ANNUAL REPORT 2018 - Eudcos · 8 • EUDCOS ANNUAL REPORT 2018 ILITS 2018 2017 % Rs’000 % Rs’000 Revenues 797,126 663,039 Bought-in materials and services (401,827) (362,109)

ANNUAL REPORT2018

Dear Shareholder,

The Board of Directors of EXCELSIOR UNITED DEVELOPMENT COMPANIES LIMITED is pleased to present the Annual Report for the year ended 30 June 2018.

This report was approved by the Board of Directors on 25 September 2018.

René Leclézio Thierry SauzierChairman Director and Chief Executive Officer

CONTENTS

HIGHLIGHTS04. Corporate Information05. Group Structure06. Group Organisational Chart07. Segmental Analysis08. Group Value Added Statement10. Board Profile14. Senior Management’s Profile 15. Chairman’s Message

ACTIVITIES REVIEW18. Chief Executive’s Review19. Key Investments22. Investment23. Financial Comments

CORPORATE GOVERNANCE26. Corporate Governance Report42. Directors of Subsidiary Companies43. Statement of Directors’ Responsibilities 44. Statement of Compliance 45. Secretary’s Certificate

FINANCIAL STATEMENTS48. Independent Auditor’s Report52. Financial Statements57. Notes to the Financial Statements

NOTICE AND PROXY FORM118. Notice of Annual Meeting119. Proxy Form

HIGHLIGHTS

4 • E U D C O S A N N U A L R E P O R T 2 0 1 8

H I G H L I G H T S

Registered Office

4 Uniciti Office Park (Previously known as Clarens Fields Business Park)

Rivière Noire Road

Bambous 90203

Mauritius

Tel: (230) 401 6101

Fax: (230) 452 9600

E-mail: [email protected]

Registrar and Transfer Agent

MCB Registry and Securities Limited

Bankers

The Mauritius Commercial Bank Ltd

Afrasia Bank Ltd

Barclays Bank Mauritius Ltd

MauBank Ltd

Auditor

BDO & Co. (Chartered Accountants)

CORPORATE INFORMATION

E U D C O S A N N U A L R E P O R T 2 0 1 8 • 5

H I G H L I G H T S

Eudcos’ direct shareholding is 18.6% and its indirect shareholding is 14.7%, through Anytime Investment Ltd and New Fabulous Investment Ltd, thus

resulting in an effective shareholding of 33.3%

*

GROUP STRUCTURE

MEDINE DISTILLERYCOMPANY LIMITED

(66.66%)GOODWEAL LTD

(50%)

INTERNATIONALDISTILLERS

(MAURITIUS) LTD (50%)

ANYTIME INVESTMENTLTD (24.5%)

30% 30%

NEW FABULOUSINVESTMENT LTD (24.5%)

NEW GOODWILL CO LTD (18.6%)*

CONCORDE TOURISTGUIDE AGENCY LIMITED

(50.16%)

COMPAGNIE MAURICIENNEDE COMMERCE LIMITÉE

(89.54%)

SUBSIDIARIES ASSOCIATES


H I G H L I G H T S

GROUP ORGANISATIONAL CHART

CHIEF EXECUTIVE OFFICERThierry SAUZIER

CONCORDE TOURISTGUIDE AGENCY LIMITED

COMPAGNIE MAURICIENNE DE COMMERCE LIMITEE

MEDINE DISTILLERY COMPANY LIMITED

GROUP HEAD OF CORPORATEDhiren PONNUSAMY

ACTING HEADRemy RODRIGUES*

GENERAL MANAGERBruno LEBREUX

GENERAL MANAGERJean-François KOENIG

*as from 1st July 2018


H I G H L I G H T S

SEGMENTAL ANALYSIS (PBIT)

Rs M

Year ended 30 June 2018 2017

Revenue

Earnings before

Interest and Tax Revenue

Earnings before

Interest and Tax

Operations 576.7 98.8 532.3 76.7

Alcoholic beverages 275.1 59.1 247.1 53.4

Commerce 114.8 (2.1) 116.9 (2.6)

Investment property 29.1 29.1 29.2 20.3

Tourism and travel 157.7 12.6 139.1 5.6

Equities Portfolio 40.7 40.0 37.0 38.6

Banking and insurance 26.8 26.3

Tourism and travel 3.4 1.5

Other 9.8 10.8

Operating profit 138.8 115.3

ASSOCIATES

Alcoholic beverages 74.4 71.9

Group total 617.4 213.2 569.3 187.2

SUMMARY

Alcoholic beverages 275.1 133.6 247.1 125.3

Commerce 114.8 (2.1) 116.9 (2.6)

Investment property 29.1 29.1 29.2 20.3

Tourism and travel 157.7 12.6 139.1 5.6

Investments : 40.7 37.0

Banking and insurance 26.8 26.3

Tourism and travel 3.4 1.5

Others 9.8 10.8

Group total 617.4 213.2 569.3 187.2


H I G H L I G H T S

2018 2017

% Rs’000 % Rs’000

Revenues 797,126 663,039

Bought-in materials and services (401,827) (362,109)

Value added 395,299 300,930

APPLIED AS FOLLOWS

EMPLOYEES

Wages, salaries, bonuses, pensions and other benefits 21.3 84,310 27.7 83,439

GOVERNMENT

Income tax 3.4 13,525 4.4 13,215

PROVIDERS OF CAPITAL

Dividends 109,308 109,308

Interests 9,634 11,644

Minority interests 58,017 24,047

44.8 176,959 48.2 144,999

REINVESTED

Depreciation and amortisation 20,966 21,484

Retained profit 99,539 37,793

30.5 120,505 19.7 59,277

100 395,299 100 300,930

GROUP VALUE ADDED STATEMENT YEAR ENDED 30 JUNE 2018


H I G H L I G H T S

1 0 • E U D C O S A N N U A L R E P O R T 2 0 1 8

H I G H L I G H T S

RENÉ LECLÉZIO (Born in 1956)Non-Executive Director and Chairman

APPOINTED AS:DIRECTOR on 16 August 2000CHAIRMAN on 1 July 2011MEMBER OF THE CORPORATE GOVERNANCE COMMITTEE on 3 March 2010

QUALIFICATIONS• BSc (Chem Eng), Imperial College, London• MBA (London Business School)

PROFESSIONAL JOURNEY• Chemical engineer in the oil and gas

industry, London• Assistant Manager of Project Finance at

Lloyds Merchant Bank, London

SKILLS• Investment management• Property development• Experience across several economic sectors• Detailed knowledge of the Medine Group• Finance and Strategy

CURRENT EXTERNAL COMMITMENTS

• Managing Director of Promotion and

Development Ltd

• Director of several public and private

companies

CURRENT EXTERNAL APPOINTMENTS IN LISTED COMPANIES

• Promotion and Development Ltd

• Caudan Development Ltd

• Mauritius Freeport Development Company Ltd

• Swan General Ltd

• Swan Life Ltd

• Medine Limited

THIERRY SAUZIER (Born in 1968)Executive Director and Chief Executive Officer

APPOINTED AS:DIRECTOR on 11 December 2014CHIEF EXECUTIVE OFFICER on 1 October 2017MEMBER OF THE CORPORATE GOVERNANCE COMMITTEE on 9 February 2018

QUALIFICATIONS• Maîtrise d’Économie Appliquée (University

of Paris Dauphine)

PROFESSIONAL JOURNEY• Started his career at the Credit Lyonnais

in France• Joined the MCB Stockbrokers Ltd in 1992,

qualified as a Licensed Stockbroker in 1993 and managed the company for seven years

• In 2000, he joined the Corporate Banking Department of the Mauritius Commercial Bank Ltd

• Appointed at Medine in 2004 as Project Consultant

• Development under his leadership of Tamarina Golf Estate, Mauritius’ first IRS Project

• In 2007, he set up the function that was to become the Medine Property cluster

• Managing Director of the Medine Property cluster from December 2009 to September 2017

• Deputy CEO of the Medine and Eudcos Groups since February 2011

• Development under his leadership of the Education cluster and Uniciti, the Group’s Smart City

• CEO of the Medine and Eudcos Groups since October 2017

SKILLS• Finance and Strategy• Significant experience in Property Development• Strong strategic understanding and detailed

knowledge of the Medine Group


• None


• Medine Limited

PIERRE DOGER DE SPÉVILLE (Born in 1938)Non-Executive Director

APPOINTED AS:DIRECTOR on 20 December 1978CHAIRMAN from 1 July 1999 to 1 July 2011MEMBER OF THE CORPORATE GOVERNANCE COMMITTEE on 3 March 2010CHAIRMAN OF THE CORPORATE GOVERNANCE COMMITTEE from 1 July 2011 to 6 February 2018

QUALIFICATIONS• Notary Public

PROFESSIONAL JOURNEY• Notary Public from 1965 to 1997

SKILLS

• Valuable experience across several sectors

• Detailed knowledge of the company

CURRENT EXTERNAL COMMITMENTS• None


• Medine Limited

BOARD PROFILE

E U D C O S A N N U A L R E P O R T 2 0 1 8 • 1 1

H I G H L I G H T S

BOARD PROFILE

THOMAS DOGER DE SPÉVILLE (Born in 1989)Non-Executive Director

APPOINTED AS:DIRECTOR on 27 December 2015

QUALIFICATIONS

• MBA from the Institut Supérieur de

Commerce de Paris, France

PROFESSIONAL JOURNEY

• Founder and Managing Director of two

companies specialised in online promotion

on the French market

• General Manager of Monoprix Bagatelle

(CMPL Ltd) from December 2014 to June

2016

SKILLS

• Marketing and commercial skills

• Strategy development and execution


• Managing Director of Saffra Ltd, involved

in food and non-food distribution in

Mauritius

CURRENT EXTERNAL APPOINTMENTS IN LISTED

COMPANIES

• Medine Limited

LAJPATI GUJADHUR (Born in 1943)Non-Executive Director

APPOINTED AS:DIRECTOR on 14 November 1988

QUALIFICATIONS

• Attorney-at-Law/ particular interest in

property & company law and civil litigation


• Attorney-at-Law since April 1969

• Attorney of the Supreme Court of Mauritius

since 21 May 1969

• Company Secretary of four family

companies

• Director of Rogers & Co. Ltd from 1990 to

2000

SKILLS

• 50 years’ experience in legal matters,

particularly civil law


• None


• Medine Limited

RAJKUMAR GUJADHUR (Born in 1951)Non-Executive Director

APPOINTED AS:DIRECTOR on 30 September 2011

QUALIFICATIONS

• None


• 18 years’ experience as assistant and,

subsequently, as Manager of Consortium

Cinématographique (Maurice) Ltée

• 13 years’ experience as Assistant Manager

in his family business

SKILLS

• Well versed in management


• None


• None


H I G H L I G H T S

BOARD PROFILE

MARC LAGESSE (Born in 1963) Independent Non-Executive Director

APPOINTED AS:DIRECTOR on 27 September 2017MEMBER OF THE CORPORATE GOVERNANCE COMMITTEE on 27 September 2017CHAIRMAN OF THE CORPORATE GOVERNANCE COMMITTEE on 9 February 2018

QUALIFICATIONS• BSc Statistics, Computing, Operational

Research and Economics (University College London)

• MBA with specialisation in Finance and Macroeconomics (London Business School)

PROFESSIONAL JOURNEY• Proprietary trader in derivatives in the UK• Former General Manager and Director of

Mauritius Fund Management Co Ltd• Former CEO of MCB Investment Management

Co Ltd• Former Group Head of Capital Markets of

MCB Ltd • Former Chief Executive Officer of Hertshten

Group Ltd

SKILLS• Member of the initial National Corporate

Governance Committee, involved in the writing of the Code for Mauritius

• Considerable experience in the identification and development of new business opportunities

• Valuable executive level experience across several sectors and geographies, including India, China, Africa

• Broadly-based NED experience and interest across diverse sectors

• Strong capital markets knowledge and experience

CURRENT EXTERNAL COMMITMENTS• Member of the Investment Committee of

the S.I.P.F.• Chair of the Africa Investment Committee

of the UK based, International donor funded, PIDG Ltd

• Chair of Quantum Insurance Ltd• Chair of the Board of Governors of Clavis

International Primary SchoolCURRENT EXTERNAL APPOINTMENTS IN LISTED COMPANIES

• Independent Non-Executive Director and Chair of the Corporate Governance Committee at United Investments Limited

• Medine Limited

JACQUES TIN MIOW LI WAN PO, G.O.S.K (Born in 1944) Non-Executive Director

APPOINTED AS:DIRECTOR on 18 June 2014MEMBER OF THE AUDIT COMMITTEE on 30 June 2015CHAIRMAN OF THE CORPORATE GOVERNANCE COMMITTEE on 13 November 2015

QUALIFICATIONS• Fellow of the Association of Chartered

Certified Accountants (FCCA)

PROFESSIONAL JOURNEY• Executive chairman in the food processing

sector of Food Canners Ltd, as well as in the alcoholic drinks sector of New Goodwill Co Ltd / International Distillers (Mauritius) Ltd

• Founder of Sungold Trading Ltd in 1989• Owner of the Pizza Hut franchise• Former member of the Monetary Policy

Committee• Board Member of the Bank of Mauritius

from 2006 to 2014

SKILLS• Extensive knowledge in the food and

alcohol manufacturing industries, in marketing consumer products and in business project development

• Strong financial skills and strategic understanding

• Experience in setting up corporate structures

• Well versed in operational control• Good knowledge of banking and other

financial institutions

CURRENT EXTERNAL COMMITMENTS• Executive Chairman of Food Canners Ltd

and its associated companies, as well as that of the New Goodwill Investment Group, which includes International Distillers (Mauritius) Ltd

• Director of several companies and institutions


• Medine Limited

JOCELYNE MARTIN (Born in 1960) Non-Executive Director

APPOINTED AS:DIRECTOR on 22 December 2015MEMBER OF THE AUDIT AND CORPORATE GOVERNANCE COMMITTEES on 14 November 2016

QUALIFICATIONS• BSc (Hons) in Statistics at the London

School of Economics• Member of the Institute of Chartered

Accountants of England and Wale

PROFESSIONAL JOURNEY• Trained at Deloitte Haskins & Sells, London

(now part of PwC)• Senior Manager at De Chazal Du Mée• Group Financial Controller at Promotion

and Development Ltd from 1995 and thereafter appointed to the Board of Directors of Promotion and Development Ltd and Caudan Development Ltd in December 2004

SKILLS• Strong financial skills• Extensive executive experience of

financial reporting and corporate finance• Portfolio development and commercial

skills• Strategic understanding of organisational

and human resources issues• Valuable experience across several sectors

of the economy

CURRENT EXTERNAL COMMITMENTS• Finance Director of Promotion and

Development Ltd, its Group and Subsidiaries

• Company Secretary of Promotion and Development, and Caudan Development Ltd


• Promotion and Development Ltd• Caudan Development Ltd• Medine Limited• Mauritius Freeport Development Company

Ltd


H I G H L I G H T S

BOARD PROFILE

MARC DE RAVEL DE L’ARGENTIÈRE (Born in 1963)Non- Executive Director

APPOINTED AS:DIRECTOR on 30 June 2011MEMBER OF THE AUDIT COMMITTEE on 30 June 2011

QUALIFICATIONS• Certificate in Accounting, Marketing,

Negotiation, Organisational Behaviour, Project Management (Edingburgh Business School)

PROFESSIONAL JOURNEY• Manager and promoter of several business

entities• Manager at Grays Ltd from 1988 to 2007,

responsible of managing world repute brands, and of importing, marketing and distributing in Mauritius and Madagascar

• Audit team member at De Chazal Du Mée Chartered Accountants from 1987 to 1988

• Worked at De Ravel & Co Chartered Accountants South Africa from 1985 to 1987

SKILLS• Strong commercial skills• Valuable experience across several sectors• Strong Financial skills and strategic

understanding

CURRENT EXTERNAL COMMITMENTS• Manager and promoter of several business

entities involved in property development and agriculture

• Managing Director of Mont Calme Ltd since 2007, involved in property development


• Medine Limited

DANIEL GIRAUD, G.O.S.K (Born in 1952) Executive Director

APPOINTED AS:CHIEF EXECUTIVE OFFICER from 1 November 2002 to 30 September 2017DIRECTOR from 24 March 2004 to 29 December 2017MEMBER OF THE CORPORATE GOVERNANCE COMMITTEE from 3 March 2010 to 29 December 2017

PATRICIA GODER, ACIS Group Company Secretary

Born in 1968. Chartered Secretary from the Institute of Chartered Secretaries and Administrators in UK. Worked for accounting and company secretarial firms before joining the Group as Deputy Secretary in 2000. Group Company Secretary since November 2006. Completed an Executive Management Programme with Essec Business School in 2016.


H I G H L I G H T S

00

00

THIERRY SAUZIERChief Executive Officer (as from 1st October 2017)

Born in 1968. Holder of a Maîtrise d’Économie Appliquée

from the University of Paris Dauphine. Worked in

stockbroking and banking in France and Mauritius for 12

years before joining Medine in 2004 as Project Consultant.

Led the Tamarina Golf Estate IRS project to its completion,

and in 2007, set up the function that was to become the

Medine Property cluster. Managing Director of that cluster

from December 2009 to September 2017. Director of Eudcos

since December 2014 and Chief Executive Officer of the

Medine and Eudcos Groups since October 2017.

JEAN-FRANCOIS KOENIGGeneral Manager, Medine Distillery

Born in 1964. Holder of Bachelor of Science in cellular biology

and a biochemical engineering degree from University of Aix

Marseille I. Started his career at Mauritius Breweries Ltd in

the Quality Department, before joining Medine in 1990. Has

been working as the General Manager of Medine Distillery

since 1996. Has been the Manager of United Spirits Producers

Ltd from 1996 to 2010 and Director of Indian Ocean Rum Co.

Ltd from 2010. Was appointed as the Executive Director of

Medine Distillery in September 2011.

BRUNO LEBREUX General Manager, Concorde

Born in 1959. Holder of IATA Advanced Diploma, Advanced

Tourism Strategy & Marketing Diploma and Diploma in GMP

from Essec Business School, Paris. Has been working as the

General Manager of Concorde since 2004, as well as the

Director of Voyages Reunion. Is an Executive Member of the

National Star Rating Committee, and a member of AHRIM,

MTPA and AIOM. Sits as a Council Member of the Mauritius

Chamber of Commerce. Was appointed as the Executive

Director of Concorde in December 2015.

DHIREN PONNUSAMY Group Head of Corporate

Born in 1979. Holder of a BSc (Hons) in Economics from

the London School of Economics & Political Science and

a Chartered Financial Analyst Charterholder. Managing

Director at Standard Chartered Bank PLC in London,

including a number of senior CFO positions in South Korea,

Singapore, Africa and the Philippines. Joined Medine as

Group Head of Corporate in January 2018.

SENIOR MANAGEMENT’S PROFILE

12

43


H I G H L I G H T S

CHAIRMAN’S MESSAGE

Dear Shareholder,

Your company’s net asset value per share (NAV) increased by 13.2 per cent during the period under consideration, compared to an increase

of 6 per cent in the SEMDEX. The sectorial breakdown is more or less what it was last year, that is, alcoholic beverages (38 per cent), financial

services (29 per cent), tourism (10 per cent) and property (9 per cent). One sector which has emerged with the purchase of shares in the

Jacques Li Wan Po Group is food manufacturing and distribution, now 11 per cent of the portfolio. As food and beverages are part of the

same consumer sector, they should be re-grouped, with the new sector representing 49 per cent of the portfolio.

Nearly all the investee companies performed well this year, with improvements over the previous year. Our exceptional

performance was registered by your 50.2 per cent subsidiary, Concorde Tourist Guide Agency (CTGA), which sold its share in

Southern Investments – owner of La Palmeraie Hotel – for a profit of Rs 117 million. You will find more details of individual

company performances in the Chief Executive’s Review.

The post-independence period was complicated in Mauritius. The 1970s worldwide was a decade characterised by high inflation and

ill-conceived socialist programmes, which prompted the British Conservative Party to launch a brilliant advertising campaign in 1978

with the slogan “Labour Isn’t Working”, showing a long queue outside an unemployment office. Mauritius too, did not escape the reign

of high taxes and high inflation, and politics then generated a fear of the nationalisation of the sugar industry. Many sugar companies

at that time, concerned about nationalisation, created investment companies in which they transferred their non-sugar investments.

Your company was born out of this fear in 1974. The Medine Sugar Estates Company (now Medine) created EUDCOS as a fully owned

subsidiary, and in 1975 distributed the shares of EUDCOS by way of a dividend in specie to its shareholders.

For years, your company was managed as an integral part of the Medine “Group”, although there was no direct shareholding link between

the two. The winding up of the holding companies, Black River Investment Company, Medine Shares Holding and Alma Investments,

in 2014, was the final act in the separation of the two companies. Even then, the companies continued to be managed as the same “Group”.

A full review of this co-management is currently underway to ensure that one company does not subsidise the other. The directors are

working on a restructuring of the group, with a view to providing a more efficient group structure and unlock value for existing shareholders.

Our objective in this exercise is to maintain or enhance shareholder value and income growth.

I would like to thank my fellow directors for their continued support during the year. I would also like to thank the CEO, Thierry Sauzier, and

his team, for the work which they have done. Going forward, as a logical consequence of the proposed restructuring of EUDCOS, Thierry will

resign as director of the company. I would like to take this opportunity to thank him for the valuable contribution which he has made to this

remarkable company.

Yours sincerely,

René LeclézioChairman

11 October 2018

ACTIVITIESREVIEW


A C T I V I T I E S R E V I E W

CHIEF EXECUTIVE’S REVIEW

Dear Shareholder,

On behalf of the Board, I am pleased to submit my first review of the performance of EUDCOS for the year ended 30 June 2018.

EUDCOS Group achieved a strong year with profits after interest and tax of Rs 267 million, a Rs 96 million increase relative to the previous year.

This surge in profits was mainly driven by the sale of La Palmeraie Hotel through the disposal of shares held by Concorde in Southern

Investments Ltd. The net contribution gain from this transaction was Rs 62 million, with a further Rs 16 million gain generated from an

unrelated sale of investment property.

On an underlying basis, the Group saw broad based growth across sectors, albeit it is worth highlighting the distillery operation, which

achieved a record year with profits reaching Rs 52 million.

The share of associates was higher than last year with an improved contribution across most investments.

The net assets value reached Rs 2,159 million, largely on the back of higher profitability and some increases in the fair value of our

investment portfolio. This translated into an increase in the net assets per share, from Rs 15.15 to Rs 17.78, or a 17% increase.

Overall, our activities performed relatively well in an increasingly competitive environment. We are cognizant of the disintermediation trend

in the travel and tour operating sector and the declining national output of molasses for our distillery operation. While we remain cautious

about the future, we are also looking at strategic options for the Group.

I set out below a review of the performance of the operations during the reporting period.



KEY INVESTMENTS

BEVERAGES

Medine Distillery Company Limited (Medine Distillery) – Subsidiary at 66.7%

Overview of Activities

Medine Distillery Company Limited (Medine Distillery) produces rum, alcohol and vinegar for the local and export markets.

Performance Review

The company performed well and increased its turnover by Rs 28 million to reach Rs 275 million for the year under review. The

revenue growth resulted from better sales on the local market and a significant increase in its export sales. It also benefitted from

favourable foreign currency rates that contributed to the higher export revenues. The profitability for this year improved in line with

the revenue growth and reached a record level of Rs 51.7 million.

Production has been good overall, with 5.7 million litres of alcohol produced. The production output was, however, limited by the

amount of molasses allocated to the distillery and in that respect will restrict the potential growth in production volume in the future.

This year, the company has launched a new vinegar on the market. This new product is made from pure sugarcane juice and produced

using a traditional method, known as the ‘Méthode Orléanaise’, whereby the vinegar goes through a slow natural fermentation

process in oak casks. Targeted at the premium vinegar market, it has a strong offering in terms of origin and uniqueness, appealing

to Mauritian chefs looking for new local ingredients for their signature serves, or to tourists as an authentic local product to bring back

home. Feedback on our Pure Cane Vinegar has been very promising thus far.

Strategy & Outlook

Prospects for 2018/19 are good and we are expecting that demand for alcohol will remain stable on the local market and continue

to grow on the export market.

International Distillers (Mauritius) Ltd (IDM) – Associate at 50.0%

International Distillers (Mauritius) Ltd (IDM) operates a bottling, sale and distribution unit of a mix of local and imported spirits, wine

and alcoholic products at Plaine Lauzun.

During the year under review, the Company increased its turnover by Rs 104 million to reach Rs 977 million, on account of an 8.5%

growth in its sales volume and reflected the strength of its local brands.

Profit realised by IDM in 2017/18 amounted to Rs 82 million, slightly lower than the preceding year. This was mainly due to a change

in product mix that resulted in a lower profit margin and took on board higher selling and distribution costs.

The share of profits attributable to EUDCOS amounted to Rs 41 million (2016/17 – Rs 41 million).



New Goodwill Co Ltd (New Goodwill) – Associate at 33.3% (effective holding)

New Goodwill Co Ltd (New Goodwill) owns and operates a rum-bottling and distribution unit at Baie du Tombeau.

For the period 2017/18, the company’s turnover reached Rs 1,881 million, representing a 2.3% growth compared to the

Rs 1,839 million turnover realised the preceding year. This was the result of higher sales prices further to an increase in excise duties.

On the other hand, the Company’s profitability fell by Rs 20 million to reach Rs 95 million, and the drop in profit was attributable to

a lower gross profit margin achieved in the year under review and a lower fair value gain on its portfolio of investments, compared

to the preceding year.

The share of profits attributable to EUDCOS amounted to Rs 33.4 million (2016/17 – Rs 30.9 million) and included the share of

subsequent adjustment to results of New Goodwill for the preceding year.

TOURISM

Concorde Tourist Guide Agency Limited (Concorde) – Subsidiary at 50.1%


Concorde Tourist Guide Agency Limited (Concorde) is one of the leading IATA-accredited Travel Agents and Destination Management

Company in Mauritius. With long years of experience in the tourism industry, the company is well-known for providing a wide and

flexible range of holiday options and travel-related products.

Over the years, Concorde has built itself a reputation of excellence, offering unique quality service, while maintaining a healthy

increase in its number of inbound and outbound customers.

Performance Review

This year was marked by a key milestone in the company’s history, with unprecedented growth from the cruise operations and tour

operating activities.

Despite a drop in the number of tourist arrivals from its main source market, Reunion Island, and lower air ticket revenue, Concorde’s

turnover grew appreciably (+ 16%), going from Rs 140 million in 2016/17 to Rs 158 million this year. This was the result of the robust

performance of the tours business activities and cruise operations, as mentioned above.

Concorde’s profit amounted to Rs 132.8 million, which is significantly higher than the Rs 10.7 million realised in the preceding year.

This year’s results included a profit of Rs 116.9 million realised on disposal of the shares in Southern Investments Ltd, the hotel

operation. Profit, excluding the profit on disposal, amounted to Rs 15.9 million, which is Rs 5.1 million higher compared to the

Rs 10.7 million realised in the preceding year, and was attributable to higher revenues achieved and higher dividend income received.

Strategy & Outlook

According to the United Nation World Tourism Organisation’s latest forecasts, international tourist arrivals are expected to grow by

more than 3% yearly, to reach 1.8 billion by 2030. The upward trend is also reflected at national level, which bodes well for the travel

and tourism industry.

Additionally, Concorde’s growth potential in the cruise and MICE segments in the coming year looks very promising. As a result, the

company remains on track to consolidate its position and make further progress in the future.

For 2018/19, Concorde will continue to focus on new growth opportunities, strengthening its customer proposition and improving

their experience, through the development of new product offerings and investments in latest technologies.

The strategic focus for the next financial year is to drive business efficiency and operational performance, and to capitalise on new

growth opportunities through on-going investment in people development and new technology capabilities. Concorde also aims to

reinforce its long-established relationships with suppliers, to meet the ever-changing needs of its customers and create long-term

value for all stakeholders.



Southern Investments Ltd (La Palmeraie Boutique Hotel) – Subsidiary at 29.1% (effective holding)

Southern Investments Ltd owns La Palmeraie Boutique Hotel, a 4–star hotel with 60 rooms, situated at Palmar on the East Coast of Mauritius.

As mentioned above, Concorde sold its entire shareholding in Southern Investments Ltd during the year under review. The results of

the hotel operation for the nine months up to the date of sale showed a turnover of Rs 95.6 million and a profit of Rs 13.4 million,

and these results are accounted in the profit statement as discontinued operations.

COMMERCIAL ACTIVITIES

Compagnie Mauricienne de Commerce Limitée (CMC) – Subsidiary at 89.54%


Compagnie Mauricienne de Commerce Limitée (CMC) is the leading operator in Mauritius’ tyre retreading industry. Long-

standing and well-established importer and local distributor of new tyres (for all types of vehicles), automotive lubricants

and fire protection equipment, it also recently diversified its product range to include industrial gases.

Additionally, the Company owns more than 60% of the total floor area devoted to office space, commercial premises and

parking facilities in the Medine Mews building, and operates a parking rental service offering both pre-paid terms and

hourly rates.

That being said, tyre retreading remains CMC’s main activity, accounting for around 79% of its turnover. The development

of the Tyre Management segment helped the company reach a 13% growth in the sale of new tyres. While the retreading

market is still shrinking, the launch of this new division helped the activity to grow again (+1%).

During the year under review, the worldwide tyre industry has been impacted by the flooding of low-cost tyres from

China. However, environmental restrictions have recently been imposed by the Chinese government onto low-cost tyre

manufacturers, bringing about an increase in tyre price from China. As a result, we are expecting healthier competition

in the future.

Performance Review

The diversification of CMC’s activities across industries, including recreational vehicles, gases, lubricants and fire-fighting equipment

supply, has made a non-negligible contribution to the company’s turnover. However, the scope for further growth in those sectors

has been limited due to the company’s strategic restructuring process.

As a result of the above, CMC’s turnover from its commercial activities went down Rs 2.1 million, going from Rs 116.9 million in

2016/17 and reaching Rs 114.8 million this year.

Commercial activities losses for the year under review amounted to Rs 3.2 million, constituting a Rs 1.4 million improvement as

compared to last year.

Strategy & Outlook

For 2018/19, CMC’s commercial division will continue its restructuring process. The company will be attentive to

the industry’s emerging trends, including the changes brought about by i-tyre (intelligent tyres) to optimise vehicle

performance, and will pursue its growth pattern mainly through its tyre sector.



INVESTMENT

EUDCOS’ PORTFOLIO OF INVESTMENTS

Over and above its shareholding in its subsidiaries and associates, EUDCOS has a portfolio of investments in a number of private

and public companies based in Mauritius. These investments relate to companies listed on the Official Market (SEM) and the

Development & Enterprise Market (DEM) of the Stock Exchange of Mauritius, as well as unquoted companies.

The value of the portfolio of investments listed on the SEM and DEM at 30 June 2018 increased by Rs 116 million to reach

Rs 1,083 million, representing a 12% growth compared to the value at 30 June 2017. The growth in value was attributable to

the increase in market prices of most of the stocks in the portfolio and in particular Swan General and Swan Life whose value

appreciated by Rs 74 million. The upward trend in the share prices of the stocks in the portfolio was in a context where the

price index for companies quoted on the SEM, and the DEM increased by 5.47% and 12.76%. There was no material movement

in the portfolio of investments during the year under review.

At June 2018, the portfolio of investments consisted mainly of the Company’s holding in Swan General (Rs 400 million), MCB

(Rs 319 million), Innodis (Rs 91 million), New Mauritius Hotels (Rs 84 million), Swan Life (Rs 76 million), UBP (Rs 48 million),

Livestock Feed (Rs 33 million) and PAD (Rs 29 million).

The value of unquoted investments at 30 June 2018 amounted to Rs 297 million and increased by Rs 101 million compared to

the previous year further to the fair valuing of the portfolio of investments.

Dividend and rental income received by the Company during the year under review amounted to Rs 137 million and was

Rs 10.7 million higher than in the previous year, following higher dividends received from the associated companies and from

the unquoted investments following acquisition made in the preceding financial year.

During the year under review, the company sold a parcel of land with a surface area of 15 acres at Mont Roches, Roche Brunes,

and booked in a profit of Rs 16 million.

The Company’s net profit, inclusive of dividend income from subsidiaries and associates, amounted to Rs 142 million for the

year under review and improved on the Rs 117 million realised the preceding year.

INVESTMENT PROPERTY

EUDCOS owns a few investment properties, which it holds on a long-term basis and which, in view of their strategic location

and good standing, are expected to generate satisfactory returns.

One of the Company’s key investment properties, through its subsidiary CMC, is the Medine Mews building, situated at the heart

of Port Louis central business district, and consisting of two blocks – one housing a shopping arcade on two floors and office

space on ten floors, and the other a nine-level car park – representing a total floor area of approximately 19,000 square metres.

Revenues generated from the investment properties owned by CMC amounted to Rs 30.2 million for the year under review and

were slightly lower than the preceding year. Net profit after tax, however, dropped to Rs 9.1 million compared to Rs 15 million

achieved the preceding year, and it was attributable to a one-off cost of repairs to the building that were taken on board in the

profit statement.



FINANCIAL COMMENTS

GROUP’S FINANCIAL RESULTS

The Group’s turnover increased by Rs 48 million to reach Rs 617 million, representing an 8.4% growth on the preceding year’s

turnover. Medine Distillery and Concorde were the main contributors with significant increase in export sales of alcohol, and

good performance of the cruise operations and tour operating activities respectively, as mentioned above. These helped to

compensate the lower revenues realised by CMC’s commercial activities following the closure of two lines of activities and in

spite of growth in the sale of new and retreaded tyres after successive years of decline. The hotel operations performed well

during the period up to the date of disposal. The Group’s turnover excludes the results of the hotel operations, which have been

classified as discontinued operations.

The Group’s profit, after interest and tax and before minority interest, jumped to Rs 267 million, an increase of Rs 96 million

compared to the Rs 171 million achieved the preceding year. The results were boosted by the profit on disposal of the hotel

operations that generated a profit of Rs 62 million and a profit on disposal of land, that contributed Rs 16 million. On the

operational side, the beverage segment was the main contributor to the growth in the Group’s bottom line results with an

increase of Rs 9 million that was mainly attributable to the good performance of MDC, as well as the higher share of profits

from the associated companies. Profits from tour operator activities increased by Rs 4 million compared to the preceding year.

The property rental activities’ profits were Rs 6 million lower and were partly compensated by the commercial activities that

reduced their losses by Rs 1.4 million and Rs 2.0 million dividends received by the holding company.

SHAREHOLDER VALUE

The Group’s profit attributable to equity holders amounted to Rs 209 million this year, compared to Rs 147 million last year.

Earnings per share amounted to Re 1.41 this year, compared to last year’s Re 1.20.

An interim dividend of Re 0.40 per share and a final dividend of Re 0.50 per share (2016/17: Re 0.90) were declared on 19 December

2017 and 21 June 2018 respectively for the year ended 30 June 2018 and were paid on 15 February and 18 September 2018 respectively.

Shareholder value, represented by the net assets attributable to the Company’s equity holders, increased by Rs 319 million this

year to reach Rs 2,159 million, representing a growth of 17.4% on last year. The increase in the shareholder’s value was mainly

made up of the Rs 209 million net profit described above, the increase in the fair value of the investment portfolio by Rs 217

million, and the deduction of Rs 109 million for the dividends paid and payable.

In light of the above, net assets per share increased to Rs 17.78, from Rs 15.15 the previous year, with the same number of

shares in issue.

ACKNOWLEDGEMENTS

I would like to thank all EUDCOS employees for their contribution to this strong set of results as well as recognise the strong

management support provided by Medine.

In addition, I would like to thank the Board of Directors for their support during this year of leadership change and transition.

Yours sincerely,

Thierry SauzierChief Executive Officer

25 September 2018


C O R P O R AT E G O V E R N A N C E

CORPORATE GOVERNANCE



Excelsior United Development Companies Limited is a public interest entity, as defined under the Financial Reporting Act 2004.

The Board of Directors adheres to the highest principles of good governance and ensures that these are followed and applied

throughout the Group. It recognises the importance of such principles and views their application as an opportunity to critically review

the Company’s structure and processes. It believes that the adoption of the highest standards of governance is imperative for the

enhancement of stakeholder value.

The Company’s compliance with the principles of the National Code of Corporate Governance for Mauritius (2016) is set out in the report.

ORGANISATIONAL CHART AND STATEMENT OF ACCOUNTABILITIES

The Group’s organisational chart showing the key senior positions and their respective reporting lines is found on page 6 of this report.

CORPORATE GOVERNANCE FRAMEWORK

The current corporate governance framework of the group is set out below:

CORPORATE GOVERNANCE REPORT

EXTERNAL AUDITORINTERNAL AUDITFUNCTION

CHIEF EXECUTIVEOFFICER

CORPORATE GOVERNANCECOMMITTEE

AUDIT COMMITTEE

MANAGEMENT COMMITTEE

SHAREHOLDERS

BOARD



GOVERNANCE STRUCTURE

Excelsior United Development Companies Limited is led by a

unitary Board, whose responsibilities are inter alia, the review and

adoption of strategic plans, the overview of business performance,

the adoption of appropriate risk management systems, and the

establishment of proper internal control systems.

Role of the BoardThe main role of the Board is to maintain a high standard of

governance so as to protect and enhance shareholders’ value. It sets

the overall strategy for the Group, oversees executive management

and ensures that good corporate governance policies and practices

are developed within the Group. The Board acts in good faith, with

due diligence and care, and in the best interests of the Company

and its shareholders. It is responsible for leading and controlling the

company and meeting all legal and regulatory requirements.

Role of Board CommitteesThe Board delegates its duties and powers, where neccesary, to

board committees, in order to ensure operational efficiency and that

specific issues are being handled with relevant expertise. Two board

committees have been established, namely the Audit Committee

and the Corporate Governance Committee. Each Committee has its

specific duties and authorities set out in its charter.

Role of ManagementManagement is responsible for the Company’s day-to-day

business operations and is accountable for the performance of

the operating companies forming part of the Group.

Key Roles and Responsibilities

The Position Statements of the Chairman, the Chief Executive Officer

and the Company Secretary have been approved by the Corporate

Governance Committee. Their key roles and responsibilities have

been clearly defined and are summarised below. The functions

and roles of the Chairman and the Chief Executive Officer are

separate to ensure a better balance of power and authority on

the Board.

Chairman

• Responsible for the leadership of the Board

• Ensures the Board’s effectiveness

• Ensures that directors receive accurate, timely and clear

information

• Encourages active participation of all Board members in

discussions and decisions

• Ensures effective communication with stakeholders

Chief Executive Officer

• Responsible for the day-to-day running of the Group’s

operations

• Develops and recommends to the Board strategies in line

with the long-term vision of the Group

• Responsible for the implementation of the strategy and

policies set by the Board

Company Secretary

• Ensures compliance with all relevant statutory and regulatory

requirements

• Prepares and circulates the agenda for Board and Board

Committees meetings, with any supporting document

• Participates in the induction process of newly appointed

Directors

• Provides comprehensive practical support and guidance to

directors as to their responsibilities

• Monitors governance processes



BALANCE

Executive 1

Independent non-executive 2

Non-executive 7

Total 10

AVERAGE AGE

< 50 2

51 - 60 3

61 - 70 2

> 70 3

LENGTH OF TENURE

< 10 years 7

10 - 20 1

21 - 30 1

31 - 40 1

GENDER DIVERSITY

Female 1

Male 9

BOARD OF DIRECTORS

Board CompositionThe Company’s Constitution provides that the Board should

consist of a minimum of six and a maximum of twelve directors.

As at 30 June 2018, the Board was composed of ten directors who

have a complementary set of skills, expertise and experience,

namely in agriculture, beverages, property and business project

development, corporate governance, marketing, law, finance

and strategy.

All directors ordinarily reside in Mauritius.

The names and profiles of the Board members are set out on

pages 10 to 13.

Change in OfficersMr Daniel Giraud, G.O.S.K., retired as Chief Executive Officer of

the Group on 30 September 2017 after 15 years in office, and

resigned as Director of the Company on 29 December 2017.

Mr Thierry Sauzier was appointed as Chief Executive Officer of the

Group on 1 October 2017.

Mr Marc Lagesse was appointed by the Board as independent

non-executive Director on 27 September 2017 to replace

Mr Gérald Lincoln, who resigned in June 2017. His appointment

was approved at the annual meeting of the shareholders held on

19 December 2017.

Board meetingsThe Board meets regularly, at least at quarterly intervals, and

holds additional meetings as and when it deems appropriate.

Meetings are scheduled annually in advance, according to an

annual Board calendar.

Six Board meetings were held during the year under review.

The Directors reviewed and adopted the Company’s and the

Group’s audited financial statements; approved the Company’s

and the Group’s budget and unaudited quarterly results and the

declaration of an interim and a final dividend; and reviewed

management reports pertaining to the Group’s different

operating units, inter alia.

The Agenda is prepared by the Company Secretary and circulated

to the Chairman, the Chief Executive and the Group Head of

Corporate for their comments and approval. Once finalised,

the agenda and accompanying Board papers are sent to all

directors at least one week prior to the meeting, giving them the

opportunity to participate fully in the Board meeting.

Minutes of Board meetings are prepared by the Company

Secretary with details of decisions reached, any concerns raised

and dissenting views expressed. Draft minutes are shared

with the Chairman, the Chief Executive and the Group Head of

Corporate for review, before circulating to the directors at least

one week prior to the next meeting. Once approved by the Board,

minutes are signed by the Chairman of the meeting.



DIRECTORS CATEGORY ATTENDANCE AT MEETINGS

René Leclézio (Chairman) Non-executive 6/6

Pierre Doger de Spéville Non-executive 6/6

Thomas Doger de Spéville Non-executive 6/6

Daniel Giraud, G.O.S.K (up to 29th December 2017) Executive 2/3

Lajpati Gujadhur Non-executive 6/6

Rajkumar Gujadhur Non-executive 5/6

Marc Lagesse (as from 27th September 2017) Independent non-executive 4/5

Jacques Tin Miow Li Wan Po, G.O.S.K Non-executive 6/6

Jocelyne Martin Non-executive 6/6

Marc de Ravel de L’Argentière Independent non-executive 6/6

Thierry Sauzier Executive 6/6

Where Board meetings could not be held, the directors approved matters by way of written resolutions circulated to them. Supporting documents were also circulated in the process.

Attendance at Board MeetingsThe Directors who held office and their attendance at Board Meetings during financial year ended 30 June 2018 are given below:

Board CharterThe Board has not yet approved its Charter. Once approved, a

copy will be made available.

ConstitutionThe Company was incorporated as a public company on

9 October 1974.

The Company’s Constitution comprises the following main clauses:

• The Company has wide objects and powers;

• There are no pre-emptive rights;

• Fully paid shares are freely transferable;

• The quorum for a meeting of shareholders is five shareholders

present or represented;

• The minimum number of Directors is six and the maximum

number is twelve;

• The quorum for a meeting of the Board is six;

• An additional Director may be appointed by the shareholders

by ordinary resolution but so that the total number of

Directors shall not at any time exceed the maximum number

fixed in accordance with the Constitution;

• The Board has the right to appoint any person to be a

Director to fill a casual vacancy. A Director so appointed shall

hold office only until the next Annual Meeting and shall then

retire but still be eligible for appointment;

• A Director who is interested shall be allowed to vote on any

matter relating to the transaction or proposed transaction in

which he is interested and shall be counted in the quorum

present at the meeting;

• In case of equality of votes at either a Board meeting or a

meeting of shareholders, the chairman of the meeting has

a casting vote.

A copy of the Company’s Constitution is available on

www.medine.com and upon request in writing to the

Company Secretary at the registered office of the Company,

4 Uniciti Office Park, Rivière Noire Road, Bambous 90203.

Directors’ Service ContractThe directors have no service contract with the Company.

Conflicts of InterestDirectors do their best to avoid conflicts of interest. Should any

conflict or potential conflict occur, it would be the duty of the

Director to make a full and timely disclosure to the Board.

Any declaration of interest is entered into the Register of Interests.

The Constitution of the Company provides that a Director who is

interested would be allowed to vote on any matter relating to the

transaction or proposed transaction in which he is interested and

would be counted in the quorum present at the Board meeting.

Related Party TransactionsDetails on related-party transactions are given in note 36 of the

Financial Statements.

Contracts of SignificanceDuring the year under review, there was no contract to which the

Company was a party and in which a Director of the Company

was interested, either directly or indirectly.



Directors’ Remuneration and Benefits

Statement of Remuneration PhilosophyThe members of the Corporate Governance Committee, in its capacity as the Remuneration Committee, have been entrusted with

determining and recommending to the Board, for its approval, the level of non-executive Directors’ fees and a general policy on

executive and Senior Management remuneration.

The Group’s underlying philosophy is to set remuneration at an appropriate level to attract, retain and motivate high calibre personnel

and to reward them in accordance to their individual as well as collective contribution towards the achievement of the Company’s

objectives and performance, whilst taking into account current market conditions and the Company’s financial position.

The remuneration policy for executive Directors approaching retirement is determined by the Corporate Governance Committee on a

case-by-case basis.

Non-executive Directors receive an annual fixed fee. Any revisions in fees are submitted to the shareholders for approval at the annual

meeting of shareholders. Directors who also serve on Board Committees receive an attendance fee per meeting. In addition, Board

members may also be entitled to non-material preferential tariffs in some of the group’s business activities. The Corporate Governance

Committee, in its capacity as Remuneration Committee, reviewed both the Directors' fees and benefits, and have ascertained that the

latter are appropriate and are not likely to cause any conflict of interest in Directors’ decision making.

Non-executive directors have not received remuneration in the form of share options or bonuses directly associated with the

company’s performance.

Fees to which Directors and Board Committee members are currently entitled are as follows:

ANNUAL FIXED FEES

RS

ATTENDANCE FEE PER MEETING

RS

BOARD

Chairman 60,000 -

Director 50,000 -

CORPORATE GOVERNANCE COMMITTEE

Chairman - 15,000

Member - 10,000

AUDIT COMMITTEE

Chairman - 20,000

Member - 15,000



2017/18RS

2016/17RS

DIRECTORS OF THE HOLDING COMPANY

Remuneration and benefits paid by the holding company to:

- Executive Directors 74,960 100,000

- Non-executive Directors 447,500 460,000

Remuneration and benefits paid by subsidiary companies to:

- Executive Directors 1,469,687 1,078,925


OTHER DIRECTORS OF SUBSIDIARY COMPANIES

Remuneration and benefits paid by the respective subsidiary companies to:

- Executive Directors 4,610,000 4,563,923


The remuneration of the Directors for the year under review is set out below:

Directors’ Dealings in SharesWith regards to Directors’ dealings in the shares of the Company, the Directors confirm that they have followed the principles of the

Model Code for Securities Transactions by Directors, as detailed in Appendix 6 of the Listing Rules issued by the Stock Exchange of

Mauritius Limited.

The Company Secretary maintains a Register of Interests that is updated with any dealing in shares or any transaction entered

into by directors and their associates, which is required to take place outside the close periods, of which they are informed by the

Company Secretary.

Directors’ Share InterestsThe Directors’ direct and indirect interests in the shares of the Company as at 30 June 2018 were as follows:

ORDINARY

Direct Indirect

DIRECTORS Number % %

René Leclézio 3 - 0.49

Pierre Doger de Spéville 10,849,330 8.93 5.19

Thomas Doger de Spéville 57,126 0.05 -

Lajpati Gujadhur 442,177 0.36 -

Rajkumar Gujadhur 590,463 0.49 -

Marc Lagesse 1,500 - -

Jacques Tin Miow Li Wan Po, G.O.S.K 802 - 0.50

Jocelyne Martin 5,100 - -

Marc de Ravel de L’Argentière 713,864 0.59 -

Thierry Sauzier 450 - -



During the year under review, share dealings by Directors were as follows:

Number of Shares Acquired

DIRECTORS Directly Indirectly

Pierre Doger de Spéville 100,000 89,300

Lajpati Gujadhur 2,000 -

Marc Lagesse 1,500 -

René Leclézio - 597,455

Jacques Tin Miow Li Wan Po, G.O.S.K - 28,327

Directors and Officers Liability Insurance The Directors and Officers of the Company and of its subsidiaries benefit from an indemnity insurance cover contracted by the Company.

Third Party Management AgreementMedine Limited provides management services to the Company and its subsidiaries, namely Medine Distillery Company Limited,

Compagnie Mauricienne de Commerce Limitée, Concorde Tourist Guide Agency Limited and Southern Investments Ltd*.

BOARD COMMITTEESTo assist the Board in the discharge of its duties, the following Board committees were established with charters approved by the

Board and which clearly define their terms of reference, composition and functionality.

Audit CommitteeThe Audit Committee is composed of three members whose attendance at meetings is given below:

* Disposed of during the year under review

MEMBERS CATEGORY ATTTENDANCE AT MEETINGS

Jacques Tin Miow Li Wan Po, G.O.S.K (Chairman) Non-executive Director 4/4

Jocelyne Martin Non-executive Director 4/4

Marc de Ravel de L’Argentière Independent non-executive Director 4/4

The committee met four times during the year under review, satisfactorily fulfilling its role, as defined by its terms of reference,

namely:

• Reviewing the financial reporting process, in particular the accuracy, reliability, integrity and compliance with legal and regulatory

requirements of the Company’s interim and annual financial statements.

• Reviewing the adequacy and effectiveness of its risk management and internal control system.

• Assessing and recommending the appointment of internal and external auditors.

• Reviewing the annual financial statements before their submission to the Board and discussing the results of the external audit

process with the external auditor.

During the year under review, the Audit Committee discussed about the progress of the restructuring process at CMC and the disposal

of Concorde’s entire shareholding in Southern Investments Ltd, and reviewed the terms and conditions of short-term advances to

related parties.



Corporate Governance CommitteeThe Corporate Governance Committee is composed of five members whose attendance at meetings is given below:

MEMBERS CATEGORY ATTENDANCE AT MEETINGS

Pierre Doger de Spéville (Chairman up to 6th February 2018) Non-Executive Director 2/2

Daniel Giraud, G.O.S.K (up to 29th December 2017) Executive Director 1/1

Marc Lagesse (Member as from 27th September 2017 and Chairman as from 9th February 2018)

Independent Non-executive Director 1/1

René Leclézio Non-Executive Director 2/2

Jocelyne Martin Non-Executive Director 2/2

Thierry Sauzier (as from 9th February 2018) Executive Director 1/1

The committee met twice during the year under review and,

in accordance with its formal terms of reference, acted in its

capacity as:

• The Nomination Committee, with the role of making

recommendations to the Board in respect of issues relating

to the appointment of Directors and the composition, size

and structure of the Board, and of ensuring that there is a

clearly defined and transparent procedure for shareholders

to recommend potential candidates.

• The Remuneration Committee, with the role of making

recommendations to the Board on remuneration issues

for executive Directors and the Company’s general policy

on executive and senior-management remuneration and

packages.

• The Committee, with the responsibility of driving the process

for the implementation of the Code of Corporate Governance

for Mauritius throughout the Group and ensuring that the

disclosure and reporting requirements set by the Code are

complied with.

The Company Secretary acts as secretary to both Board

Committees. Minutes of each meeting are recorded.

There is transparency and full disclosure from Board Committees

to the Board of Directors. Minutes of the meetings of the Audit

Committee are submitted to the Board for noting.

The charters of both committees are reviewed as and when

necessary.

In addition to Board Committees, a Management Committee

was set up during the year under review, with defined terms

of reference.

Management CommitteeThe Management Committee comprises of the Chief Executive,

the Group Head of Corporate and the General Manager of each

subsidiary company. The Committee is chaired by the Chief

Executive and meets on a monthly basis. At the Chair’s request,

the Committee may have regular invitees, but these invitees

have no voting rights nor constitute the Committee’s quorum.

The Committee’s responsibility is to deal with the day-to-day

activities of the Group’s business, develop and implement

business plans, policies, procedures and budgets that have

been recommended and approved by the Board, monitor the

operating and financial performance of the Group, prioritise and

allocate investment and resources, manage and develop talent,

and manage the risk profile of the Group.

The Committee implements the policy and strategy adopted by

the Board and deals with all operational matters affecting the

Group. Of its own motion or at the Board’s request, it promptly

gives or makes available to the Board such information, reports

and other documents, to enable the Board to carry out its duties.



BOARD EFFECTIVENESS

Nomination ProcessThe nomination of any director is reviewed and discussed by the

Corporate Governance Committee in its capacity as Nomination

Committee, taking into account the candidate’s skills,

qualifications and experience. The Committee recommends to

the Board the nomination to be put before the annual or special

meeting of the shareholders for approval.

Board Induction and TrainingAn induction pack is immediately sent to a newly appointed

director upon his appointment, containing namely his letter of

appointment, a copy of the last Annual Report, minutes of recent

Board meetings, a schedule of dates of future Board meetings,

an organisational structure and other documents pertaining to his

role, legal duties and responsibilities, namely the Constitution,

the Code of Ethics and Business Conduct, the Code of Corporate

Governance and salient features of the DEM rules, the Companies

Act and the Securities Act. He would meet the Chief Executive

and senior management to be briefed on the operations and

businesses of the Group.

A newly appointed director is required to notify the Company

Secretary of his interests and those of his associates in the

Company’s shares for entry in the Register of Interests and

further notification to the relevant authorities.

Newly appointed directors are encouraged to register as

members of the Mauritius Institute of Directors and to follow

training courses to develop and refresh their knowledge and

skills, fees of which are borne by the Company.

Board and Directors’ EvaluationThe last Board evaluation exercise was carried out individually in

November 2016 to enable the Board to take appropriate actions

to improve its effectiveness and functioning, and the next one

will be conducted during the present financial year.

SENIOR OFFICERS’ SHARE INTERESTS

Senior Officers’ direct and indirect interests in the shares of the

Company as at 30 June 2018 were as follows:

ORDINARY

Direct Indirect

SENIOR OFFICER Number % %

Thierry Sauzier 450 - -

During the year under review, there was no share dealing by

Senior Officers.

RISK MANAGEMENT

The Group’s policy is to develop a minimum framework for

governance that lays the foundation for further development

of superior governance practices, which are vital for growing

the business. The Group recognises that transparent disclosure,

financial control and accountability are pillars of good corporate

governance. It is the Group’s endeavour to attain the highest

level of governance to enhance stakeholder value.

The Group is committed to the identification, monitoring and

management of the risks associated with its business activities

and has embedded in its management systems a number of

management controls to that end. These include:

• Internal Audit: the Group’s internal audit function has been

outsourced to Messrs Ernst & Young, who report regularly

to the Audit Committee. As part of their internal audit plan,

Messrs Ernst & Young perform a number of internal audit

reviews across the Group.

• Financial Reporting: the Group has a comprehensive

budgeting system, with an annual budget approved by the

Board of Directors. This budget is reviewed on a monthly

basis and revised if necessary.

• Insurance: the Group’s primary risks are covered by a number

of insurance policies. The Company believes that its assets

are well protected against any foreseeable event.

• Health and Safety: a Group Health and Safety Committee has

been set up, with the objective of minimising the health and

safety risks facing employees.

By virtue of the diverse nature of its business activities, the Group

is exposed to a variety of risks, as outlined hereunder.

Business RiskThe overall revenues and operating results of the Group depend

on a diversity of products and services, and this diversified

strategy in itself limits the risk faced by the Group, since the

markets involved differ in their structure and economic cycles.

The Group has an informal risk management process in place

as an integral part of its ongoing business planning processes.

Potential negative developments, such as changes in customer

demand or the political framework, are dealt with in a timely

manner to avoid deviations from the business plan.



Human Resources RiskThe Group’s future success and growth are highly dependent

on its innovativeness, competence and capabilities, and the

commitment of its employees. Competition to hire the best is

further intensified by the scarcity of qualified specialists in the

sectors in which we operate. Therefore, sourcing and recruiting

key specialists and talents and retaining them within the Group

are priorities for the Company.

Our managers and employees, with their commitment to the

Group, are of central importance to our success. To find key

personnel to fill vacancies, and to avoid losing competent

employees, we position ourselves as an attractive employer

and we promote the long-term retention of employees in the

Group. As well as career prospects and attractive incentives, we

offer development programmes where and when needed for

senior Management and training for our other employees. We

consider talent development a priority in mitigating the risks

of skill mismatch. The management of human resources risk is

an on-going activity that involves careful planning and constant

fluidity to enable Management to tackle any potential changes

in the human resources sector. On the basis of the controls and

policy in place, we assume that the likelihood of a serious human

resources risk occurring is low.

Information Technology (IT) RiskIT risks can affect a business’s results when information is

unavailable, erroneous or unintentionally disclosed, or when the

processes to be depicted have been implemented in IT systems

in a way that is too inflexible, too complex or illegal. Security

gaps and insufficient emergency planning measures can quickly

become incidents that affect the entire company.

Data protection violations due to incorrect authorisations create a

negative external impression. The increasing dependency on IT,

as well as the growing interconnectivity of IT landscapes, makes

it necessary for companies to invest heavily in maintenance and

enhancement. In addition, data processing is a time-consuming

and costly activity. As the complexity of the IT landscape

increases, so do the potential risks and costs to the business.

The general risk situation means that more professional threats

can be expected, with the trend moving towards targeted

industrial espionage and sabotage. Significant risk scenarios

for the Group include the failure of its central IT systems, the

publication of classified confidential information and the

unauthorised manipulation of its IT systems.

The Group ensures the necessary availability of business-critical

application systems and access to business-relevant data, by

means of the appropriate redundancy of systems, networks

and sites, as well as suitable tested contingency measures.

An IT Security Policy is in place within the Group. It includes

appropriate organisational and technical precautions for access

control, access rights, virus protection and data protection. The

effectiveness of these measures is continuously monitored and

reviewed by the internal auditor as well as the external auditor.

A dedicated process ensures that IT risks are evaluated, and

appropriate measures taken. On the basis of the measures taken,

we assume that the likelihood of a serious IT risk occurring is low.

Health, Safety and Environmental RisksGiven the diversity of its business activities, the Group is exposed

to risks of possible damage to people, goods and its image. We

minimise the risks to people and the environment by means

of auditing, advising and training in matters of environmental

protection, as well as occupational health and safety. In order to

ensure the continuity of plant and equipment, we monitor these

risks at all our locations. By adhering to high technical standards,

our rules of conduct, and all legal requirements in environmental

protection and occupational health and safety, the Group ensures

the preservation of its goods and assets.

Legal and Commercial RisksThe multiple business units within the Group minimise legal

risk by consulting the Group’s own in-house Legal Counsel, who

provides sound legal advice on relevant files on a day-to-day

basis, assists business units in complying with applicable laws

and regulations in force, and vets or drafts a variety of legal

documents to facilitate business transactions. Having sound legal

documents in place not only ensures quality of service through

effective execution by relevant business units of their own

contractual obligations, thus avoiding any claim for damages,

but this also offers business units, where applicable, the relevant

safeguards, and recourse to a view with reduced legal and

commercial risks such as ensuring a satisfactory quality of service

from third parties or payment from debtors. The analysis of legal

and commercial risks at the conception stage of any potential

project enables business units to effectively carry out due

diligence exercises and adopt the most viable legal framework.

The in-house Legal Counsel ensures effective communication

between the Group and external legal advisors.

Market Risk Some of the Group’s activities are adversely affected by the

present economic slowdown in some of their markets in Europe,

and there is a risk that the Eurozone’s debt crisis and Brexit may

make matters worse for them in other markets too. By virtue of

the diverse nature of the Group’s investments, however, such

events will not significantly affect the overall financial viability

of the Group.



Financial RiskThe Group’s management of financial risk is detailed in note 3 of

the Financial Statements.

INTERNAL CONTROL

The objective of the internal control system for accounting is

to implement controls that provide assurance that the financial

statements are prepared in compliance with the relevant

accounting laws and standards. It covers measures designed

to ensure the complete, correct and timely transfer and

presentation of information that is relevant for the preparation

of the consolidated financial statements and the management

report of the Group.

The internal control system is subject to continuous development

and is an integral component of the accounting and financial

reporting processes of all the Group’s relevant business units and

functions. With respect to the accounting process, the internal

control system measures are intended to minimise the risk of

materially false statements in the consolidated accounting

process of the Group.

Policies, systems, processes and procedures have been put in

place and their application is regularly reviewed and assessed

by the internal auditor to ensure that they are effective and

are being complied with. Through the audits conducted on the

Company’s various operating units and on its subsidiaries, the

external auditor also reports and makes recommendations

to Management and to the Audit Committee on any material

weaknesses in accounting and internal control systems which

come to its notice. Its findings are discussed with Management

as well as with the members of the Audit Committee.

INTERNAL AUDIT

The internal audit function provides to the Audit Committee,

to Management and ultimately to the Board, independent

and objective assurance as to the adequacy and effectiveness

of the risk management and internal control framework and

governance processes.

The internal audit function has been outsourced to Messrs Ernst

& Young. As internal auditor, it has unrestricted access to the

records, Management and employees of all operating units within

the Group. It reports to the Audit Committee and maintains an

open line of communication with Management.

Since its appointment in 2006, the internal auditor has carried

out a number of audit assignments on the basis of an annual

audit plan approved by the Audit Committee. It regularly reports

its findings to the committee and also reviews the extent to

which its recommendations are implemented. Its intervention

has contributed to the improvement and strengthening of

the internal control systems applicable in the Group’s various

operating units. Moreover, at the Audit Committee’s request, the

frequency of EY’s internal audits assignments has increased given

the Group’s risk exposure.

EXTERNAL AUDITOR

The Audit Committee is responsible for making a recommendation

on the appointment, reappointment and removal of the

external auditor.

The Committee plays a key role in evaluating the effectiveness

and independence of the external auditor. Any instruction to the

external auditor to provide non-audit services is closely reviewed

and approved by the Board, on the recommendation of the Audit

Committee, thus ensuring the auditor’s independence.

A resolution for the re-appointment of BDO & Co as auditor of the

Company for financial year ending 30 June 2019 will be proposed

at the forthcoming annual meeting of the shareholders.

The Finance Act 2016 provides that listed companies are required

to rotate their auditors every seven years, and a subsequent

regulation (Government Notice No. 64 of 2017) provides that

the current auditors are allowed to continue in office for the

financial year ending 30 June 2019. Consequently, the Company

will undertake to rotate its auditor as from financial year ending

30 June 2020.



GROUP COMPANY

2017/18 2016/17 2017/18 2016/17

Rs Rs Rs RsAudit fees paid to:

- BDO & Co. 1,255,000 1,500,000 390,000 375,000

- Other firms - - - -

Fees paid for other services provided by:

- BDO & Co. - - - -

- Other firms - - - -

SHAREHOLDER RELATIONS AND COMMUNICATION

Communication with ShareholdersThe Board recognises the importance of communication with

shareholders.

Shareholders are kept informed, through press communiqués, of

all material events affecting the Company, especially if an event

could have an effect on the share price.

During the year under review, the Group’s quarterly results, half-

yearly results and audited financial statements, were submitted

to the Stock Exchange of Mauritius Ltd and to the Financial

Services Commission, immediately after being approved by the

Directors, and were published accordingly.

Shareholders are encouraged to attend all meetings of

shareholders, annual or special, in order to remain informed of

the Group’s strategy and objectives.

The Annual Report, including the notice of the Annual Meeting of

Shareholders, is sent to each shareholder of the Company, and

the notice of the meeting is published in two daily newspapers

at least 14 days before the meeting. The present Annual Report

is available on www.medine.com.

At a shareholders’ meeting, the shareholders are given the

opportunity to ask questions. The Chairman and the Chief

Executive Officer are normally available to answer them. All

Directors, including the chairmen of both Board committees, are

expected to attend the Annual Meeting. The Chief Finance Officer

and the external auditor are also present to assist the Directors in

addressing queries by shareholders.

Shareholders’ queries that are received by telephone, letter or

email, are properly attended to by the Company Secretary and by

the Registrar and Transfer Agent of the Company.

Any matter in relation to any off-market transfer of shares,

change of name or address and loss of share certificates or

dividend cheques should be addressed to the Registrar and

Transfer Agent as follows:

MCB Registry & Securities Ltd,

2nd Floor, MCB Centre,

Sir William Newton Street, Port Louis;

Tel. 202 5640;

Email address: [email protected]

In addition, any request for copies of quarterly accounts or annual

report, and of the statement of direct and indirect interests

of officers of the Company required under rule 8(2) (m) of the

Securities (Disclosure Obligations of Reporting Issuers) Rules 2007

should be addressed to the Company Secretary as follows:

4 Uniciti Office Park,

Rivière Noire Road,

Bambous 90203;

Tel. 401 6101;

Email address: [email protected]

Auditor’s Remuneration



SHAREHOLDING PROFILE

Excelsior United Development Companies Limited is listed on the Development & Enterprise Market (DEM) of the Stock Exchange of

Mauritius with an issued and fully paid-up share capital of Rs 121,453,252 consisting of 121,453,252 ordinary shares of Re 1.00 each.

Although there is no ultimate holding company in the capital structure, PAD (i.e. Promotion and Development Ltd and its 100%

subsidiary, Commercial Holding Ltd) is the largest shareholder of the Company, holding 20.97% of its share capital.

Common DirectorsMr René Leclézio and Mrs Jocelyne Martin are both directors of Promotion and Development Ltd, and Mr Leclézio is also a director of

Commercial Holding Ltd.

The Company’s share ownership spread, shareholder category profile and substantial shareholders as at 30 June 2018 were as follows:

SIZE OF SHAREHOLDING Number of ShareholdersNumber of

Shares Held% Holding

1 - 500 shares 682 124,763 0.10

501 - 1,000 shares 258 196,103 0.16

1,001 - 5,000 shares 654 1,734,757 1.43

5,001 - 10,000 shares 237 1,728,281 1.43

10,001 - 50,000 shares 414 9,283,080 7.64

50,001 - 100,000 shares 113 8,036,660 6.62

100,001 - 250,000 shares 77 11,795,048 9.71

250,001 - 500,000 shares 31 10,556,826 8.69

Above 500,000 shares 33 77,997,734 64.22

Total 2,499 121,453,252 100.00

SHAREHOLDINGS OVER 5%Number of

Shares Held% Holding

PAD* 25,473,427 20.97

Mr Pierre Doger de Spéville** 17,093,130 14.07

* Promotion and Development Ltd’s shareholding, inclusive of that of its 100% subsidiary, Commercial Holding Ltd (898,859 shares/0.74%).**Mr Pierre Doger de Spéville’s shareholding, inclusive of that of his wholly owned société, Sperry & Cie (6,243,800 shares/5.14%).

CATEGORY

Individuals 2,152 66,526,888 54.78

Insurance and Assurance Companies 14 5,778,923 4.76

Investment and Trust Companies 32 26,037,271 21.44

Pensions and Provident Funds 29 3,615,863 2.98

Other Corporate Bodies 272 19,494,307 16.05

Total 2,499 121,453,252 100.00

The number of shareholders given above is indicative, due to consolidation of multi portfolios for reporting purposes. The total number

of active shareholders as at 30 June 2018 was 2,516.



SHAREHOLDERS’ AGREEMENT

There is no shareholders’ agreement with regards to the

Company.

DIVIDEND POLICY

Whilst the Board has not determined a formal dividend policy, it

endeavours to pay dividends that reflect the Company’s financial

performance, after taking into account the funding requirements

of the Company’s current and forthcoming investment projects.

Summary of dividends per share paid over the past five years:

FINANCIAL YEAR END Re

30.06.2014 0.73

30.06.2015 0.80

30.06.2016 0.80

30.06.2017 0.90

30.06.2018 0.90

An interim dividend of Re 0.40 per share and a final dividend of

Re 0.50 per share, totalling Rs 109,307,926.80 (2016/17: Re 0.90

and Rs 109,307,926.80) were declared on 19 December 2017 and

21 June 2018 respectively, for the year ended 30 June 2018. These

were paid on 15 February and 18 September 2018 respectively.

CALENDAR OF EVENTS

EVENTS Date

Balance Sheet Date 30 June

Last Annual Meeting of Shareholders December 2017

Interim dividend 2017/18- Declaration - Payment

December 2017 February 2018

Final dividend 2017/18- Declaration- Payment

June 2018September 2018

Publication of first-quarter results November

Publication of half-year results February

Publication of third-quarter results May

Publication of end-of-year results September

Publication of Annual Report 2017/18 December 2018

Forthcoming Annual Meeting of Shareholders December 2018

SHARE PRICE PERFORMANCE VS DEMEX OVER THE PAST FIVE YEARS

Shar

e P

rice

(R

s)

Dem

ex P

rogr

essi

on

JuneJune

0

5

10

15

20

25

0

50

100

150

200

250



CODE AND POLICIES

Given the management agreements and the close relationship

existing between Medine Limited and the EUDCOS Group, the

latter has subscribed to the Code of Ethics and Business Conduct,

the Environmental Policy, and the Social, Safety and Health Policy

adopted by Medine Limited in 2011, which are summarised below:

Code of Ethics and Business ConductMedine’s Code of Ethics and Business Conduct lists and details the

standards of behaviour that have made the Company’s reputation.

They are the standards that all Directors and employees are

expected to uphold in conducting the Company’s business. They

go beyond the requirements of law. The Code has been actively

endorsed by EUDCOS’s Board of Directors and shared with all

employees of the Group.

Compliance by all employees with the high moral, ethical and

legal standards of the Code is mandatory, and if employees

become aware of, or suspect, a contravention of the Code, they

are encouraged to promptly and confidentially report it.

Environmental Policy and InitiativesEUDCOS acknowledges its duty as a responsible corporate citizen

to protect the natural environment for future generations.

The Group’s objective is to better understand its adverse

environmental impact, to inform and educate its people about it,

and to set achievable goals for reducing it.

The Group has identified its most significant adverse

environmental impacts as:

• Depletion of natural resources through the procurement and

use of goods and services;

• Carbon emissions into the atmosphere from the use of fossil

fuel-based energy in its offices and through its business

transport requirements;

• Production of waste in its offices; and

• Use of water resources and the discharge of wash-water to

the sewer.

It has also identified its positive environmental impacts as:

• The reduction of waste through the promotion of recycling

and waste management activities;

• The introduction and use of a range of energy-saving devices

and practices; and

• The implementation of practices that reduce its carbon

emissions.

EUDCOS is committed to managing its environmental impacts and

continuously improving its environmental performance by:

• Complying, as a minimum requirement, with relevant

legislation, regulations and other relevant requirements;

• Where possible, implementing systems that meet the

requirements of ISO 14001 as a certified environmental

management system (EMS) and regularly reviewing them;

• Setting realistic objectives and targets for each of its most

significant environmental impacts;

• Minimising its energy consumption and carbon emissions,

and encouraging the use of less polluting forms of transport

whenever possible;

• Minimising the amount of waste produced by way of

reduction, recovery, re-use and recycling;

• Communicating its Environmental Statement and relevant

procedures to employees and other stakeholders, and

promoting environmentally sensitive behavior; and

• Where possible, reporting its environmental commitment

and performance.

General Policy on Social, Safety and Health at WorkAs a responsible Group that sees in its workforce and stakeholders

a unique asset, EUDCOS continuously seeks to ensure that

health and safety principles are upheld in the workplace, and

hence has implemented relevant guidelines to safeguard the

Group’s employees.

Management monitors the enforcement of health and safety

guidelines by:

• Promoting a health and safety culture within the Group;

• Providing employees with adequate training and equipment

so as to ensure safe work practices;

• Providing necessary resources to avoid employees taking

any undue risks; and

• Undertaking necessary corrective and preventive actions

when unhealthy or unsafe working conditions are identified.

The employees' adherence to established safety practices is

mandatory.

The Group undertakes to comply with all the health and safety

principles as set in the Occupational Safety and Health Act 2005,

so far as they are reasonably practical to comply with.



EMPLOYEE SHARE OPTION SCHEME

There is no share option plan in place within the Group.

CHARITABLE AND POLITICAL DONATIONS

By reason of the management agreements and the close relationship existing between Medine Limited and the EUDCOS Group, all CSR

initiatives of the Company and of its subsidiaries are generally channelled through Fondation Medine Horizons, the Medine Group’s

SPV for the implementation of social projects. In compliance with the CSR Fund Provision introduced by the Finance Act 2009, the

Company and its subsidiaries have, this year again, entrusted Fondation Medine Horizons with their CSR levy. In addition, the Group

made other charitable contributions. Political donations are generally made up of several contributions and in line with the Group’s

apolitical position.

GROUP COMPANY

2017/18 2016/17 2017/18 2016/17

Rs Rs Rs RsDonations made during the year:

- Political - 200,000 - 200,000

- CSR - Statutory 1,569,182 1,098,865 148,754 82,243

- Other donations 71,820 218,202 - -

René Leclézio Thierry Sauzier

Chairman Director and Chief Executive Officer

25 September 2018



DIRECTORS OF SUBSIDIARY COMPANIESAS AT 30 JUNE 2018

NAMESCompagnie Mauricienne

de Commerce LimitéeConcorde Tourist

Guide Agency LimitedMedine Distillery Company Limited

René Leclézio ü ü üVincent Ah Chuen üPierre Doger de Spéville üThomas Doger de Spéville ü üJean Marie Dupuis üDerrick Fon Sing üCatherine Frécaut üRamapatee Gujadhur üSheokumar Gujadhur üSheo Shankar Gujadhur üJean-François Koenig üBruno Lebreux üJacques Tin Miow Li Wan Po, G.O.S.K üJack Loupy üDhiren Ponnusamy üMarc de Ravel de L’Argentière üThierry Sauzier ü ü ü



STATEMENT OF DIRECTORS’ RESPONSIBILITIES

Company law requires the Directors to prepare financial statements for each financial year, which give a true and fair view of the

financial position, financial performance and cash flow of the Company and of the Group. In preparing such financial statements, the

Directors are required to:

• Ensure that adequate accounting records and an effective system of internal control and risk management have been maintained;

• Select suitable accounting policies and then apply them consistently;

• Make judgements and estimates that are reasonable and prudent;

• State whether International Financial Reporting Standards have been followed and complied with, subject to any material

departures being disclosed and explained in the financial statements; and

• Prepare the financial statements on the going-concern basis, unless it is inappropriate to presume that the Company will continue

in business.

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

The Directors are responsible for keeping proper accounting records, that disclose with reasonable accuracy and at any time, the

financial position of the Company, and enable them to ensure that the financial statements comply with the Companies Act 2001.

They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and

detection of fraud and other irregularities.

The Directors report that:

• Adequate accounting records and an effective system of internal control and risk management have been maintained;

• The Code of Corporate Governance has been adhered to and, where there has not been compliance, relevant explanations have

been provided in the Statement of Compliance; and

• The external auditor is responsible for reporting on whether the financial statements are fairly presented.

Signed on behalf of the Board of Directors

René Leclézio Thierry SauzierChairman Director and Chief Executive Officer

25 September 2018



Name of Public Interest Entity (‘P.I.E’): Excelsior United Development Companies Limited

Reporting period: Year ended 30 June 2018

We, the Directors of Excelsior United Development Companies Limited, hereby confirm that to the best of our knowledge the P.I.E has

not fully complied with the principles of the Code of Corporate Governance.

Reasons for non-compliance with some areas of the Code are given below:

PRINCIPLES AREAS OF THE CODE AND REASONS FOR NON-COMPLIANCE

1 • The Board Charter will be approved during the next financial year.

2 • The Company has only one executive director since the former Chief Executive Officer, who was an executive director, retired in September 2017.

• The Chairman of the audit committee is not an independent director, but the Board believes that he has the requisite skills and experience to chair that committee.

3 • The Company’s Succession Plan will be approved during the next financial year.

4 • The remuneration of the Directors has not been disclosed on an individual basis, due to the commercial sensitivity of such information.

• A Board and Directors’ evaluation exercise will be conducted during the next financial year.

5 • A Risk Management Framework will be implemented during the next financial year.• There is no formal whistle-blowing policy, but this is presently under review for potential future implementation.

Signed by

René Leclézio Thierry Sauzier

Chairman Director and Chief Executive Officer

25 September 2018

STATEMENT OF COMPLIANCE(Section 75(3) of the Financial Reporting Act)



In my capacity as Company Secretary of Excelsior United Development Companies Limited (the “Company”), I certify that, to the best

of my knowledge and belief, the Company has filed with the Registrar of Companies for the financial year ended June 30, 2018 all

such returns as are required of the Company under the Companies Act 2001.

Patricia Goder

Company Secretary

25 September 2018

COMPANY SECRETARY’S CERTIFICATE JUNE 30, 2018

FINANCIALSTATEMENTS


INDEPENDENT AUDITOR’S REPORT To the Shareholders of Excelsior United Development Companies Limited

F I N A N C I A L S TAT E M E N T S

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

We have audited the consolidated financial statements of Excelsior United Development Companies Limited and its subsidiaries (the

Group), and the Company’s separate financial statements on pages 52 to 117 which comprise the statements of financial position as at

June 30, 2018, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements

of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the financial statements on pages 52 to 117 give a true and fair view of the financial position of the Group and of the Company as at June 30, 2018, and of their financial performance and their cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with the Companies Act 2001.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are

further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent

of the Group and of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for

Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements

in Mauritius, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial

statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole,

and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

KEY AUDIT MATTER HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER

(1) Disposal of investment in subsidiary company

Refer to note 35 in the financial statements.

During the year, the Group sold its investment in Southern Investments Ltd, an indirect subsidiary company, for Rs.175,488,000.

The disposal has been classified as discontinued operation which has the effect of reporting both results of business up to the date of disposal and the profit on disposal as a single item in the consolidated statement of profit or loss.

Because of the importance to readers of the financial statements of the allocation between continued and discontinued operations and the material impact of the Group’s profit on disposal on the statement of profit or loss, this is considered to be a key audit matter.

Our audit procedures to assess whether the sale transaction has been appropriately accounted for included:

1. read the sale agreement and ascertain whether the sale transaction has been recorded and disclosed in accordance with the terms of the sale agreement;

2. reperform the calculation of the gain on disposal by comparing the consideration received to the carrying value of the identified assets and liabilities;

3. agree the consideration received from the sale to the contract and to bank records; and

4. observe the discontinued operations disclosures included in the financial statements.

Based on our audit procedures, we found the disposal of the investment in subsidiary to be appropriately accounted for.




Key Audit Matters (cont’d)

KEY AUDIT MATTER HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER

(2) Valuation of investment properties

Refer to notes 4 & 6 in the financial statements.

Investment properties, which are significant assets in the Group’s statement of financial position, are valued at Rs.382,000,000 as at June 30, 2018.

The Group measures its investment properties at fair value.

Fair value, which is a significant accounting estimate, is dependent on a range of judgemental assumptions and has required the use of an independent external valuer. The valuation of investment properties is based on the valuation reports made on June 30, 2015, 2016 and 2018 by an independent property surveyor.

Due to the level of judgment involved in the valuation of investment properties as well as the significance of these assets to the Group’s statement of financial position, this is considered to be a key audit matter.

Our audit procedures included:

1. Observe management’s controls and effectiveness of systems in place for the valuation of investment properties;

2. Evaluate the independent external valuer’s competence, capabilities and objectivity;

3. Assess the methodologies used and the appropriateness of the key assumptions based on our knowledge of the property industry; and

4. Verify on a sample basis the accuracy and relevance of the input data used within the fair value calculations.

Based on our audit procedures, we found investment properties to be properly accounted for and disclosed in the financial statements.

(3) Fair value of investments in subsidiaries and associates in the separate financial statements

Refer to notes 4, 8 & 9 in the financial statements

In the separate financial statements, investments in subsidiaries and associates are carried at fair value.

Determination of fair values of Level 3 investments in subsidiaries and associates by management is a complex and subjective area requiring significant estimates, particularly where valuations utilise unobservable inputs (e.g. discount rates, earnings multiple, dividend yield and valuation techniques weight).

At June 30, 2018, Company’s investments in Level 3 investments in subsidiaries and associates amounted to Rs.668,882,000 and Rs.762,688,000 respectively.

As the Company’s investments in Level 3 investments in subsidiaries and associates are measured by management at fair value at each reporting date, these fair value measurements significantly impact the Company’s statement of financial position, this is considered to be a key audit matter.

Our audit procedures included:

1. update our understanding of the valuation process employed by the Company for fair valuing the investments in subsidiaries and associates;

2. assess the reasonableness of the key assumptions used, including the discount rates, earnings multiple, dividend yield and valuation techniques weight based on the economic and industry statistics relevant to the business; and

3. review the computation of the fair value measurements of the investments in subsidiaries and associates.

Based on our audit procedures, we found the fair value of the investments in subsidiaries and associates to be reasonable.

Other informationThe Directors are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and our auditor’s report thereon. The chairman’s statement is expected to be made

available to us after the date of this auditor’s report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion

thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider

whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise

appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of

this other information, we are required to report that fact. We have nothing to report in this regard.

When we read the chairman’s statement, if we conclude that there is a material misstatement therein, we are required to communicate

the matter to those charged with governance.




Responsibilities of Directors and Those Charged with Governance for the Financial Statements

The directors are responsible for the preparation and fair presentation of the financial statements in accordance with International

Financial Reporting Standards and in compliance with the requirements of the Companies Act 2001, and for such internal control as

the directors determine is necessary to enable the preparation of the financial statements that are free from material misstatement,

whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group and the Company or to cease operations, or have no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group and the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,

whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of

assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it

exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably

be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the

audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit 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 Group and the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by directors.

• Conclude on the appropriateness of directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group and the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group and the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit

and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our

independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.




Report on Other Legal and Regulatory Requirements

Companies Act 2001

We have no relationship with, or interests in, the Company or any of its subsidiaries, other than in our capacity as auditor and dealings

in the ordinary course of business.

We have obtained all information and explanations we have required.

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

Financial Reporting Act 2004

The Directors are responsible for preparing the corporate governance report. Our responsibility is to report the extent of compliance with

the Code of Corporate Governance as disclosed in the annual report and on whether the disclosure is consistent with the requirements

of the Code.

In our opinion, the disclosure in the annual report is consistent with the requirements of the Code.

Other matterThis report is made solely to the members of Excelsior United Development Companies Limited (the “Company”), as a body, in accordance with Section 205 of the Companies Act 2001. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

BDO & CO Per Georges Chung Ming Kan, F.C.C.A

Chartered Accountants Licensed by FRC

Port Louis, Mauritius.

Date: 25 September 2018



STATEMENTS OF FINANCIAL POSITIONYear ended 30 June 2018

THE GROUP THE HOLDING COMPANYNote 2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000ASSETSNon-current assetsProperty, plant and equipment 5 156,205 294,960 - - Investment properties 6 382,000 442,000 52,000 112,000 Intangible assets 7 3,732 17,245 - - Investments in subsidiaries 8 - - 668,882 644,614 Investments in associates 9 253,904 238,972 762,688 707,150 Investments in available-for-sale financial assets 10 1,400,546 1,183,568 1,380,546 1,163,568 Deferred tax assets 11 4,189 3,223 - -

2,200,576 2,179,968 2,864,116 2,627,332 Current assetsInventories 12 62,577 59,932 - - Trade and other receivables 13 401,706 313,362 59,536 75,121 Cash and bank balances 14 73,595 46,862 558 419

537,878 420,156 60,094 75,540

Total assets 2,738,454 2,600,124 2,924,210 2,702,872

EQUITY AND LIABILITIESCapital and reservesShare capital 15 121,453 121,453 121,453 121,453 Share premium 13,830 13,830 13,830 13,830 Revaluation surplus and other reserves 16 1,054,757 834,842 2,329,252 2,033,914 Retained earnings 969,204 869,665 347,313 314,916 Owners’ interest 2,159,244 1,839,790 2,811,848 2,484,113 Non-controlling interests 185,865 224,278 - -

Total equity 2,345,109 2,064,068 2,811,848 2,484,113

LIABILITIESNon-current liabilitiesBorrowings 17 17,022 28,291 - -Deferred tax liabilities 11 6,483 22,646 291 508Retirement benefit obligations 18 52,635 55,799 3,794 2,013

76,140 106,736 4,085 2,521Current liabilitiesTrade and other payables 19 156,584 147,210 9,207 7,805Proposed dividend 20 60,727 60,727 60,727 60,727Current tax liabilities 21 3,534 7,907 343 706Borrowings 17 96,360 213,476 38,000 147,000

317,205 429,320 108,277 216,238Total liabilities 393,345 536,056 112,362 218,759

Total equity and liabilities 2,738,454 2,600,124 2,924,210 2,702,872

Net assets value per share 17.78 15.15 23.15 20.45

The financial statements have been approved for issue by the Board of Directors on: 25 Septembre 2018

René Leclézio Thierry SauzierDirector Director

The notes on pages 57 to 117 form an integral part of these financial statements. Auditor’s report on pages 48 to 51.



STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Year ended 30 June 2018

THE GROUP THE HOLDING COMPANY

Note 2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000Continuing operations

Turnover 22 617,422 569,344 137,182 126,563

Operating expenses 23 (507,103) (467,032) (7,419) (8,655)

Operating profit 110,319 102,312 129,763 117,908

Other income 24 24,949 10,639 19,125 6,976

Other gains - net 25 3,536 2,313 - -

Share of profit in associates 9 74,446 71,956 - -

Profit before finance costs 213,250 187,220 148,888 124,884

Finance costs 26 (8,186) (9,426) (5,778) (6,365)

Profit before tax 28 205,064 177,794 143,110 118,519

Income tax 21(b) (13,525) (13,215) (1,405) (1,094)

Profit for the year from continuing operations 191,539 164,579 141,705 117,425

Post tax profit for the year from discontinued operation 35(a) 75,325 6,569 - -

Profit for the year 266,864 171,148 141,705 117,425

Other comprehensive income:

Items that will not be reclassified to profit or loss:

Remeasurement of retirement benefit obligations 30 3,882 (5,478) (1,846) (85)

Income tax relating to component of other comprehensive income 30 (371) 822 322 13

Items that may be reclassified subsequently to profit or loss:

Fair value gain on available-for-sale financial assets 30 217,071 124,437 217,071 124,437 Reclassification to profit or loss on disposal of available-for-sale financial assets 30(a) (15) (1,015) (15) (1,015)Fair value gain on investments in subsidiaries 30(b) - - 24,268 23,739

Fair value gain on investments in associates 30(b) - - 55,538 142,075

Other comprehensive income for the year, net of tax 220,567 118,766 295,338 289,164

Total comprehensive income for the year 487,431 289,914 437,043 406,589

Profit attributable to:

- Owners of the parent 31 208,847 147,101 141,705 117,425

- Non-controlling interests 58,017 24,047 - -

266,864 171,148 141,705 117,425

Total comprehensive income attributable to:

- Owners of the parent 428,762 267,136 437,043 406,589

- Non-controlling interests 58,669 22,778 - -

487,431 289,914 437,043 406,589

Analysed as follows:

Continuing operations 412,106 283,345 437,043 406,589

Discontinued operation 75,325 6,569 - -

487,431 289,914 437,043 406,589

Earnings per share (Re.) for profit from continuing operations 31 1.41 1.20 1.17 0.97

Earnings per share (Re.) 31 1.72 1.21 1.17 0.97




STATEMENTS OF CHANGES IN EQUITYYear ended 30 June 2018

THE GROUP Note

Attributable to owners of the parent

Share Capital

Share Premium

RevaluationSurplus

and Other Reserves

RetainedEarnings Total

Non-Controlling

InterestsTotal

EquityRs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2017 121,453 13,830 834,842 869,665 1,839,790 224,278 2,064,068

Profit for the year - - - 208,847 208,847 58,017 266,864

Other comprehensive income for the year - - 219,915 - 219,915 652 220,567

Total comprehensive income for the year - - 219,915 208,847 428,762 58,669 487,431

Disposal of subsidiary company 35 - - - - - (73,220) (73,220)

Dividends to non-controlling interests

- Subsidiaries - - - - - (23,862) (23,862)

Dividends to owners of the parent company 20 - - - (109,308) (109,308) - (109,308)

Balance at June 30, 2018 121,453 13,830 1,054,757 969,204 2,159,244 185,865 2,345,109

At July 1, 2016 121,453 13,830 714,807 836,107 1,686,197 232,837 1,919,034

Profit for the year - - - 147,101 147,101 24,047 171,148

Other comprehensive income for the year - - 120,035 - 120,035 (1,269) 118,766

Total comprehensive income for the year - - 120,035 147,101 267,136 22,778 289,914

Acquisition of non-controlling interest 34 - - - (4,235) (4,235) (6,764) (10,999)

Dividends to non-controlling interests

- Subsidiaries - - - - - (24,573) (24,573)

Dividends to owners of the parent company 20 - - - (109,308) (109,308) - (109,308)

Balance at June 30, 2017 121,453 13,830 834,842 869,665 1,839,790 224,278 2,064,068




STATEMENTS OF CHANGES IN EQUITYYear ended 30 June 2018

NoteShare

CapitalShare

Premium

RevaluationSurplus

and Other Reserves

RetainedEarnings Total

THE HOLDING COMPANY Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2017 121,453 13,830 2,033,914 314,916 2,484,113

Profit for the year - - - 141,705 141,705

Other comprehensive income for the year - - 295,338 - 295,338

Total comprehensive income for the year - - 295,338 141,705 437,043

Dividends 20 - - - (109,308) (109,308)

Balance at June 30, 2018 121,453 13,830 2,329,252 347,313 2,811,848

At July 1, 2016 121,453 13,830 1,744,750 306,799 2,186,832

Profit for the year - - - 117,425 117,425

Other comprehensive income for the year - - 289,164 - 289,164

Total comprehensive income for the year - - 289,164 117,425 406,589

Dividends 20 - - - (109,308) (109,308)

Balance at June 30, 2017 121,453 13,830 2,033,914 314,916 2,484,113




STATEMENTS OF CASH FLOWS Year ended 30 June 2018


Note 2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000Operating activities

Cash received from customers 1,206,892 1,093,688 3,516 3,799

Cash paid to suppliers and employees (1,076,684) (1,005,226) (6,082) (9,084)

130,208 88,462 (2,566) (5,285)

Dividends received

- Subsidiaries - - 33,261 33,261

- Associates 59,517 53,178 59,517 53,178

- Others 41,202 36,732 40,384 36,130

Cash generated from operations 230,927 178,372 130,596 117,284

Interest received 7,545 3,928 4,754 1,733

Interest paid (9,633) (11,632) (5,778) (6,365)

Income tax paid (18,519) (6,944) (1,293) (414)

Net cash from operating activities 210,320 163,724 128,279 112,238

Investing activities

Purchase of property, plant and equipment (19,276) (17,303) - -

Purchase of intangible assets (393) (201) - -

Proceeds from disposal of investment property 76,067 - 76,067 -

Purchase of investments in available-for-sale financial assets - (80,000) - (80,000)

Disposals of investments in available-for-sale financial assets 101 8,141 101 8,141

Net cash (advanced to)/received from related companies (160,710) (36,052) 14,000 (23,100)

Proceeds on disposal of investment in subsidiary net of cash disposed 35 (e) 176,738 - - -

Proceeds on disposals of property, plant and equipment 2,868 582 - -

Net cash from/(used in) investing activities 75,395 (124,833) 90,168 (94,959)

Financing activities

Proceeds from borrowings 2,150 87,728 - 80,000

Repayment of borrowings (123,091) (19,624) (109,000) -

Finance lease principal payments (640) (1,544) - -

Acquistion of non-controlling interest 34 - (10,999) - -

Dividends paid to company’s shareholders 20 (109,308) (97,162) (109,308) (97,162)

Dividends paid to non-controlling interests (17,154) (15,139) - -

Net cash used in financing activities (248,043) (56,740) (218,308) (17,162)

Net cash (used in) / from discontinued operation 35 (g) (4,135) 1,967 - -

Increase/(Decrease) in cash and cash equivalents 33,537 (15,882) 139 117

Movement in cash and cash equivalents

At July 1, 1,645 17,527 419 302

Increase/(Decrease) 33,537 (15,882) 139 117

At June 30, 14 (b) 35,182 1,645 558 419




NOTES TO THE FINANCIAL STATEMENTS

1. COMPANY PROFILE

Excelsior United Development Companies Limited (EUDCOS) is a limited liability company incorporated and domiciled in Mauritius. The main activity of the company consists principally of investing in shares and holding property. Its registered office and principal place of business is situated at 4, Uniciti Business Park, Riviere Noire Road.

These financial statements will be submitted for consideration and approval at the forthcoming Annual Meeting of Shareholders of the Company.

2. SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of these financial statements are set out below:

These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1. Basis of preparationThe financial statements of Excelsior United Development Companies Limited and its subsidiaries comply with the Companies Act 2001 and have been prepared in accordance with International Financial Reporting Standards (IFRS).

The financial statements include the consolidated financial statement of the parent company and its subsidiary Companies (The Group) and the separate financial statements of the parent company (The Company). The financial statements are presented in Mauritian Rupees and all values are rounded to the nearest thousand (Rs 000), except when otherwise indicated.

Where necessary, comparative figures have been amended to conform with change in presentation in the current year. The financial statements are prepared under the historical cost convention, except that:

i. certain property, plant and equipment are carried at deemed cost or at revalued amount;

ii. investments properties are stated at fair value;iii. available-for-sale investments are stated at their fair

value;iv. relevant financial assets and financial liabilities are

stated at their fair value or at amortised cost.

(a) Amendments to published Standards effective in the reporting periodRecognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12). The amendments clarify the accounting for deferred tax where an asset is measured at fair value and that fair value is below the asset’s tax base. The amendment has no impact on the Group’s financial statements.

Disclosure Initiative (Amendments to IAS 7). The amendments require the entity to explain changes in its liabilities arising from financing activities. This includes changes arising from cash flows (eg drawdowns and repayments of borrowings) and non-cash changes such as acquisitions, disposals, accretion of interest and unrealised

exchange differences. A reconciliation of the opening and closing carrying amounts for each item for which cash flows have been or would be classified as financial activities is presented in note 14 (c).

Annual Improvements to IFRSs 2014-2016 CycleIFRS 12 Disclosure of Interests in Other Entities. The amendments clarify that entities are not exempt from all of the disclosure requirements in IFRS 12 when entities have been classified as held for sale or as discontinued operations. The amendment has no impact on the Group’s financial statements.

(b) Standards, Amendments to published Standards and Interpretations issued but not yet effective

Certain standards, amendments to published standards and interpretations have been issued that are mandatory for accounting periods beginning on or after January 1, 2018 or later periods, but which the Group has not early adopted.

At the reporting date of these financial statements, the following were in issue but not yet effective:

IFRS 9 Financial InstrumentsIFRS 15 Revenue from Contracts with Customers Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28)IFRS 16 LeasesClarifications to IFRS 15 Revenue from Contracts with CustomersClassification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2)Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments to IFRS 4)Annual Improvements to IFRSs 2014-2016 CycleIFRIC 22 Foreign Currency Transactions and Advance Consideration Transfers of Investment Property (Amendments to IAS 40)IFRS 17 Insurance ContractsIFRIC 23 Uncertainty over Income Tax TreatmentsPrepayment Features with negative compensation (Amendments to IFRS 9)Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28)Annual Improvements to IFRSs 2015-2017 CyclePlan Amendment, Curtailment or Settlement (Amendments to IAS 19)

Where relevant, the Group is still evaluating the effect of these Standards, Amendments to published Standards and Interpretations issued but not yet effective, on the presentation of its financial statements.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 4.


NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 30 JUNE 2018


2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.2. Property, plant and equipmentFreehold land, buildings on freehold land and buildings on leasehold land, held for use in the production or supply of goods or for administrative purposes, and certain plant and machinery are stated at their fair value, based on periodic valuations, by external independent valuers, less subsequent depreciation for buildings and plant and machinery. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

All other property, plant and equipment is initially recorded at cost. Certain property, plant and equipment, which have subsequently been shown at market value, based on valuations made by external independent valuers, are now stated at deemed cost less depreciation. The directors consider these revalued amounts as the deemed cost. All other assets are stated at historical cost less depreciation.

Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the assets carrying amount or recognised as a separate asset as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Increases in the carrying amount arising on revaluation are credited to other comprehensive income and shown as revaluation surplus in shareholders’ equity. Decreases that offset previous increases of the same asset are charged against revaluation surplus, directly in equity; all other decreases are charged to profit or loss.

Properties in the course of construction for production, rental or administrative purposes or for purposes not yet determined are carried at cost less any recognised impairment loss. Cost includes professional fees and for qualifying assets, borrowing costs capitalised. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use. Depreciation on other assets is calculated on the straight-line method to write off their cost or revalued amounts to their residual values over their estimated useful lives as follows:

Annual rates- Buildings 1% - 4%- Plant and machinery 1% - 20%- Furniture, fittings and equipment 10%, 20% and 33 1/3%- Motor vehicles 20 %- Electrical equipment and installations 10%, 15% and

33 1/3%- Asset costing less than Rs.10,000 100%

Land is not depreciated.

The assets’ residual values, useful lives and depreciation method are reviewed, and adjusted prospectively, if appropriate, at the end of each reporting period.

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

Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying amount and are included in profit or loss. On disposal of revalued assets, amounts included in revaluation surplus relating to that asset are transferred to retained earnings.

2.3. Investment propertyInvestment property, held to earn rentals/or for capital appreciation or both and not occupied by the Group is carried at fair value, representing open-market value determined annually. Changes in fair values are included in profit or loss.

When the use of a property changes from owner-occupied to investment property, the property is remeasured to fair value and reclassified as investment property.

When the use of a property changes such that it is reclassified as property, plant and equipment, its fair value at the date of reclassification becomes its cost for subsequent accounting.

2.4. Intangible assets

(a) GoodwillGoodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

Goodwill is tested annually for impairment.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the gains and losses on disposal.

Goodwill is allocated to cash-generating units for the purpose of impairment testing.

(b) Computer softwareAcquired computer software licences are capitalised on the basis of costs incurred to acquire and bring to use the specific software and are amortised over their estimated useful lives (1-5 years).

(c) Customer listCustomer lists are shown at historical cost, have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight line method over their estimated useful lives (4 years).




NOTES TO THE FINANCIAL STATEMENTS


2.5. Investments in subsidiariesSeparate financial statements of the investorInvestments in subsidiaries are carried at fair value. Unrealised gains and losses arising from changes in fair value are included in other comprehensive income. The carrying amount is reduced to recognise any impairment in the value of individual investments.

Consolidated financial statementsSubsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group.

The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the atcquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in profit or loss as a bargain purchase gain.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Transactions and non-controlling interestsThe Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

Disposal of subsidiariestWhen the Group ceases to have control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.

2.6. Investments in associatesSeparate financial statementts of the investorInvestments in associates are carried at fair value. Unrealised gains and losses arising from changes in fair value are included in other comprehensive income. The carrying amount is reduced to recognise any impairment in the value of individual investments.

Consolidated financial statementsAn associate is an entity over which the Group has significant influence but not control, or joint control, generally accompanying a shareholding between 20% and 50% of the voting rights.

Investments in associates are accounted for by the equity method. Investments in associates are initially recognised at cost as adjusted by post acquisition changes in the group’s share of the net assets of the associate less any impairment in the value of individual investments.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the associate’s identifiable assets and liabilities recognised at the date of acquisition is recognised as goodwill, which is included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of identifiable assets and liabilities over the cost of acquisition, after assessment, is included as income in the determination of the Group’s share of the associate’s profit or loss.

When the Group’s share of losses exceeds its interest in an associate, the Group discontinues recognising further losses, unless it has incurred legal or constructive obligation or made payments on behalf of the associate.

Unrealised profits and losses are eliminated to the extent of the Group’s interest in the associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Upon loss of significant influence over the associate, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence





2.6. Investments in associates (cont’d)and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss.

Where necessary, appropriate adjustments are made to the financial statements of associates to bring the accounting policies used in line with those adopted by the Group.

2.7. Financial assets

(a) Available-for-sale financial assetsThe Group classifies its financial assets as available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired.

Management determines the classification of its investments at initial recognition and re-evaluates this designation at every reporting date.

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within twelve months of the end of the reporting period.

(b) Recognition and measurementInitial measurementPurchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase or sell the asset. Investments are initially measured at fair value plus transaction costs for all financial assets.

DerecognitionFinancial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.

Subsequent measurementAvailable-for-sale financial assets are subsequently carried at their fair values.

Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost.

Unrealised gains and losses arising from changes in the fair value of financial assets classified as available-for-sale are recognised in equity. When financial assets classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in profit or loss as gains and losses on financial assets.

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by considering various valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the

same, discounted cash flows analysis, cost, net assets, capitalised earnings and dividend basis.

(c) Impairment of financial assetsThe Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of financial assets classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered in determining whether the securities are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss-measured as the difference between acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in equity is removed from equity and recognised in profit or loss.

If the fair value of a previously impaired debt security increases and the increase can be objectively related to an event occurring after the impairment loss was recognised, the impairment loss is reversed and the reversal recognised in profit or loss. Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale are not reversed through profit or loss.

2.8. Trade receivablesTrade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of provision is recognised in profit or loss.

2.9. Bank borrowingsBorrowings are recognised initially at fair value being their issue proceeds net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period.

2.10. Trade and other payablesTrade and other payables are stated at their fair value and subsequently measured at amortised cost using the effective interest method.




2 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.11. Cash and cash equivalentsCash and cash equivalents include cash in hand, deposits held at call with banks and bank overdraft. Bank overdraft is shown within borrowings in current liabilities on the statement of financial position.

2.12. Share capitalOrdinary shares are classified as equity.

2.13. InventoriesInventories are stated at the lower of cost and net realisable value. Cost is determined by the weighted average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads, but excludes interest expense. Net realisable value is the estimate of the selling price in the ordinary course of business, less the costs of completion and applicable variable selling expenses.

2.14. Impairment of non-financial assetsAssets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).

2.15. Leases Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Finance leases are capitalised at the estimated present value of the underlying lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the remaining balance of the liability. Finance charges are charged to profit or loss. The property, plant and equipment acquired under finance leasing contracts is depreciated over the useful life of the asset.

Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

2.16. Assets leased out under operating leasesAssets leased out under operating leases are included in investment properties in the statement of financial position. The carrying amounts of properties represent their fair value. Rental income is recognised on a straight line basis over the lease term.

2.17. Current and deferred income taxThe tax expense for the period comprises of current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current taxThe current income tax charge is based on taxable income for the year calculated on the basis of tax laws enacted or substantively enacted by the end of the reporting period.

Deferred taxDeferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, if the deferred income tax arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither accounting nor taxable profit or loss, it is not accounted for.

Deferred income tax is determined using tax rates that have been enacted or substantively enacted at the reporting date and are expected to apply in the period when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which deductible temporary differences can be utilised.

For the purposes of measuring deferred tax liabilities and deferred tax assets for investment properties that are measured using the fair value model, the carrying amounts of such properties are presumed to be recovered entirely through sale, unless the presumption is rebutted. The presumption is rebutted when the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodies in the investment property over time, rather than through sale.

2.18. Retirement benefit obligations

(a) Defined contribution plansA defined contribution plan is a pension plan under which the Group pays a fixed contributions into a separate entity. The Group has no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Payments to defined contribution plans are recognised as an expense when employees have rendered service that entitle them to the contributions.





2.18. Retirement benefit obligations (cont’d)

(b) Defined benefit plansA defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

The liability recognised in the statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method.

Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), is recognised immediately in other comprehensive income in the period in which they occur. Remeasurements recognised in other comprehensive income shall not be reclassified to profit or loss in subsequent period.

The Group determines the net interest expense/(income) on the net defined benefit liability/(asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit liability/(asset), taking into account any changes in the net defined liability/(asset) during the period as a result of contributions and benefit payments. Net interest expense/(income) is recognised in profit or loss.

Service costs comprising current service cost, past service cost, as well as gains and losses on curtailments and settlements are recognised immediately in profit or loss.

(c) Gratuity on retirement For employees who are not covered by the above pension plans, the net present value of gratuity on retirement payable under the Employment Rights Act 2008 is calculated by an actuary and provided for. The obligations arising under this item are not funded.

2.19 Foreign currencies

(i) Functional and presentation currencyItems included in the consolidated financial statements are measured using Mauritian Rupees, the currency of the primary economic environment in which the entity operates (“functional currency”). The consolidated financial statements are presented in Mauritian Rupees, which is the company’s functional and presentation currency.

All values are rounded to the nearest thousand (Rs ’000) except where otherwise indicated.

(ii) Transactions and balancesForeign currency transactions are translated into the functional currency using the exchange rates prevailing on the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in profit or loss with ‘finance (costs)/revenue-net’. All other foreign exchange gains and losses are presented in profit or loss within ‘other (losses)/gains-net’.

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date the fair value was determined.

Translation differences on non-monetary items, such as equities classified as available-for-sale financial assets, are included in the fair value reserve in equity.

2.20 Revenue recognitionRevenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods supplied and services rendered, stated net of discounts, returns, value added taxes, rebates and other similar allowances and after eliminating sales within the Group.

(a) Sales of goods Sales of goods are recognised when the goods are delivered and titles have passed, at which time all of the following conditions are satisfied:• the Group has transferred to the buyer the significant

risks and rewards of ownership of the goods;• the Group retains neither continuing managerial

involvement to the degree usually associated with ownership nor effective control over the goods sold;

• the amount of revenue can be measured reliably;• it is probable that the economic benefits associated

with the transaction will flow to the Group; and• the costs incurred or to be incurred in respect of the

transaction can be measured reliably.

(b) Rendering of servicesRevenue from rendering of services are recognised in the accounting year in which the services are rendered (by reference to the completion of the specific transaction assessed on the basis of the actual service provided as a proportion of total services to be provided).

(c) Dividend income is recognised when the shareholder’s right to receive payment in established.





2.20. Revenue recognition (cont’d)

(d) Other revenues earned by the Group are recognised on the following bases:• Interest income - on a time-proportion basis using the

effective interest method. When a receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at original effective interest rate, and continues unwinding the discount as interest income. Interest income on impaired loans is recognised either as cash is collected or on a cost-recovery basis as conditions warrant.

• Rental income from investment property - on a straight-line basis over the term of the lease.

• Other income - on an accrual basis unless collectability is in doubt.

2.21 ProvisionsProvisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources that can be reliably estimated will be required to settle the obligation.

2.22 Segment reportingSegment information presented relate to operating segments that engage in business activities for which revenues are earned and expenses incurred.

2.23 Dividend distributionDividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividends are declared.

3. FINANCIAL RISK MANAGEMENT

3.1 Financial Risk FactorsThe Group’s activities expose it to a variety of financial risks: interest rate risk, credit risk, liquidity risk, foreign exchange risk and market risk.

A description of the significant risk factors is given below together with the risk management policies applicable.

Interest rate riskThe Group’s income and operating cash flows are exposed to interest rate risk as it sometimes borrows at variable rates. The Group has interest-bearing assets.

The GroupAt June 30, 2018, if the interest rates on rupee-denominated borrowings had been 1% lower/higher with all other variables held constant, post-tax profit for the year would have been Rs.1,336,000 (2017: Rs.1,517,000) higher/lower, mainly as a result of lower/higher interest expense on floating rate borrowings.

The above risk is partly mitigated by the interest-bearing assets of the Group.

At June 30, 2018, if the interest rates on rupee-denominated interest bearing assets had been 1% lower/higher with all other variables held constant, post-tax profit for the year would have been Rs.1,031,000 (2017: Rs.1,415,000) lower/higher, mainly as a result of lower/higher interest income on interest bearing assets.

The Holding CompanyAt June 30, 2018, if the interest rates on rupee-denominated borrowings had been 1% lower/higher with all other variables held constant, post-tax profit for the year would have been Rs.786,000 (2017: Rs.910,000) higher/lower, mainly as a result of lower/higher interest expense on floating rate borrowings.

The above risk is partly mitigated by the interest-bearing assets of the Company.

At June 30, 2018, if the interest rates on rupee-denominated interest bearing assets had been 1% lower/higher with all other variables held constant, post-tax profit for the year would have been Rs.399,000 (2017: Rs.432,000) lower/higher, mainly as a result of lower/higher interest income on interest bearing assets.

Credit riskCredit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s trade receivables. The amounts presented in the statements of financial position are net of allowances for doubtful receivables, estimated by the group’s management based on prior experience and the current economic situation.The Group has no significant concentration of credit risk. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. Cash transactions are limited to high credit quality financial institutions. The Group has policies that limit the amount of credit exposure to any financial institution.

The table below shows the credit concentration of the Group at the end of the reporting period:


2018 2017 2018 2017

Counterparties % % % %

10 major counterparties per company 63 60 - -

Others (diversified risk) 37 40 - -

100 100 - -

Management does not expect any losses from non-performance of these customers.




3. FINANCIAL RISK MANAGEMENT (CONT’D)

3.1 Financial Risk Factors (cont’d)

Liquidity riskLiquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivery of cash or another financial asset.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of

funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Group aims at maintaining flexibility in funding by keeping committed credit lines available.

The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the end of the reporting period to the contractual maturity date.

The GROUP Less than 1 year

Between 1 and 2 years


Over 5 years Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At June 30, 2018

Bank overdrafts 38,413 - - - 38,413

Bank loans 49,737 11,384 5,638 - 66,759

Unsecured loan from related companies 8,210 - - - 8,210

Trade and other payables 156,584 - - - 156,584

At June 30, 2017

Bank overdrafts 45,217 - - - 45,217

Bank loans 157,851 11,026 17,265 - 186,142

Lease liabilities 640 - - - 640

Unsecured loan from related companies 9,768 - - - 9,768


The Holding Company Less than 1 year



Over 5 years Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At June 30, 2018

Bank loan 38,000 - - - 38,000


At June 30, 2017

Bank loan 147,000 - - - 147,000


Foreign exchange riskThe Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures primarily with respect to Euros and US dollars. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operation. The Group’s dealings in foreign currency purchases is managed by seeking the best rates. Fluctuations arising on purchases transactions are partly offset by sales transactions effected in Euros and US dollars to some extent.

Difference on exchange resulting from settlement of transactions denominated in foreign currencies is recognised in profit or loss.

The GroupAt June 30, 2018, if the rupee had weakened/strengthened by 1% against the US dollar/Euro/GBP/ZAR with all variables held constant, post tax-profit of the Group for the year would have been Rs.192,000 (2017: Rs.631,000) higher/lower, mainly as a result of foreign exchange gains/losses on translation of US dollar/Euro/GBP/ZAR denominated net assets over liabilities. Profit is less sensitive to movement in exchange rates in 2018 than 2017 because of the decreased amount of USD/Euro/GBP/ZAR denominated net assets over liabilities.





3.1 Financial Risk Factors (cont’d)

Foreign exchange risk (cont’d)

USD EURO ZAR GBP MUR Total

2018 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Bank Balances 3,215 29,010 - - 41,370 73,595

Trade and other receivables 847 24,553 - 458 375,848 401,706

Trade and other payables (5,148) (29,641) (182) (421) (121,192) (156,584)

USD EURO ZAR GBP MUR Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

2017

Bank Balances 1,475 42,799 - - 2,588 46,862

Trade and other receivables 658 49,127 - 521 263,056 313,362

Trade antd other payables (3,665) (16,717) - - (126,828) (147,210)

Market riskThe Group is susceptible to equity market price risk arising from uncertainties about future prices of the equity securities because of investments held by the Group and classified on the statements of financial position as available-for-sale. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio.

Sensitivity analysisThe table below summarises the impact of increases/decreases in the fair value of the investments on equity. The analysis is based on the assumption that the fair value has increased/decreased by 5%.

Impact on equityTHE GROUP THE HOLDING COMPANY

2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Available-for-sale 70,027 59,178 69,027 58,178

3.2 Fair value estimationThe fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting period. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1.

Instruments included in level 1 comprise primarily quoted equity investments classified as trading securities or available-for-sale.

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on specific estimates. If all significant inputs required to fair value an instruments are observable, the instrument is included in level 2.

If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The company uses a variety of methods and makes assumptions that are based on market conditions existing at the end of each reporting period.


NOTES TO THE FINANCIAL STATEMENTS Year ended 30 June 2018



3.2 Fair value estimation (cont’d)The dividend, capitalised earnings and net assets value basis have been used to determine the fair value for the unquoted available-for-sale investments, investments in subsidiaries and investments in associates.

The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cashflows at the current market interest rate that is available to the Group for similar financial instruments.

3.3 Capital risk managementThe Group’s objectives when managing capital are:• to safeguard the entity’s ability to continue as a going

concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders; and

• to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

Consistently with others in the industry, the Group monitors capital on the basis of the debt-to-adjusted capital ratio. This ratio is calculated as net debt adjusted capital. Net debt is calculated as total debt (as shown in the statement of financial position) less cash and cash equivalents. Adjusted capital comprises all components of equity (i.e. share capital, share premium, non-controlling interests, retained earnings, and revaluation surplus and other reserves).

During 2018, the Group’s strategy, which was unchanged from 2017, was to maintain the debt-to-adjusted capital ratio at the lower end in order to secure access to finance at a reasonable cost.

The debt-to-adjusted capital ratios of the Group/Company at June 30, 2018 and at June 30, 2017 were as follows:


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Total debt (note 17) 113,382 241,767 38,000 147,000

Less: cash and cash equivalents (note 14(a)) (73,595) (46,862) (558) (419)

Net debt 39,787 194,905 37,442 146,581

Total equity 2,345,109 2,064,068 2,811,848 2,484,113

Debt-to-adjusted capital ratio 0.02:1 0.09:1 0.01:1 0.06:1

The decrease in the debt-to-adjusted capital ratio in 2018 is mainly attributable to the repayment of bank loans and disposal of an investment property during the year.

There were no changes in the Group’s approach to capital risk management during the year.

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptionsThe Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

(a) Estimated impairment of goodwillThe Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 2.4(a). These calculations require the use of estimates.

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




4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D)

(c) Fair value of securities not quoted in an active marketThe fair value of securities not quoted in an active market may be determined by the Group using valuation techniques including third party transaction values, earnings, net assets value, cost, dividend or discounted cash flows, whichever is considered to be appropriate. The Group would exercise judgement and estimates on the quality and quantity of pricing sources used. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

(d) Revaluation of freehold land, buildings and plant and machineryFreehold land and buildings held for use in the supply of goods and services or for administrative purposes and plant and machinery are stated at their fair value, based on periodic valuations by external independent valuers. Changes in fair value are recognised in other comprehensive income. The key assumptions used to determine the fair value are further explained in note 5.

(e) Fair value of investment propertyInvestment property, held to earn rentals/or for capital appreciation or both and not occupied by the Company is carried at fair value, based on periodic valuations by external independent valuers. Changes in fair value are recognised in profit or loss. The key assumptions used to determine the fair value are further explained in note 6.

(f) Pension benefitsThe present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost/(income) for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of pension obligation.

The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, the Group considers the interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension obligation.

Other key assumptions for pension obligations are based in part on current market conditions. Additional information is disclosed in note 18.

(g) Limitations of sensitivity analysisSensitivity analysis in respect of market risk demonstrates the effect of a change in a key assumption while other assumptions remain unchanged. In reality, there is a correlation between the assumptions and other factors. It should also be noted that these sensitivities are non-linear

and larger or smaller impacts should not be interpolated or extrapolated from these results.

Sensitivity analysis does not take into consideration that the Group’s assets and liabilities are managed. Other limitations include the use of hypothetical market movements to demonstrate potential risk that only represent the Group’s view of possible near-term market changes that cannot be predicted with any certainty.

(h) Asset lives and residual valueProperty, plant and equipment are depreciated over its useful life taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In reassessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values. Consideration is also given to the extent of current profits and losses on the disposal of similar assets.

(i) Depreciation policiesProperty, plant and equipment are depreciated to their residual values over their estimated useful lives. The residual value of an asset is the estimated net amount that the Group would currently obtain from disposal of the asset, if the asset were already of the age and in condition expected at the end of its useful life.

The directors therefore make estimates based on historical experience and use best judgement to assess the useful lives of assets and to forecast the expected residual values of the assets at the end of their expected useful lives.

(j) Impairment of assetsGoodwill is considered for impairment at least annually. Property, plant and equipment, and intangible assets are considered for impairment if there is a reason to believe that impairment may be necessary. Factors taken into consideration in reaching such a decision include the economic viability of the asset itself and where it is a component of a larger economic unit, the viability of that unit itself.

Future cash flows expected to be generated by the assets or cash-generating units are projected, taking into account market conditions and the expected useful lives of the assets. The present value of these cash flows, determined using an appropriate discount rate, is compared to the current net asset value and, if lower, the assets are impaired to the present value. The impairment loss is first allocated to goodwill and then to the other assets of a cash-generating unit.

Cash flows which are utilised in these assessments are extracted from formal budget. The Group utilises the valuation model to determine asset and cash-generating unit values supplemented, where appropriate, by discounted cash flow and other valuation techniques.




4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D)

(k) Deferred tax on investment propertiesFor the purposes of measuring deferred tax liabilities or deferred tax assets arising from investment properties the directors reviewed the Group’s investment property portfolio and concluded that none of the Group’s investment properties are held under a business model whose objective is to consume substantially all of the economic

benefits embodied in the investment properties over time, rather than through sales. Therefore, in determining the Group’s deferred taxation on investment properties, the directors have determined that the presumption that the carrying amounts of investment properties measured using the fair value model are recovered entirely through sale is not rebutted. As a result, the Group has not recognised any deferred taxes on changes in fair value of investment properties as the Group is not subject to any capital gain taxes on disposal of its investment properties.

5. PROPERTY, PLANT AND EQUIPMENT

(i) THE GROUP

FreeholdLand &

Buildings

Building on Leasehold

LandPlant &

Machinery

Furniture, Fittings and Equipments

MotorVehicles

Electrical Equipment & Installations Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

(a) COST AND VALUATION

At June 30, 2017 74,528 166,473 216,535 56,879 36,722 17,852 568,989

Additions 224 600 12,969 2,992 5,148 138 22,071

Disposals - - (1,923) - (3,726) - (5,649)

Assets scrapped - - (2,703) (89) - - (2,792)

Disposal of subsidiary company (note 35 (b)) - (167,073) (46,700) (30,590) (2,823) - (247,186)At June 30, 2018 74,752 - 178,178 29,192 35,321 17,990 335,433

- Valuation 70,000 - - - - - 70,000

- Cost 4,752 - 178,178 29,192 35,321 17,990 265,433 74,752 - 178,178 29,192 35,321 17,990 335,433

DEPRECIATION

At June 30, 2017 4,269 42,136 135,736 51,249 25,984 14,655 274,029

Charge for the year 1,059 3,807 14,690 3,444 3,936 684 27,620

Disposal adjustments - - (498) - (2,473) - (2,971)

Adjustment for assets scrapped - - (2,703) (89) - - (2,792)

Disposal of subsidiary company (note 35 (b)) - (45,943) (40,160) (28,074) (2,481) - (116,658)

At June 30, 2018 5,328 - 107,065 26,530 24,966 15,339 179,228

NET BOOK VALUE

At June 30, 2018 69,424 - 71,113 2,662 10,355 2,651 156,205




5. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

FreeholdLand &

Buildings

Building on Leasehold

LandPlant &

Machinery

Furniture, Fittings and Equipments

MotorVehicles

Electrical Equipment & Installations Total

(i) THE GROUP Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

(b) COST AND VALUATION

At June 30, 2016 73,865 160,751 207,986 54,422 34,621 16,611 548,256

Additions 663 5,722 12,010 2,457 3,870 1,241 25,963

Disposals - - - - (1,769) - (1,769)

Assets scrapped - - (3,461) - - - (3,461)

At June 30, 2017 74,528 166,473 216,535 56,879 36,722 17,852 568,989

- Valuation 70,000 160,000 30,000 - - - 260,000

- Cost 4,528 6,473 186,535 56,879 36,722 17,852 308,989

74,528 166,473 216,535 56,879 36,722 17,852 568,989

DEPRECIATION

At June 30, 2016 3,022 36,711 123,474 46,737 23,229 13,814 246,987

Charge for the year 1,247 5,425 15,723 4,512 4,317 841 32,065

Disposal adjustments - - - - (1,562) - (1,562)

Adjustments for assets scrapped - - (3,461) - - - (3,461)

At June 30, 2017 4,269 42,136 135,736 51,249 25,984 14,655 274,029

NET BOOK VALUE

At June 30, 2017 70,259 124,337 80,799 5,630 10,738 3,197 294,960

(c) Property, plant and equipment acquired under finance lease are as follows:

THE GROUP

2018 2017

Motor Vehicles

Plant & Machinery

TotalMotor

VehiclesPlant &

MachineryTotal

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Cost-capitalised finance leases - - - 4,934 867 5,801

Accumulated depreciation - - - (4,451) (816) (5,267)

Net book values - - - 483 51 534

Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.





(d) The freehold land and buildings have been valued by JPW International Ltd, Independent Property Surveyor, at their open market value on June 30, 2016 as follows:

Rs’000

Freehold land 15,400

Buildings on freehold land 54,600

70,000

The fair value of the Group’s land was derived using the sales comparison approach. Sales prices of comparable land in close proximity are adjusted for differences in key attributes such as property size. The fair value of the Group’s building on freehold land was derived using the depreciated replacement cost adjusted for age etc. The fair value reflects the cost of a market participant to construct assets of comparable utility and age, adjusted for obsolescence. The most significant input into the valuation approach is price per square metre.

The buildings on leasehold land and plant and machinery of Southern Investments Limited, a subsidiary company, were valued by JPW International Ltd, Independent Property Surveyor, at their open market value on June 30, 2008 as follows:

Rs’000

Buildings on leasehold land 160,000

Plant and machinery 30,000

190,000

The fair value of the above freehold land, buildings and plant and machinery are based on the estimated market value at which they would have been exchanged on the date of valuation between a willing buyer and a willing seller in arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.

Significant increases/(decreases) in the above observable inputs in isolation would result in a significant higher/(lower) fair value.

Details of the Group’s property, plant and equipment measured at fair value and information about the fair value hierarchy are as follows:

2018 2017

Level 2 Rs’000 Rs’000

Freehold land 15,400 15,400

Buildings on freehold land 54,600 54,600

Buildings on leasehold land - 160,000

Plant and machinery - 30,000

70,000 260,000

As the freehold land, buildings and plant and machinery have been valued using observable market data but there is no active market, it is within level 2 of the fair value hierarchy. The directors are of the opinion that the carrying amounts of these assets represent their fair value.

The revaluation surplus net of deferred income taxes was credited to revaluation surplus in shareholders’ equity.





(i) THE GROUP (CONT’D)

(e) If the land, buildings and plant and machinery were stated on the historical cost basis, the amounts would be as follows at the end of the reporting period:

2018 2017

CostAccumulated depreciation

Net book values Cost

Accumulated depreciation

Net book values

Rs’000 Rs’000 Rs'000 Rs’000 Rs’000 Rs’000

Freehold land 369 - 369 369 - 369

Buildings on freehold land 41,913 (8,356) 33,557 41,913 (8,008) 33,905

Buildings on leasehold land - - - 114,128 (35,791) 78,337

Plant and machinery - - - 33,055 (33,055) -

42,282 (8,356) 33,926 189,465 (76,854) 112,611

(f) The property, plant and equipment have been pledged as security for borrowings.

(g) Depreciation expense has been charged as follows:

THE GROUP

2018 2017

Rs'000 Rs'000

Continuing operations - operating expenses 19,654 20,112

Discontinued operation 7,966 11,953

27,620 32,065 (h) No asset has been acquired under finance lease in 2018 & 2017.

(ii) The Holding Company

2017 & 2018 ElectricalEquipment &Installations

Furniture & Fittings Total

Rs’000 Rs’000 Rs’000

(a) COST

At July 1, 2016, June 30, 2017 & June 30, 2018 2,481 2,081 4,562

DEPRECIATION

At July 1, 2016, June 30, 2017 & June 30, 2018 2,481 2,081 4,562

NET BOOK VALUE

At July 1, 2016, June 30, 2017 & June 30, 2018 - - -

(b) Depreciation expense has been charged in operating expenses.




6. INVESTMENT PROPERTIES


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 442,000 442,000 112,000 112,000

Disposal (60,000) - (60,000) -

At June 30, 382,000 442,000 52,000 112,000

(a) Details of the investment properties measured at fair value and information about the fair value hierarchy are as follows:


2018 2017 2018 2017Level 2 Level 2 Level 2 Level 2

Rs’000 Rs’000 Rs’000 Rs’000

Land - 60,000 - 60,000

Buildings 382,000 382,000 52,000 52,000

382,000 442,000 52,000 112,000

The buildings of the Company and the Group have been valued by JPW International Ltd, Independent Property Surveyor, at Rs.52,000,000 and Rs.382,000,000 respectively at their open market value on June 30, 2015. The land were valued by JPW International Ltd, Independent Property Surveyor, at Rs.60,000,000 at their open market value on June 30, 2016. On June 30, 2018, the carrying value of the building of the subsidiary company was confirmed at Rs.330,000,000 by JPW International Ltd, independent property surveyor.

The methods of valuation used to value the building are firstly, the comparative method of valuation which involves the assessment of the retail floor space based on comparison of sales of office space within the building or in close proximity to the property adjusted to reflect its characteristics, condition, floor and size and secondly, the investment method of valuation which involves the capitalisation of the rental income adjusted to take account of outgoings/taxes where applicable, at the estimated current rate of return expected from such properties. The most significant inputs into the valuation approach is price per square metre and rental income per square metre respectively. The fair value of the Group’s land was derived using the sales comparison approach. Sales prices of comparable land in close proximity are adjusted

for differences in key attributes such as property size. The most significant input into the valuation approach is price per square metre.

The fair value of the above land and building is based on the estimated market value at which they would have been exchanged on the date of valuation between a willing buyer and a willing seller in arm’s length transaction after proper marketing wherein the parties had each other acted knowledgeably, prudently and without compulsion. On the basis of current economic and property environnment, the directors are satisfied that the carrying amounts of the investment properties reflect their fair value at June 30, 2018.

Significant increases/(decreases) in the above observable inputs in isolation would result in a significant higher/(lower) fair value.

As the land and buildings have been valued using observable market data but there is no active market, it is within level 2 of the fair value hierarchy.

The movements in the opening balance and closing balance of the investment properties categorised within levels 2 of the fair value hierarchy during the year are as follows:


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 442,000 442,000 112,000 112,000

Disposal (60,000) - (60,000) -

At June 30, 382,000 442,000 52,000 112,000




6. INVESTMENT PROPERTIES (CONT’D)

(b) Rental income from the properties amounted to Rs.29,076,000 (2016: Rs.29,178,000) for the Group and Rs.3,700,000 (2016: Rs.3,700,000) for the Company. Direct operating expenses arising on the investment properties were Rs.6,141,000 (2017: Rs.6,396,000) for the Group and Rs.nil (2017: nil) for the Company.

7. INTANGIBLE ASSETS

THE GROUP

ComputerSoftware Goodwill

Customerlist Total

Rs’000 Rs’000 Rs’000 Rs’000

(a) COST

At July 1, 2017 13,792 21,416 700 35,908

Additions 393 - - 393

Disposal of subsidiary company (note 35 (b)) (3,096) (12,511) - (15,607)

At June 30, 2018 11,089 8,905 700 20,694

AMORTISATION

At July 1, 2017 11,423 7,007 233 18,663

Amortisation charge for the year 1,370 - - 1,370

Disposal of subsidiary company (note 35 (b)) (3,071) - - (3,071)

At June 30, 2018 9,722 7,007 233 16,962

NET BOOK VALUE

At June 30, 2018 1,367 1,898 467 3,732

THE GROUP

ComputerSoftware Goodwill

Customerlist Total

Rs’000 Rs’000 Rs’000 Rs’000

(b) COST

At July 1, 2016 13,581 21,416 700 35,697

Additions 211 - - 211

At June 30, 2017 13,792 21,416 700 35,908

AMORTISATION

At July 1, 2016 9,890 7,007 233 17,130

Amortisation charge for the year 1,533 - - 1,533

At June 30, 2017 11,423 7,007 233 18,663

NET BOOK VALUE

At June 30, 2017 2,369 14,409 467 17,245




7. INTANGIBLE ASSETS (CONT’D)

(c) Amortisation charge has been charged as follows in operating expenses.

THE GROUP

2018 2017

Rs’000 Rs’000

Continuing operations - operating expenses 1,312 1,372

Discontinued operation 58 161

1,370 1,533

(d) Impairment test for goodwill: goodwill is allocated to the Company’s Cash-Generating Units (CGU’s) identified according to the country of incorporation and business segment.

The aggregate carrying amounts of goodwill allocated to each cash generating unit are as follows:

2018 2017

Rs’000 Rs’000

Tourism - Concorde Tourist Guide Agency Limited 174 174

Tourism - Southern Investments Ltd - 12,511

Commerce - Compagnie Mauricienne de Commerce Limitée 1,724 1,724

1,898 14,409

All above companies are incorporated in Mauritius.

8. INVESTMENTS IN SUBSIDIARIES

THE HOLDING COMPANY

2018 2017

Rs’000 Rs’000(a)

At July 1, 644,614 620,875

Fair value gain recognised in other comprehensive income (note 30 (b)) 24,268 23,739

At June 30, 668,882 644,614




8. INVESTMENTS IN SUBSIDIARIES (CONT’D)

(b) The subsidiaries are as follows:

Name Main business

Class of shares held Type

Stated Capital

Effective Shareholding

Proportion of ownership interests

held by non-controlling interests

Place of business

Rs’000 2018 2017 2018 2017

% % % %

Compagnie Mauricienne de Commerce Limitée

Sale of tyres and the holding of investment property Ordinary Direct 10,000 89.5 89.5 10.5 10.5

Motorway M2,Les Pailles

Medine Distillery Company Limited

Production and sale of alcohol and vinegar Ordinary Direct 21,598 66.7 66.7 33.3 33.3

Médine,Bambous

Concorde Tourist Guide Agency Limited

Provision of travel and tourism services Ordinary Direct 7,766 50.2 50.2 49.8 49.8

Royal Road, Floreal

Southern Investments Ltd Operates a hotel resort Ordinary Indirect 150,000 - 29.1 - 70.9

Coastal Road, Belle Mare

The year end of all the above subsidiaries, which are all incorporated in Mauritius, is June 30.

(i) The company holds 50.2% in Concorde Tourist Guide Agency Limited, which previously holds 58.0% in Southern Investments Ltd. Though the effective shareholding was 29.1%, the company previously exercises control over Southern Investments Ltd. During the year, the investment in Southern Investments Ltd has been disposed of (note 35).

(c) Details of the Company’s investments in subsidiaries measured at fair value and information about the fair value hierarchy are as follows:

Level 3

2018 2017

Rs’000 Rs’000Investments by sectors

Beverages 301,756 307,160

Tourism 141,242 92,604

Property 218,807 202,396

Commercial 7,077 42,454

668,882 644,614

The fair value measurements have been categorised as Level 3 fair values as significant inputs used in the valuation techniques are not based on observable market data.

The fair value of investments in subsidiaries not quoted in an active market is determined by the Company using a mix of valuation techniques including the asset based and the capitalised earnings basis. The directors consider the carrying amounts of investments in subsidiaries to represent their fair value.





At June 30, 2018, the most significant unobservable inputs for the valuation are as follows:

Investmentsby sectors

Valuation techniques

Valuationtechniques

weight

Description ofunobservable

inputsUnobservable

inputs

BeveragesCapitalised earnings

Asset based80%20%

Earnings multipleNet assets

12.7 timesBook value

TourismCapitalised earnings

Asset based70% - 80%20% - 30%



PropertyCapitalised earnings

Asset based50%50%



Commercial Asset based 100% Net assets Book value

There has been no change in the valuation technique during the year.

The movement in the fair value measurements of investments in subsidiaries using significant unobservable inputs are as follows:

At July 1, 2017

Fair value gain/(loss) recognised in other

comprehensive incomeAt June, 30

2018

Rs’000 Rs’000 Rs’000Investments by sectors

Beverages 307,160 (5,404) 301,756

Tourism 92,604 48,638 141,242

Property 202,396 16,411 218,807

Commercial 42,454 (35,377) 7,077

644,614 24,268 668,882

At July 1, 2016

Fair value gain/(loss) recognised in other

comprehensive incomeAt June, 30

2017

Rs’000 Rs’000 Rs’000Investments by sectors

Beverages 286,704 20,456 307,160

Tourism 98,602 (5,998) 92,604

Property 189,435 12,961 202,396

Commercial 46,134 (3,680) 42,454

620,875 23,739 644,614





Sensitivity analysis

The table below summarises the impact of a change in the following significant unobservable inputs on the fair value of investments in subsidiaries.

Investments by sectors

Fair value at June 30,

2018

Significant unobservable

inputs

Change in unobservable

inputs

Sensitivity to fair value at

June 30, 2018Rs’000 Rs’000

Beverages 301,756 Earnings multiple

Net assets± 1 time

-5% ± 25,260

-506

Tourism 141,242 Earnings multiple

Net assets± 1 time

-5% ± 3,218

-199

Property 218,807 Earnings multiple

Net assets± 1 time

-5% ± 5,695

-7,466

Commercial 7,077 Net assets -5% -1,754


Fair value at June 30,

2017


inputs


inputs


June 30, 2017Rs’000 Rs’000


Net assets± 1 time

-5% ± 23,234

-479

Tourism 92,604 Earnings multiple

Net assets± 1 time

-5%± 4,418

-678

Property 202,396 Earnings multiple

Net assets± 1 time

-5% ± 4,888

-7,138

Commercial 42,454 Net assets -5% -2,123

The higher the earnings multiple and the net assets, the higher the fair value.

(d) Subsidiaries with material non-controlling interests

Details for subsidiaries that have non-controlling interests that are material to the entity:

Name

Profit allocated to non-controlling interests

during the year

Accumulated non-controlling

interests at June 30,

2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Compagnie Mauricienne de Commerce Limitée 626 1,092 39,426 38,290

Medine Distillery Company Limited 17,246 15,064 42,296 38,526

Concorde Tourist Guide Agency Limited 32,621 2,975 104,143 26,700

Southern Investments Ltd 7,524 4,916 - 120,762

58,017 24,047 185,865 224,278





(e) Summarised financial information on subsidiaries with material non-controlling interests

(i) Summarised statement of financial position and statement of profit or loss and other comprehensive income

2018

NAMECurrent assets

Non-Current assets

Current liabilities

Non-Current

liabilities RevenueProfit for the year

Other compre-hensive

income for the year

Total compre-hensive

income for the year

Dividend paid

to non- controlling

interests

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Compagnie Mauriciennede Commerce Limitée 58,882

408,088 55,564 34,478 144,985 5,987 4,882 10,869 -

Medine Distillery Company Limited 143,930 67,660 72,919 11,784 275,068 51,740 (387) 51,353 13,319

Concorde Tourist Guide Agency Limited

274,973 40,236 80,443 25,794 157,742 132,830 540 133,370 6,579

2017

NAMECurrent assets

Non-Current assets

Current liabilities

Non-Current

liabilities RevenueProfit for the year


income for the year


income for the year

Dividend paid

to non- controlling

interests


Compagnie Mauricienne de Commerce Limitée 64,683

411,732 60,683 49,672 147,326 10,440 (2,564) 7,876 -

Medine Distillery Company Limited 124,951 67,100 66,713 9,846 247,099 45,191 (38) 45,153 13,319

Concorde Tourist Guide Agency Limited 78,567 98,729 64,402 24,089 139,106 10,763 (1,982) 8,781 6,579

Southern Investments Ltd 76,416

135,784 21,282 20,609 110,655 6,568 - 6,568 4,675





(e) Summarised financial information on subsidiaries with material non-controlling interests (cont’d)

(ii) Summarised cash flow information:

NAMEOperatingactivities

Investingactivities

Financingactivities

Net increase in cash and cash

equivalentsOperatingactivities

Investingactivities

Financingactivities

Net increase/ (decrease) in

cash and cash equivalents

2018 2017Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Compagnie Mauricienne de Commerce Limitée 11,605 713 (12,115) 203 12,221 (657) (12,632) (1,068)

Medine Distillery Company Limited 65,392 (8,216) (39,957) 17,219 59,557 (25,810) (39,957) (6,210)

Concorde Tourist Guide Agency Limited 34,759 (2,230) (13,669) 18,860 12,921 (9,598) (14,010) (10,687)

Southern Investments Ltd - - - 20,273 (8,873) (9,434) 1,966

The summarised financial information above is the amount before intra-group eliminations.

9. INVESTMENTS IN ASSOCIATES

THE GROUP

2018 2017

(a) Rs’000 Rs’000

At July 1, 238,972 220,190

Share of profit after tax 74,446 71,956

Share of dividends (59,514) (53,174)

At June 30, 253,904 238,972

THE HOLDING COMPANY

2018 2017

(b) Rs’000 Rs’000

At July 1, 707,150 565,075

Fair value gain recognised in other comprehensive income (note 30(b)) 55,538 142,075

At June 30, 762,688 707,150




9. INVESTMENTS IN ASSOCIATES (CONT’D)

(c) Details of the Company’s investments in associates measured at fair value and information about the fair value hierarchy are as follows:

Level 3

2018 2017


Beverages 762,688 707,150

The fair value measurements have been categorised as Level 3 fair values as significant inputs used in the valuation techniques are not based on observable market data.

The fair value of investments in associates not quoted in an active market is determined by the Company using a mix of valuation techniques including the capitalised earnings basis, the asset based and the dividend yield basis. The directors consider the carrying amounts of investments in associates to represent their fair value.

At June 30, 2018, the most significant unobservable inputs for the valuation are as follows:

Investmentsby sector



weight


inputs

Range of Unobservable

inputs

Beverages

Capitalised earnings Dividend yield

Asset based

40% - 45%35% - 40%

20%

Earnings multipleDividend yield

Net assets

7.9 - 10.5 times5.3% - 5.7%

Book value

There has been no change in the valuation technique during the year.

The movement in the fair value measurements of investments in associates using significant unobservable inputs are as follows:

THE HOLDING COMPANY

2018 2017

Rs’000 Rs’000

At July 1, 707,150 565,075

Fair value gain recognised in other comprehensive income 55,538 142,075

At June 30, 762,688 707,150





Sensitivity analysisThe table below summarises the impact of a change in the following significant unobservable inputs on the fair value of investments in associates.

Investments by sectors Fair value at

June 30, 2018


inputs


inputs


June 30, 2018

Rs’000 Rs’000


Dividend yieldNet assets

± 1 time+10 / -10 basis points

-5%

± 24,548 - 6,583 / + 6,828

-1,408

Investments by sectors Fair value at

June 30, 2017Significant

unobservable inputs


inputs


June 30, 2017

Rs’000 Rs’000

Beverages 707,150Earnings multiple


± 1 time+10 / -10 basis points

-5%

± 22,924 - 6,075 / + 6,301

-1,333

The higher the earnings multiple and the net assets, the higher the fair value. The lower the dividend yield, the higher the fair value.

(d) The principal associated companies are as follows:

Name of company Year end Nature of businessPrincipal place

of businessCountry of

incorporation

Proportion of effective

ownership interest 2018 & 2017

Direct Indirect% %

Goodweal Ltd June 30,Holder of trademark

and patent

Uniciti Office Park, Riviere

Noire Road Mauritius 50.00 -

Distillerie de Bois Rouge Limitée June 30, Dormant Port Louis Mauritius 33.33 -

International Distillers (Mauritius) Ltd June 30,

Production, bottling and distribution of alcohol

Plaine Lauzun, Royal Road Mauritius 50.00 -

Anytime Investment Ltd June 30, Investment holdingTombeau Bay

Royal Road Mauritius 24.50 -

New Fabulous Investment Ltd June 30, Investment holding Tombeau Bay Mauritius 24.50 -

New Goodwill Co Ltd June 30,

Production and sale of local rum and

compounded spirits Royal Road,

Tombeau Bay Mauritius 18.63 14.70

All of the above associates are accounted for using the equity method.





(e) Summarised financial information in respect of each of the material associates is set out below:

NAMECurrent assets

Non-Current assets

Current liabilities

Non-Current

liabilities Revenue

Profitfor the

year


income for the year


income for the year

Dividend received

duringthe year


2018

Goodweal Ltd 16 - - - - - - - -

International Distillers (Mauritius) Ltd 378,031 26,652 78,988 8,714 977,196 82,192 - 82,192 31,155

Anytime Investment Ltd 13 61,543 33 - - 30,449 - 30,449 6,254

New Fabulous Investment Ltd 13 61,543 33 - - 30,449 - 30,449 6,254

New Goodwill Co Ltd 318,064 21,025 75,254 67,736 1,881,747 98,932 - 98,932 15,851

2017

Goodweal Ltd 16 - - 16 - - - - -

International Distillers (Mauritius) Ltd 363,308 29 57 9 873,683 81,871 - 81,871 26,063

Anytime Investment Ltd 56,587 43 29 - - 28,303 - 28,303 5,970

New Fabulous Investment Ltd 56,587 43 29 - - 28,303 - 28,303 5,970

New Goodwill Co Ltd 290,309 16,928 58,890 66,096 1,838,788 92,067 - 92,067 15,171





(f) Reconciliation of summarised financial information

Reconciliation of the above summarised financial information to the carrying amount recognised in the financial statements:

Name

Opening net

assets July 1,

Profitfor the

year Dividends


income for the year

Closing net

assetsOwnership

interestInterest in associates Goodwill

Carrying value

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 % Rs’000 Rs’000 Rs’000

2018

Goodweal Ltd 16 - - - 16 50.00% 8 - 8

International Distillers (Mauritius) Ltd 297,099 82,192 (62,310) - 316,981 50.00% 158,491 28,725 187,216

Anytime Investment Ltd 56,601 30,449 (25,527) - 61,523 24.50% 15,074 - 15,074

New Fabulous Investment Ltd 56,601 30,449 (25,527) - 61,523 24.50% 15,074 - 15,074

New Goodwill Co Ltd 182,250 98,932 (85,083) - 196,099 18.63% 36,533 - 36,532

225,180 28,725 253,904

2017

Goodweal Ltd 16 - - - 16 50.00% 8 - 8

International Distillers (Mauritius) Ltd 267,354 81,871 (52,126) - 297,099 50.00% 148,550 28,725 177,275

Anytime Investment Ltd 52,671 28,303 (24,373) - 56,601 24.50% 13,868 - 13,868

New Fabulous Investment Ltd 52,671 28,303 (24,373) - 56,601 24.50% 13,868 - 13,868

New Goodwill Co Ltd 171,610 92,067 (81,427) - 182,250 18.63% 33,953 - 33,953

210,247 28,725 238,972

(g) Aggregate information of associate that are not individually material: 2018 2017

Rs’000 Rs’000

Distillerie de Bois Rouge Limitée - 154

Losses for the year not recognised were as follows:

Accumulated losses not recognised 2,661 2,661

Deficit of assets not recognised 1,918 1,918

(h) Though the Group holds over 20% of the equity share capital of the following companies, the Group does not have significant influence over the financial and operating policy decisions of these companies. Consequently, these investments are classified as available-for-sale investments.





Proportion of effective ownership interest

2018 2017

% %

Name of company

Voyages Reunion (Havas) 29.3 29.3

Sopral Limited 30.0 30.0

Sunkist Invesments Ltd 28.0 28.0

10. INVESTMENTS IN AVAILABLE-FOR-SALE FINANCIAL ASSETS

(a) The movement in available-for-sale financial assets is as follows:


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 1,183,568 978,034 1,163,568 958,034

Additions - 87,500 - 87,500

Disposals (93) (6,403) (93) (6,403)

Increase in fair value (note 30) 217,071 124,437 217,071 124,437

At June 30, 1,400,546 1,183,568 1,380,546 1,163,568


Non-current 1,400,546 1,183,568 1,380,546 1,163,568

Current - - - -

1,400,546 1,183,568 1,380,546 1,163,568

(b) Equity securities at fair value:


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Listed 971,418 878,560 971,418 878,560

DEM 111,801 88,690 111,801 88,690

Unquoted (note (c)) 317,327 216,318 297,327 196,318

1,400,546 1,183,568 1,380,546 1,163,568




10. INVESTMENTS IN AVAILABLE-FOR-SALE FINANCIAL ASSETS (CONT’D)

The equity securities are categorised as follows:

THE GROUP THE HOLDING COMPANY 2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Level 1 1,083,219 967,250 1,083,219 967,250

Level 3 317,327 216,318 297,327 196,318

TOTAL 1,400,546 1,183,568 1,380,546 1,163,568

The fair value of listed or quoted available-for-sale securities is based on the Stock Exchange or DEM quoted prices at the close of business at the end of the reporting period.

In assessing the fair value of unquoted available-for-sale securities, the Group used the dividend basis and a mix of earnings multiple, dividend and net assets basis of valuation and makes assumptions that are based on market conditions existing at the end of each reporting period.

(c) Basis of valuation of unquoted investments:

THE GROUP THE HOLDING COMPANY 2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Dividend basis 8,175 8,175 8,175 8,175

Mix of earnings multiple, dividend and net assets basis 309,152 208,143 289,152 188,143

TOTAL 317,327 216,318 297,327 196,318

At June 30 2018, the most significant unobservable inputs for the valuation are as follows:

Basis of valuationValuation

techniques


weight


inputs

Range of Unobservable

inputs

- Dividend basis- Mix of earnings multiple,

dividend and net assets basis

Dividend yieldCapitalised earnings

Dividend yieldAsset based

40% - 100%35% - 40%40% - 45%

20% - 100%

Dividend yieldEarnings multiple


5.8% - 6.0%5.8 - 7.6 times

4.7% - 6.0%Book value




10. INVESTMENTS IN AVAILABLE-FOR-SALE FINANCIAL ASSETS (CONT’D)

Sensitivity analysis

The table below summarises the impact of a change in the following significant unobservable inputs on the fair value of the unquoted investments on equity.

Significant unobservable inputs


input

Sensitivity to fair value


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Earnings multiple ± 1 time ± 5,368 ± 4,003 ± 4,317 ± 3,469

Dividend yield +10 / -10 basis points - 1,253/+1,304 - 918/+1,586 - 948/+985 - 766/+1,262

Net assets -5% -1,949 -746 -1,237 -413

(d) The table below shows the changes in levels 1 and 3 instruments


LEVEL 1Available-for-sale investments

2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 967,250 870,194 967,250 870,194

Additions - - - -

Disposal (93) (6,403) (93) (6,403)

Gain recognised in other comprehensive income 116,062 103,459 116,062 103,459

At June 30, 1,083,219 967,250 1,083,219 967,250


LEVEL 3Available-for-sale investments

2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 216,318 107,840 196,318 87,840

Additions - 87,500 - 87,500

Gain recognised in other comprehensive income 101,009 20,978 101,009 20,978

At June 30, 317,327 216,318 297,327 196,318

(e) None of the financial assets are either past due or impaired.

(f) All securities are denominated in Rupee.




11. DEFERRED INCOME TAXES

Deferred income taxes are calculated on all temporary differences under the liability method at 17% (2017: 15%).

(a) There is a legally enforceable right to offset current tax assets against current tax liabilities and deferred income tax assets and liabilities when the deferred income taxes relate to the same fiscal authority on the same entity. The following amounts are shown in the statements of financial position:


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Deferred income tax assets (4,189) (3,223) - -

Deferred income tax liabilities 6,483 22,646 291 508

2,294 19,423 291 508

(b) The movement in the deferred tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same fiscal authority on the same entity, is as follows:


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 19,423 19,681 508 438

(Credited)/Charged to profit or loss (note 21(c)) (1,777) 564 105 83

Charged/(Credited) to other comprehensive income (note 21(c)) 371 (822) (322) (13)

Disposal of subsidiary company (note 35 (b)) (15,723) - - -

AT JUNE 30, 2,294 19,423 291 508

(c) The movement in deferred tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same fiscal authority on the same entity, is as follows:

(i) THE GROUP At July 1,2017

Charged to other comprehensive

income

Credited to profit or loss

Disposal of subsidiary

company (note 35 (b))

At June 30,2018

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Deferred income tax liabilities

Accelerated tax depreciation 16,331 - 87 (16,418) -

Assets revaluation 11,462 297 - - 11,759

27,793 297 87 (16,418) 11,759

Deferred income tax assets

Accelerated tax depreciation - - (518) - (518)

Retirement benefit obligations (8,370) 74 (1,346) 695 (8,947)

(8,370) 74 (1,864) 695 (9,465)

Net deferred income tax liabilities 19,423 371 (1,777) (15,723) 2,294




11. DEFERRED INCOME TAXES (CONT’D)

(c) The movement in deferred tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same fiscal authority on the same entity, is as follows: (cont’d)

At July 1,2016

Credited to other comprehensive

income

Charged/ (Credited) to profit or loss

At June 30,2017

Deferred income tax liabilities Rs’000 Rs’000 Rs’000 Rs’000

Accelerated tax depreciation 15,924 - 407 16,331

Assets revaluation 11,462 - - 11,462

27,386 - 407 27,793

Deferred income tax assets

Tax losses (849) - 849 -

Retirement benefit obligations (6,856) (822) (692) (8,370)

(7,705) (822) 157 (8,370)

Net deferred income tax liabilities 19,681 (822) 564 19,423

(ii) THE HOLDING COMPANY At July 1,2017


income

Charged/(Credited) to profit or loss

At June 30,2018

Deferred income tax liability Rs’000 Rs’000 Rs’000 Rs’000

Accelerated tax depreciation 810 - 126 936

Deferred income tax asset

Retirement benefit obligations (302) (322) (21) (645)

Net deferred income tax liabilities 508 (322) 105 291

At July 1,2016


income

Charged to profit or loss

At June 30,2017

Deferred income tax liability Rs’000 Rs’000 Rs’000 Rs’000

Accelerated tax depreciation 785 - 25 810

Deferred tax asset

Retirement benefit obligations (347) (13) 58 (302)

Net deferred income tax liabilities 438 (13) 83 508




12. INVENTORIES

THE GROUP

2018 2017

Rs’000 Rs’000

(a) Raw materials (at cost) 13,836 7,832

Raw materials (at net realisable value) 6,681 5,798

Finished goods (at cost) 22,953 22,949

Finished goods (at net realisable value) 16,095 19,860

Consumables (at cost) - 1,338

59,565 57,777

Goods in transit 3,012 2,155

62,577 59,932

(b) The carrying amounts of raw materials, finished goods and consumables are arrived at as follows:

THE GROUP

2018 2017

Rs’000 Rs’000

At cost 63,129 61,882

Fall in value (3,564) (4,105)

At net realisable value 59,565 57,777

In 2017, the additional fall in value of Rs.400,000 has been charged to operating expenses. There has been no additional fall in value in 2018. The movement of Rs.541,000 in fall in value in 2018 represents stock written off during the year.

(c) Inventories have been pledged as security for borrowings.

(d) The cost of inventories recognised as expense and included in operating expenses amounted to Rs.152,481,000 (2017: Rs.144,286,000).

13. TRADE AND OTHER RECEIVABLES


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

(a) Trade receivables 98,222 114,715 - -

Less provision for impairment (note (g)) (10,567) (10,759) - -

Trade receivables - net 87,665 103,956 - -

Dividends receivable 7,991 7,671 7,991 7,671

Other receivables and prepayments (note (e)) 12,296 18,851 3,186 5,091

Receivables from related parties 293,764 182,884 48,359 62,359

401,706 313,362 59,536 75,121




13. TRADE AND OTHER RECEIVABLES (CONT’D)

(b) The carrying amounts of trade and other receivables approximate their fair value.

(c) As at June 30, 2018, trade receivables of Rs.10,567,000 (2017: Rs.10,759,000) for the Group were impaired. The amount of the provision was Rs.10,567,000 as at June 30, 2018 (2017: Rs.10,759,000). The individually impaired receivables mainly relate to customers, which are in unexpectedly difficult economic situation. It was assessed that a portion of these receivables is expected to be recovered.

The ageing of these receivables is as follows: THE GROUP

2018 2017

Rs’000 Rs’000

3 to 6 months - 84

Over 6 months 10,567 10,675

10,567 10,759

(d) As at June 30, 2018, trade receivables of Rs.19,345,000 (2017: Rs.22,639,000) for the Group were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default.

The ageing analysis of these trade receivables is as follows: THE GROUP

2018 2017

Rs’000 Rs’000

3 to 6 months 15,141 14,101

Over 6 months 4,204 8,538

19,345 22,639

(e) Other receivables and prepayments THE GROUP THE HOLDING COMPANY

2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Other receivables and prepayments - gross 14,737 21,226 5,997 7,466

Less provision for impairment (note (g)) (2,441) (2,375) (2,441) (2,375)

Other receivables and prepayments - net 12,296 18,851 3,556 5,091




13. TRADE AND OTHER RECEIVABLES (CONT’D)

(f) The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies:


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Rupee 375,848 263,056 59,536 75,121

Euro 847 49,127 - -

US Dollar 24,553 658 - -

GBP 458 521 - -

401,706 313,362 59,536 75,121

(g) The movement on the provision for impairment of trade and other receivables are as follows:


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 13,134 15,581 2,375 2,197

Provision written off during the year as uncollectible (1,387) (3,625) - -

Provision for receivable impairment (note 23) 1,343 1,178 66 178

Disposal of subsidiary company (note (35)) (82) - - -

At June 30, 13,008 13,134 2,441 2,375


Trade receivables 10,567 10,759 - -

Other receivables and prepayments 2,441 2,375 2,441 2,375

13,008 13,134 2,441 2,375

(h) The other classes within trade and other receivables do not contain impaired assets.

(i) The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above. The Group does not hold any collateral as security.

14. CASH AND CASH EQUIVALENTS


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

(a) Cash and bank balances 73,595 46,862 558 419




14. CASH AND CASH EQUIVALENTS (CONT’D)

(b) Cash and cash equivalents and bank overdrafts include the following for the purpose of the statements of cash flows:


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Cash and bank balances 73,595 46,862 558 419

Bank overdrafts (note 17) (38,413) (45,217) - -

35,182 1,645 558 419

(c) Reconciliation of liabilities arising from financing activities:

THE GROUP 2017 Cashflow

Disposal of Subsidiary

Company 2018 Rs’000 Rs’000 Rs’000 Rs’000

Bank loans (186,142) 119,383 - (66,759)

Other loans repayable at call (9,768) 1,558 - (8,210)

Obligations under finance leases (640) 640 - -

(196,550) 121,581 - (74,969)

Cash in hand and at bank 46,862 31,890 (5,157) 73,595

Bank overdraft (note 14) (45,217) 397 6,407 (38,413)

Cash and cash equivalents 1,645 32,287 1,250 35,182

Net debt (194,905) 153,868 1,250 (39,787)

THE HOLDING COMPANY2017 Cashflows 2018

Rs’000 Rs’000 Rs’000

Bank loans (147,000) 109,000 (38,000)

Cash in hand and at bank 419 139 558

Net debt (146,581) 109,139 (37,442)

15. SHARE CAPITAL

2018 & 2017

Rs’000

Authorised

150,000,000 ordinary shares of Re.1 each 150,000

Issued and fully paid

121,453,252 ordinary shares of Re.1 each 121,453

All shares issued are fully paid.Fully paid ordinary shares carry one vote per share and carry a right to dividends.




16. REVALUATION SURPLUS AND OTHER RESERVES

THE GROUP Fair value reserves

Revaluation surplus

Actuarial losses Total

Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2017 735,131 116,939 (17,228) 834,842

Increase in fair value of available for-sale investments (note 30(a)) 217,071 - - 217,071

Reclassification to profit or loss on disposal of available-for-sale financial assets (15) - - (15)

Remeasurement of retirement benefit obligations (note 30(a)) - - 2,859 2,859

Balance at June 30, 2018 952,187 116,939 (14,369) 1,054,757

Fair value reserves

Revaluation surplus


Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2016 611,709 116,939 (13,841) 714,807

Increase in fair value of available for-sale investments (note 30(a)) 124,437 - - 124,437

Reclassification to profit or loss on disposal of available-for-sale financial assets (1,015) - - (1,015)

Remeasurement of retirement benefit obligations (note 30(a)) - - (3,387) (3,387)

Balance at June 30, 2017 735,131 116,939 (17,228) 834,842

THE HOLDING COMPANY Fair value reserves

Revaluation surplus


Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2017 1,974,700 59,585 (371) 2,033,914

Remeasurement of retirement benefit obligations (note 30(b)) - - (1,524) (1,524)

Fair value gain on investments in subsidiaries (note 30(b)) 24,268 - - 24,268

Fair value gain on investments in associates (note 30(b)) 55,538 - - 55,538

Increase in fair value of availablefor-sale investments (note 30(a)) 217,071 - - 217,071

Reclassification to profit or loss on disposal of available-for-sale financial assets (15) - - (15)

Balance at June 30, 2018 2,271,562 59,585 (1,895) 2,329,252




16. REVALUATION SURPLUS AND OTHER RESERVES (CONT’D)Fair value reserves

Revaluation surplus


Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2016 1,685,464 59,657 (371) 1,744,750

Remeasurement of retirement benefit obligations (note 30(b)) - (72) - (72)

Fair value gain on investments in subsidiaries (note 30(b)) 23,739 - - 23,739

Fair value gain on investments in associates (note 30(b)) 142,075 - - 142,075

Increase in fair value of availablefor-sale investments (note 30(a)) 124,437 - - 124,437

Reclassification to profit or loss on disposal of available-for-sale financial assets (1,015) - - (1,015)

Balance at June 30, 2017 1,974,700 59,585 (371) 2,033,914

(a) Fair value reserve - investmentThe fair value reserve for investment comprises the cumulative net change in fair value of available-for-sale financial assets, investments in subsidiaries and investments in associates that have been recognised in other comprehensive income until the investments are derecognised or impaired.

(b) Revaluation surplusThe revaluation surplus relates to the revaluation of property, plant and equipment.

(c) Actuarial (losses)/gainsThe actuarial (losses)/gains reserve represents the cumulative remeasurement of defined benefit obligation recognised.

17. BORROWINGS


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Bank loans (note (b)) 66,759 186,142 38,000 147,000

Obligations under finance leases (note (c)) - 640 - -

Bank overdrafts (notes (d) & 14 (b)) 38,413 45,217 - -

Other loans repayable at call (note (e)) 8,210 9,768 - -

113,382 241,767 38,000 147,000


Non-current

Bank loans 17,022 28,291 - -

Current

Bank overdrafts 38,413 45,217 - -

Bank loans 49,737 157,851 38,000 147,000

Other loans repayable at call 8,210 9,768 - -

Obligations under finance leases - 640 - -

96,360 213,476 38,000 147,000

Total borrowings 113,382 241,767 38,000 147,000




17. BORROWINGS (CONT’D)

(a) The bank borrowings include secured liabilities (leases, bank loans and bank overdrafts) amounting to Rs.105,172,000 (2017: Rs.231,999,000) and Rs.38,000,000 (2017: Rs.147,000,000) for the Group and the Company respectively.

(b) Bank loans


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Repayable before one year 49,737 157,851 38,000 147,000

Repayable after one year and before two years 11,384 11,026 - -

Repayable after two years and before three years 5,638 11,444 - -

Repayable after three years and before five years - 5,821 - -

66,759 186,142 38,000 147,000

Bank loans are secured by floating charges over the assets of the Group. The rates of interest on these loans vary between 4.9% and 8%.

(c) Current finance lease liabilities - minimum lease payments:

THE GROUP

2018 2017

Rs’000 Rs’000

Finance lease liabilities - Not later than one year - 670

Future finance charges on finance leases - (30)

Present value of finance lease liabilities - 640

Lease liabilities are effectively secured as the rights to the leased assets revert to the lessor in the event of default. The rates of interest on these leases are at 8.5%.

The Group leases various assets under non-cancellable finance lease agreement. The lease terms are five years and the ownership of the assets lie within the Group.

(d) Bank overdrafts are secured by floating charges over the assets of the Group. The rates of interest on these bank overdrafts vary between 7.25% and 10.15%.

(e) Other loans repayable at call are unsecured. The rates of interest on these loans vary between 6.5% and 8.5%.




17. BORROWINGS (CONT’D)

(f) The exposure of the Group’s borrowings to interest-rate changes and the contractual repricing dates are as follows:

6 months or less

6 - 12 months

1 - 5 years

Over 5 years Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Borrowings

At June 30, 2018 113,382 - - - 113,382

Borrowings

At June 30, 2017 241,767 - - - 241,767

The exposure of the Company’s borrowings to interestt-rate changes and the contractual repricing dates are as follows:

6 months or less

6 - 12 months

1 - 5 years

Over 5 years Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Borrowings

At June 30, 2018 38,000 - - - 38,000

Borrowings

At June 30, 2017 147,000 - - - 147,000

(g) The carrying amounts of borrowings are not materially different from the fair value. The fair values are based on cash flows discounted using a rate based on the average borrowing rate of 6.25% (2017: 5.64%) and are within level 2 of the fair value hierarchy as the borrowing rate reflects market interest rate.

(h) The carrying amounts of borrowings are denominated in rupee.




18. RETIREMENT BENEFIT OBLIGATIONS


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Amounts recognised in the statements of financial position

Pension benefits (note (a) (ii)) 52,635 51,554 3,794 2,013

Other post retirement benefits (note (b)(i)) - 4,245 - -

52,635 55,799 3,794 2,013

Amounts charged to profit or loss

Included in operating expenses (note 29)

- Pension benefits (note (a) (v)) 10,436 8,732 427 144

Included in discontinued operations

- Other post retirement benefits (note (b) (i)) 677 526 - -

Amounts (credited)/charged to other comprehensive income

Remeasurement of retirement benefit obligations recognised in other comprehensive income (note (a) (v)) (3,882) 5,478 1,846 85

(a) Pension benefits(i) The Group operates a defined benefit pension. The plan is a final salary plan, which provides benefits to members in the form

of a guaranteed level of pension payable for life. The level of benefits provided depends on members’ length of service and their salary in the final years leading up to retirement.

The assets of the fund are held independently and administered by The MCB Investment Management Co Ltd and Confident Asset Management Ltd.

The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out at June 30, 2018 by AON Hewitt Ltd (Actuarial Valuer). The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

(ii) The amounts recognised in the statements of financial position are as follows:


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Present value of funded obligations 124,516 119,280 5,618 4,029

Fair value of plan assets (71,881) (67,726) (1,824) (2,016)

Liability in the statements of financial position 52,635 51,554 3,794 2,013




18. RETIREMENT BENEFIT OBLIGATIONS (CONT’D)

(a) Pension benefits (cont’d)(iii) The movement in the present value of funded obligations over the year is as follows:


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 119,280 104,978 4,029 4,536

Current service cost 6,655 5,922 - -

Past service cost 608 - 311 -

Employee contributions 112 106 - -

Interest cost 7,502 7,257 235 287

Benefits paid (6,576) (3,667) (856) (896)

Liability experience (gain)/loss (4,370) - 1,485 -

Liability loss due to change in financial assumptions 1,305 4,684 414 102

At June 30, 124,516 119,280 5,618 4,029

(iv) The movement in the fair value of plan assets over the year is as follows:


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 67,726 62,991 2,016 2,220

Interest income 4,329 4,447 119 143

Employer contributions 5,473 4,643 492 532

Benefits paid (6,576) (3,667) (856) (896)

Employee contributions 112 106 - -

Return on plan assets excluding interest income 817 (794) 53 17

At June 30, 71,881 67,726 1,824 2,016





(a) Pension benefits (Cont’d)(v) The amounts recognised in profit or loss and other comprehensive income are as follows:


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Current service cost 6,655 5,922 - -

Past service cost 608 - 311 -

Net interest expense 3,173 2,810 116 144

Components of defined benefit costs recognised in profit or loss 10,436 8,732 427 144

Remeasurement of retirement benefit obligations:

Return on plan assets below interest income (817) 794 (53) (17)

Liability loss due to change in financial assumptions 1,305 4,684 414 102

Liability experience loss/(gain) (4,370) - 1,485 -

Components of defined benefit costs recognised in other comprehensive income (note 30) (3,882) 5,478 1,846 85

Total of defined benefit cost 6,554 14,210 2,273 229

The past service cost, the current service cost and the net interest expenses for the year is included in operating expenses in profit or loss. The actuarial gain/(loss) on retiremtent benefit obligations is included in other comprehensive income.

(vi) The reconciliation of the net defined benefit liability in the statements of financial position is as follows:


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 51,554 41,987 2,013 2,316

Amount recognised in profit or loss 10,436 8,732 427 144

Amount recognised in other comprehensive income (3,882) 5,478 1,846 85

Employer contribution (5,473) (4,643) (492) (532)

At June 30, 52,635 51,554 3,794 2,013

1 0 0 • E U D C O S A N N U A L R E P O R T 2 0 1 8




(a) Pension benefits (Cont’d)

(vii) The allocation of plan assets at the end of the reporting period for each category, are as follows:


2018 2017 2018 2017

Equity - Overseas quoted 5% 1% 21% 18%

Equity - Overseas unquoted 1% 0% 4% 2%

Equity - Local quoted 15% 7% 27% 29%

Equity - Local unquoted 1% - 2% -

Debt - Overseas quoted 10% 5% 10% 7%

Debt - Overseas unquoted 1% 4% 5% -

Bonds - Local quoted 4% - - -

Property - Overseas - 0% - -

Property - Local 6% 4% 8% 21%

Other qualifying insurance policies 57% 79% 23% 23%

100% 100% 100% 100%

(viii) The principal actuarial assumptions used for accounting purposes are as follows:


2018 2017 2018 2017

Discount rate 6.5% 7% 6.5% 7%

Future salary increases 5.0% 5% 5.0% 5%

Future pension increases 1.5% 1% 1.5% 0%

Rate of medical cost increases 6.5% 7% 6.5% 7%

Average retirement age (ARA) 60 60 60 60

Average life expectancy for:

Male at ARA 23.2 years 23.2 years 23.2 years 23.2 years

Female at ARA 26.2 years 26.2 years 26.2 years 26.2 years

The weighted average duration of the defined benefit obligation is 5 years.

(ix) The assets of the plan are invested in bonds, equities and properties. The expected return on plan assets was determined by considering the expected returns available on the assets underlying the current investment policy. Expected yields on fixed interest investments are based on gross redemption yields as at the end of the reporting period. Expected returns on equity and property investments reflect long-term real rates of return experienced in the respective markets.


2018 2017 2018 2017

Actual return on plan assets 5,146 3,653 172 160

E U D C O S A N N U A L R E P O R T 2 0 1 8 • 1 0 1




(a) Pension benefits (Cont’d)(x) Sensitivity analysis on Defined benefit obligation at the end of the reporting period

THE GROUPTHE HOLDING

COMPANY

2018 2018

Rs’000 Rs’000

Increase in benefit obligation at end of period resulting from a 1% decrease in discount rate 17,465 276

Decrease in benefit obligation at end of period resulting from a 1% increase in discount rate 14,160 230

An increase/decrease of 1% in other principal actuarial assumptions would not have a material impact on defined benefit obligations at the end of the reporting period.The sensitivity above have been determined based on a method that extrapolates the impact on net defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The present value of the defined benefit obligation has been calculated using the projected unit credit method.

The sensitivity analysis may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

(xi) The defined benefit pension plan exposes the Group to actuarial risks, such as longevity risk, currency risk, interest rate risks and market (investment) risk.

(xii) The funding requirements are based on the pension fund’s actuarial measurement framework set out in the funding polices of the plan.

(xiii) Expected contributions to post-employment benefit plans for the year ending June 30, 2019 is Rs.6,689,000 for the Group and Rs.558,000 for the Company.

(b) Other post retirement benefitsOther post retirement benefits comprise mainly of retirement gratuity payable under the Employment Rights Act 2008 and

other benefits.

(i) Movement in Retirement Gratuity are as follows:

THE GROUP 2018 2017

Rs’000 Rs’000

At July 1, 4,245 3,719

Total current service cost charged in profit or loss 677 526

Benefits paid (283) -

Disposal of subsidiary company (note 35 (b)) (4,639) -

At June 30, - 4,245

The total charge for the Group has been included in ‘’operating expenses’’.

(ii) It has been assumed that the rate of future salary increases will be equal to the discount rate.




19. TRADE AND OTHER PAYABLES


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Trade payables 63,160 69,396 - -

Accrued expenses 69,420 63,731 2,371 962

Other payables 24,004 14,083 6,836 6,843

156,584 147,210 9,207 7,805

The carrying amounts of trade and other payables approximate their fair value.

20. DIVIDENDS

THE HOLDING COMPANY

2018 2017

Rs’000 Rs’000

Amounts recognised as distributions to equity holders in the year: 60,727 48,581

At July 1,

Proposed

Interim dividend for the year ended June 30, 2017 of Re.0.40 per share proposed on December 22, 2016 and paid on February 15, 2017 - 48,581

Final dividend for the year ended June 30, 2017 of Re.0.50 per share proposed on June 27, 2017 and paid on September 15, 2017 - 60,727

Interim dividend for the year ended June 30, 2018 of Re.0.40 per share proposed on December 19, 2017 and paid on February 15, 2018 48,581 -

Final dividend for the year ended June 30, 2018 of Re.0.50 per share proposed on June 21, 2018 and payable on September 18, 2018 60,727 -

109,308 109,308

Paid

Final dividend for the year ended June 30, 2016 of Re.0.40 per share proposed on June 22, 2016 and paid on September 15, 2016 - (48,581)

Interim dividend for the year ended June 30, 2017 of Re.0.40 per share proposed on December 22, 2016 and paid on February 15, 2017 - (48,581)

Final dividend for the year ended June 30, 2017 of Re.0.50 per share proposed on June 27, 2017 and paid on September 15, 2017 (60,727) -

Interim dividend for the year ended June 30, 2018 of Re.0.40 per share proposed on December 19, 2017 and paid on February 15, 2018 (48,581) -

(109,308) (97,162)

Amount due at June 30, 60,727 60,727




21. CURRENT TAX LIABILITIES

(a) Amount shown on the statements of financial position is as follows:


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 7,907 1,156 706 109

Current tax on adjusted profit for the year 13,529 13,960 1,040 1,045

Over provision in previous year (43) (265) (43) (34)

CSR Contribution 3,572 - 303 -

Less: Payment (18,699) (6,944) (1,293) (414)

Less: Tax deducted at source (370) - (370) -

Disposal of subsidiary company (note 35(b)) (2,362) - - -

Amount due at June 30, 3,534 7,907 343 706

(b) The tax on the group’s and the company’s profit before tax differs from the theoretical amount that would arise using the basic tax rate as follows:


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Profit before tax

- Continuing operations 205,064 177,794 143,110 118,519

- Discontinued operation (note 35) 77,081 7,613 - -

- Total 282,145 185,407 143,110 118,519

Tax calculated at 3% & 15% (2017: 15%) 38,927 27,811 21,467 17,778

Income not subject to tax (29,044) (16,824) (22,089) (18,835)

Expenses not deductible for tax purposes 3,308 3,858 1,803 2,127

Excess of capital allowances over depreciation (16) (36) (16) (25)

Excess of depreciation over capital allowances 623 - - -

Other tax allowances (269) - (125) -

Utilisation of tax losses - (849) - -

Current tax on the adjusted profit for the year at 3% & 15% (2017: 15%) 13,529 13,960 1,040 1,045

CSR Contribution 3,572 - 303 -

Over provision in previous year (43) (265) (43) (34)

Deferred tax (credit)/ charge (note 11) (1,777) 564 105 83

15,281 14,259 1,405 1,094

Discontinued operation (note 35(f)) (1,756) (1,044) - -

Charge to profit or loss 13,525 13,215 1,405 1,094

Credit to other comprehensive income

Deferred tax charge/(credit) (notes 11 and 30) 371 (822) (322) (13)

Total tax charge 13,896 12,393 1,083 1,081

Further information about deferred tax is presented in note 11.




22. TURNOVER


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

The analysis of turnover is as follows:

Sales of goods 389,898 364,035 - -

Sales of services 157,744 139,105 - -

Dividend income

- Subsidiaries - - 33,261 33,261

- Associates - - 59,517 53,178

- Others 40,704 37,026 40,704 36,424

Rental income from investment properties 29,076 29,178 3,700 3,700

617,422 569,344 137,182 126,563

There are no transactions with a single external customer that accounts for 10% or more of the Group’s total revenue.

23. EXPENSES BY NATURE


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Depreciation and amortisation 20,966 21,484 - -

Employee benefit expense (note 29) 84,310 83,439 427 144

Provision for receivable impairment (note 13(g)) 1,343 1,178 66 178

Tour expenses 64,065 52,431 - -

Cost of inventories recognised as expense (note 12) 152,481 144,286 - -

Fall in value of inventories (note 12(b)) - 400 - -

Steam, furnace oil, alcohol, electricity and water 75,383 62,226 - -

Direct operating expenses for investment properties 4,343 4,707 - -

Other operating expenses 19,414 6,184 - -

Motor vehicles running expenses 16,173 14,883 - -

Repairs and maintenance 19,361 11,234 - -

Utilities 4,779 4,631 - -

Corporate and management fees 9,239 9,459 2,729 2,729

Rental charges 4,375 3,770 - -

Insurance 4,263 4,095 - -

Marketing, advertising, overseas marketing and promotion expenses 6,732 15,696 - -

Administrative expenses 12,098 16,047 4,197 5,604

Other expenses 7,778 10,882 - -

Operating expenses 507,103 467,032 7,419 8,655




24. OTHER INCOME


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Profit on disposal of property, plant & equipment - 375 - -

Profit on disposal of investment property 16,067 - 16,067 -

Profit on disposal of investment in available-for-sale financial assets 23 2,753 23 2,753

Interest income 5,781 7,141 2,990 3,600

Sundry income 3,078 370 45 623

24,949 10,639 19,125 6,976

25. OTHER GAINS - NET


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Net foreign exchange gain on operations (note 27) 3,536 2,313 - -

26. FINANCE COSTS - NET


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Net foreign exchange gain on financing activities (note 27) 1,448 2,218 - -

Interest expense:

Bank overdrafts (1,310) (1,540) - -

Bank loans repayable by instalments (7,800) (9,232) (5,778) (6,365)

Finance leases (19) (117) - -

Other loans not repayable by instalments (505) (755) - -

(9,634) (11,644) (5,778) (6,365)

Finance costs - net (8,186) (9,426) (5,778) (6,365)




27. NET FOREIGN EXCHANGE GAINS


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Other gains - net (note 25) 3,536 2,313 - -

Finance costs - net (note 26) 1,448 2,218 - -

4,984 4,531 - -

28. PROFIT BEFORE TAXATION


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Profit before taxation is arrived at after:

crediting:

Rent from property 29,076 29,178 3,700 3,700

Profit on disposal of property, plant and equipment - 375 - -

Profit on disposal of investments in available-for-sale financial assets 23 2,753 23 2,573

charging:

Depreciation (note 5)

- owned assets 19,120 18,662 - -

- leased assets 534 1,450 - -

Amortisation of intangible assets 1,312 1,372 - -

Provision for receivable impairment 1,343 1,178 66 178

Fall in value of inventories (note 12) - 400 - -

Employee benefit expense (note 29) 84,310 83,439 427 144

Cost of inventories recognised as expense 152,481 144,286 - -

29. EMPLOYEE BENEFIT EXPENSE


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Salaries and wages 69,217 69,729 - -

Pension costs (note 18) 10,436 8,732 427 144

Pension costs - defined contribution plan 1,136 1,161 - -

Social security costs 3,521 3,817 - -

84,310 83,439 427 144




30. OTHER COMPREHENSIVE INCOME

(a) THE GROUP

Note

Retirement benefit

obligations

Available- for-sale

fair value reserve

Revaluation surplus

Rs’000 Rs’000 Rs’000

2018

Increase in fair value of available-for-sale investments 10 (a) - 217,071 -

Reclassification to profit or loss on disposal of available-for-sale financial assets 10 (a) - (15) -

Remeasurement of retirement benefit obligations 18 3,882 - -

3,882 217,056 -

Income tax charge

Deferred tax on remeasurement of retirement benefit obligations 21(c) (371) - -

Other comprehensive income for the year 2018, net of tax 3,511 217,056 -

Other comprehensive income attributable to:

- Owners of the parent 2,859 217,056 -

- Non-controlling interests 652 - -

3,511 217,056 -

Note

Retirement benefit

obligations

Available- for-sale

fair value reserve

Translation of foreign operation

Rs’000 Rs’000 Rs’000

2017

Increase in fair value of available-for-sale investments 10 (a) - 124,437 -

Reclassification to profit or loss on disposal of available-for-sale financial assets 10 (a) - (1,015) -

Remeasurement of retirement benefit obligations 18 (5,478) - -

(5,478) 123,422 -

Income tax credit

Deferred tax on remeasurement of retirement benefit obligations 21(c) 822 - -

Other comprehensive income for the year 2017, net of tax (4,656) 123,422 -

Other comprehensive income attributable to:

- Owners of the parent (3,387) 123,422 -

- Non-controlling interests (1,269) - -

(4,656) 123,422 -




(b) THE HOLDING COMPANY

Note

Retirement benefit

obligations Fair value

reserve Revaluation

surplus

Rs’000 Rs’000 Rs’000

2018

Remeasurement of retirement benefit obligations 18 (1,846) - -

Fair value gain on investments in subsidiaries 8(a) - 24,268 -

Fair value gain on investments in associates 9(b) - 55,538 -

Increase in fair value of available-for-sale investments 10(a) - 217,071 -

Reclassification to profit or loss on disposal of available-for-sale financial assets - (15) -

(1,846) 296,862 -

Income tax credit


Other comprehensive income for the year 2018, net of tax (1,524) 296,862 -

Note

Retirement benefit

obligations Fair value

reserve Revaluation

surplus

Rs’000 Rs’000 Rs’000

2017

Remeasurement of retirement benefit obligations 18 (85) - -

Fair value gain on investments in subsidiaries 8(a) - 23,739 -

Fair value gain on investments in associates 9(b) - 142,075 -

Increase in fair value of available-for-sale investments 10(a) - 124,437 -

Reclassification to profit or loss on disposal of available-for-sale financial assets - (1,015) -

(85) 289,236 -

Income tax credit


Other comprehensive income for the year 2018, net of tax (72) 289,236 -




31. EARNINGS PER SHARE


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Profit attributable to owners of the parent for continuing operations 171,163 145,448 141,705 117,425

Profit attributable to owners of the parent 208,847 147,101 141,705 117,425

Number of ordinary shares in issue (shares of Re.1 each) (note 15) 121,453 121,453 121,453 121,453

Earnings per share from continuing operations 1.41 1.20 1.17 0.97 Re.

Earnings per share (Re.) Re. 1.72 1.21 1.17 0.97

32. CONTINGENT LIABILITIES

(a) An action has been entered in Court by previous distillers claiming damages for purported breach of contract. The directors believe that the claim entered into against the company is contrary to the Fair Trading Act and therefore no provision is warranted for the time being.

(b) With respect to the sale of its investment in Southern Investments Ltd. Concorde Tourist Guide Agency Limited has given warranties in the ordinary course of business from which it is anticipated that no material liabilities would arise.

33. COMMITMENTS

(a) The future minimum lease payment receivable under non cancellable operating leases are as follows:

THE GROUP

2018 2017

Rs’000 Rs’000

Not later than 1 year 14,707 14,386

Later than 1 year and before 5 years 30,524 23,377

Later than 5 years 6,053 10,070

51,284 47,833

The Group leases various outlets, offices and parking under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights.




33. COMMITMENTS (CONT’D)

(b) The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

THE GROUP

2018 2017

Rs’000 Rs’000

Not later than 1 year 4,230 3,782

Later than 1 year and before 5 years 13,890 11,802

18,120 15,584

34. BUSINESS COMBINATION

Acquisition of additional interest in a subsidiary

Last year, Concorde Tourist Guide Agency Limited, a subsidiary company, acquired an additional 7.92% interest in Southern Investments Ltd for Rs.10,999,000 in cash, thereby increasing its ownership interest from 50.07% to 57.99%. The carrying amount of the share of net assets of Southern Investments Ltd effectively acquired from the non-controlling interest by the Group on the date of the acquisition was Rs.6,764,000. Hence, a difference of Rs.4,235,000 was recognised by the Group in retained earnings.

2017

Rs’000

Cash consideration paid to non-controlling interest 10,999

Carrying amount of the effective non-controlling interest acquired 6,764

Difference recognised in retained earnings 4,235

The following summarises the effect of changes in the Group’s ownership interest in Southern Investments Ltd

2017

Rs’000

Group’s effective ownership interest at beginning of period 43,499

Effective increase in Group’s ownership interest 6,764

Group’s effective ownership interest at end of period 50,263




35. DISCONTINUED OPERATION

Disposal of investment in subsidiary

Concorde Tourist Guide Agency Limited, a subsidiary company, disposed of all its investment in Southern Investments Ltd in 2018 at a net consideration of Rs.175,488,000.

(a) Post tax profit for the year from discontinued operation is analysed as follows:

2018 2017

Rs’000 Rs’000

Gain on disposal of investment in subsidiary (note (d)) 61,906 -

Profit for the year (note (f)) 13,419 6,569

75,325 6,569

(b) Analysis of assets and liabilities over which control was lost

2018

Rs’000

Current assets

Inventory 1,560

Trade and other receivables 84,278

Cash and cash equivalents 5,157

Non-current assets

Property, plant and equipment (note 5) 130,528

Intangible assets (note 7) 25

Current liabilities

Trade and other payables (18,126)

Bank overdraft (6,407)

Current tax liabilities (note 21) (2,362)

Non-current liabilities

Deferred tax liabilities (note 11) (15,723)

Retirement benefit obligations (note 18(b)) (4,639)

Net assets disposed of (note (c)) 174,291




35. DISCONTINUED OPERATION (CONT’D) (c) Group’s share of net assets disposed

2018

Rs’000

Net assets disposed of (note (b)) 174,291

Share of direct non controlling interest of 42.01% (73,220)

Group's share of net assets disposed of 101,071

Goodwill (note 7) 12,511

Group's share of net assets disposed of including goodwill (note (d)) 113,582

(d) Gain on disposal of investment in subsidiary

2018

Rs’000

Consideration received 190,840

Less: Taxes and expenses (15,352)

Net consideration received 175,488

Group's share of net assets disposed of including goodwill (note (c)) (113,582)

Gain on disposal 61,906

(e) Net cash inflow on disposal of subsidiary

2018

Rs’000

Net consideration received 175,488

Less: Cash and cash equivalents disposed of (5,157)

Add: Bank overdraft disposed of 6,407

Total consideration received 176,738

(f) Profit from discontinued operation arises as follows:

THE GROUP

2018 2017

Rs’000 Rs’000

Revenue 95,616 110,656

Other income 1,376 1,345

Other gains/(losses) 1,398 (399)

Operating expenses (83,858) (104,914)

Finance revenue-net 643 923

Profit before tax 15,175 7,611

Tax (note 21)(b)) (1,756) (1,044)

Profit for the year 13,419 6,567




35. DISCONTINUED OPERATION (CONT’D)

(g) Cash used in discontinued operation:

THE GROUP

2018 2017

Rs’000 Rs’000

Operating activities 22,611 20,273

Investing activities (17,312) (8,872)

Financing activities (9,434) (9,434)

Net decrease in cash and cash equivalents (4,135) 1,967

36. RELATED PARTY TRANSACTIONS

(a) THE GROUP

Fellow subsidiaries

Other shareholders

of subsidiaries

Enterprise with common

shareholder

Rs’000 Rs’000 Rs’000

June 30, 2018

Sales of goods 1,703 119,716 11,009

Purchases of goods 16,955 - 9,287

Short term loans advanced - - 350,050

Short term loans recalled - - 187,409

Corporate and management services - - 9,239

Amount owed by related parties 183 2,097 294,162

Amount owed to related parties 1,191 - 9,280

Interest expense - - 2,990

Interest income - - 1,928




36. RELATED PARTY TRANSACTIONS (CONT’D)

(a) THE GROUP (CONT’D)

Fellow subsidiaries

Other shareholders

of subsidiaries

Enterprise with common

shareholder

Rs’000 Rs’000 Rs’000

June 30, 2017

Sales of goods 7,811 206,788 13,837

Purchases of goods 19,316 77 9,305

Short term loans advanced - - 115,749

Short term loans recalled - - 95,445

Corporate and management services - - 10,859

Amount owed by related parties 133 - 182,751

Amount owed to related parties - - -

Interest expense - - 674

Interest income - - 7,069

(b) THE HOLDING COMPANY

Enterprises with common shareholders

2018 2017

Rs’000 Rs’000

Loans refunded 169,700 107,750

Loans recalled 183,700 84,650

Corporate and management services 2,729 2,729

Amount owed by related parties 48,359 62,359

Interest income 2,990 3,600

(c) Terms and conditions of transaction with related parties

The above transactions have been made at arm’s length, on normal commercial terms and in the ordinary course of business. The amount owed to/by related parties are unsecured and settlement occurs in cash. The amount owed to/by related parties in respect of enterprise with common shareholder carried interest rate varying between 4.25% and 6.9%. Short term advances from enterprise with common shareholder are unsecured, carried interest rate of 4.25% and settlement occurs in cash. There has been no guarantees provided or received for any related party receivables or payables. For the year ended June 30, 2017, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (2016:nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.




36. RELATED PARTY TRANSACTIONS (CONT’D)

(d) KEY MANAGEMENT PERSONNEL COMPENSATION


2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Salaries and short-term employee benefits 10,207 21,134 522 560

Post-employment benefits 944 654 - -

11,151 21,788 522 560

37. SEGMENT INFORMATION

Segment information presented relate to operating segments that engage in business activities for which revenues are earned and expenses incurred. On the basis of organization and the types and products and services, the reportable segments have been classified as follows:

(i) Investments – Investments held in shares;

(ii) Property rental;

(iii) Beverages - Production, import and sale of alcoholic products;

(iv) Commerce - Import and distribution of tyres, automotive lubricants and fire protection equipment; and

(v) Tourism - Operates a hotel and provides travel and tourism services.

(a) Segment results

THE GROUP Investments Property Beverages Commerce Tourism Eliminations Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Year ended June 30, 2018

Revenues 137,182 30,157 275,068 114,829 157,742 (97,555) 617,422

Segment result 148,887 13,068 59,130 (2,090) 89,021 (93,883) 214,133

Share of profit of associates - - 74,442 - - - 74,442

148,887 13,068 133,572 (2,090) 89,021 (93,883) 288,575

Finance cost (8,186)

Profit before tax 280,389

Tax (13,525)

Profit for the year 266,864

Attributable to:

- Owners of the parent 208,847

- Non-controlling interests 58,017

266,864




37. SEGMENT INFORMATION (CONT’D)

(a) Segment results (cont’d)

InvestmentsProperty

Rental Beverages Commerce Tourism Unallocated Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Segment Assets 1,460,640 382,000 211,590 99,329 315,209 - 2,468,768

Associates - - 253,904 - - - 253,904

Unallocated Corporate Assets - - - - - 15,782 15,782

2,738,454

Segment Liabilities 112,362 - 84,703 90,044 106,236 - 393,345

Unallocated Corporate Liabilities - - - - - - -

- 393,345

Capital expenditure - - 11,706 820 7,143 19,669

Depreciation - - 11,079 2,943 5,631 19,653

Amortisation - - 66 96 1,150 1,312

THE GROUP Investments Property Beverages Commerce Tourism Eliminations Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Year ended June 30, 2017

Revenues 126,563 30,390 247,100 116,936 249,762 (90,751) 680,000

Segment result 124,884 20,348 53,385 (2,552) 17,083 (91,195) 121,953

Share of profit of associates - - 71,956 - - - 71,956

124,884 20,348 125,341 (2,552) 17,083 (91,195) 193,909

Finance cost (8,502)

Profit before tax 185,407

Tax (14,259)

Profit for the year 171,148

Attributable to:

- Owners of the parent 147,101

- Non-controlling interests 24,047

171,148




37. SEGMENT INFORMATION (CONT’D)

(a) Segment results (cont’d)

InvestmentsProperty

Rental Beverages Commerce Tourism Unallocated Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Segment Assets 1,259,108 442,000 192,050 116,414 310,927 - 2,320,499

Associates - - 238,972 - - - 238,972

Unallocated Corporate Assets - - - - - 40,653 40,653

2,600,124

Segment Liabilities 218,759 - 76,558 110,355 110,355 - 536,056

Unallocated Corporate Liabilities - - - - - - -

536,056

Capital expenditure - - 9,707 933 15,534 - 26,174

Depreciation - - 11,029 3,781 17,255 - 32,065

Amortisation - - 66 96 1,371 - 1,533

The accounting policies of the operating segments are the same as those described in the principal accounting policies adopted by the Group and listed in note 2 in the notes to the financial statements.

Unallocated costs represent corporate expenses. Segment assets consist primarily of property, plant and equipment, investment property, inventories, receivables and share of investment in associated companies and exclude deferred tax assets, goodwill and cash and cash equivalents.

Segment liabilities comprise operating liabilities and exclude items such as taxation and certain corporate borrowings. Capital expenditure comprises additions to property, plant and equipment, and intangible assets.

Certain revenues have been eliminated from the total revenues generated by all the reportable segments to arrive at the revenue for the Group. These eliminated transactions are in respect of transactions between the reportable segments. The net revenues disclosed by the Group hence represent the revenues derived from external customers.

(b) Geographical information

Non-current assets Profit for the year

2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Mauritius 2,125,925 2,106,285 263,672 169,684

Reunion Island 74,651 73,683 3,192 1,464

TOTAL 2,200,576 2,179,968 266,864 171,148

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS


Notice is hereby given that the 44th Annual Meeting of the Shareholders of Excelsior United Development Companies Limited will

be held at 5 Uniciti Office Park, Rivière Noire Road, Bambous on Friday 21st December 2018 at 9.30 a.m. to transact the following

business:

AGENDA

1. To receive, consider and approve the Group’s and Company’s audited financial statements for the year ended 30 June 2018, including the annual report and the auditor’s report.

2. To reappoint Mr. Pierre Doger de Spéville as director of the Company until the next annual meeting in compliance with section 138 (6) of the Companies Act 2001.

3. To reappoint Mr. Lajpati Gujadhur as director of the Company until the next annual meeting in compliance with section 138 (6) of the Companies Act 2001.

4. To reappoint Messrs. BDO & Co as auditor of the Company for the financial year ending on 30 June 2019 and authorise the Board of Directors to fix its remuneration.

5. To ratify the remuneration paid to the auditor for the year ended 30 June 2018.

A shareholder of the Company may appoint a proxy to attend and vote at the meeting on his behalf. The instrument appointing the

proxy must be deposited at the registered office of the Company, 4 Uniciti Office Park, Rivière Noire Road, Bambous 90203, not less than

twenty-four hours before the meeting.

By Order of the Board

Patricia GoderCompany Secretary

05 December 2018

PROXY FORM


I/We (Block Capitals, please)

being a shareholder/shareholders of the above-named Company, hereby appoint

of

or failing him

of

as my/our proxy to vote for me/us and on my/our behalf at the Annual Meeting of the Shareholders of the Company to be held on Friday 21 December 2018 at 9:30 a.m. and at any adjournment thereof.

Signed this ………................………… day of ……….......................………… 2018

Signature ………................…….........................……

Please indicate with an X in the spaces below how you wish your votes to be cast.

FOR AGAINST

RESOLUTION 1 To receive, consider and approve the Group’s and Company’s audited financial statements for the year ended 30 June 2018, including the annual report and the auditor’s report thereon.

RESOLUTION 2 To reappoint Mr. Pierre Doger de Spéville as director of the Company until the next annual meeting in compliance with section 138 (6) of the Companies Act 2001.

RESOLUTION 3 To reappoint Mr. Lajpati Gujadhur as director of the Company until the next annual meeting in compliance with section 138 (6) of the Companies Act 2001.

RESOLUTION 4 To reappoint Messrs. BDO & Co as auditor for the financial year ending 30 June 2019 and authorise the Board of Directors to fix its remuneration.

RESOLUTION 5 To ratify the remuneration paid to the auditor for the year ended 30 June 2018.

NOTES

1. A member may appoint a proxy of his own choice.

2. If the appointor is a corporation, this form must be under its common seal or under the hand of some officer or attorney duly authorised in that behalf.

3. In the case of joint holders, the signature of any one holder will be sufficient, but the names of all the joint holders should be stated.

4. If this form is returned without any indication as to how the person appointed proxy shall vote, he will exercise his discretion as to how he votes or whether he abstains from voting.

5. To be valid, this form must be completed and deposited at the registered office of the Company, 4 Uniciti Office Park, Rivière Noire Road, Bambous 90203, not less than twenty-four hours before the time fixed for holding the meeting or adjourned meeting.

This document is printed on Tauro Offset, a paper from well-managed forests.

Edited and designed by Beyond Communications

EXCELSIOR UNITED

DEVELOPMENT COMPANIES LIMITED

4, Uniciti Office Park, Rivière-Noire Road,

Bambous 90203, Mauritius

T +230 401 6101

F +230 452 9600

E [email protected]

Documents

ANNUAL REPORT 2018 - Eudcos · 8 • EUDCOS ANNUAL REPORT 2018 ILITS 2018 2017 % Rs’000 % Rs’000 Revenues 797,126 663,039 Bought-in materials and services (401,827) (362,109)