designated to a long-term benefit fund as well as qualifying insurance policies.




3.20 Post employment benefits (Cont’d)

The liability recognised in the statement of financial position for defined benefit plans is the present value of the defined benefit obligation (DBO) at the reporting date less the fair value of plan assets, together with adjustments for unrecognised actuarial gains or losses and past service costs.

Management estimates the DBO annually with the assistance of independent actuaries. The estimate of its post-retirement benefit obligations is based on standard rates of inflation, future salary increase, future guaranteed pension increase and post retirement mortality rates. It also takes into account the Group’s specific anticipation of future salary increase. Discount factors are determined close to each year-end by reference to high quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related pension liability.

Actuarial gains and losses are not recognised as an expense unless the total unrecognised gain or loss exceeds 10% of the greater of the obligation and related plan assets. The amount exceeding this 10% corridor is charged or credited to profit or loss over the employees’ expected average remaining working lives. Actuarial gains and losses within the 10% corridor are disclosed separately. Past service costs are recognised immediately in profit or loss, unless the changes to the pension plan are conditional on the employees remaining in services for a specified period of time (the vesting period). In this case, the past service costs are amortised on a straight-line basis over the vesting period.

Contributions to the National Pension Scheme are expensed to the consolidated statement of comprehensive income in the year in which they fall due.

3.21 Income taxes

Tax expense recognised in profit or loss comprises the sum of deferred tax, current tax and CSR (Corporate Social Responsibility Fund) not recognised in other comprehensive income or directly in equity.

Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.

The Company and its Mauritian subsidiaries are subject to Corporate Social Responsibility Fund and the contribution is at a rate of 2% on the book profit of the preceding financial year.

Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases.

Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted by the end of the reporting period.

Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against future taxable income, based on the Group’s forecast of future operating results which is adjusted for significant non-taxable income and expenses and specific limits to the use of any unused tax loss or credit. Deferred tax liabilities are always provided for in full.

Deferred tax assets and liabilities are offset only when the Group has a right and intention to set off current tax assets and liabilities from the same taxation authority.

Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or loss, except where they relate to items that are recognised in other comprehensive income (such as the revaluation of land and building) or directly in equity, in which case the related deferred tax is also recognised in other comprehensive income or equity, respectively.




3.22 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. At the time of the effective payment, the provision is deducted from the corresponding expenses. All known risks at reporting date are reviewed in detail and provision is made where necessary.

3.23 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

Bank overdrafts are shown within borrowings under current liabilities.

3.24 Equity, reserves and dividend payments

Share capital represents using the nominal value of shares that have been issued.

Share premium represents the excess amount received on the nominal value of shares issued.

Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.

Share application monies represents funds received from shareholders and for which shares have yet to be allotted.

Other components of equity concern the surplus on the revaluation of land and building and retranslation of foreign operation. Retained earnings include the retained profits for both the current and prior periods.

Dividend distributions payable to equity shareholders are included in current liabilities when the dividends have been approved by the Board prior to the reporting date.

3.25 Trade receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business and are classified as current assets if settlement is expected within one year.

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

3.26 Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers and are classified as current liabilities if payment is due within one year.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

3.27 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried 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.

Fees paid on loan facilities are recognised as transaction costs.




3.28 Research and development expenditure

Research costs are expensed when incurred. Development costs are capitalised if certain criteria are met, otherwise they are expensed in the period in which they are incurred.

3.29 Comparatives

Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year.

3.30 Significant management judgement in applying accounting policies

When preparing the consolidated financial statements, management undertakes a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.

Significant management judgement

The following are significant management judgements in applying the accounting policies of the Group that have the most significant effect on the consolidated financial statements.

Recognition of service

Determining when to recognise revenues from after-sales services requires an understanding of the customer’s use of the related products, historical experience and knowledge of the market.

Deferred tax assets

The assessment of the probability of future taxable income in which deferred tax assets can be utilised is based on the Group’s latest approved budget forecast, which is adjusted for significant non-taxable income and expenses and specific limits to the use of any unused tax loss or credit. If a positive forecast of taxable income indicates the probable use of a deferred tax asset, especially when it can be utilised without a time limit, that deferred tax asset is usually recognised in full. The recognition of deferred tax assets that are subject to certain legal or economic limits or uncertainties is assessed individually by management based on the specific facts and circumstances.

Estimation uncertainty

Defined benefit liability

Management estimates the defined benefit liability annually with the assistance of independent actuaries; however, the actual outcome may vary due to estimation uncertainties. The estimate of its defined benefit liability Rs 39,539,934 (2010: Rs 19,411,328) is based on standard rates of inflation, future salary increases, future guaranteed pension increase and post retirement mortality rates. It also takes into account the Group’s specific anticipation of future salary increases. Discount factors are determined close to each year-end by reference to high quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related pension liability. Estimation uncertainties exist particularly with regard to salary escalation (analysis given in Note 19), which may vary significantly in future appraisals of the Group’s defined benefit obligations.

Useful lives and residual values of property, plant and equipment and intangible assets

Management reviews the useful lives of depreciable assets at each reporting date. At the reporting date, management assesses that the useful lives represent the expected utility of the assets to the Group. The carrying amounts are analysed in Notes 7 and 9. Actual results, however, may vary due to technical obsolescence, particularly relating to software and IT equipment.




3.30 Significant management judgement in applying accounting policies (Cont’d)

Estimation uncertainty (Cont’d)

Inventories

Inventories are measured at the lower of cost and net realisable value. In estimating net realisable values, management takes into account the most reliable evidence available at the times the estimates are made.

Provision for doubtful debts

The Group reviews the adequacy of provision for doubtful debts at each reporting date. During the year, the directors considered that provisions made are adequate, based on the credit worthiness of its receivables.

Available-for-sale investments

The Group follows the guidance of IAS 39 on determining when an investment is other than temporarily impaired. This determination requires significant judgement. In making this judgement, the Group evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost and the financial health and near-term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow.

4. Financial instrument risk

Risk management objectives and policies

The Group’s activities expose it to a variety of financial risks: market risk (foreign exchange risk and interest rates risk), credit risk and liquidity risk. The Group’s risk management policies are designed to identify and analyse these risks, to set appropriate risk limits and controls, and to monitor the risks and adherence to limits by means of reliable and up-to date information systems.

The Group’s risks are managed at the level of the Board of Directors. The Board is responsible for overseeing the establishment and implementation of effective risk management systems and the monitoring of internal compliance and controls.

The most significant financial risks to which the Group is exposed are described below.

4.1 Market risks

The Group is exposed to market risk through its use of financial instruments and specifically to currency risk, which result from both its operating and investing activities.

Foreign currency sensitivity

The Group is exposed to foreign exchange risk arising from its currency exposures, primarily with respect to the Euro (“EUR”) and the US Dollar (“USD”). Consequently, the Group is exposed to the risk that the exchange rates of the Mauritian rupee relative to the EUR and USD may change in a manner which has a material effect on the reported value of the Group’s assets and liabilities which are in EUR and USD.



4. Financial instrument risk (Cont’d)

4.1 Market risks (Cont’d)

Foreign currency sensitivity (Cont’d)

The Group manages its foreign currency exposures by forecasting its need for foreign currencies and retaining such amounts that will be necessary to settle purchases denominated in foreign currencies. The Group also has a banking facility to negotiate better rates for spot transactions.

To mitigate the Group’s exposure to foreign currency risk, non-MUR cash flows are monitored and forward exchange contracts are entered into in accordance with the Group’s risk management policies.

Foreign currency denominated financial assets and liabilities which expose the Group to currency risk are disclosed below. The amounts shown are those reported to key management translated into MUR at the closing rate:

The exchange rates for the year ended 30 June 2011 and 30 June 2010 are as shown below:

30 June 2011 The Group The CompanyFinancial

assetsFinancialliabilities

Financial assets

Financial liabilities

Rs Rs Rs Rs

United States Dollar (USD) 55,177,918 95,160,292 16,614 24,754Euro (EUR) 92,095,424 326,269,024 9,226,532 188,206,410South African Rand (ZAR) 8,517,509 13,307,938 - 2,579,433Pounds Sterling (GBP) 424,677 1,266,805 391,106 -Seychelles Rupee (SCR) 320,870 22,592 - -Others 10,649 - - -Total 156,547,047 436,026,651 9,634,252 190,810,597

30 June 2010 The Group The CompanyFinancial

assetsFinancialliabilities

Financial assets

Financial liabilities

Rs Rs Rs Rs

United States Dollar (USD) 28,432,794 56,515,964 - 338,050Euro (EUR) 36,502,899 216,215,123 10,577,343 155,907,275Japanese Yen (JPY) - 678,318 - 678,318South African Rand (ZAR) - 8,974,707 - 55,537Pounds Sterling (GBP) 9,189,605 15,439 9,189,605 15,439Total 74,125,298 282,399,551 19,766,948 156,994,619

2011 2010Rs Rs

EURO/MUR 41.85 38.51USD/MUR 28.85 31.51





Foreign currency sensitivity (Cont’d)

The Group

The following table illustrates principally the sensitivity of profit and equity in regards to the Group’s financial assets and financial liabilities and the USD/MUR and EUR/MUR exchange rate “all other things being equal”.

It assumes a 8% change of the USD/MUR exchange rate for the year ended 30 June 2011 (2010: 1%) and a 8% change for the EUR/MUR (2010: 15%) exchange rate. These percentages have been determined based on the average market volatility in exchange rates in the previous 12 months. The sensitivity analysis is based on the Group’s foreign currency financial instruments held at each reporting date and also takes into account forward exchange contracts that offset effects from changes in currency exchange rates.

If the MUR had strengthened against the USD by 8% and Euro by 8% respectively, then this would have the following impact:

The Company

If the MUR had strengthened/weakened against EURO by 8% (2010: 1%), the impact would have been a decrease/increase of MUR 14,284,177 respectively on the Company’s profit and equity (2010: decrease/increase of MUR 25,252,789).

One of the Company’s subsidiaries, Pharmacie Nouvelle Limited, has entered into forward foreign exchange contracts (for terms not exceeding 6 months) to minimise the exchange rate risk arising from these future purchases. The derivative financial asset arising from these transactions was nil for the year ended 30 June 2011.

Interest rate sensitivity

The Group’s policy is to minimise interest rate cash flow risk exposures on long-term financing. Long-term borrowings are therefore usually at fixed rates. At 30 June 2011, the Group has interest bearing financial liabilities in the form of bank overdrafts, bank loans, import loans and finance leases. The Group is exposed to interest rate risk as it also borrowed funds at floating interest rates. The interest on bank loans is based on the bank’s prime lending rate (PLR) plus 1% with a minimum of 9% per annum (2010: 9.25%) while interests on import loans and finance leases are based on the market rates.

If the MUR had weakened against the USD by 8% and Euro by 8% respectively, then this would have the following impact:

2011 2010Profit Equity Profit Equity

Rs Rs Rs Rs

EURO (18,733,888) (18,733,888) (26,956,834) (26,956,834)USD (3,198,590) (3,198,590) (280,832) (280,832)

2011 2010Profit Equity Profit Equity

Rs Rs Rs Rs

EURO 18,733,888 18,733,888 26,956,834 26,956,834USD 3,198,590 3,198,590 280,832 280,832





Interest rate sensitivity (Cont’d)

The sensitivity analysis below has been determined based on the exposure to interest rates at the reporting date. The analysis is prepared assuming that the amount of liability outstanding at the reporting date was as such outstanding for the whole period.

If interest rate had been 25 basis points higher/lower, the effect on profit and equity would have been as follows:

4.2 Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has policies in place to deal with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. The Group uses publicly available financial information and its own trading records to rate its major customers. The Group has no history of default clients. The Group continuously monitors defaults of customers and incorporates this information into its credit risk controls.

The Group’s maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at the reporting date, as summarised below:

2011 2010The Group The Company The Group The Company

Rs Rs Rs Rs

+25% (1,249,924) (433,599) (611,622) (431,312)- 25% 1,249,924 433,599 611,622 431,312


Non-current assetsAvailable-for-sale investments 1,580,088 3,880,088 65,000 2,365,000

Current assetsTrade and other receivables 678,109,453 358,007,879 152,786,671 157,539,376Cash and cash equivalents 22,557,812 31,163,439 2,480,199 20,644,323

700,667,265 389,171,318 155,266,870 178,183,699

Total 702,247,353 393,051,406 155,331,870 180,548,699




4.2 Credit risk (Cont’d)

In respect of trade and other receivables, the Group is not exposed to any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. Trade receivables consist of a large number of customers in various industries and geographical areas. Based on historical information about customer default rates, management considers the credit quality of trade receivables that are not past due or impaired to be good. The Group also works on leasing conditions in order to minimise risk of default.

Details of unimpaired trade receivables are described in Note 15.

The carrying amount of financial assets recorded in the consolidated financial statements represents the Group’s maximum exposure to credit risk.

The credit risk for the bank balances is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

4.3 Liquidity risk analysis

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity risk is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group reputation.

Ultimate responsibility for liquidity risk management rests with the Board of Directors who also monitors the Group’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by ensuring timely recovery of receivables and also by securing credit facilities from financial institutions and related parties.

The following are the contractual maturities of financial liabilities including interest payments:

The Group

30 June 2011Carrying amount

Contractual cash flows

Less than one year 1-5 years

Rs Rs Rs Rs

Bills payable 110,143,794 112,301,913 112,301,913 -Obligations under finance leases 186,916,833 219,018,800 75,716,401 143,302,399Bank overdrafts 301,485,012 301,485,012 301,485,012 -Bank loans 390,260,788 407,568,273 336,129,376 71,438,897Trade and other payables 589,569,438 589,569,438 589,569,438 -Total 1,578,375,865 1,629,943,436 1,415,202,140 214,741,296




4.3 Liquidity risk analysis (Cont’d)

The Group (Cont’d)

The Company




Rs Rs Rs Rs

Bills payable 103,288,242 104,872,061 104,872,061 -Obligations under finance leases 149,302,174 175,748,183 62,393,562 113,354,621Bank overdrafts 82,336,316 82,336,316 82,336,316 -Bank loans 141,885,245 194,731,437 35,351,435 159,380,002Trade and other payables 390,422,280 385,922,280 385,922,280 -Total 867,234,257 943,610,277 670,875,654 272,734,623




Rs Rs Rs Rs





Rs Rs Rs Rs




5. Capital management policies and procedures

The Company’s capital management objectives are:

• to ensure its ability and that of its subsidiaries to continue as a going concern; and• to provide an adequate return to the shareholders

by pricing products and services commensurately with the level of risk.

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of the statement of financial position.

The Company sets the amount of capital in proportion to its overall financing structure, that is, equity and financial liabilities. The Company 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 Company may adjust the amount of dividends paid to shareholders, reduce capital, issue new shares, or sell assets to reduce debts.

The gearing ratio for the Group and the Company are as follows:

Debt is defined as long and short-term borrowings, as detailed in Note 20.

Equity includes both capital and reserves.

6. Goodwill

The directors are of the opinion that the goodwill has not suffered any impairment at 30 June 2011.

The Group 2011 2010Rs Rs

Debt 878,662,633 373,523,736Cash and cash equivalents (22,557,812) (31,163,439)

Net debt 856,104,821 342,360,297

Equity 809,834,599 467,668,968

Total capital 1,665,939,420 810,029,265

Gearing ratio 51.39% 42.27%

The Company 2011 2010Rs Rs

Debt 288,354,939 263,736,026Cash and cash equivalents (2,480,199) (20,644,323)

Net debt 285,874,740 243,091,703

Equity 533,814,863 357,119,627

Total capital 819,689,603 600,211,330

Gearing ratio (Net debt to total capital) 34.88% 40.50%

2011Rs

Goodwill arising on acquisition of a subsidiary (Note 29) 265,240

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

for t

he y

ear e

nded

30

June

201

1


7. P

rope

rty,

pla

nt a

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quip

men

t

The

Grou

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ld

land

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RsRs

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1 Ju

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76,9

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0148

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86,7

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Addi

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971

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8,97

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--

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--

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At 3

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207,

406,

203

268,

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45,5

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315,

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1,175

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Depr

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At 0

1 Ju

ly 2

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-6,

305,

738

873,

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120,

228,

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r the

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-1,1

44,9

8633

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164,

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46,8

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09,9

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975

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7. P

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At 3

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483,

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ear

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ount

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7. Property, plant and equipment (Cont’d)

The freehold land and buildings were revalued in March 2011 by Tinkler, Ramlackhan, Chartered Valuation Surveyors. The valuation was made on the basis of the market value for existing use.

If the freehold land and buildings were stated on the historical cost basis, the amounts would be as follows:

The CompanyFreehold

landFreehold building

Motor vehicles

Furniture and

equipmentTools and equipment

Computer equipment Total

Rs Rs Rs Rs Rs Rs Rs

CostAt 01 July 2010 53,200,000 163,507,878 240,763,937 52,908,593 29,208,611 38,870,015 578,459,034Additions 15,806,472 4,005,579 53,165,598 3,933,672 2,693,805 6,014,166 85,619,292Disposals (15,806,472) (2,450,000) (39,356,403) (6,054,839) (7,519,612) (10,090,037) (81,277,363)Revaluation surplus 44,100,000 5,210,661 - - - - 49,310,661At 30 June 2011 97,300,000 170,274,118 254,573,132 50,787,426 24,382,804 34,794,144 632,111,624

DepreciationAt 01 July 2010 - 6,305,738 99,883,716 22,311,061 16,883,022 20,043,043 165,426,580Charge for the year - 3,306,236 31,880,690 5,090,371 2,301,652 6,011,715 48,590,664Disposals adjustment - (13,833) (24,176,775) (6,054,839) (7,519,612) (10,090,037) (47,855,096)Revaluation adjustment - (9,314,474) - - - - (9,314,474)At 30 June 2011 - 283,667 107,587,631 21,346,593 11,665,062 15,964,721 156,847,674Net book valuesAt 30 June 2011 97,300,000 169,990,451 146,985,501 29,440,833 12,717,742 18,829,423 475,263,950

The CompanyFreehold

landFreehold building

Motor vehicles

Furniture and

equipmentTools and equipment

Computer equipment Total

Rs Rs Rs Rs Rs Rs Rs

CostAt 01 July 2009 53,200,000 162,418,680 229,765,476 48,593,199 28,173,258 31,752,402 553,903,015Additions - 1,089,198 51,873,374 4,367,277 1,035,353 7,223,973 65,589,175Disposals - - (40,874,913) (51,883) - (106,360) (41,033,156)At 30 June 2010 53,200,000 163,507,878 240,763,937 52,908,593 29,208,611 38,870,015 578,459,034

DepreciationAt 01 July 2009 - 3,047,478 92,635,684 17,631,179 14,662,203 14,642,773 142,619,317Charge for the year - 3,258,260 30,928,179 4,692,671 2,220,819 5,414,788 46,514,717Disposals adjustment - - (23,680,147) (12,789) - (14,518) (23,707,454)At 30 June 2010 - 6,305,738 99,883,716 22,311,061 16,883,022 20,043,043 165,426,580Net book values30 June 2010 53,200,000 157,202,140 140,880,221 30,597,532 12,325,589 18,826,972 413,032,454


Cost 238,192,809 182,843,542 175,892,162 171,886,583Accumulated depreciation (27,257,821) (13,783,855) (14,060,070) (11,229,044)Net book values 210,934,988 169,059,687 161,832,092 160,657,539



7. Property, plant and equipment (Cont’d)

The net book values of property, plant and equipment held under finance leases comprise of:

Property, plant and equipment have been pledged as security for borrowings.

8. Investment property

The investment property is leased out on operating leases. Rental income amounted to Rs 4,067,460 is included within other income. Direct operating expenses of Rs 414,163 are reported within administrative expenses.

Investment property has been pledged as security for borrowings.

9. Intangible assets


Motor vehicles 199,366,953 154,513,067 136,066,107 140,880,215Furniture and equipment 4,096,334 9,593,750 - 4,109,722Tools and equipment 3,512,115 8,625,198 1,809,880 766,725Computer equipment 2,797,866 3,616,753 2,797,866 3,616,753

209,773,268 176,348,768 140,673,853 149,373,415

The Group The Company2011 2011Rs Rs

At 01 July - -Additions 47,755,605 47,755,605Transfers to property, plant and equipment (47,755,605) -Acquisition through business combination 70,300,000 -At 30 June 70,300,000 47,755,605

The Group Brand nameComputer software Total

Rs Rs Rs

CostAt 01 July 2010 14,766,184 1,594,421 16,360,605Additions - 261,360 261,360Net exchange differences 140,801 - 140,801Acquisition through business combination 634,410 - 634,410At 30 June 2011 15,541,395 1,855,781 17,397,176

Amortisation At 01 July 2010 5,745,006 586,574 6,331,580Charge for the year 960,000 124,037 1,084,037Net exchange differences 57,245 - 57,245Acquisition through business combination 105,736 - 105,736At 30 June 2011 6,867,987 710,611 7,578,598Net book valuesAt 30 June 2011 8,673,408 1,145,170 9,818,578



9. Intangible assets (Cont’d)

Intangible assets have been pledged as security for borrowings.

The Group Brand nameComputer software Total

Rs Rs Rs

CostAt 01 July 2009 15,518,092 1,316,520 16,834,612Additions - 277,901 277,901Net exchange differences (751,908) - (751,908)At 30 June 2010 14,766,184 1,594,421 16,360,605

Amortisation At 01 July 2009 4,828,000 464,067 5,292,067Charge for the year 960,000 122,507 1,082,507Net exchange differences (42,994) - (42,994)At 30 June 2010 5,745,006 586,574 6,331,580Net book valuesAt 30 June 2010 9,021,178 1,007,847 10,029,025

The Company Brand nameComputer software Total

Rs Rs Rs

CostAt 01 July 2010 and 30 June 2011 6,708,000 1,225,071 7,933,071

Amortisation At 01 July 2010 3,956,000 217,224 4,173,224Charge for the year 688,000 122,507 810,507At 30 June 2011 4,644,000 339,731 4,983,731Net book valuesAt 30 June 2011 2,064,000 885,340 2,949,340

CostAt 01 July 2009 6,708,000 947,170 7,655,170Additions - 277,901 277,901At 30 June 2010 6,708,000 1,225,071 7,933,071

Amortisation At 01 July 2009 3,268,000 94,717 3,362,717Charge for the year 688,000 122,507 810,507At 30 June 2010 3,956,000 217,224 4,173,224Net book valuesAt 30 June 2010 2,752,000 1,007,847 3,759,847



10. Investments in subsidiaries

10.1 Unquoted and at cost

10.2 Details pertaining to the subsidiaries are as follows:

Direct holding

Indirect holding through Leal Equipements Compagnie Ltée

2011 2010Rs Rs

At 01 July 64,753,868 57,116,968Additions 36,171,760 13,676,000Reclassification 34,653,444 50,400Impairment loss - (5,000,000)Written off - (1,089,500)At 30 June 135,579,072 64,753,868

No. of ordinary

shares held

Proportion of voting rights held

Name of subsidiaries Principal activities 2011 2010

Leal Communications & Informatics Ltd IT Services 1,302,500 90% 90%Leal Equipements Compagnie Ltée Mechanical engineering and

agricultural equipment 211,765 75% 75%United Motors Limited Dealer in motor vehicles and

spare parts 370,167 100% 100%Societe Clency & Patrick Leal Investment holding - 91% 91%DistriPc Ltd Softwares and hardwares 60,000 75% 75%Leal Logistics & Shipping Ltd Investment holding 33,538 92% 92%SARL Solinfo IT Services 6,000 50% 50%Supreme Refinement (EU) Ltd Tour operator & Travel agent 80,000 100% 100%Pharmacie Nouvelle Limited (see note below) Distributor of pharmaceutical

products 6,694,811 49.5% -Solar-Ernte-Technik Ltd Renewable energy 15,000 60% -

No. of ordinary

shares held



Leal Equipments Compagnie (Seychelles) Ltd Mechanical and hydraulic after sales services 9,999 100% -



10. Investments in subsidiaries (Cont’d)

10.2 Details pertaining to the subsidiaries are as follows (Cont’d):

Indirect holding through Pharmacie Nouvelle Limited

The Company owns 49.5% equity shares of Pharmacie Nouvelle Limited and consequently does not have more than half of the voting power of those shares. However, based on the contractual arrangements between the Company and one of the investors, the Company has power to control the financial and operating policies of Pharmacie Nouvelle Limited.

11. Investments in associates

No. of ordinary

shares held



Compagnie Mauricienne D’Exportation Limitée

Import and distribution of textile products 10,435 100% -

Compagnie Manufacturière de Produits Cosmétiques Limitée

Manufacturing of cosmetics109,368 100% -

Océan Indien Distribution (Ile Maurice) Ltée Retailing of imported flat packed furniture - 100% -

Distrimed Ltée Dormant 160,000 100% -

2011 2010The Group Rs Rs

At 01 July 91,397,952 91,520,019Additions 250,000 200,000Share of profit for the year 3,268,469 2,050,004Dividends received (2,257,321) (4,514,657)Transfer from/(to) available-for-sale investments 2,300,000 (2,000,000)Elimination upon transfer to available-for-sale investments - (206,157)Share of comprehensive income of associates - 4,348,743Fair value adjustments before derecognition as associate 17,265,122 -Derecognition of associate:Fair value of investments transfer to investment in subsidiaries (51,918,566) -Share of profit of associates (57,240,838) -At 30 June 3,064,818 91,397,952



11. Investments in associates (Cont’d)

Details pertaining to the Group’s associates are as follows:

*Pharmacie Nouvelle Limited has been consolidated using the equity method up to 30 April 2011, the date when control was obtained and thereafter it has been derecognised as an associate. The effect of this derecognition as an associate is as follows:

All associates are incorporated in the Republic of Mauritius.

Name of associates Principal activities Assets Liabilities Revenue Profit/(loss)

% interest held

Group share of profit/(loss)

30 June 2011 Rs Rs Rs Rs Rs

Exclusive Island Ltd

Tour Operator 2,556,313 1,640,254 12,953,079 (317,762) 27% (85,796)

Pharmacie Nouvelle Limited*

Distributor of pharmaceutical products 893,023,779 616,056,761 1,158,680,881 23,552,667 33.40% 6,555,493

Cisolve International Ltd

Information & Communication services 11,412,222 10,308,823 10,345,517 (7,568,382) 40% (3,027,353)

Flexidrive Ltd Fleetmaster - - - - 50% -

Luxury Automobiles Co Ltd

Sale of cars 6,615,185 1,939,368 11,538,300 (214,586) 50% (107,293)

Luxury Cars Co Ltd Sale of cars 1,143,818 254,952 - (133,163) 50% (66,582)Total 914,751,317 630,200,158 1,193,517,777 15,318,774 3,268,469

2011Rs

Fair value of investment in Pharmacie Nouvelle Limited before derecognition 51,918,566Carrying amount of investment at date control is obtained (91,894,282)Loss on derecognition (39,975,716)

Name of associates Principal activities Assets Liabilities Revenue Profit

% interest held

Group share of profit

30 June 2010 Rs Rs Rs Rs Rs

Exclusive Island Ltd

Tour Operator 3,798,620 2,564,799 11,255,807 178,336 27% 48,151

Pharmacie Nouvelle Limited

Distributor of pharmaceutical products 863,532,796 601,268,990 1,119,413,571 689,293 33.40% 230,223

Cisolve International Ltd

Information & Communication services 21,227,316 12,555,538 65,386,511 4,429,075 40% 1,771,630

Total 888,558,732 616,389,327 1,196,055,889 5,296,704 2,050,004



11. Investments in associates (Cont’d)

12. Available-for-sale investments

Details of the investments are as follows:

The above investments are stated at cost which is a reflection of the fair values.

13. Loan

The loan to a related company is interest free, unsecured and receivable after more than one year.

The Company 2011 2010Rs Rs

At 01 July 40,064,444 41,864,444Additions 250,000 200,000Transfer to investment in subsidiary (34,653,444) -Transfer from/(to) available-for-sale investments 2,300,000 (2,000,000)At 30 June 7,961,000 40,064,444


At 01 July 3,880,088 1,549,088 2,365,000 65,000Transfer (to)/from investments in associates (2,300,000) 2,000,000 (2,300,000) 2,000,000Reclassification - 331,000 - 300,000At 30 June 1,580,088 3,880,088 65,000 2,365,000

2011The Group The Company

Name of companies Class of shares Cost CostRs Rs

Progos Ltd Ordinary shares 50,000 50,000The State Bank of Mauritius Ltd Ordinary shares 12,750 7,500Ariva Ltée Ordinary shares 1,478,838 -Other investments Ordinary shares 38,500 7,500Total 1,580,088 65,000



14. Inventories (At cost)

The cost of inventories expensed during the year was as follows:

The above inventories have been pledged as security for borrowings.

15. Trade and other receivables


Motor vehicles 152,939,452 116,405,911 114,777,944 87,404,249Machines 22,430,296 28,557,113 - -General goods 60,796,769 61,453,775 - -Spare parts 124,918,672 97,090,957 79,188,619 62,062,895Raw materials 67,616,666 - - -Work in progress 4,273,168 64,202 107,733 46,053Finished goods 252,278,621 1,095,524 - -Goods in transit 138,015,970 103,602,248 68,814,074 62,195,911

823,269,614 408,269,730 262,888,370 211,709,108Less provision for write down (18,432,612) (8,982,808) (4,252,971) (6,107,817)Total 804,837,002 399,286,922 258,635,399 205,601,291


Cost of inventories 2,310,865,589 1,765,534,500 921,199,244 700,009,605

The Group The Company 2011 2010 2011 2010 Rs Rs Rs Rs

Trade receivables, gross 658,354,083 355,917,654 141,936,854 146,278,198 Allowance for credit losses (20,197,570) (7,094,230) (4,954,583) (1,679,871)Trade receivables, net 638,156,513 348,823,424 136,982,271 144,598,327Due by related parties 2,294,120 182,973 12,898,280 9,251,270Other receivables 37,658,820 9,001,482 2,906,119 3,689,777 Financial assets 678,109,453 358,007,879 152,786,670 157,539,374Advances to suppliers 29,852,111 9,652,354 1,455,648 - Other receivables and prepayments 48,769,318 15,157,333 68,126,172 50,321,723Non-financial assets 78,621,429 24,809,687 69,581,820 50,321,723Total 756,730,882 382,817,566 222,368,490 207,861,097



15. Trade and other receivables (Cont’d)

All amounts are short-term. The net carrying value of trade receivables is considered a reasonable approximation of fair value.

All of the Group’s trade and other receivables have been reviewed for indicators of impairment. Certain trade receivables were found to be impaired and an allowance for credit losses of MUR 20,197,570 (2010: MUR 7,094,230) has been recorded accordingly within other expenses.

The impaired trade receivables are mostly due from customers in the business-to-business market that are experiencing financial difficulties.

The movements in the allowance for credit losses are presented below:

Included in trade receivables balance are trade debtors with a carrying amount of Rs 146,418,153 (2010: Rs 101,510,799) which are past due at year end for which the Group has not provided as there has not been a significant change in the credit quality and the amounts are fully recoverable. An analysis of unimpaired trade receivables that are past due is given below:

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the directors believe that no further credit provision is required in excess of the existing provision.

The amounts due by the related parties are unsecured, interest free and receivable on demand. Trade and other receivables have been pledged as security for borrowings.


At 01 July 7,094,230 7,195,326 1,679,871 2,525,700Transfer 4,500,000 - 4,500,000 -Impairment loss 6,422,168 3,828,258 4,352,942 3,039,240Amounts written off (uncollectible) (8,691,827) (3,929,354) (5,578,230) (3,885,069)Provision through business combination 10,872,999 - - -At 30 June 20,197,570 7,094,230 4,954,583 1,679,871


60-90 days 27,866,591 60,701,423 8,147,119 6,280,763Over 90 days 118,551,562 40,809,376 54,025,215 20,611,708Total 146,418,153 101,510,799 62,172,334 26,892,471



16. Cash and cash equivalents

The cash and cash equivalents above have been pledged as security for borrowings.

17. Assets classified as held for sale

The freehold land and building of Rs 42,235,000 were disposed during the current financial year for Rs 47,500,000, resulting in a profit on disposal of Rs 5,265,000.

18. Equity

18.1 Share capital

The share capital of the Company consists only of fully paid ordinary shares with a nominal value of Rs 100. All shares are equally eligible to receive dividends and the repayment of capital and represent one vote at the shareholders’ meeting.

The share capital was increased during the year to Rs 227,739,000 by the issue of 227,582 ordinary shares of Rs 100 each.

18.2 Share premium

The Group The Company 2011 2010 2011 2010 Rs Rs Rs RsCash at bank and in handMUR 8,639,050 2,360,258 675,351 877,375 USD 3,731,853 2,846,065 16,607 - EURO 9,461,116 16,751,690 1,397,135 10,577,343 GBP 391,106 9,189,605 391,106 9,189,605 ZAR 128,816 5,053 - - SCR 10,649 6,031 - - Others 195,222 4,737 - - Total 22,557,812 31,163,439 2,480,199 20,644,323

2011 2010 Rs Rs

At 01 July 204,980,800 204,980,800 Issue of shares 22,758,200 - At 30 June 227,739,000 204,980,800

2011 2010 Rs Rs

At 01 July 5,782,800 5,782,800 Issue of shares 6,827,460 - At 30 June 12,610,260 5,782,800



18. Equity (Cont’d)

18.3 Other component of equity

Revaluation and other reserves consist principally of the surplus on the revaluation of land and building and translation of foreign operations.

18.4 Share application monies

Share application monies represent funds received from the shareholders and for which shares have not yet been issued at the reporting date.

19. Retirement benefit obligations

The Group The Company Revaluation and other reserves Revaluation and other reserves 2011 2010 2011 2010 Rs RS Rs Rs

At 01 July 91,481,254 83,179,583 13,333,968 13,333,968 Other comprehensive income Revaluation of property, plant and equipment 65,328,716 - 58,625,134 -

Share of other comprehensive income of associates - 4,348,743 - -

Exchange differences on translation of foreign operations (10,345) 3,992,248 - -

Released upon deemed disposal of subsidiary - (39,320) - -

Total other comprehensive income 65,318,371 8,301,671 58,625,134 -At 30 June 156,799,625 91,481,254 71,959,102 13,333,968

The Group The Company 2011 2010 2011 2010 Rs Rs Rs RsAmounts recognised in the statement of financial position Present value of funded obligations 127,954,914 102,872,629 127,954,914 102,872,629 Fair value of plan assets (80,137,592) (67,611,759) (80,137,592) (67,611,759)Deficit of plan assets 47,817,322 35,260,870 47,817,322 35,260,870 Unrecognised actuarial loss (26,335,067) (15,849,542) (26,335,067) (15,849,542)Liability recognised 21,482,255 19,411,328 21,482,255 19,411,328 Liability arising on business combination 18,057,679 - - -Total 39,539,934 19,411,328 21,482,255 19,411,328



19. Retirement benefit obligations (Cont’d)

The Group The Company 2011 2010 2011 2010 Rs Rs Rs RsAmounts recognised in the statement of comprehensive income Current service cost 8,737,461 5,827,065 6,437,188 5,827,065 Interest cost 17,500,645 9,307,304 10,915,186 9,307,304 Expected return on plan assets (12,346,525) (6,181,855) (7,435,064) (6,181,855)Recognised actuarial losses 351,715 304,141 353,623 304,141 Scheme expenses 551,657 319,600 365,912 319,600 Cost of insuring risk benefits 1,815,944 1,191,343 1,157,805 1,191,343 Effect of curtailment (108,606) - - -Total included in staff costs 16,502,291 10,767,598 11,794,650 10,767,598

Movement in liability recognised in the statement of financial position

At 01 July 19,411,328 16,610,483 19,411,328 16,610,483 Total expenses 11,794,650 10,767,598 11,794,650 10,767,598 Contributions paid (9,723,723) (7,966,753) (9,723,723) (7,966,753)Liability arising on business combination 18,057,679 - - -At 30 June 39,539,934 19,411,328 21,482,255 19,411,328

Change in defined benefit obligations Present value of defined benefit obligation at 01 July 102,872,629 87,391,754 102,872,629 87,391,754 Current service cost 6,437,188 5,827,065 6,437,188 5,827,065 Interest cost 10,915,186 9,307,304 10,915,186 9,307,304 Actuarial losses 7,949,943 695,414 7,949,943 695,414 Net transfer in (220,032) (348,908) (220,032) (348,908)Present value of defined benefit obligations at 30 June 127,954,914 102,872,629 127,954,914 102,872,629 On acquisition of subsidiary 79,766,833 - - -Total 207,721,747 102,872,629 127,954,914 102,872,629



19. Retirement benefit obligations (Cont’d)

The Group The Company 2011 2010 2011 2010 Rs Rs Rs RsChange in plan assets Fair value of plan assets at 01 July 67,611,759 57,257,904 67,611,759 57,257,904 Expected return on plan assets 7,435,064 6,181,855 7,435,064 6,181,855 Employer’s contribution 9,723,723 7,966,753 9,723,723 7,966,753 Scheme expenses (365,912) (319,600) (365,912) (319,600)Cost of insuring risk benefits (1,157,805) (1,191,343) (1,157,805) (1,191,343)Actuarial losses (2,889,205) (1,934,902) (2,889,205) (1,934,902)Net transfer in (220,032) (348,908) (220,032) (348,908)Fair value of plan assets at 30 June 80,137,592 67,611,759 80,137,592 67,611,759 On acquisition of subsidiary 51,254,039 - - -Total 131,139,631 67,611,759 80,137,592 67,611,759

The assets of the plan are invested in Anglo-Mauritius deposit administration fund. The latter is expected to produce a smooth progression of return from one year to the next. The breakdown of the assets above corresponds to a notional allocation of the underlying investments based on the long-term strategy of the fund.

In terms of the individual expected returns, the expected return on equities has been based on an equity risk premium above a risk free rate. The risk free rate has been measured in accordance to the yields on government bonds at the measurement date.

The main actuarial assumptions used for accounting purposes were as follows: The Group and the Company

Discount rate 9.5% 10.0%Expected return on plan assets 10.0% 10.5%Future salary increase 7.5% 8.0%Future guaranteed pension increase 0.0% 0.0%

General description of the plan

The scheme is a final salary Defined Benefit Plan. The plan provides for a pension at retirement and a benefit on death or disablement in service before retirement. The scheme for managers and directors are included in the holding company scheme and the contributions were paid by the respective group companies.

Retirement benefit obligations have been calculated using the Projected Unit Credit method and are based on the latest actuarial report dated September 2011 submitted by Anglo-Mauritius Assurance Society Limited.

The actual return on plan assets was Rs 9,439,315 for the year ended 30 June 2011 for the Group (30 June 2010: Rs 4,246,953).

The Group expects to make a contribution of Rs 16,962,690 to the defined benefit plans during the next financial year (2010: Rs 10,569,223).

The Group also operates a defined contribution scheme for employees who joined as from 01 July 2004 and no pension liability arises from this scheme. The Group has made a contribution of Rs 2,208,286 to the defined contribution scheme during the year ended 30 June 2011 (30 June 2010: Rs 810,548).



20. Borrowings

Obligations under finance leases

Apportioned as follows:


Non-currentBank loans 62,234,425 78,172,742 52,983,908 69,837,655Obligations under finance leases (see note below) 125,862,333 102,576,267 78,967,151 78,156,554

Other loans 235,000 235,000 235,000 235,000188,331,758 180,984,009 132,186,059 148,229,209

CurrentBank overdrafts 301,485,012 82,336,316 16,800,030 22,370,618Bank loans 327,591,363 63,277,504 97,850,948 56,117,406Obligations under finance leases (see note below) 61,054,500 46,725,907 41,517,902 37,018,793Other loans 200,000 200,000 - -

690,330,875 192,539,727 156,168,880 115,506,817

Total borrowings 878,662,633 373,523,736 288,354,939 263,736,026


Not later than 1 year 77,415,401 62,611,915 51,196,398 49,866,523Later than 1 year and not later than 5 years 141,803,399 114,018,468 89,344,337 85,542,693

219,218,800 176,630,383 140,540,735 135,409,216Future finance charges (32,301,967) (27,328,209) (20,055,682) (20,233,869)Present value of finance lease liabilities 186,916,833 149,302,174 120,485,053 115,175,347


Portion repayable within 1 year 61,054,500 46,725,907 41,517,902 37,018,793Portion repayable after more than 1 year 125,862,333 102,576,267 78,967,151 78,156,554

186,916,833 149,302,174 120,485,053 115,175,347



20. Borrowings (Cont’d)

Fair value

The fair value of the finance lease liabilities is approximately equal to their carrying amount.

Summary of borrowings arrangements

Bank loans

The loans are secured by fixed and floating charges on the assets of the Group and the rates of interest vary between 8.75% and 11.25% at 30 June 2011.

Bank overdrafts

The bank overdrafts are secured by fixed and floating charges on the Group’s assets.

Leasing arrangements

Finance leases relate to motor vehicles, furniture and equipment, tools and equipment and computer equipment with leases varying from 3 to 5 years. The Group has options to purchase the leased assets for a nominal amount at the conclusion of the lease arrangements. The Group’s obligations under finance leases are secured by the lessors’ title to the leased assets.

21. Trade and other payables

The average credit period for payment is 30 days. No interest is charged on trade payables for overdue balances. The Group has financial risk management policies in place to ensure that all payables are settled within the credit timeframe.

The carrying amount of trade and other payables is considered to be a reasonable approximation of the fair value.


Bills payable 110,143,794 103,288,242 22,605,319 46,569,883Trade payables 502,717,388 339,663,684 180,409,205 154,713,016Due to related parties 4,769,203 105,571 - 7,657,820Other payables and accruals 122,384,500 124,371,622 95,108,653 95,787,172Advances from customers 12,123,325 3,142,961 - -Total 752,138,210 570,572,080 298,123,177 304,727,891



During the year, the Company paid interim dividend of Rs 22,547,888 to its equity shareholders which represent a payment of Rs 11 per share (2,049,808 ordinary shares). A final dividend of Rs 4,554,780 was paid representing a payment of Rs 2 per share (2,277,390 ordinary shares).

During the year ended 30 June 2010, the Company paid dividends of Rs 20,498,080 representing a payment of Rs 10 per share (2,049,808 ordinary shares).

23. Revenue

Revenue represents amounts invoiced to clients in respect of goods sold and services provided, net of returns and taxes.

22. Dividends


Interim dividend paid 22,547,888 10,249,040 22,547,888 10,249,040Final dividend paid 4,554,780 10,249,040 4,554,780 10,249,040

27,102,668 20,498,080 27,102,668 20,498,080

Dividends payable 9,315,000 8,827,432 - -


Sales of new vehicles 1,555,829,719 1,204,225,164 935,888,059 688,035,103Sales of spare parts 343,505,691 312,538,808 223,220,768 201,473,183Sales of services 156,913,858 153,043,310 67,614,811 58,170,062Rental services 82,513,840 66,981,929 70,263,114 62,693,879Sales of IT products 835,026,138 646,140,287 - -Tour operator & travel agency services 2,142,844 4,323,558 - -Others 32,429,228 6,250,794 5,710,611 3,280,423Consumer goods 113,254,304 - - -Pharmaceutical products 47,367,263 - - -Textile and chemical auxiliaries 10,540,637 - - -Total 3,179,523,522 2,393,503,850 1,302,697,363 1,013,652,650



24. Profit before tax

Analysis of staff costs (excluding directors’ remuneration and fees) and number of employees


The above is stated after charging/(crediting): Cost of inventories expensed 2,310,865,589 1,765,534,500 921,199,244 700,009,605Depreciation and amortisation 67,038,198 62,414,110 48,590,664 46,514,717Profit on disposals of property, plant and equipment (6,307,886) (1,246,347) (3,495,863) (234,064)Other services 228,027 - - -Auditors’ remuneration 2,120,000 1,045,000 525,000 440,000Directors’ remuneration (note below) 44,727,929 33,634,083 32,572,407 22,305,424Staff costs (note below) 190,247,574 148,766,284 72,130,714 62,743,140Net foreign exchange gains (47,315,977) (40,487,485) (19,112,417) (17,975,477)Interest expense (Note 26) 53,055,496 44,174,383 30,683,337 33,671,792

Directors’ remuneration The Group The Company2011 2010 2011 2010Rs Rs Rs Rs

- Full-time directors 39,312,459 30,473,433 27,986,317 19,144,774 - Part-time directors 5,415,470 3,160,650 4,586,090 3,160,650

44,727,929 33,634,083 32,572,407 22,305,424


Salaries and relevant contributions 179,723,802 128,282,477 68,015,727 51,108,879Social security costs 10,523,772 20,483,807 4,114,987 11,634,261

190,247,574 148,766,284 72,130,714 62,743,140

Number of employees at end of year 913 464 310 252



25. Other income

26. Finance income/(costs)

27. Taxation

27.1 Income tax expense

The Company

The Company is liable to income tax at the rate of 15% and at 30 June 2011 it had an income tax liability of Rs 9,106,838 (2010: Rs 4,252,457). The income tax liability is calculated according to the tax rate and tax laws applicable to the fiscal period which it relates, based on the taxable profit for the year.


Dividend income 4,675 1,925 51,252,408 45,711,962Rental income 319,558 - 12,195,964 11,065,231Management fees - 60,004 3,820,000 4,425,130Profit on disposals of property, plant and equipment 6,307,886 1,246,347 3,495,863 234,064

Others 23,022,540 10,773,437 7,211,663 1,603,327Total 29,654,659 12,081,713 77,975,898 63,039,714


26.1 Finance incomeInterest income on:- Bank deposits 61,863 69,955 61,863 13,117- Other loans 339,008 75,315 103,921 281,876Total 400,871 145,270 165,784 294,993

26.2 Finance costsInterest expense on:Bank overdrafts (8,278,275) (4,904,439) (590,631) (1,276,024)Bank loans (13,626,539) (14,808,272) (11,730,274) (13,376,451)Finance leases (17,177,800) (16,453,363) (11,979,058) (13,160,463)Others (3,220,278) (2,116,749) (1,625,493) (1,412,653)Import loans (10,752,604) (5,891,560) (4,757,881) (4,446,201)

(53,055,496) (44,174,383) (30,683,337) (33,671,792)Bank charges (7,751,264) (6,631,134) (1,915,085) (2,147,313)Total (60,806,760) (50,805,517) (32,598,422) (35,819,105)



27. Taxation (Cont’d)

27.1 Income tax expense (Cont’d)

The Subsidiaries

The subsidiaries incorporated in the Republic of Mauritius are liable to income tax at the rate of 15% and at 30 June 2011, they had income tax liabilities of Rs 10,140,200 (2010: Rs 10,777,018).

The overseas subsidiary is taxed at the rate of 33 1/3% and at 30 June 2011 it had no income tax liability (2010: Nil).

The Company and its local subsidiaries are subject to the Alternative Minimum Tax (AMT). The AMT applies where a company’s “normal tax payable” is less than 7.5% of its book profit. It is not applicable where a company is exempt from tax or where 10% of any dividend declared does not exceed the “normal tax payable”. At 30 June 2011, the AMT did not apply to either the Company or its local subsidiaries.

The Company and its local subsidiaries are also subject to the Advanced Payment Scheme (APS) whereby they are required to submit an APS Statement and pay tax quarterly on the basis of either last year’s income or the income for the current quarter.

No provision has been made for CSR as the Company and its local subsidiaries have made qualified donations during the year.

Statement of comprehensive income

Statement of financial position


Income tax on the adjusted profit 20,458,563 15,029,475 9,106,838 4,252,457Movement on deferred taxation (Note 27.2) 1,538,949 2,232,473 292,810 1,664,447Movement in deferred tax asset - 140,095 - -Under provision for prior year 839,904 - 913,425 -Tax charge 22,837,416 17,402,043 10,313,073 5,916,904


At 01 July 7,774,023 10,431,477 2,172,980 1,842,619Tax liability for the year 20,458,563 15,029,475 9,106,838 4,252,457Tax paid during the year (8,154,898) (6,113,347) (3,086,405) (73,274)Tax deducted at source (690,797) (582,000) (609,796) (562,749)Tax overpaid in prior year (833,300) - - -Tax paid under APS (15,297,334) (10,991,582) (8,421,503) (3,286,073)Tax liability arising through business combination 1,739,824 - - -Under provision for prior year 839,904 - 913,425 -At 30 June 5,835,985 7,774,023 75,539 2,172,980

Tax payable 6,102,004 7,774,023 75,539 2,172,980Tax recoverable (266,019) - - -Net tax 5,835,985 7,774,023 75,539 2,172,980



27. Taxation (Cont’d) 27.1 Income tax reconciliation

The tax on the Group’s and the Company’s profit before taxation differs from the theoretical amount that would arise using the basic tax rate as follows:

27.2 Deferred taxation

Deferred income taxes are calculated on all temporary differences under the liability method at the rate of 15%.

The movement on the deferred taxation is as follows:


Profit before tax 141,226,287 67,534,095 103,628,533 59,787,484

Tax at 15 % 21,183,943 10,130,114 15,544,280 8,968,123Non-allowable expenses 13,272,039 12,560,832 9,442,926 9,696,613Under/(over) provision for prior year 839,903 (4,724) 913,425 -Tax losses relieved - (496,126) - -Deferred tax assets not recognised 1,020,338 3,675,292 - -Exempt income (3,556,976) (141,445) (8,212,241) (6,891,905)Movement in deferred tax 1,538,949 2,372,568 292,810 1,664,447Share of profit of associates (490,270) (307,502) - -Annual allowances (10,970,510) (10,386,966) (7,668,127) (7,520,374)Tax charge 22,837,416 17,402,043 10,313,073 5,916,904


At 01 July 13,131,503 10,758,935 10,914,472 9,250,025Movement for the year 1,538,949 2,372,568 292,810 1,664,447Deferred tax on acquisition of subsidiary (6,187,030) - - -At 30 June 8,483,422 13,131,503 11,207,282 10,914,472

Deferred tax assets 6,924,796 36,330 - -Deferred tax liabilities (15,408,218) (13,167,833) (11,207,282) (10,914,472)Net 8,483,422 13,131,503 11,207,282 10,914,472



28. Earnings per share

The earnings and number of ordinary shares in issue used in the calculation of earnings per share are as follows:

The number of ordinary shares has not been weighted for the calculation of earning per share since the issue of share was made on 28 June 2011.

29. Consolidation

(i) Details regarding the new subsidiaries, their activities, their total assets and liabilities as at 30 June 2011, and revenues and net operating profit/(loss) for its year/period then ended are as follows:


Profit for the year attributable to equity holders 110,708,734 47,129,028 93,315,460 53,870,580

Number Number Number Number

Ordinary shares in issue 2,049,808 2,049,808 2,049,808 2,049,808

Rs Rs Rs Rs

Earnings per share 54.01 22.99 45.52 26.28

Pharmacie Nouvelle Limited (Group)

Leal Equipement Compagnie

(Seychelles) LtdSolar-Ernte-Technik

Ltd

Country of incorporation Republic of Mauritius Republic of Seychelles Republic of Mauritius

Proportion of ownership interest 49.5% 100% 60%

Activities Wholesale distribution of pharmaceutical

products, consumer goods and products for textile industry

Mechanical and hydraulic after sales

services

Provision of renewable energy

services2011Rs

Total assets 893,023,779 404,439 3,664,182

Total liabilities 616,056,761 737,101 3,197,000

Operating revenues 1,158,680,881 131,535 -

Operating profit /(loss) 73,521,229 (89,817) (1,947,610)



29. Consolidation (Cont’d)

(ii) Goodwill on acquisition

Leal Equipements Compagnie (Seychelles) Ltd’s contribution to the Group results

Leal Equipements Compagnie (Seychelles) Ltd incurred a loss of Rs 89,817 for the 3 months from 31 March 2011 to the reporting date as it is a newly incorporated company.

Solar-Ernte-Technik Ltd

No goodwill on acquisition of this subsidiary as this acquisition was made at the incorporation of the investee.

30. Related party transactions

For the year ended 30 June 2011, both the Company and its subsidiaries entered into the following transactions with related parties:

The Group

2011Rs

Purchase considerationFair value of previously held equity interest 51,918,568 -Cost of shares acquired 25,071,759 26,247Total consideration 76,990,327 26,247

Fair value of net assets at date of acquisition:Share capital 68,149,923 21,189Pre-acquisition reserve 68,038,730 (267,723)

136,188,653 (246,534)

Goodwill (59,198,326) 272,781

Currency retranslation difference - (7,541)

At 30 June 2011 (59,198,326) 265,240

Nature of relationship Nature of transactionsVolume of

transactions

Debit/(credit) balances at 30

June 2011

Debit/(credit) balances at 30

June 2010Rs Rs Rs

Associates Sales of goods and services 86,985 701,502 788,487Associates Financing 26,057 (80,943) (54,886)Associates Purchase of goods 100,625 (48,300) (148,925)Associates Dividend income 2,257,320 - -Key management personnel Remuneration and other benefits 82,378,727 - -Common directorship Loans - 2,159,696 2,159,696



30. Related party transactions (Cont’d)

The Company

At the reporting date, the Group had outstanding commitments under non-cancellable operating leases which fall due as follows:

Operating lease payments represent rental for motor vehicles, offices and land. The lease is negotiated for an average term of 5 years and rentals are fixed for an average of 5 years.

Nature of relationship Nature of transactionsVolume of

transactions

Debit/(credit) balances at

30 June 2011

Debit/(credit) balances at

30 June 2010Rs Rs Rs

Subsidiaries Purchases of goods 25,063,791 (2,128,897) (8,390,989)Subsidiaries Corporate services 11,580,585 - -Subsidiaries Sales of goods 4,434,160 1,717,109 755,268Subsidiaries Other services 21,543,214 1,575,261 1,336,083Subsidiaries Rent expenses 1,389,000 - -Subsidiaries Loans 413,001 8,752,582 9,165,583Subsidiaries Dividend income 5,249,658 57,985,000 41,197,304Associates Sales of goods and services 86,985 701,502 788,487Associates Financing 26,057 (80,943) (54,886)Associates Purchase of goods 100,625 (48,300) (148,925)Associates Dividend income 2,257,320 - -Key management personnel Remuneration and other benefits 54,805,882 - -

Directors fees 32,572,407 - -

The amounts receivable from related parties are unsecured, interest free and receivable on demand.

The amounts payable to related parties are unsecured, interest free and repayable on demand.

All the other transactions are carried out on commercial terms.

31. Commitments

The Group

Operating lease arrangements where the Group is a lessee

2011 2010Rs Rs

Minimum lease payment under operating lease recognised in statement of comprehensive income 18,039,288 9,498,295

2011 2010Rs Rs

Within one year 21,024,905 7,740,849

Between 2 to 5 years 56,899,143 15,394,487



31. Commitments (Cont’d)

32. Other commitments

The Company

Operating lease arrangements where the Company is a lessee

At the reporting date, the Company had outstanding commitments under non-cancellable operating leases which fall due as follows:

Operating lease payments represent rental for motor vehicles, offices and land. The lease is negotiated for an average term of 5 years and rentals are fixed for an average of 5 years.

Operating lease arrangement where the Company is a lessor

Rental income for the year amounted to Rs 12,195,964 (2010: Rs 11,065,231).

The freehold land and building was leased out on operating leases. Future maximum lease payments are as follows:

The capital commitments comprise of commitments for acquisition of office equipment and IT equipment.

33. Contingent liabilities

At 30 June 2011, the Group had given bank guarantees of Rs 115,012,307 in favour of third parties, for which no material adverse effect on the Group’s financial position or results of operations is anticipated by the directors.

2011 2010Rs Rs

Minimum lease payment under operating lease recognised in statement of comprehensive income 9,896,432 7,270,652

2011 2010Rs Rs

Within one year 9,575,385 3,977,501

Between 2 to 5 years 31,466,287 12,800,400

2011 2010Rs Rs

Within 1 year 10,124,048 11,519,9641 to 5 years 21,963,134 46,079,856

32,087,182 57,599,820

The GroupRs

Capital CommitmentsApproved and contracted for 23,300,000

Documents

06 - Leal · PDF fileVirginie Quevauvilliers COO – Marketing ... The Mauritius Post and Cooperative Bank Ltd Bank of Baroda ... background. He holds a Doctorate