Annual Report - LES MOULINS DE LA CONCORDE · 6 LMLC ANNUAL REPORT 2016 LMLC ANNUAL REPORT 2015/16 7 1. The directors have pleasure in submitting the Annual Report of Les Moulins

Annual Report2016

02 Directorate

10 Chairman’s Review

27 Statement of Directors’

Responsibilities

32 Auditors’ Report

36 Statements of

Changes In Equity

95 Proxy Form

05 Notice of Meeting

12 Secretary’s Certificate

29 Financial Highlights

34 Statements of

Financial Position

38 Statements of Cash Flows

06 Annual report

13 Corporate Governance

Report

30 Statement of Compliance

35Statements of Profit or Loss and Other

Comprehensive Income

39 Notes to the

Financial Statements

Contents

LMLC ANNUAL REPORT 20162

BOARD OF DIRECTORS - JUNE 30, 2016

HANSRAJ RUHEE (Chairman)

VINCENT AH CHUEN

CEDRIC DE SPEVILLE

MICHEL DE SPEVILLE, C.B.E. (Alternate NOEL EYNAUD)

PIERRE DINAN

ERIC ESPITALIER-NOEL

ANWAR JOONAS

DEONANAN MAKOOND

JEAN-PIERRE MONTOCCHIO

PIERRE-YVES POUGNET ARUNA DEVI BUNWAREE RAMSAHA(Alternate BENOIT BARBEAU)

PETRUS VAN NIEKERK

SECRETARY

FOOD & ALLIED SECRETARIAL SERVICES CO LTD

GENERAL MANAGER PHILIPPE LA HAUSSE DE LALOUVIERE

AUDITORSBDO & CO

BANKERSTHE MAURITIUS COMMERCIAL BANK LTD

STATE BANK OF MAURITIUS LTD

THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED

BARCLAYS BANK MAURITIUS LIMITED

REGISTERED OFFICE AND FACTORYREGISTERED OFFICE: FOOD & ALLIED GROUP HEADQUARTERS, GENTILLY, MOKA 80810

OFFICES AND FACTORY: CARGO PENINSULA, QUAY D, PORT LOUIS, 11610

Directorate

.

LMLC ANNUAL REPORT 2016 5LMLC ANNUAL REPORT 20164

1. To consider the Annual Report of the Company for the year ended June 30, 2016.

2. To receive the Auditors’ Report for the year ended 30 June 2016.

3. To consider and approve the financial statements of the Company for the year ended June 30, 2016.

4. To re-appoint the following persons who retire (i) by rotation as per the Constitution and (ii) in accordance with section 138 (6) of the Companies Act 2001 and who offer themselves for re-election:

• Mr. Michel de Spéville C.B.E • Mr. Pierre-Yves Pougnet • Mr. Vincent Ah Chuen

5. To re-appoint Mr. Petrus van Niekerk who retires by rotation as per the Company’s Constitution and offers himself for re-election.

6. To re-appoint :

• Mr. Hansraj Ruhee

• Mr. Pierre Dinan as Directors of the Company until the next Annual

Meeting in accordance with section 138 (6) of the Companies Act 2001.

7. To ratify the payment of a dividend.

8. To re-appoint Messrs. BDO & Co as Auditors of the Company who will hold office until the next Annual Meeting and to authorise the Directors to fix their remuneration.

9. To transact such other business, if any, as may be transacted at such Annual Meeting.

BY ORDER OF THE BOARD

FOOD & ALLIED SECRETARIAL SERVICES CO LTDSECRETARY

September 8, 2016

Notice is hereby given that the 29th Annual Meeting of Shareholders of the Company will be held at the offices of Les Moulins de la Concorde Ltée, Cargo Peninsula, Quay D, Port Louis, on Wednesday November 9, 2016 at 11.30 a.m.

Members entitled to attend and vote at the meeting may appoint proxies to attend and vote for them. The instrument appointing a proxy or any general power of attorney shall be deposited to the attention of The Company Secretary, Food & Allied Secretarial Services Co Ltd, Food & Allied Group Headquarters, Gentilly, Moka not less than 24 hours before the day fixed for the meeting or else the instrument of proxy shall not be treated as valid.

BRN: C07006395

Notice of Meeting

AGENDA

LMLC ANNUAL REPORT 2015/16 7LMLC ANNUAL REPORT 20166

1. The directors have pleasure in submitting the Annual Report of Les Moulins de la Concorde Ltée together with the audited financial statements for the year ended June 30, 2016.

2. PRINCIPAL ACTIVITIES

The principal activity of Les Moulins de la Concorde Ltée is the milling of wheat and its main products, wheat flour and wheat bran which are sold on the local market and exported to the Indian Ocean Islands and African countries. The Company also sells various types of wheat flour in small packs.

The principal activity of its subsidiary companies are as follows: 1. Concordia Offshore Developments Ltd - holding of investment. 2. Amigel Ltd - production of unbaked frozen products.

The consolidated statements of profit or loss and other comprehensive income for the year ended June 30, 2016 is set out on page 35.

3. DIRECTORATE AT JUNE 30, 2016

Les Moulins de la Concorde Ltée - The Company Concordia Offshore Developments Ltd - Subsidiary

Hansraj Ruhee (Chairman) Michel de Spéville, C.B.E. (Chairman)

Vincent Ah Chuen Gérard Boullé

Cédric de Spéville Cédric de Spéville

Michel de Spéville, C.B.E. (Alternate Noël Eynaud) Pierre-Yves Pougnet

Pierre Dinan

Eric Espitalier-Noël Amigel Ltd - Subsidiary

Anwar Joonas Gérard Boullé (Chairman)

Deonanan Makoond Vincent Ah Chuen

Jean-Pierre Montocchio Cédric de Spéville

Pierre-Yves Pougnet Michel de Spéville, C.B.E.

Aruna Devi Bunwaree Ramsaha(Alternate Benoit Barbeau)

Anwar Joonas

Hansraj Ruhee

Petrus van Niekerk

Annual Report


6. AUDITORS’ FEES

The fees paid to the auditors, for audit and other services were:

THE GROUP THE COMPANY

2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Audit fees paid to:

- BDO & Co 705 625 615 575

Fees paid for other services provided by:

- BDO & Co - 250 - 250

7. DIVIDENDS

Dividends of Rs 43.2 millions (2015: Rs 37.8 millions) on ordinary shares and Rs 6 millions (2015: Rs 6 millions) on preference shares have been paid in respect of the current year.

Approved by the Board of Directors on September 08, 2016 and signed on its behalf by:

Hansraj Ruhee Pierre Dinan Chairman Director

3. DIRECTORATE AT JUNE 30, 2016 (CONT’D)

Directors’ remuneration There was no contract of significance subsisting during the period to which the Company or one of its subsidiaries is a party and in which a director is or was materially interested, either directly or indirectly. Remuneration and benefits (including bonuses and commissions) received and receivable from the

Company and its subsidiaries were as follows:

Directors of Les Moulins de la Concorde Ltée 2016 2015

Rs000's Rs000's

Executive Directors

Full-Time - -

Part-Time - -

Non-Executive Directors

Full-Time - -

Part-Time ((12) (2015:12)) 1,726 1,599

1,726 1,599

Directors of subsidiaries 2016 2015

Rs000's Rs000's

Executive Directors

Full-Time - -

Part-Time - -

Non-Executive Directors - -

Full-Time 145 140

Part-Time ((10) (2014:10)) 145 140

4. DIRECTORS’ SERVICE CONTRACTS

None of the Directors of the Company and of the subsidiaries has service contracts with the Company or with any of its subsidiaries.

5. DONATIONSTHE GROUP THE COMPANY

2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Political donations - 1,200 - 1,200

Charitable donations 283 277 283 277

283 1,477 283 1,477


made in the year under review; the switch-over to a new Supervisory Control and Data Acquisition (SCADA) system to control mill operations. This modern SCADA system replaces the original system in place since mill start-up in 1989, and was successfully commissioned. The other major improvement was the coming on line of the full potential of the packing infrastructure, recently built and installed. This allows the storage and packing of the smaller quantities of special flours and their packing in a variety of pack sizes and formats. The company is now better equipped to address future client needs and requirements.

All the four existing internationally-recognised accreditation systems were maintained during the year; ISO9001 (quality management system), ISO 14001 (environmental management), ISO 18000 (health and safety management) and HACCP (food safety system). In addition, the ISO 17025 norm for laboratory processes was obtained during this year, which complements the stringent quality norms of the Company.

AFTER SALE SERVICE AND TRAINING

The Company continues to maintain comprehensive technical assistance visits to more than 200 bakeries in the country. The training courses provided to professional bakers and patissiers to upgrade their skills, teach new methods and improve baking product quality, continue to develop and improve. These services are highly appreciated by bakers and their benefits are reflected in the diversity and improvement in product quality offered to the public. The training courses provided at the company’s training centre “La Fournée des Moulins” are also available to the general public and more than 1,000 individuals took advantage of these training courses during the year.

Technico-commercial visits were made to bakeries and clients in countries of the region. These visits strengthened client-supplier relations and permit a better understanding of client needs and difficulties.

PUBLIC OUTREACH

Fête du Pain

This annual event was again organised but the focus of the “Fête du Pain” this year was towards the baking sector professionals. As a result, the public events were restricted to two days of exposition of decorative bakery and sandwich competitions at the Caudan Waterfront. A series of training courses and competitions among professional and student bakers from hotels, traditional and commercial bakeries were held over a few weeks, to improve and develop new techniques.

World Bakery Cup

An intensive training schedule was conducted with eight young Mauritian bakers, who constituted the National baking team, in preparation for the “Coupe du Monde de la Boulangerie”. They were coached by M.Laval Sophie of La Fournée des Moulins. This event was held in Paris in February where the team competed as one of the top 12 teams in the world.

CORPORATE SOCIAL RESPONSIBILITY/ SPONSORSHIPS

The Company continues to support the “Pain d’Epices” project in Rodrigues which has created and now sustains a cottage-industry of baking entrepreneurs. The “Association-Mezon Rodrigues” is now increasingly in the hands of Rodrigan producers and LMLC has taken the initiative to support the project to ensure its sustainability.

The Company contributes to the “Foundation Solidarité” of the Food & Allied Group, which has a series of CSR projects assisting the vulnerable sectors of the society.

Training courses in baking are offered to non-profit organisations as part of LMLC’s CSR initiatives.

The Company continues to sponsor several educational institutions and needy students and has set up a scholarship system for students in technical fields. This has allowed the employment of gifted young men and women after their graduation from school.

SUBSIDIARIES

Amigel Ltd

The Tamam franchise concept has shown good potential and four shops were operational in 2016. However, the pace of opening of the franchise shops was slower than expected impacting negatively on company’s results which reported a loss of Rs 13.1M as at 30 June 2016. New measures have been put in place to accelerate the development of the franchise.

Concordia Offshore Developments Ltd

Concordia Offshore Development Ltd (CODL) effectively disposed of its shares in Companhia Industrial da Matola (CIM) and the proceeds of the sale were received in January 2016. The Group’s share of profit on this transaction was Rs 24M, net of non-controlling interest of Rs 7M.

ACKNOWLEDGEMENTS

I take this opportunity to express my thanks to my fellow directors for their guidance and support during this year, in particular those who, in addition to their duties on the Board, also served on the committees, for which I am grateful.

I equally acknowledge the commitment of Management and the Company’s personnel at large. Their efforts and rigour continue to sustain the activities, performance and development of the Company.

Hansraj Ruhee

Chairman

September 08, 2016

OVERVIEW

For the second year in a row the company achieved commendable sales volumes on the local market which, coupled with higher productivity, resulted in an improved operational performance. Moreover, the sale of an investment held in our subsidiary Concordia Offshore Developments Limited (CODL) positively impacted the group’s overall results. The Group achieved a turnover of Rs 2.16 Billion for the year with a net profit before tax of Rs 172.3M.

THE COMPANY

The Company had a good year in terms of good sales and financial results. While turnover was close to that of last year, profitability improved, largely on account of higher productivity and favourable raw material prices. In addition, sales volumes increased by 3% over last year, contributing positively to the company’s profitability.

The Company’s turnover of Rs 2.15 Billion for the year was achieved from sales of around 162,000 MT of flour and bran. The net profit before tax of Rs 142M and payment of dividend of Rs 8.00 per ordinary share to the shareholders concluded a successful year.

SALES

The contracts of the State Trading Corporation (STC) for the supply of flour to the nation for the calendar years 2015 and 2016 were awarded to LMLC based on its favorable offers. As a result, STC was again the main client of LMLC for which some 105,000 tonnes of flour were produced during the year. Four types of flour are milled for the national requirements; white flour for French-style bread,

Asian type flour for faratha and chapathi as well as two types of brown flour for baking brown bread. National consumption of flour continues to increase year on year with dietary changes and the increasing variety and quality of flour-based products on the market. We expect this trend to continue over the foreseeable future.

The production and sales by LMLC of a variety of flours in small packs, continue to increase despite competition. These products under the brands “Blédor” and “Les Moulins” are sold mainly on the local retail market. Despite strong competition from repackers of small packs of subsidised flour, LMLC products sold well, on account of their excellent quality.

The export market for flour encountered fierce competition from international producers. As a result, export sales to clients in the Region declined to 17,000 tonnes during the year, from the 20,500 tonnes achieved in 2014-2015. Strategies have been adapted to redress the situation going forward.

BRAN

The local demand for fresh, high quality bran for the animal feed sector was satisfied by LMLC. Some 5,000 tonnes of surplus bran was exported to Africa, Asia and the Region. This production supports and sustains the animal and poultry farming activities in Mauritius and Rodrigues.

OPERATIONS

Milling operations continued to show excellent performance with high extraction rates and industrial efficiencies resulting in improved productivity. Two major improvements were

Chairman's Review

On behalf of the Board of Directors, I am pleased to submit the audited financial statements of the Company (LMLC) and the Group together with an overview of the Company’s main activities for the year ended June 30, 2016.


Corporate Governance ReportThe Board of Directors is ultimately responsible and accountable for ensuring that corporate governance is established and maintained in the Company. In this regard, governance structures and procedures have been implemented, in conformity with the Company’s internal policies as well as external legislation. The day-to-day responsibility for corporate governance rests with executive management who reports to the Board of Directors via the Corporate Governance Committee.

The Statement of Directors’ Responsibilities and Statement of Compliance are on pages 27 and 30 respectively.

1. SHAREHOLDING STRUCTURE

1.1 Shareholders holding more than 5% of the Company

The shareholders holding more than 5% of the Company at June 30, 2016 are:

No. Shareholders Ordinary %

1 Livestock Feed Limited 1,573,089 29.13

2 Credo LM (Pty) Ltd 1,538,482 28.49

3 Management and Development Company Limited 482,847 8.94

4 Mauritius Ports Authority (MPA) 450,000 8.33

5 Société Matram * 319,296 5.91

*wholly owned by Management and Development Company Limited.

1.2 Distribution of Shareholding at June 30, 2016

The company had 1,956 ordinary shareholders as at June 30, 2016, distributed as follows:

No. of Shares No. of Shareholders No. of Shares owned % Shareholding

0 - 500 1,660 220,811 4.09

501 - 1 000 155 112,598 2.09

1 001 - 5 000 115 253,847 4.70

5 001 - 10 000 14 104,073 1.93

10 001 - 100 000 6 158,957 2.94

100 001 - 200 000 1 186,000 3.44

200 001 - 500 000 3 1,252,143 23.19

above 500,000 2 3,111,571 57.62

1,956 5,400,000 100

2. SHAREHOLDERS’ AGREEMENTS AFFECTING GOVERNANCE OF THE COMPANY BY THE BOARD

There are no shareholders’ agreements that affect the governance of the Company by the Board.

3. CONSTITUTION OF THE COMPANY

The Memorandum and Articles of Association of the Company was repealed and replaced by a new Constitution on 7th December 2015.

We certify that, to the best of our knowledge and belief, the Company has filed with the Registrar of Companies all such returns as are required of the Company under the Companies Act 2001.

FOOD & ALLIED SECRETARIAL SERVICES CO. LTDSecretary

September 08, 2016

Secretary's CertificateYEAR ENDED JUNE 30, 2016

YEAR ENDED JUNE 30, 2016

Corporate Governance Report

NO. No

n-Ex

ecut

ive

Inde

pend

ent

Non

-Ind

epen

dent

Direct Shareholding

in LMLC%

Indirect Shareholding

in LMLC%

Number of other

Directorshipsin Listed

CompaniesDIRECTORS

Ord Pref Ord Pref

1. Hansraj Ruhee (Chairman) ✩ ✩ - 0.038 0.040 0.011 0.030 1

2. Vincent Ah Chuen ✩ ✩ - 0.084 - - - 3

3. Cédric de Spéville ✩ - ✩ - - 0.25 - 4

4. Michel de Spéville, C.B.E. ✩ - ✩ 0.002 0.009 19.92 - 3

5. Pierre Dinan ✩ ✩ - - - - - 3

6. Eric Espitalier-Noël ✩ ✩ - - - 0.826 - 7

7. Anwar Joonas ✩ ✩ - 0.030 0.070 - - -

8. Deonanan Makoond ✩ ✩ - - - - - -

9. Jean-Pierre Montocchio ✩ ✩ - - - - - 7

10. Pierre-Yves Pougnet ✩ - ✩ 0.071 0.023 - - 3

11. Aruna Devi Bunwaree Ramsaha ✩ - ✩ - - - - -

12. Petrus van Niekerk ✩ - ✩ - - 28.490 0.780 -

ALTERNATE DIRECTORS

1 Noël Eynaud (Alternate to Michel de Spéville)

✩ - ✩ - - 0.039 0.48 2

2 Benoit Barbeau (Alternate toAruna D. Bunwaree Ramsaha)

✩ - ✩ - - - - -

1 Hansraj Ruhee (Chairman)Diploma in Business Administration. Executive Director of Ramphul Ltd. He was appointed Director of Les Moulins de La Concorde Ltée on 03 March 2006. Mr Ruhee is also an independent Director of the Mauritius Oil Refineries Ltd and is a member of its Audit and Corporate Governance Committees. He is also the chairman of its Ethics committee. Mr. Ruhee is a past President of The Mauritius Chamber of Agriculture and the Mauritius Sugar Syndicate. He is still serving on the main committee of the Mauritius Sugar Syndicate. Mr Ruhee was appointed Chairman of Les Moulins de la Concorde Ltée on 15 November 2013.

2 Vincent Ah Chuen

Mr. Vincent Ah Chuen is the Managing Director of ABC Group of Companies. He was appointed to the Board of Les Moulins de La Concorde Ltée on 11 December 1991. Mr. Ah Chuen also sits on the Board of ABC Motors Co Ltd, Mauritius Union Assurance Co Ltd and is the Chairman of POLICY Ltd.

3 Cédric de Spéville

Obtained a “Maîtrise en économie” from University of Paris I Panthéon Sorbonne in 2001. He also completed a Msc in Accounting and Finance at the London School of Economics in 2002 and obtained a Master in Business Administration from Columbia Business School in 2007. He was Consultant for COFINTER in Paris from 2002 to 2003 and joined the Food & Allied Group of Companies in 2003. In January 2013, Cédric de Spéville was appointed Group Chief Executive Officer. He is director on various companies of the Food & Allied Group. He is a former President of the Mauritius Chamber of Commerce and Industry. He was appointed to the Board of Les Moulins de la Concorde Ltée on 22 April 2009.

Other directorships: The Bee Equity Partners Ltd, Livestock Feed Limited, Tropical Paradise Co. Ltd and Mauritius Freeport Development Co Ltd.

Corporate Governance Report3. CONSTITUTION OF THE COMPANY (CONT’D)

3.1 Material Clauses in the Constitution

(i) Shareholders have a pre-emptive right on all new shares issued by the Company up to the extent of their respective holding in the shares of the Company.

(ii) The shares of the Company are traded on the Development and Enterprise Market and are free from any restrictions on ownership.

(iii) The new Constitution of the Company makes provision for retirement of directors by rotation whereby each year, one-third of the Directors longest in office shall retire and offer themselves for re-election at the annual meeting of shareholders. Each lot of one-third of the directors, if re-elected, will have a three-year term after which they shall offer themselves for re-election. Accordingly, at the annual meeting to be held on 9 November 2016, Messrs Michel de Spéville, Vincent Ah-Chuen, Pierre-Yves Pougnet and Petrus van Niekerk will step down and offer themselves for re-election.

4. THE BOARD

The Company is headed by a unitary Board consisting of twelve non-executive members and two alternate members, seven of whom are independent.

Although there are no executive Directors sitting on the Board, it is the Board’s view that the activeparticipation of the General Manager at all Board meetings and the participation of senior executives to sub-committees of the Board meet with the spirit of the Code of Corporate Governance for Mauritius.

The Board, as the governing body, fully understands its role, responsibility and authority in setting the direction, the management and control of the Company. A Code of Conduct was adopted by the Directors which provides them guidance in the conduct of business of the Company and in dealing with stakeholders with integrity and in an ethical manner.

5. DIRECTORS (CONT’D)

The table below indicates the Directors common to the shareholder companies having more than 5% holding in Les Moulins de la Concorde Ltée and Directors common to the subsidiaries of the Company:

SHAREHOLDERS HAVING MORE THAN 5%SUBSIDIARIES OF

LMLC

NO. DIRECTORS LMLC LFL MADCOCREDO

LM MPASOCIETEMATRAM CODL

AMIGEL LTD

1 Hansraj Ruhee (Chairman)

✩ - - - - - - ✩

2 Vincent Ah Chuen ✩ - - - - - - ✩

3 Cédric de Spéville ✩ ✩ ✩ - - - ✩ ✩

4 Michel de Spéville, C.B.E. ✩ ✩ ✩ - - ✩ ✩ ✩

5 Pierre Dinan ✩ ✩ - - - - - -

6 Eric Espitalier-Noël ✩ ✩ ✩ - - - - -

7 Anwar Joonas ✩ - - - - - - ✩

8 Deonanan Makoond ✩ - - - - - - -

9 Jean-Pierre Montocchio ✩ - - - - - - -

10 Pierre-Yves Pougnet ✩ ✩ ✩ - - ✩ ✩ -11 Aruna Devi Bunwaree

Ramsaha✩ - - - - - - -

12 Petrus van Niekerk ✩ - - ✩ - - - -

ALTERNATE DIRECTORS


✩ ✩ ✩ - - ✩ - -

14 Benoit Barbeau(Alternate to Aruna D. Bunwaree Ramsaha)

- - - - - - - -

LMLC: Les Moulins de la Concorde Ltée LFL: Livestock Feed Limited MPA: Mauritius Ports Authority

MADCO: Management and Development Company Limited CODL: Concordia Offshore Developments Ltd

YEAR ENDED JUNE 30, 2016 YEAR ENDED JUNE 30, 2016

6. DIRECTORS’ PROFILE

LMLC ANNUAL REPORT 201614 LMLC ANNUAL REPORT 2016 15


Corporate Governance Report6. DIRECTORS’ PROFILE (CONT’D)

9 Jean-Pierre Montocchio

Born in 1963, he was appointed notary public in Mauritius in 1990. He participated in the National Committee on Corporate Governance as a member of the Board of Directors’ Sub-Committee. He is a director of a number of listed companies in Mauritius.

Other directorships: Caudan Development Ltd (Chairman), Fincorp Investment Ltd (Chairman), New Mauritius Hotels Ltd, Promotion and Development Ltd (Chairman), MCB Group Ltd, Rogers Co. Ltd and ENL Land Ltd.

10 Pierre-Yves Pougnet

Accountant by profession, Mr. Pierre-Yves Pougnet was appointed to the Board of Les Moulins de la Concorde Ltée on 22 November 1987. Mr. Pougnet also sits on the Board of P.O.L.I.C.Y. Limited, Livestock Feed Limited, Tropical Paradise Co. Ltd and Avipro Co Ltd.

11 Aruna Devi Bunwaree Ramsaha

Deputy Director-General of the Mauritius Ports Authority, Mrs Bunwaree Ramsaha is a Fellow of the Chartered Association of Certified Accountants (FCCA) and is also holder of an MBA.

Mrs Bunwaree Ramsaha also sits on the board of Froid des Mascareignes and Transfroid Ltée and is an alternate director on the board of Cargo Handling Corporation Ltd and Mauritius Cargo Community Services Ltd.

12 Petrus Johannes van Niekerk

Founder and Director of a Group of grain milling and feed manufacturing companies operating in southern Africa. He was appointed to the Board of Les Moulins de La Concorde Ltée on 02 December 1987.

ALTERNATE DIRECTORS


Accountant by profession, he is a Director of Management and Development Company Limited. He was appointed to the Board of Les Moulins de La Concorde Ltée on 30 June 1993 and is a member of the Audit and Risk Committee. Mr. Eynaud is alternate director on the Board of Livestock Feed Limited and Tropical Paradise Co Ltd.

2 Benoit Barbeau (Alternate to Aruna Devi Bunwaree Ramsaha)

Captain Barbeau had been appointed as Port Master at the Mauritius Ports Authority since 2010. He acts as alternate to Mrs Bunwaree Ramsaha on the Board of Les Moulins de la Concorde Ltée since the 10th November 2015.

Corporate Governance Report6. DIRECTORS’ PROFILE (CONT’D)

4 Michel de Spéville, C.B.E.

Founder President of the Food & Allied Group. Founder and Senator of the “Jeune Chambre Economique de l’Ile Maurice”. Elevated to the rank of “Commander of the Order of the British Empire” (C.B.E). Honorary Citizen of Moka-Flacq District of Mauritius. “Honorary Fellow Agribusiness”, University of Mauritius. Elevated to the rank of “Chevalier de l’Ordre de Mérite de Madagascar”. Elevated to the rank of “Chevalier de la Légion d’honneur de France”.

Mr. Michel de Spéville is Chairman and member of the Board of various companies of the Food & Allied Group and a member of the Board of Directors of Fincorp Investment Ltd. He is also a former President of the Mauritius Chamber of Commerce & Industry and a former President of “L’Institut de la Francophonie pour l’Entreprenariat” (IFE).

5 Pierre Dinan

BSc. (Econ), FCA (Fellow of the Institute of Chartered Accountants in England and Wales), was a Senior Partner at De Chazal du Mée (DCDM) for 20 years until he retired in June 2004. He was also a Director of Multiconsult, a global business management services company, for twelve years until 2004. He acts presently as a Company Director for a number of public companies in the manufacturing and financial services sectors respectively. He is an independent member of the Monetary Policy Committee set up under the Bank of Mauritius Act. Mr. Dinan was the founder Chairman of the Mauritius Institute of Directors. He was appointed to the Board of Les Moulins de la Concorde Ltée on 04 February 2009 and is the Chairman of the Audit and Risk Committee and the Corporate Governance Committee.

Other directorships: Livestock Feed Limited, Swan General Ltd and Swan Life Ltd.

6 Eric Espitalier-Noël

Holds a Bachelor’s degree in Social Sciences and an MBA. He was first appointed to the Board of Les Moulins de la Concorde Ltée in 2006 and is currently the Chief Executive Officer of ENL Commercial Limited.

Other directorships: Automatic Systems Ltd, ENL Land Ltd, ENL Limited, Malls of (Mauritius) Bagatelle Ltd, Livestock Feed Limited, Rogers & Co Ltd and Tropical Paradise Co. Ltd (alternate director).

7 Anwar Joonas

Holder of B. Com., Executive Chairman of Joonas & Co Ltd and Managing Director of Galvabond Ltd. He was appointed to the Board of Les Moulins de La Concorde Ltée on 18 January 1993 as alternate Director to Mr. Mohammed Issack Joonas and appointed Director on 22 April 2009.

Mr A. Joonas also sits on the Board of Lafarge (Mauritius) Cement Ltd. He is the Past President of the Mauritius Employers Federation, Chairman of MEF CSR Fund, Council Member of The Mauritius Institute of Training & Development (MITD), Charter Member & Past President of the Rotary Club of Quatre Bornes.

8 Deonanan Makoond

Holder of MSC, Tourism Planning & B.A (Hons) in Economics. He is the CEO of Business Mauritius, the coordinating body of the Mauritius private sector. He co-chairs with the Board of Investment a wide range of initiatives on Business Facilitation and Ease of Doing Business in Mauritius. He is also a member of Statistics Mauritius. He co-chairs the Skills Working Group with the Ministry of Labour and the Ministry of Education the Graduate Training for Employment Scheme (GTES) to address the issue of skills mismatch. He co-chaired the implementation of rescue plans in the context of the financial crisis and European crisis. Mr Makoond was a Director of the European Centre for Development Policy Management (ECDPM), a Dutch Foundation based in Maastricht and specialising in matters regarding ACP-EU trade relations.

He was appointed to the Board of Les Moulins de La Concorde Ltée on 03 May 2007.



Corporate Governance Report9. DIRECTORS’ REMUNERATION (CONT’D)

The attendance of the Directors and Committee Members and their remuneration for the financial year ended June 30, 2016 are as follows:

Directors

Board Attendance

Out of7 Meetings

held

BoardFees

Rs.

Audit and Risk

CommitteeAttendance

Out of 5 Meetings

held

Audit and Risk

CommitteeFees

Rs.

Corporate GovernanceCommitteeAttendance

Out of3 Meetings

held

Corporate Governance

Committee Fees

Rs.

Hansraj Ruhee 7/7 126,000 - - 3/3 44,000

Vincent Ah Chuen 6/7 103,000 - - - -

Cédric de Spéville 7/7 111,000 - - - -

Michel de Spéville, C.B.E. 6/7 103,000 - - - -

Pierre Dinan 5/7 95,000 5/5 75,000 3/3 54,000

Eric Espitalier-Noël 7/7 111,000 - - - -

Anwar Joonas 6/7 103,000 5/5 65,000 - -

Deonanan Makoond 2/7 71,000 - - - -

Jean-Pierre Montocchio 5/7 95,000 - - 1/3 28,000

Pierre-Yves Pougnet 5/7 95,000 3/5 49,000 3/3 44,000

Shekur Suntah* 1/7 63,000 - - - -

Petrus van Niekerk 5/7 95,000 - - - -

Aruna Devi Bunwaree Ramsaha** 4/7 87,000 - - - -

Alternate Directors

Noël Eynaud 0/7 - 5/5 65,000 - -

Benoit Barbeau 0/7 - - - - -

* Mr Suntah resigned from the Board on 9th November 2015 ** Mrs Aruna Devi Bunwaree Ramsaha was appointed as director of the Company on 10th November 2015

No fee was paid to the Directors sitting on the subsidiary company Concordia Offshore Developments Ltd whereas those Directors sitting on the Board of Amigel Ltd were entitled to an annual remuneration of Rs 10,000 (the Chairman of Amigel Ltd Rs 15,000) and an attendance fee of Rs 5,000 per meeting.

9.1 Statement of Remuneration Philosophy

Directors’ fees are benchmarked on local norms and reviewed on a regular basis by the Board upon recommendation of the Corporate Governance Committee (see 10.1).

The level of remuneration of senior staff is benchmarked on the Industry’s norms and is reviewed by Management and Development Company Limited (MADCO) on an annual basis.

7. PROFILE OF SENIOR MANAGEMENT TEAM

1 Philippe la Hausse de Lalouvière General Manager

Employed in the Food & Allied Group since 1988 and previously General Manager of New Maurifoods Limited, he holds a Bachelor’s degree in sciences and post-graduate degree in natural sciences. He has served in the chair and on the boards of several large non-governmental organizations and para-statal bodies in the field of environment, heritage as well as industry.

2 Jimmy Pierrelouis Finance Manager

Employed by Les Moulins de la Concorde Ltée since May 2014. Mr Pierrelouis holds a Bachelor’s degree in Accounting and Finance from the University of Mauritius and is a Fellow Member of the Association of Chartered Certified Accountants. He has more than 10 years of broad ranging experience across various industries: tobacco, petroleum, audit, printing & stationery; both locally and in Africa.

3 Robert Soder Production Manager

Employed by Les Moulins de la Concorde Ltée since October 2008. He has worked for the Food & Allied Group as Production Manager at New Maurifoods Limited for five years. Before this, he was Production and Operations Manager in two milling operations in Nigeria and in Haiti. He is a Qualified miller since 1987 and holds a Diploma as milling technologist since 1993 from Swiss Milling school.

8. DIRECTORS’ DEALINGS IN SHARES OF THE COMPANY

With regard to directors’ dealings in shares of the Company, the directors confirm that they have followed the principles set out in the DEM Rules on restrictions on dealings by the directors.

None of the directors have traded in the shares of the Company during the year under review.

9. DIRECTORS’ REMUNERATION

The remuneration for Members of the Board, Audit and Risk and Corporate Governance Committees at 30 June 2016 were as follows:


Type of Meeting

Chairperson Directors

Annual Retainer

Rs

Meeting Fee

Rs

Annual Retainer

Rs

Meeting Fee

Rs

Board Meeting 70,000 8,000 55,000 8,000

Audit and Risk 35,000 8,000 25,000 8,000

Corporate Governance 30,000 8,000 20,000 8,000



11. INTERNAL AUDITORS

The internal audit service is contracted to Food & Allied Corporate Services Ltd, which has a team of qualified professionals with extensive experience in auditing, fraud examination, risk management, food safety, industrial efficiencies, information systems security and governance.

The Internal Audit team has an independent appraisal function that reviews the adequacy and effectiveness of internal controls and the systems that support them. This includes controls at both the operational and financial levels as well as offering guidance to Management in relation to the evaluation of overall business risks and actions taken to mitigate such risks.

The Internal Audit Manager reports to the Chairman of the Audit and Risk Committee who in turn brings to the Board any material issues requiring special attention of the Directors.

The Board with the assistance of the Audit and Risk Committee and the Internal Auditor monitors the effectiveness of internal controls. During the year both regular and surprise audits were performed, the results of which and Management response to, were monitored by the Committee.

Weaknesses identified by the Internal Auditors during their reviews were brought to the attention of Management and the Audit & Risk Committee formally by way of risk rated structured reports. These comprise the results of the current review together with updates on the corrective actions taken by Management to improve control systems and procedures. The purpose, authority and responsibility of the Internal Auditors are formally defined in its Charter.

The Internal Audit team has the authority to access and examine all information, both paper-based and electronic documents as well as inspect physical assets. No complaints were received from the Internal Auditor during the year under review with respect to restrictions on access to records, management or employees of the organisation.

12. EXTERNAL AUDITORS

The external auditors, BDO & Co, were contracted for the financial audit and their services were retained for a reconciliation inventory of assets to the fixed assets register, during the financial year.

13. SHARE OPTION PLAN

There is no Share Option Plan in place at the Company.

14. SHARE PRICE INFORMATION

The following graph shows the Company’s share price on the DEM market for the year under review:

15. DIVIDEND POLICY

The Company’s policy is to pay a dividend based on the Company’s performance so as to ensure, as far as possible, a relatively consistent return to Shareholders.

16. RELATED PARTY TRANSACTIONS

Related party transactions are made at arm’s length and in the normal course of business.

Related party transactions between the Company or any of its subsidiaries or associates and a director, controlling shareholder or companies owned or controlled by a director or controlling shareholder are disclosed in the note 27 to the financial statements on pages 91 to 92.

140

01-J

ul-1

5

01-A

ug-1

5

01-S

ep-1

5

01-O

ct-1

5

01-N

ov-1

5

01-D

ec-1

5

01-J

an-1

6

01-F

eb-1

6

01-M

ar-1

6

01-A

pr-1

6

01-M

ay-1

6

01-J

un-1

6

150

160

170

180

190

200

145

155

165

175

185

195

290

300

310

320

330

340

350

355

295

305

315

325

335

345

-

-

-

-

-

-

-

-

-

-

-

-

-

-

ORD

INA

RY S

HA

RES

(Rs)

SHARE PRICE

PREF

EREN

CE

SHA

RES

(Rs)

ORDINARY SHARE (Rs)

PREFERENCE SHARE (Rs)

DEMEX

190

195

200

205

210

01-J

ul-1

5

01-A

ug-1

5

01-S

ep-1

5

01-O

ct-1

5

01-N

ov-1

5

01-D

ec-1

5

01-J

an-1

6

01-F

eb-1

6

01-M

ar-1

6

01-A

pr-1

6

01-M

ay-1

6

01-J

un-1

6

VALU

E

Corporate Governance Report10. BOARD COMMITTEES

10.1 Corporate Governance Committee

The Corporate Governance Committee for the financial year ended June 30, 2016 comprised of the following members:

Mr. Pierre Dinan Chairman

Mr. Pierre-Yves Pougnet Member

Mr. Hansraj Ruhee Member

Mr. Jean-Pierre Montocchio Member

Food & Allied Secretarial Services Co Ltd acts as Secretary of the Committee.

The General Manager, Mr Philippe la Hausse de la Louvière, attends the meeting of the Corporate Governance Committee.

The terms of reference of the Corporate Governance Committee are in summary:

- to make recommendations to the Board on all corporate governance provisions to be adopted so that the Board remains effective and complies with prevailing corporate principles and practices; and

- to ensure that the disclosure requirements with regard to corporate governance, whether in the annual report or other reports on an ongoing basis, are in accordance with the principles of the Code of Corporate Governance as recommended by the National Committee on Corporate Governance

The Committee met twice during the year and continued the established programme of monitoring governance performance within the Company and also ensuring the Company’s compliance with existing legislations and policies.

The previous Memorandum & Articles of the Company was judged to be in need of updating in view of changes in national legislation over the past two decades. In that respect, a new constitution was adopted at the annual meeting held on 7th December 2015.

The Board recognized the significance of the board evaluation exercise which was carried out in 2014 and has decided that this exercise be carried out on a two-year basis. A new board evaluation was carried out during the financial year ended June 30, 2016.

A formal induction programme has been put in place for the Company. Newly appointed Directors are accompanied by the General Manager and the Management staff in their introduction to the Company and its business operations.

10.2 Remuneration and Nomination

The Corporate Governance Committee assumed the tasks of remuneration and nomination committee and to make recommendations to the Board with regard to: (a) Directors and Committee Members’ fees and (b) the nomination of Directors.

The Corporate Governance Committee has worked out an internal procedure which provides guidance to the Board on the nomination of Directors. The procedure was approved by the Board.

10.3 Audit and Risk Committee

The members of the Audit and Risk Committee at June 30, 2016 are:

Mr. Pierre Dinan Chairman

Mr. Noël Eynaud Member

Mr. Anwar Joonas Member

Mr. Pierre-Yves Pougnet Member

Food & Allied Secretarial Services Co Ltd acts as Secretary of the Committee.

The Committee met four times during the year. Careful consideration was devoted to the reports of auditors with special attention given to the Risk Register.

The terms of reference of the Audit and Risk Committee are in summary:

- to assist the Board in fulfilling its supervisory responsibilities.

- to review the financial reporting process, the system of internal control and assessment of business and financial risks, the internal audit process and the external audit process.

- to monitor compliance with laws and regulations as well as Board policies and Board decisions. In performing its duties, the Committee maintains effective working relationships with the Board of Directors, Management, as well as the Internal and External Auditors;

- to ensure that the Internal Auditors follow an established system of internal control and policies which ensure that the control objectives are attained;

- to submit recommendations to the Board (for consideration and acceptance by Shareholders) for the appointment and remunerations of the External Auditors;

- to review quarterly and annual financial statements for publication and submit same to the Board for final approval; and

- to monitor and review the Risk Register of the Company and to make recommendations to the Board regarding all aspects of risks associated with the Company.

The Company’s results after each quarter were meticulously analysed and the performance of the enterprise scrutinised by the committee.

Particular attention was paid during the year to the functioning of the electronic control systems which operate the mill functions. A new system based on modern, improved hardware and with enhanced reporting functions was installed in the mills to satisfactory full implementation.

The audit findings reports of both the external auditors as well as the comprehensive internal audit team were closely followed. The response of Management to the issues raised was monitored to ensure satisfactory closure.

Corporate Governance ReportYEAR ENDED JUNE 30, 2016 YEAR ENDED JUNE 30, 2016


Corporate Governance Report19. MANAGEMENT SYSTEMS AND INTERNAL CONTROLS (CONT’D)

These systems are audited internally and are accredited by external consultants, some from overseas, who perform annual audits of the systems in place.

These systems set out policies to ensure food safety, customer care and satisfaction, reliability and consistency in production, environment friendly processes, safe and healthy working conditions, laboratory analysis of raw materials and finished products, teamwork and employee involvement.

During the year, all control systems functioned well and the enterprise once again attained the “Gold” level in the Excellence Award and maintained all accreditation systems satisfactorily.

20. MAJOR EVENTS

Event Month

1 Approval of Final Accounts and publication of Abridged Financial Statements

September

2 Annual Meeting December

3 Dividend Declaration May

4 Dividend Payment June

5 Publication of Quarterly Accounts

- 1st quarter - ending 30th September November

- 2nd quarter - ending 31st December February

- 3rd quarter - ending 31st March May

21. DONATIONS

COMPANY

2016 2015

Rs000’s Rs000’s

Charitable Donations 283 277

Political Donations Nil 1,200

22. PUBLIC OUTREACH

An intensive training schedule was conducted with eight young Mauritian bakers, who constituted the National baking team, in preparation for the “Coupe du Monde de la Boulangerie”. They were coached by Mr Laval Sophie of “La Fournée des Moulins”. This event was held in Paris in February where the team competed as one of the top 12 teams in the world.

The “Fournée des Moulins” training centre at the mill site continued to operate successfully during the year,

providing courses to 1,019 trainees, many of whom were employed in the baking sector. New or improved baking techniques were imparted to candidates, thus contributing to the progress and development of the baking sector in Mauritius.

The team of baking and food-technology technicians employed by the Company continued providing their technical services to bakers and other flour users in Mauritius and Rodrigues. These services are greatly appreciated by local entrepreneurs and clients.

Technico–commercial visits were conducted during the year to Reunion island, Mayotte, Madagascar and the Seychelles by company technicians to serve existing clients and explore additional export markets.

Bakers and flour consumers from Réunion Island visited the mill during the year, in order to discuss their product needs and quality.

The ‘Fête du Pain’ was held in Mauritius during May and June 2016. This year the event was on specialist bakery needs and services extended to the professional sector. Competitions were among Bakery, apprentices and hotel bakers, as well as commercial bakers, in decorative bread, sandwiches and specialist bread.

The Company web site and social media sites showed steady visitor growth over the year.

The Company sponsored social, cultural and sporting projects, including the donation of flour and semolina during religious festivals, and to organisations concerned with unpriviledged groups.

23. SOCIAL POLICIES & ACTIVITIES

23.1 Corporate Social Responsibility

The Company contributed Rs 0.7 M to the “Fondation Solidarité” of the Food & Allied Group.

The “Fondation Solidarité” was set up in 1999 by the Food & Allied Group as a special purpose vehicle to direct and coordinate collective support actions in poverty alleviation and community development in Mauritius. The “Foundation” is managed and monitored on a regular professional basis.

Management and staff of the Company have been directly involved in supporting specific community projects, notably the “Pain d’Epice à base de miel de Rodrigues” project, now in its fifth year. The Association “Mezon Rodrigues” functioned among the Rodriguese Pain d’Epice producers in order to support their production and commercial activities. LMLC assists the Association in their activities.

LMLC also provided support to projects concerning nutrition and national health, including the provision of baking training sessions at the Company’s Training Centre.

Corporate Governance Report17. MANAGEMENT AGREEMENTSLes Moulins de la Concorde Ltée has a management contract with Management and Development Company Limited (MADCO) since its inception.

MADCO is actively involved in the monitoring of the performance and strategic development of the companies of the Food & Allied Group. As a result Les Moulins de la Concorde Ltée benefits from a cohesive sharing of enterprise management culture, values and ethics. MADCO also participates in important exercises of raw material procurement, personnel recruitment and management and determining major capital expenditure.

Les Moulins de la Concorde Ltée has a technical management agreement with NMI Group Services (Pty) Ltd, an associate company of Credo LM (Pty) Ltd. In terms of the contract the Company benefits from the vast technical experience in the domain of milling of the NMI Group in the southern African Region. Audits of mass reconciliation for the entire wheat milling process are conducted every year as well as monitoring of the plant and machinery maintenance process and mill upkeep. The Company also provides technical and strategic input and support for development projects.

18. RISK MANAGEMENT

Reviews of the Company’s Risk Register were done by Management on a continuous basis during the year. The domains of finance, production, operations, human resources, food quality, information technology, environment, security and communication risks were addressed. The risk appetite fixed by the Board was maintained at the previous year’s level of Rs 20 Million.

The Risk Register was updated by Management with actions being taken to eliminate or mitigate risks. As a result, certain risks were successfully and significantly reduced such as risk of foreign exchange fluctuations affecting results and mitigated by procuring wheat in the same currency as the export sales.

The milling control system was comprehensively modernised to take advantage of the huge advances in information technology hardware and software since the original system was installed two decades ago. Testing of the entire system was performed with final implementation successfully carried out.

Key risks for the company include:

- aspects of food safety, which are mitigated effectively through the control measures set up within the HACCP-accreditation system;

- changing rates of foreign exchange which are largely mitigated by the sales of products being conducted in the same currency as purchases of raw materials;

- physical damage to facilities through explosion or fire, which are mitigated by an intensive system of ATEX (explosive atmosphere) control measures in place and continually monitored.

The Audit and Risk Committee was satisfied that the measures to effectively mitigate or counter risks had been identified and appropriate action plans were in place.

The Business Continuity Plan (BCP) is a stepwise and planned approach to recovering business operations in the aftermath of a materialized risk and gives comfort for the sustainability of operations. The Risk Register provides the scenarios, which could affect sustainable operations of the enterprise, and scenario-tests were successfully conducted during the year.

19. MANAGEMENT SYSTEMS AND INTERNAL CONTROLS

Management of the Company follows a formalised set of policies and procedures. These are laid out in manuals in the fields of Human Resources, Finance, IT and all aspects of industrial Production. Compliance is ensured through a comprehensive series of audits performed by auditors external to the Company. The principle of continual improvement is at the base of all procedures.

The internal functioning of the enterprise is continually monitored through a series of audits and monitoring systems, which include:

- Internal audits of all operations,

- External audits of operational and financial aspects,

- Information technology audits,

- Technical audits by milling engineers and millers concerning yields, efficiencies and machine performance,

- Food safety, environmental impact, management systems and health and safety systems (as detailed below),

- An “Excellence Award” series of audits which compare the company management to norms established by the Food & Allied Group.

LMLC continued to successfully maintain the four internationally-recognised management systems already in place:

- Quality Management (ISO 9001:2000),

- Environmental Management (ISO 14001),

- Food Safety Management (HACCP),

- Occupational Health and Safety Assessment Services (OHSAS),

- Testing and calibration norm (ISO 17025)




24.5 Contract of significance with substantial shareholders

The Company has a formal management contract with MADCO whereby the Company pays a fee based on its annual gross turnover.

The Company has formal technical management contract with NMI Group Services (Pty) Ltd whereby the Company pays a fee based on its annual gross turnover.

24.6 Contract of significance with directors

There is no contract of significance with the Directors.

Three directors of LMLC are also Directors of Food & Allied Secretarial Services Co Ltd.

One director of LMLC is also director of NMI Group Services (Pty) Ltd.

25. SUMMARY OF RESULTS, ASSETS AND LIABILITIES

GROUP

2016 2015

Rs000’s Rs000’s

Results - Net profit after tax 147,998 74,097

Current assets 625,755 731,886

Non-current assets 1,249,290 1,294,222

Total assets 1,875,045 2,026,108

Capital and reserves 1,487,892 1,418,006

Current liabilities 224,580 450,397

Non-current liabilities 162,573 157,705

Total equity and liabilities 1,875,045 2,026,108

Food & Allied Secretarial Services Co LtdSECRETARY

September 08, 2016

Corporate Governance Report23. SOCIAL POLICIES & ACTIVITIES (CONT’D)

23.2 Ethics

The Company’s Code of Ethics which presents the objectives and ethical policies of the Company is actively promoted amongst employees through sensitisation and awareness programmes.

Top and middle management were particularly targeted through sensitisation programmes as crucial stakeholders of the code within the Company.

23.3 Environment

The carbon footprint and CO2 emissions of the Company were calculated and an action plan for their reduction was implemented during the year. From agriculture (wheat farming), logistics (maritime transport of wheat), the flour and bran production process to monitoring the logistics of selling products, targets and actions were proposed to reduce the carbon footprint of LMLC.

The environmental management system, certified to ISO 14001: 2004 standards by Anglo Japanese American Registrars Mauritius Ltd, ensures that the Company’s activities impact on the environment is kept to a minimum. Energy consumption, the reduction of waste, the recuperation and use of rainwater, favouring raw materials from suppliers which respect good environmental practices and the minimization of the “carbon footprint” are important aspects of the environmental management plan.

Investment was made in several energy-efficient motors in order to reduce electricity consumption.

LMLC contributed to the Port Area Environment Committee through the maintenance of “green areas” on its site and in the surroundings.

23.4 Health & Safety

Scrupulous respect of employee health and safety norms is a sine qua non for efficient and well-managed industrial operations. To this end the Company is accredited with OHSAS certification (Occupational Health and Safety Accreditation System) best practice in health and safety management.

The Company hires the services of an experienced Health and Safety Officer who ensures compliance with existing legal requirements in this area and facilitates the functioning of an active health and safety committee at LMLC. All conditions within the Company which impact on the health and safety of employees are monitored.

Particular attention was paid to emergency response procedures during the year which were tested repeatedly. A cardiac defibrillator was acquired for the enterprise in case of need.

24. STATUTORY DISCLOSURES

24.1 Direct and indirect interests of senior officers in the equity or debt securities of LMLC or any subsidiary

The direct and indirect interests of the Directors of the Company are already disclosed in the Directors’ profile of the Corporate Governance Report (see point 6).

The senior officers (General Manager, Finance Manager and Company Secretary) do not hold shares in the Company.

24.2 Right to subscribe for equity or debt securities of LMLC granted to any senior officer

No senior officer of Les Moulins de la Concorde Ltée (LMLC) has been granted any right to subscribe for equity or debt securities of the Company.

24.3 Operating results

For the period under review, LMLC published comments on its quarterly operating results in the widely-read local media.

24.4 Service contracts

There are no service contracts with the Directors of the Company.

The Company has a service contract with New Edge Solutions Ltd, an IT services provider.

The Company has a distribution contract with Panagora Marketing Company Limited for the distribution of flour in small packs.

Both New Edge Solutions Ltd and Panagora Marketing Company Limited form part of the Food & Allied Group.

In addition, flour mixes and improvers are sold to Cascadelle Distribution through a service agreement for retail distribution.

The Company has contracted Food & Allied Secretarial Services Co Ltd (a wholly-owned subsidiary of Management and Development Co Ltd (MADCO)) to provide corporate secretarial services to the Company and its subsidiary Amigel Ltd.

Amigel Ltd has a franchise agreement with the French company “La Mie Caline Ltée” for the provision of technical and marketing services for its activities.

The Company contracts out many operational activities such as Security, Machinery and Electrical maintenance, transport, pest control, to local service providers.

All transactions carried out in terms of the above contracts are in normal course of business and at arm’s length.


24. STATUTORY DISCLOSURES (CONT’D)

LMLC ANNUAL REPORT 2016 27LMLC ANNUAL REPORT 2015/1626

FINANCIAL STATEMENTS

The Directors acknowledge their responsibilities for:

(i) adequate accounting records and maintenance of effective internal control systems;

(ii) the preparation of financial statements which fairly present the state of affairs of the Group and the Company as at the end of the financial year and the results of its operations and cash flows for that period and which comply with International Financial Reporting Standards (IFRS);

(iii) the selection of appropriate accounting policies supported by reasonable and prudent judgments.

The report of the external auditors confirming that the financial statements are fairly presented is on page 32.

The Directors report that:

(i) adequate accounting records and an effective system of internal controls and risks management have been maintained;

(ii) appropriate accounting policies supported by reasonable and prudent judgments and estimates have been used consistently;

(iii) International Financial Reporting standards have been adhered to. Any departure in fair presentation has been disclosed, explained and quantified;

(iv) the Code of Corporate Governance has been adhered to. Reasons have been provided where there has not been compliance.

INTERNAL CONTROL

The Directors acknowledge their responsibility for the Company’s systems of control. The systems have been designed to provide the directors with reasonable assurance that assets are safeguarded, that transactions are authorized and properly recorded and that there are no material errors and irregularities.

An internal audit system is in place to assist management in the effective discharge of its responsibilities, and it is independent of management and reports to the Audit and Risk Committee.

RISK MANAGEMENT

The Directors acknowledge their responsibility for maintaining a sound and effective system of internal controls to safeguard the Company’s assets and shareholders’ interests.

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

Hansraj Ruhee Pierre DinanChairman Director

September 08, 2016

Statement of directors’ responsibilities YEAR ENDED JUNE 30, 2015

Corporate Governance ReportYEAR ENDED JUNE 30, 2016

LMLC ANNUAL REPORT 2015/16 29LMLC ANNUAL REPORT 201628

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

1,741

2,1662,1552,161 2,164

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

80.6

89.1

172.3

106.3

46.7

Profit before Tax and Dividends (Rs million)

Turnover (Rs million) Production - MT'000

11.95

14.85

5.55

12.20

24.83

Earnings per share (Rs)

4.90%4.71%4.67%

4.02%4.55%

Dividend Yield (%)

126

107

29

123

32 32 32

124

31

BranFlour

128

Financial Highlights

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

1,741

2,1662,1552,161 2,164

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

80.6

89.1

172.3

106.3

46.7

Profit before Tax and Dividends (Rs million)

Turnover (Rs million) Production - MT'000

11.95

14.85

5.55

12.20

24.83

Earnings per share (Rs)

4.90%4.71%4.67%

4.02%4.55%

Dividend Yield (%)

126

107

29

123

32 32 32

124

31

BranFlour

128



Statement of ComplianceJUNE 30, 2016

(Section 75 (3) of the Financial Reporting Act)

Name of Public Interest Entity: LES MOULINS DE LA CONCORDE LTEE

Reporting Period: 1 JULY 2015 TO 30 JUNE 2016

We, the Directors of LES MOULINS DE LA CONCORDE LTEE, confirm that to the best of our knowledge LES MOULINS DE LA CONCORDE LTEE has complied with all of its obligations and requirements under the Code of Corporate Governance except for:

Section 2 (2.2.3) - Composition of the Board - where although there are no executive Directors sitting on the Board, it is the Board’s view that the active participation of the General Manager at all Board meetings and the participation of senior executives to sub-committees of the Board meet with the spirit of the Code of Corporate Governance for Mauritius (see Note 4 of the report).

Hansraj Ruhee Pierre Dinan Chairman Director

September 08, 2016

LMLC ANNUAL REPORT 2016 33LMLC ANNUAL REPORT 2015/1632

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements on pages 34 to 93 give a true and fair view of the financial position of the Group and of the Company as at June 30, 2016, and 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.

Report on Other Legal and Regulatory Requirements

Companies Act 2001

We have no relationship with, or interests in, the Company or any of its subsidiaries, other than in our capacity as auditors, business advisers and dealings in the ordinary course of business.

We have obtained all information and explanations we have required.

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

Financial Reporting Act 2004

The Directors are responsible for preparing the corporate governance report. Our responsibility is to report on the extent of compliance with the Code of Corporate Governance as disclosed in the annual report and on whether the disclosure is consistent with the requirements of the Code.

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

BDO & Co

Chartered Accountants

Port Louis, Shabnam Peerbocus, FCA

Mauritius. Licensed by FRC

September 08, 2016

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

Report on the Financial Statements

We have audited the group financial statements of Les Moulins de la Concorde Ltée and its subsidiary companies (the “Group”) and the Company’s separate financial statements on pages 34 to 93 which comprise the statements of financial position at June 30, 2016, the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Directors’ Responsibility for the Financial Statements

The directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in compliance with the requirements of the Companies Act 2001, and for such internal control as the directors determine is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.


LMLC ANNUAL REPORT 2016LMLC ANNUAL REPORT 201634 35


Notes 2016 2015 2016 2015Rs000’s Rs000’s Rs000’s Rs000’s

Revenue 2.16 2,160,600 2,155,272 2,149,155 2,148,459

Fluctuations in foreign exchange rates 21 (6,547) (75,645) (6,547) (75,645)

2,154,053 2,079,627 2,142,608 2,072,814

Cost of sales 22 (1,901,583) (1,893,052) (1,891,176) (1,890,199)

Gross profit 252,470 186,575 251,432 182,615

Other income 23 37,438 5,303 6,916 6,284

Selling and distribution costs 22 (33,320) (34,994) (32,612) (34,502)

Administrative expenses 22 (99,420) (91,170) (90,260) (85,396)

Operating profit 20 157,168 65,714 135,476 69,001

Net finance income 24 5,766 23,840 6,090 19,172

Share of profit/(loss) of associate 8(a) 9,349 (408) - -

Profit before taxation 172,283 89,146 141,566 88,173

Income tax expense 18(b) (24,285) (15,049) (24,285) (16,501)

Profit for the year 147,998 74,097 117,281 71,672

Other comprehensive income:Items that will not be reclassified to profit or loss:Gain on revaluation of property, plant and equipment

- 103,588 - 103,588

Income tax relating to revaluation of property, plant and equipment

- (15,538) - (15,538)

Remeasurements of defined benefit obligations 956 (412) 956 (412)

Income tax relating to remeasurements of defined benefit obligations

(143) 62 (143) 62

Items that may be reclassified subsequently to profit or loss:Currency translation differences - 18,597 - -Change in value of available-for-sale financial assets

(9,588) 9,355 2,601 109

Reclassification adjustment for gains of available-for-sale financial assets

(10,927) - - -

Share of other comprehensive income of associate (9,210) (180) - -Other comprehensive income for the year, net of tax

(28,912) 115,472 3,414 87,809

Total comprehensive income for the year 119,086 189,569 120,695 159,481

Profit attributable to:Owners of the parent 140,081 71,855 117,281 71,672

Non-controlling interests 7,917 2,242 - -

147,998 74,097 117,281 71,672

Total comprehensive income attributable to:Owners of the parent 116,486 180,923 120,695 159,481

Non-controlling interests 2,600 8,646 - -

119,086 189,569 120,695 159,481

Earnings per share (Rs/cs) 25 24.83 12.20 20.61 12.16

The notes on pages 39 to 93 form an integral part of these financial statements.Auditors’ report on pages 32 and 33.


Notes 2016 2015 2016 2015Rs000’s Rs000’s Rs000’s Rs000’s

ASSETSNon-current assetsProperty, plant and equipment 5 823,483 810,382 793,827 789,245Intangible assets 6 9,211 4,921 5,310 299Investments in subsidiary companies 7 - - 124,720 124,720Investment in associate 8 222,946 222,807 147,644 147,644Investments in financial assets 9 192,198 254,660 80,755 78,154Deferred tax assets 16 1,452 1,452 - -

1,249,290 1,294,222 1,152,256 1,140,062

Current assetsInventories 10 420,887 423,868 420,207 423,626Trade and other receivables 11 140,191 148,341 143,538 182,250Cash and cash equivalents 26(b) 64,677 159,677 14,449 135,483

625,755 731,886 578,194 741,359

Total assets 1,875,045 2,026,108 1,730,450 1,881,421

EQUITY AND LIABILITIESCapital and reserves (attributable to owners of the parent)Share capital 12 570,000 570,000 570,000 570,000Revaluation and other reserves 13 228,809 251,137 159,060 158,750Retained earnings 651,928 562,314 623,943 552,758Owners’ equity 1,450,737 1,383,451 1,353,003 1,281,508Non-controlling interests 37,155 34,555 - -Total equity 1,487,892 1,418,006 1,353,003 1,281,508

LIABILITIESNon-current liabilitiesBorrowings 14 16,500 22,345 16,500 22,345Retirement benefit obligations 15 29,805 30,557 29,805 30,557Deferred tax liabilities 16 116,268 104,803 116,268 104,803

162,573 157,705 162,573 157,705

Current liabilitiesTrade and other payables 17 49,886 92,901 47,419 84,712Current tax liabilities 18(a) 9,130 183 9,130 183Borrowings 14 165,564 357,313 158,325 357,313

224,580 450,397 214,874 442,208Total liabilities 387,153 608,102 377,447 599,913

Total equity and liabilities 1,875,045 2,026,108 1,730,450 1,881,421

These financial statements have been approved for issue by the Board of Directors on September 08, 2016.

Hansraj Ruhee Pierre DinanChairman Director


Statements of Profit or Loss and Other Comprehensive Income

Statements of Financial PositionYEAR ENDED JUNE 30, 2016

JUNE 30, 2016

37



Attributable to equity holders of the Company

NoteShare

capital

Revaluationand other

reservesRetained earnings Total

Convertibleshareholder’s

loan

Non-controlling

interestsTotal

equity

Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s

THE GROUP

Balance at July 1, 2015 570,000 251,137 562,314 1,383,451 - 34,555 1,418,006

Profit for the year - - 140,081 140,081 - 7,917 147,998

Other comprehensive incomefor the year

- (23,595) - (23,595) - (5,317) (28,912)

Total comprehensive incomefor the year - (23,595) 140,081 116,486 - 2,600 119,086

Transfer of excess depreciationon revaluation of property, plant and equipment

- (3,104) 3,104 - - - -

Dividends - 2016 19 - - (49,200) (49,200) - - (49,200)

Consolidation adjustment - 4,371 (4,371) - - - -

Balance at June 30, 2016 570,000 228,809 651,928 1,450,737 - 37,155 1,487,892

Balance at July 1, 2014 570,000 143,443 531,859 1,245,302 7,026 25,909 1,278,237

Profit for the year - - 71,855 71,855 - 2,242 74,097

Other comprehensive incomefor the year

- 109,068 - 109,068 - 6,404 115,472

Total comprehensive incomefor the year - 109,068 71,855 180,923 - 8,646 189,569

Transfer of excess depreciationon revaluation of property,plant and equipment

- (1,374) 1,374 - - - -

Change in ownership of associate

- - 1,232 1,232 - - 1,232

Effect of adjustment in associate - - (206) (206) - - (206)Transfer to trade and other payables

- - - - (7,026) - (7,026)

Dividends - 2015 19 - - (43,800) (43,800) - - (43,800)

Balance at June 30, 2015 570,000 251,137 562,314 1,383,451 - 34,555 1,418,006


Statements of Changes in Equity

NoteShare

capital

Revaluationand other

reservesRetained earnings Total

Rs000’s Rs000’s Rs000’s Rs000’s

THE COMPANY

Balance at July 1, 2015 570,000 158,750 552,758 1,281,508

Profit for the year - - 117,281 117,281

Other comprehensive income for the year - 3,414 - 3,414

Total comprehensive income for the year - 3,414 117,281 120,695

Transfer of excess depreciation on revaluation of property, plant and equipment, net of tax - (3,104) 3,104 -

Dividends - 2016 19 - - (49,200) (49,200)

Balance at June 30, 2016 570,000 159,060 623,943 1,353,003

Balance at July 1, 2014 570,000 72,315 523,512 1,165,827

Profit for the year - - 71,672 71,672

Other comprehensive income for the year - 87,809 - 87,809

Total comprehensive income for the year - 87,809 71,672 159,481

Transfer of excess depreciation on revaluation of property, plant and equipment, net of tax

- (1,374) 1,374 -

Dividends - 2015 19 - - (43,800) (43,800)

Balance at June 30, 2015 570,000 158,750 552,758 1,281,508



Statements of Changes in Equity (cont’d)


38 39

YEAR ENDED JUNE 30, 2016YEAR ENDED JUNE 30, 2016

Notes to the Financial Statements

1. GENERAL INFORMATION

Les Moulins de la Concorde Ltée is a public limited company incorporated and domiciled in Mauritius. The address of its registered office is Food and Allied Group Headquarters, Gentilly, Moka and its principal place of business is at Cargo Peninsula, Quay D, Port Louis.

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

2. SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation

The financial statements of Les Moulins de la Concorde Ltée comply with the Companies Act 2001 and have been prepared in accordance with International Financial Reporting Standards (IFRS).

The financial statements include the consolidated financial statements of the parent company and its subsidiary companies (The Group) and the separate financial statements of the parent company (The Company). 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) buildings, flour mill equipment and sundry equipment are carried at revalued amounts;

(ii) investments in available-for-sale securities are stated at fair value; and

(iii) relevant financial assets and financial liabilities are stated at fair value.

Standards, Amendments to published Standards and Interpretations effective in the reporting period

There are no standards, amendments to published standards and interpretations effective for the first time

in the reporting period.

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

Certain standards, amendments to published standards and interpretations have been issued that are mandatory for accounting periods beginning on or after January 1, 2016 or later periods, but which the Group has not early adopted.

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

IFRS 9 Financial Instruments

IFRS 14 Regulatory Deferral Accounts

Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11)

Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38)

IFRS 15 Revenue from Contract with Customers

Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41)

Equity Method in Separate Financial Statements (Amendments to IAS 27)


Notes 2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Cash flow from operating activities

Cash generated from operations 26(a) 150,462 328,541 194,249 329,503

Interest received 30 389 30 389

Interest paid (13,530) (13,391) (13,411) (13,391)

Tax paid 18(a) (4,016) (5,046) (4,016) (5,046)

Net cash from operating activities 132,946 310,493 176,852 311,455

Cash flow from investing activities

Purchase of property, plant and equipment 5 (61,367) (79,852) (50,803) (66,475)

Acquisition of intangible assets 6 (5,241) (1,261) (5,241) (47)

Proceeds from sale of property, plant and equipment 72 616 72 616

Purchase of investment in subsidiary 7 - - - (44,990)

Purchase of investment in associate 8 - (18,670) - (18,670)

Purchase of investment in financial assets 9 - (1,041) - (1,041)

Proceeds from disposal of available-for-sale investment

73,465 - - -

Dividends received 23 2,574 2,614 2,574 2,614

Net cash used in investing activities 9,503 (97,594) (53,398) (127,993)

Cash flow from financing activities

Payment on medium-term borrowings (5,935) (5,906) (5,935) (5,906)

Dividends paid 19 (49,200) (43,800) (49,200) (43,800)

Net cash used in financing activities (55,135) (49,706) (55,135) (49,706)

Net increase in cash and cash equivalents 87,314 163,193 68,319 133,756

Movement in cash and cash equivalents

At July 1, (191,701) (298,639) (215,895) (298,746)

Increase in cash and cash equivalents 87,314 163,193 68,319 133,756

Unrealised exchange losses - (51,168) - (50,849)

Effects of foreign exchange rate changes 9,346 (5,087) 9,545 (56)

At June 30, 26(b) (95,041) (191,701) (138,031) (215,895)


Statements of Cash Flows

LMLC ANNUAL REPORT 2016 LMLC ANNUAL REPORT 2016

LMLC ANNUAL REPORT 2015/16 4140

Notes to the Financial Statements (cont'd)


2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.1 Basis of preparation (cont’d)

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28)

Annual Improvements to IFRSs 2012-2014 Cycle

Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28)

Disclosure Initiative (Amendments to IAS 1)

IFRS 16 Leases

Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12)

Amendments to IAS 7 Statement of Cash Flows

Clarifications to IFRS 15 Revenue from Contracts with Customers

Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2)

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/Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 4.

2.2 Property, plant and equipment

Buildings, flour mill and sundry equipment, held for use in the production of goods or for administrative purposes are stated at their fair value, based on periodic, but at least triennial valuations, by external independent valuers, less subsequent depreciation for buildings. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. All other property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the assets’ carrying amount or recognised as a separate asset as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group/Company 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 the revaluation surplus directly in equity; all other decreases are charged to profit or loss.

Each year the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset’s original cost is transferred from revaluation surplus to retained earnings.

Properties in the course of construction for production, or administrative purposes or for purposes not yet determined, are carried at cost less any recognised impairment loss. Cost includes professional fees. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.


Notes to the Financial Statements (cont'd)


LMLC ANNUAL REPORT 2016 41

2.2 Property, plant and equipment (cont’d)

Depreciation is calculated on the straight-line method to write off the cost or revalued amounts of the assets to their residual values over their estimated useful lives as follows:

Annual rates

Buildings 2% - 10%

Flour mill equipment 3.7% - 9%

Sundry equipment 4% - 20%

Office furniture and equipment 20% - 100%

Bakery equipment 15%

Motor vehicles 20%

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

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

Gains and losses on disposals of property, plant and equipment are determined by comparing proceeds with carrying amount and are included in profit or loss. On disposal of revalued assets, the amounts included in revaluation surplus are transferred to retained earnings.

2.3 Intangible assets

(a) Computer software

Acquired computer software licences are capitalised on the basis of costs incurred to acquire and bring to use the specific software and are amortised using the straight-line method over their estimated useful lives (7 years).

Costs associated with developing or maintaining computer software are recognised as an expense as incurred. Costs that are directly associated with the production of identifiable and unique software controlled by the Group/ Company and that will generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Direct costs include the software development employee costs and an appropriate portion of relevant overheads.

(b) Franchise

Franchise is carried at cost less accumulated impairment losses, if any. Franchise is tested annually for impairment.

LMLC ANNUAL REPORT 2015/16 43LMLC ANNUAL REPORT 2015/1642

Notes to the Financial Statements (cont'd) Notes to the Financial Statements (cont'd)




2.4 Investment in subsidiary companies

Separate financial statements of the investor

In the separate financial statements of the investor, investments in subsidiary companies are carried at cost or at fair value. The carrying amount is reduced to recognise any impairment in the value of individual investments.

Consolidated financial statements

Subsidiaries are all entities (including structured entities) over which the Group/Company has control. The Group/Company controls an entity when the Group/Company is exposed to, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group/Company. 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/Company. 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/Company. 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/Company recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree 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.

Transaction with non-controlling interests

The Group treats transactions with non-controlling interest as transactions with the 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 the net assets of the subsidiary is recorded in equity. Gains and losses on disposals to non-controlling interests are also recorded in equity.


2.5 Investment in associate

Separate financial statements of the investor

In the separate financial statements of the investor, investment in associated company is carried at cost or at fair value. The carrying amount is reduced to recognise any impairment in the value of investment.

Consolidated financial statements

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

Investment in associate is accounted for using the equity method, except when classified as held-for-sale. Investment in associate is 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 investment.

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

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

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

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

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.

Dilution gains and losses arising in investments in associates are recognised in profit or loss.






2.6 Financial assets

(a) Categories of financial assets

The Group/Company classifies its financial assets in the following categories : loans and receivables and available-for-sale financial assets.

The classification depends on the purpose for which the investments were acquired. Management

determines the classification of its financial assets at initial recognition.

(i) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

The Group’s/Company’s loans and receivables comprise cash and cash equivalents, and trade and other receivables.

(ii) Available-for-sale financial assets

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

(b) Recognition and measurement

Purchases and sales of financial assets are recognised on trade-date, the date on which the Group/Company purchase or sell the asset. Investments are initially measured at fair value plus transaction costs for all financial assets except those that are carried at fair value through profit or loss.

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

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

Unrealised gains and losses arising from changes in the fair value of financial assets classified as available-for-sale are recognised in other comprehensive income.

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

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active and for unlisted securities, the Group/Company establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions and reference to other instruments that are substantially the same, discounted cash flow analysis and option pricing models refined to reflect the issuer’s specific circumstances.

(c) Impairment of financial assets

(i) Financial assets classified as available-for-sale

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


2.6 Financial assets (cont’d)

(c) Impairment of financial assets (cont’d)

(i) Financial assets classified as available-for-sale (cont’d)

If the fair value of a previously impaired debt security classified as available-for-sale 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.

(ii) Financial assets carried at amortised cost

For loans and receivables category the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and, the amount of the loss is recognised in profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

2.7 Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group/Company will not be able to collect all amounts due according to the original terms of receivables.

The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of provision is recognised in profit or loss.

2.8 Trade and other payables

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

2.9 Borrowings

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

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






2.10 Cash and cash equivalents

Cash and cash equivalents include cash in hand and at bank and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.

2.11 Share capital

Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as deduction, net of tax, from proceeds.

Preference share capital

Preference share capital is classified as equity if it is non-redeemable, or redeemable only at the Company’s option, and any dividends are discretionary. Discretionary dividends thereon are recognised as distributions within equity upon approval by the Company’s shareholders.

2.12 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined by the first-in, first-out (FIFO) method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity) but excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and applicable variable selling expenses.

2.13 Retirement benefit obligations

(a) Defined benefit plans

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

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

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

The Group/Company 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.


2.13 Retirement benefit obligations (cont’d)

(b) Defined contribution plans

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

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

(c) Gratuity on retirement

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

2.14 Current and deferred income tax

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

Current tax

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

Deferred tax

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

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

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






2.15 Foreign currencies

(a) Functional and presentation currency

Items included in the financial statements of the Company and each of its subsidiaries are measured in 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.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing on the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.

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

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.

(c) Group companies

The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i) assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;

(ii) income and expenses for each statement representing profit or loss and other comprehensive income are translated at average exchange rates; and

(iii) all resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities are taken to shareholders’ equity. When a foreign operation is sold, such exchange differences are recognised in profit or loss as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

2.16 Revenue recognition

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


2.16 Revenue recognition (cont’d)

(a) Sale of goods

Sales of goods are recognised when the goods are delivered and title have passed, at which time all of the following conditions are satisfied:

• the Group/Company has transferred to the buyer the significant risks and rewards of ownership of the goods;

• the Group/Company retains neither continuing managerial involvement to the degree usually associated with the 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/Company; and

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

(b) Other revenues earned by the Group/Company 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/Company 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.

• Dividend income - when the shareholders’ right to receive payment is established.

2.17 Leases

Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.

2.18 Dividend distribution

Dividend 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.

2.19 Segment reporting

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

2.20 Provisions

Provisions are recognised when the Group/Company 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.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).






2.21 Convertible shareholder’s loan

Convertible shareholder’s loan classified as equity as at June 30, 2014 has been transferred to trade and other payables. It was interest free and repayment was expected within one year. As at June 30, 2016, it has been fully repaid.

3. FINANCIAL RISK MANAGEMENT

3.1 Financial Risk Factors

The Group’s/Company’s activities expose it to a variety of financial risks: market risk (including price risk, currency risk, cash flow and fair value interest rate risk), credit risk and liquidity risk. The Group’s/Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effect of the Group’s/Company’s financial performance. A description of the significant risk factors is given below together with the risk management policies applicable.

(a) Market risk

(i) Price risk

The Group/Company is exposed to equity securities price risk because of investments held by Group/Company and classified as available-for-sale. The Group/Company is not exposed to commodity price risk. To manage its price risk arising from investments in equity securities, the Group/Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group/Company.

Sensitivity analysis

The table below summarises the impact of increases/decreases in the fair value of the investments on the Group’s/ Company’s equity. The analysis is based on the assumption that the fair value had increased/decreased by 5%.

Impact on equity


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Available-for-sale financial assets

Fair value increase by 5% 9,610 12,733 4,038 3,908

(ii) Currency risk

The Group/Company operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Euro and the US dollar. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.

The Group/Company has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. As the currency exposure to the net assets of the Group’s/Company’s foreign operations are not significant, no hedging transactions have been entered into to manage the risk.

(a) Market risk (cont’d)

(ii) Currency risk (cont’d)

2016

Currency Profile Equivalent in Rs000’s Rs000’s

USD EURO ZAR CHF MZN MUR TOTAL

Available-for-sale financial assetsTrade and other receivables

Cash and cash equivalents

Trade and other payables

Bank borrowings

2015




- - - - 52,875 201,785 254,660

Trade and other receivables 64,478 27,489 - - - 56,374 148,341

Cash and cash equivalents 112,276 18,949 - - - 28,452 159,677

Trade and other payables 1,059 3,523 197 803 - 87,319 92,901

Bank borrowings 249,976 - - - - 129,682 379,658





3. FINANCIAL RISK MANAGEMENT (CONT’D)

3.1 Financial Risk Factors (cont’d)

(a) Market risk (cont’d)

(ii) Currency risk (cont’d)

2016



Available-for-sale financial assets - - - - - 80,755 80,755



Trade and other payables 5,594 566 - 826 - 40,433 47,419

Bank borrowings 233 - - - - 174,592 174,825

2015




- - - - - 78,154 78,154



Trade and other payables 1,059 3,523 197 803 - 79,130 84,712

Bank borrowings 249,976 - - - - 129,682 379,658

If the rupee had weakened/strengthened by 5% against the USD, EURO, ZAR, CHF and MZN with all other variables held constant, post tax profit and equity would have changed as follows:


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Impact of ± 5% movement:Post-tax profit and equity 6,249 1,530 4,147 (1,609)

(iii) Cash flow and fair value interest rate risk

The Group’s/Company’s interest-rate risk arises from bank borrowings. At June 30, 2016 if interest rates on rupee-denominated borrowings had been 10 basis points higher/lower with all the other variables held constant, post-tax profit for the year would have been Rs000’s 114 (2015: Rs000’s 4) lower/higher, mainly as a result of higher/lower interest expense on floating rate borrowings.



(b) Credit risk

Credit risk is the risk of financial loss to the Group/Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

The Group’s/Company’s credit risk is primarily attributable to its trade receivables. The amounts presented in the position are net of allowances for doubtful receivables, estimated by the Group’s/Company’s management based on prior experience and the current economic environment.

The Group/Company has a significant concentration of credit risk. The Group/Company has policies in place to ensure that sales of products and services are made to clients with an appropriate credit history.

The table below shows the credit risk concentration at the reporting date:

2016 2015

% %

Counterparties:

Four major counterparties 62

Others 38

100

No credit limits were exceeded during the reporting period, and management does not expect any losses from non-performance by these counterparties.

(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit market positions. The Group/Company aims at maintaining flexibility in funding by keeping committed credit lines available.

Management monitors rolling forecasts of the Group’s/Company’s liquidity reserve on the basis of expected cash flow.

Forecasted liquidity reserve as of June 30, 2017 is as follows:


2017 2017

Rs000’s Rs000’s

Opening balance (95,041) (138,031)

Operating proceeds 2,093,388 2,004,874

Operating outflows (1,982,540) (1,885,690)

Cash flow for investments (87,531) (78,636)

Payments of debts and dividends (5,846) (5,846)

Cashflow from financing 7,500 -

Closing balance (70,070) (103,329)

Management does not foresee any major liquidity risk over the next two years for the subsidiaries of the Company.







(c) Liquidity risk (cont’d)

The table below analyses the Group’s/Company’s non-derivative financial liabilities and net-financial liabilities into relevant maturity groupings based on the remaining period at the end of the reporting period to the contractual maturity date.

Less than Between 1 Between 2 Over 1 year and 2 years and 3 years 3 years

Rs000’s Rs000’s Rs000’s Rs000’s

Bank borrowings 165,564 5,500 5,500 5,500Trade and other payables 49,886 - - -

215,450 5,500 5,500 5,500At June 30, 2015Bank borrowings 357,313 5,845 5,500 11,000Trade and other payables 92,901 - - -

450,214 5,845 5,500 11,000

Bank borrowings 158,325 5,500 5,500 5,500Trade and other payables 47,419 - - -

205,744 5,500 5,500 5,500At June 30, 2015Bank borrowings 357,313 5,845 5,500 11,000Trade and other payables 84,712 - - -

442,025 5,845 5,500 11,000

3.2 Fair value estimates

The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting period. A market is regarded as active if quoted prices are readily and regularly available from an exchange dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Group/Company 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 by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on specific estimates.

If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.


3.3 Capital risk management

The Group’s/Company’s objectives when managing capital are to safeguard the Group’s/Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The Group/Company sets the amount of capital in proportion to risk. The Group/Company manages the capital structure and makes adjustments to it in 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/Company 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/Company monitors capital on the basis of the debt-to-equity ratio. This ratio is calculated as net debt to equity. Net debt is calculated as total debts (as shown in the statement of financial position) less cash and cash equivalents. Capital comprises all components of equity (i.e share capital, non-controlling interest, retained earnings and revaluation surplus).

The debt-to-equity ratios at June 30, 2016 and 2015 were as follows:


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Total debt (note 14) 182,064 379,658 174,825 379,658

Less: cash at bank and in hand (note 26(b)) (64,677) (159,677) (14,449) (135,483)

117,387 219,981 160,376 244,175

Total equity 1,487,892 1,418,006 1,353,003 1,281,508

Debt-to-equity ratio 8% 16% 12% 19%

The debt-to-equity ratio decrease in 2016 is mainly attributable to higher profit resulting in higher cash flow and to the sale of investment held by one of the subsidiaries of the Group.





4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

4.1 Critical accounting estimates and assumptions

The Group/Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Impairment of available-for-sale financial assets

The Group/Company 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/ Company evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost, and the financial health of and near-term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow.

(b) Pension benefits

The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of pension obligations.

The Group/Company determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, the Group/Company 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 15.

(c) Fair value of securities not quoted in an active market

The fair value of securities not quoted in an active market may be determined by the Group/Company using valuation techniques such as third party transaction values, earnings, net asset value or discounted cash flows, whichever is considered to be appropriate. The Group/Company would exercise judgement and estimates on the quantity and quality of pricing sources used. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

(d) Depreciation policies

Property, plant and equipment are depreciated to their residual values over their estimated useful lives. The residual value of an asset is the estimated net amount that the Group/Company would currently obtain from disposal of the asset, if the asset were already of the age and in condition expected at the end of its useful life.

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.

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D)

4.1 Critical accounting estimates and assumptions (cont’d)

(e) Revaluation of property, plant and equipment

The Company measures land and buildings at revalued amounts with changes in fair value being recognised in other comprehensive income. The Company engaged independent valuation specialists to determine fair value and the last revaluation was carried out as at June 30, 2015.

(f) Asset lives and residual values

Property, plant and equipment are depreciated over its useful life taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In reassessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values. Consideration is also given to the extent of current profits and losses on the disposal of similar assets.

(g) Limitation of sensitivity analysis

Sensitivity analysis, in respect of market risk, demonstrates the effect of a change in a key assumption while other assumptions remain unchanged. In reality, there is a correlation between the assumptions and other factors. It should also be noted that these sensitivities are non-linear and larger or smaller impacts should not be interpolated or extrapolated from these results.

Sensitivity analysis does not take into consideration that the Group’s/Company’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/Company’s view of possible near-term market changes that cannot be predicted with any certainty.





5. PROPERTY, PLANT AND EQUIPMENT

(a) THE GROUP - 2016

OfficeFlour mill Bakery Sundry Furniture & Motor Assets in

Buildings equipment equipment equipment Equipment vehicles progress Total

Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s

COST OR VALUATION

At July 1, 2015 754,379 860,170 19,306 102,155 13,626 7,055 5,971 1,762,662

Additions 628 488 9,087 1,950 1,463 2,100 50,855 66,571

Disposal - - - (2,160) - - - (2,160)

Assets written off - (5,049) - (836) (595) - - (6,480)

Transfer to intangible asset - - - - - - (5,204) (5,204)

Transfers 3,745 7,648 483 5,873 1,816 - (19,565) -

At June 30, 2016 758,752 863,257 28,876 106,982 16,310 9,155 32,057 1,815,389

DEPRECIATION

At July 1, 2015 254,968 613,910 823 66,016 11,122 5,441 - 952,280

Charge for the year 18,142 19,927 1,601 5,577 1,398 944 - 47,589

Disposal adjustment - - - (2,160) - - - (2,160)

Adjustments for assets written off

- (4,654) - (554) (595) - - (5,803)

At June 30, 2016 273,110 629,183 2,424 68,879 11,925 6,385 - 991,906

NET BOOK VALUE

At June 30, 2016 485,642 234,074 26,452 38,103 4,385 2,770 32,057 823,483

5. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

(b) THE GROUP - 2015

OfficeFlour mill Bakery Sundry Furniture & Motor Assets in

Buildings equipment equipment equipment Equipment vehicles progress Total

Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s

COST OR VALUATION

At July 1, 2014 659,077 730,459 - 104,966 22,111 7,094 109,375 1,633,082

Additions 6,543 47,962 10,640 7,022 1,714 - 5,971 79,852

Disposals - (3,403) - (1,967) - (39) - (5,409)

Assets written off - (1,650) - (9,802) (10,254) - (26) (21,732)

Revaluation surplus 88,759 (13,766) - 1,876 - - - 76,869

Transfers - 100,568 8,666 60 55 - (109,349) -

At June 30, 2015 754,379 860,170 19,306 102,155 13,626 7,055 5,971 1,762,662

DEPRECIATION

At July 1, 2014 257,317 603,381 - 70,569 20,419 4,190 - 955,876

Charge for the year 13,653 26,934 823 5,807 946 1,290 - 49,453

Disposal adjustments - (3,209) - (1,567) - (39) - (4,815)

Adjustments for assets written off

- (1,506) - (9,765) (10,243) - - (21,514)

Revaluation adjustments

(16,002) (11,690) - 972 - - - (26,720)

At June 30, 2015 254,968 613,910 823 66,016 11,122 5,441 - 952,280

NET BOOK VALUE

At June 30, 2015 499,411 246,260 18,483 36,139 2,504 1,614 5,971 810,382






(c) THE COMPANY - 2016

Office

Flour mill Sundry Furniture & Motor Assets in

Buildings equipment equipment Equipment vehicles progress Total


COST OR VALUATION

At July 1, 2015 754,379 860,170 100,306 13,103 7,055 5,491 1,740,504

Additions 628 488 929 1,100 2,100 50,762 56,007

Disposal - - (2,160) - - - (2,160)

Assets written off - (5,049) (836) (595) - - (6,480)

Transfer to intangible asset - - - - - (5,204) (5,204)

Transfer 3,745 7,648 5,873 1,816 - (19,082) -

At June 30, 2016 758,752 863,257 104,112 15,424 9,155 31,967 1,782,667

DEPRECIATION

At July 1, 2015 254,968 613,910 65,927 11,013 5,441 - 951,259

Charge for the year 18,142 19,927 5,277 1,254 944 - 45,544

Disposal adjustment - - (2,160) - - - (2,160)

Adjustments for assets written off - (4,654) (554) (595) - - (5,803)

At June 30, 2016 273,110 629,183 68,490 11,672 6,385 - 988,840

NET BOOK VALUE

At June 30, 2016 485,642 234,074 35,622 3,752 2,770 31,967 793,827


(d) THE COMPANY - 2015

Office

Flour mill Sundry Furniture & Motor Assets in

Buildings equipment equipment Equipment vehicles progress Total


At July 1, 2014 659,077 730,459 104,966 22,111 7,094 100,594 1,624,301

Additions 6,543 47,962 5,233 1,246 - 5,491 66,475

Disposals - (3,403) (1,967) - (39) - (5,409)

Assets written off - (1,650) (9,802) (10,254) - (26) (21,732)

Revaluation surplus 88,759 (13,766) 1,876 - - - 76,869

Transfer - 100,568 - - - (100,568) -

754,379 860,170 100,306 13,103 7,055 5,491 1,740,504

At July 1, 2014 257,317 603,381 70,569 20,419 4,190 - 955,876

Charge for the year 13,653 26,934 5,718 837 1,290 - 48,432

Disposal adjustments - (3,209) (1,567) - (39) - (4,815)

Adjustments for assetswritten off

- (1,506) (9,765) (10,243) - - (21,514)

Revaluation adjustments (16,002) (11,690) 972 - - - (26,720)

254,968 613,910 65,927 11,013 5,441 - 951,259

499,411 246,260 34,379 2,090 1,614 5,491 789,245






(e) It is the group policy to revalue the assets of the Company every three years. Revaluations are done more frequently if there is any indication that the carrying amount differs materially from its fair value. The Company’s property, plant and equipment were last revalued on a depreciated replacement cost basis as follows:

- Buildings on June 30, 2015 - by Mr Vincent d’Unienville BSc, ARICS of V. d’Unienville & Associates Co Ltd, Chartered Quantity Surveyors.

- Flour mill and sundry equipment on June 30, 2015 - by Buhler (pty) Ltd, professional suppliers of milling plants throughout Africa.

All the buildings are categorised under Level 2.

(f) If the buildings, flour mill and sundry equipment were stated on the historical cost basis, the net book amounts would be as follows:

Flour Mill Sundry

Buildings equipment equipment

Rs000’s Rs000’s Rs000’s

THE GROUP

At June 30, 2016 153,239 191,178 14,972

At June 30, 2015 171,381 211,105 20,549

THE COMPANY

At June 30, 2016 153,239 191,178 13,423

At June 30, 2015 171,381 211,105 18,700

(g) Depreciation charge is allocated in profit or loss as follows:


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Cost of sales 36,237 39,967 36,238 39,967

Administrative expenses 5,384 3,497 3,339 2,476

Selling and distribution costs 5,968 5,989 5,967 5,989

47,589 49,453 45,544 48,432

(h) Bank borrowings are secured by floating charges over all the assets of the Company, including property, plant and equipment (note 14).

6. INTANGIBLE ASSETS

(a) THE GROUP

ComputerSoftware Franchise

Asset inprogress Total

Rs000’s Rs000’s Rs000’s Rs000’s

At June 30, 2014 3,181 - 3,829 7,010

Additions 113 1,148 - 1,261

Transfer 94 3,735 (3,829) -

At June 30, 2015 3,388 4,883 - 8,271

Additions 37 - - 37

Transfer from property, plant and equipment

5,204 - - 5,204

At June 30, 2016 8,629 4,883 - 13,512

AMORTISATION

At June 30, 2014 2,792 - - 2,792

Amortisation charge 148 410 558

At June 30, 2015 2,940 410 - 3,350

Amortisation charge 253 698 - 951

At June 30, 2016 3,193 1,108 - 4,301

5,436 3,775 - 9,211

At June 30, 2015 448 4,473 - 4,921





6. INTANGIBLE ASSETS (CONT’D)

(b) THE COMPANY

Computer

Software

Rs000’s

COST

At June 30, 2014 3,181

Additions 47

At June 30, 2015 3,228

Transfer from property, plant and equipment 5,204

Additions 37

8,469

At June 30, 2014 2,792

Amortisation charge 137

At June 30, 2015 2,929

Amortisation charge 230

3,159

5,310

At June 30, 2015 299

Amortisation charge of Rs000’s 951 (2015: Rs000’s 558) for the Group and Rs000’s 230 (2015: Rs000’s 137) for the Company has been charged to administrative expenses.

7. INVESTMENT IN SUBSIDIARY COMPANIES (COST)

2016 2015

Rs000’s Rs000’s

At July 1, 124,720 79,720

Transfer from deposit on shares - 10

Additions - 44,990

At June 30, 124,720 124,720

7. INVESTMENT IN SUBSIDIARY COMPANIES (COST) (CONT’D)

(a) The list of the Company’s subsidiaries is as follows:

Name2016 & 2015

Class of shares

held Year endStated capital

Proportion of

ownershipPlace ofbusiness

Country of incorporation

Mainbusiness

ConcordiaOffshore DevelopmentsLtd Ordinary June 30

Rs’000 175,048 77%

Les Cascades Building,

Edith Cavell Street,

Port Louis MauritiusInvestment

holding

Amigel Ltd Ordinary June 30Rs000’s 45,000 100%

Cargo Peninsula,Quay D,

Port Louis Mauritius

Producer of unbaked

frozen products

Concordia Offshore Developments Ltd holds investments in Mauritius Freeport Development (“MFD”), Mer Rouge Trading Ltd (“MRT”), and Premier Logistics Co Ltd (“PLC”). The Group’s shareholding in MFD, MRT and PLC is 5% (2015: 5%) 5% (2015: 5%) and 17.14% (2015: 17.14%) respectively.

(b) Subsidiary with material non-controlling interest

Details for subsidiary that have non-controlling interest that are material to the entity are as follows:

Name

2016

Profit allocated to non-controlling interest

during the period

Rs000’s

Accumulated non-controlling interests

at June 30Rs000’s

Concordia Offshore Developments Ltd 7,917 37,155

Name2015

Profit allocated to non-controlling interest

during the periodRs000’s

Accumulated non-controlling interests

at June 30

Concordia Offshore Developments Ltd 2,242 34,555





7. INVESTMENT IN SUBSIDIARY COMPANIES (COST) (CONT’D)

(c) Summarised financial information on subsidiary with material non-controlling interest

(i) Summarised statement of financial position and statement of profit or loss and other comprehensive income:

Name

2016

Current assets

Non-currentassets

Current liabilities Revenues

Post-taxprofit

Other compre-hensive income for the

year

Total compre-hensive income for the

year


Concordia OffshoreDevelopments Ltd 50,288 111,442 191 3,428 34,423 (23,116) 11,307

Name

2015

Current assets

Non-currentassets

Current liabilities Revenues

Post-taxprofit


year


year


Concordia OffshoreDevelopments Ltd 4,873 176,506 31,147 5,351 9,749 9,246 18,995

(ii) Summarised cash flow information

Name2016

Operating activities

Rs000’s

Investing activities

Rs000’s

Net increase in cash and cash

equivalentRs000’s

Concordia Offshore Developments Ltd (27,814) 73,466 45,662

Name2015

Operating activities

Rs000’s

Investing activities

Rs000’s

Net decrease in cash and cash

equivalentRs000’s

Concordia Offshore Developments Ltd (7) - (7)

The summarised financial information above is the amount before intra-group eliminations.

8. INVESTMENT IN ASSOCIATE

(a) (i) In separate financial statements of the investor

THE COMPANY2016 2015

Rs000’s Rs000’s

At July 1, 147,644 128,974

Additions - 18,670

At June 30, 147,644 147,644

(a) (ii) The results of the following associated company have been included in the consolidated financial statements:

2016 & 2015

% holding Year end

Indigo Hotels & Resorts Limited 27.4 June 30

THE GROUP

2016 2015

Rs000’s Rs000’s

At July 1, 202,521 183,413

Additions - 18,670

Share of profit/(loss) for the year 9,349 (408)

Share of movement of other comprehensive income for the year (9,210) (180)

Effects of changes in ownership - 1,232

Effects of adjustments in associate - (206)

202,660 202,521

Goodwill 20,286 20,286

At June 30, 222,946 222,807

(b) (i) Indigo Hotels & Resorts Limited is a limited liability company incorporated and domiciled in Mauritius. Its main activity is to provide management services to hotels. Its place of business is at Food and Allied group headquarters, Gentilly, Moka.

(ii) The associated company is accounted for using the equity method.

(iii) The associated company is a private company and there is no quoted market price available for its shares.





8. INVESTMENT IN ASSOCIATE (CONT’D)

(c) Summarised financial information

(i) Summarised financial information in respect of the associate is set out below:

NameCurrent

assets

Non-currentassets

Current liabilities

Non-current

liabilities RevenuePost-tax

profit


year


year

2016 Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s

Indigo Hotels & Resorts Limited 128,593 2,179,264 232,094 425,783 647,808 38,112 (37,985) 127

NameCurrent

assets

Non-currentassets

Current liabilities

Non-current

liabilities RevenuePost-tax

loss


year


year

2015 Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s

Indigo Hotels & Resorts Limited 112,455 2,193,850 182,553 473,892 570,662 (8,080) (1,464) (9,544)

The summarised financial information above represents amounts shown in the associate’s financial statements prepared in accordance with IFRS, adjusted for equity accounting purposes such as fair value adjustments made at time of acquisition.

(ii) Reconciliation of summarised financial information

2016 2015

Rs000’s Rs000’s

Opening net assets at July 1, 1,649,860 1,529,351

Issue of shares - 68,139

Change in ownership - 63,606

Profit /(Loss) for the year 38,112 (8,080)

Other comprehensive income for the year (37,985) (1,464)

Effects of changes in associate's opening balances - (1,692)

Closing net assets at June 30, 1,649,987 1,649,860

Less non-controlling interest in the subsidiary of the associate (910,353) (910,731)

739,634 739,129

Interest in associates 202,660 202,521

Goodwill 20,286 20,286

Carrying value 222,946 222,807

9. INVESTMENTS IN FINANCIAL ASSETS

(a) THE GROUP

The movement in investments in financial assets are as follows:

2016 2015Rs000’s Rs000’s


At July 1, 254,660 220,580

Additions - 1,041

Disposal (52,874) -

Currency translation differences - 23,684

(Decrease)/Increase in fair value (9,588) 9,355

At June 30, 192,198 254,660

2016 2015Rs000’s Rs000’s

Equity securities at fair value

Level 1 132,948 142,439

Level 3 59,250 112,221

Total available-for-sale financial assets 192,198 254,660

(b) THE COMPANY

The movement in investments in financial assets are as follows:

2016 2015Rs000’s Rs000’s


At July 1, 78,154 77,004

Additions - 1,041

Increase in fair value (note 13(b)) 2,601 109

At June 30, 80,755 78,154

2016 2015Rs000’s Rs000’s

Equity securities at fair value

Level 1 56,072 53,375

Level 3 24,683 24,779

Total available-for-sale financial assets 80,755 78,154





9. INVESTMENTS IN FINANCIAL ASSETS (CONT’D)

(c) The fair value of DEM quoted available-for-sale securities is based on the DEM market quoted prices at the close of business on the reporting date. In assessing the fair value of unquoted available-for-sale securities, the Group and the Company use appropriate methods and make assumptions that are based on market conditions existing at each end of reporting date. The cost of unquoted securities are not materially different from fair value.

(d) Available-for-sale financial assets are denominated in the following currencies:


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Metical MZN - 52,875 - -

MUR 192,198 201,785 80,755 78,154

192,198 254,660 80,755 78,154

(e) None of the financial assets is either past due or impaired.

10. INVENTORIES

(a)


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Raw materials 274,477 170,633 274,209 170,517

Raw materials in transit 76,586 177,368 76,586 177,368

Finished goods 16,470 29,733 16,255 29,643

Consumables 6,252 5,516 6,072 5,497

Spare parts 47,102 40,618 47,085 40,601

420,887 423,868 420,207 423,626

(b) The cost of inventories recognised as expense and included in operating expenses amounted to Rs’000 1,699,201 (2015: Rs’000 1,683,720) for the Group and Rs’000 1,695,044 (2015: Rs’000 1,682,787) for the Company.

(c) The bank borrowings are secured by floating charges on the assets of the Company including inventories

(note 14).

11. TRADE AND OTHER RECEIVABLES


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Trade receivables 90,392 87,068 90,243 98,598

Prepayments 9,001 6,388 8,810 6,261

Other receivables 10,826 12,909 10,195 11,987

Receivables from related companies 29,972 41,976 34,290 65,404

140,191 148,341 143,538 182,250

The carrying amounts of trade and other receivables approximate their fair value.

As at June 30, 2016 and June 30, 2015, no trade receivables were past due or impaired.

The other classes within trade of other receivables do not contain impaired assets.

The carrying amounts of the Group’s/Company’s trade and other receivables are denominated in various currencies (note 3.1(a)(ii)).

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above. The Group/Company does not hold any collateral as security.

12. SHARE CAPITAL

THE GROUP AND THE COMPANY

2016 & 2015

Issued and fully paid Ordinary Preference Total

Shares of Rs100. each Rs000’s 540,000 30,000 570,000

Number of shares 000’s 5,400 300 5,700

The holders of the preference shares are entitled to a fixed cumulative dividend of 13% per annum in preference to the holders of ordinary shares.

Any balance the Board decides to distribute by way of dividends shall be distributed “pari-passu” per share amongst the ordinary and preference shareholders, the latter being entitled to a maximum dividend of 20%.

The preference shares carry a right to repayment of capital in winding up in priority to the ordinary shares but no other rights in respect of dividends, capital and voting.





13. REVALUATION AND OTHER RESERVES

(a)(i) THE GROUP - 2016

Revaluationsurplus

Available-for-sale fair

value reserveTranslation

reserveReserve ofassociates

Actuariallosses

reserves Total

Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s

At July 1, 2015 121,943 56,600 47,612 32,207 (7,225) 251,137Transfer of depreciation on revaluation surplus on property, plantand equipment (3,653) - - - - (3,653)

Income tax on excess depreciation 548 - - - - 548

Remeasurements of defined benefit obligations - - - - 956 956

Income tax relating to components of other comprehensive income - - - - (143) (143)

Currency translation differences - - - - - -

Decrease in fair value of available-for-sale financial assets - (9,588) - - - (9,588)

Reclassification adjustment for gains of available-for-sale financial assets - (5,610) - - - (5,610)

Share of other comprehensive income of associate - - - (9,210) - (9,210)

Consolidation adjustment - - 4,372 - - 4,372

At June 30, 2016 118,838 41,402 51,984 22,997 (6,412) 228,809

(a)(ii) THE GROUP - 2015

Revaluationsurplus


value reserveTranslation

reserveReserve ofassociates

Actuariallosses

reserves Total

Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s

At July 1, 2014 35,267 49,372 33,293 32,386 (6,875) 143,443Transfer of depreciation on revaluation surplus on property, plantand equipment (1,616) - - - - (1,616)

Income tax on excess depreciation 242 - - - - 242

Revaluation of property, plant and equipment 103,588 - - 32 - 103,620

Increase in fair value of available-for-sale financial assets - 7,228 - - - 7,228

Currency translation differences - - 14,319 - - 14,319

Remeasurements of defined benefit obligations - - - (211) (412) (623)

Income tax relating to components of other comprehensive income (15,538) - - - 62 (15,476)

At June 30, 2015 121,943 56,600 47,612 32,207 (7,225) 251,137

13. REVALUATION AND OTHER RESERVES (CONT’D)

Revaluation surplus

The revaluation surplus arises on revaluation of property, plant and equipment.

Available-for-sale fair value reserve

Available-for-sale fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets that has been recognised in other comprehensive income until the investments are derecognised or impaired.

Translation of foreign operations

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

Actuarial losses reserve

The actuarial losses reserve represents the cumulative remeasurements of defined benefit obligation recognised.

(b)(i) THE COMPANY - 2016

Revaluationsurplus


valuereserve

Actuariallosses

reserves Total

Rs000’s Rs000’s Rs000’s Rs000’s

Balance at July 1, 2015 121,943 44,032 (7,225) 158,750

Transfer of depreciation on revaluation surplus on property, plant and equipment to retained earnings (3,653) - - (3,653)

Remeasurements of defined benefit obligations - - 936 936

Increase in fair value of available-for-salefinancial assets - 2,601 - 2,601

Income tax relating to components of other comprehensive income 548 - (122) 426

At June 30, 2016 118,838 46,633 (6,411) 159,060





13. REVALUATION AND OTHER RESERVES (CONT’D)

(b) (ii) THE COMPANY - 2015

Revaluationsurplus

Available-for-

sale fairvalue

reserve

Actuariallosses

reserves Total

Rs000’s Rs000’s Rs000’s Rs000’s

Balance at July 1, 2014 35,267 43,923 (6,875) 72,315

Transfer of depreciation on revaluation surplus on property, plant and equipment to retained earnings (1,374) - - (1,374)

Revaluation of property, plant and equipment 103,588 - - 103,588

Remeasurements of defined benefit obligations - - (412) (412)

Increase in fair value of available-for-sale financial assets

- 109 - 109

Income tax relating to components of other com-prehensive income

(15,538) - 62 (15,476)

At June 30, 2015 121,943 44,032 (7,225) 158,750

14. BORROWINGS


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Non-currentBank loan 16,500 22,345 16,500 22,345

Current

Bank overdrafts 159,719 351,378 152,480 351,378

Bank loan 5,845 5,935 5,845 5,935

165,564 357,313 158,325 357,313Total borrowings 182,064 379,658 174,825 379,658

(a) The bank borrowings are secured by floating charges over all the assets of the Company, including property, plant and equipment and inventories (notes 5 and 10).

(b) The effective interest rates of the loans at the reporting date were as follows:.


2016 2015

Rs. USD EUR Rs. USD EUR

% % % % % %

Bank overdrafts 6.65% 1.69%-3.5% 3.97% 6.90% 1.69% -

Bank loan 6.65% - - 6.90% - -

(c) The maturity of non-current borrowings is as follows:


2016 2015

Rs000’s Rs000’s

After one year and before two years 5,500 5,845

After two years and before three years 5,500 5,500

After three years and before five years 5,500 11,000

16,500 22,345

(d) The carrying amounts of the Group’s/Company’s borrowings are denominated in Mauritian rupees.

(e) The carrying amounts of borrowings are not materially different from their fair value.





15. RETIREMENT BENEFIT OBLIGATIONS


2016 2015

Rs000’s Rs000’s

Amounts recognised in the statement of financial position

Defined pension benefits (note 15(a)(iii)) 16,983 17,649

Other post retirement benefits (note 15(b)(i)) 12,822 12,908

29,805 30,557

Analysed as follows:Non-current liabilities 29,805 30,557

Amounts charged to profit or loss :

- Defined pension benefits (note 15(a)(vi)) 460 447

- Other post retirement benefits (note 15(b)(iii)) (255) 1,170

205 1,617

Amount credited/(charged) to other comprehensive income- Defined pension benefits (note 15(a)(viii)) 1,125 (472)

- Other post retirement benefits (note 15(b)(iv)) (169) 60

956 (412)

(a) Pension schemes

(i) The Group/Company contributes and operates a defined benefit pension. The plan is a defined benefit arrangement, with benefits based on final salary. It provides for pension at retirement and a benefit on death or disablement in service before retirement.

The assets of the fund are independently administered by The Swan Life Ltd (formerly known as Anglo-Mauritius Assurance Society Limited) which carries out a full valuation of the plan every year.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligations was carried out at June 30, 2016. The present value of the defined benefit obligations, and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

(ii) The amounts recognised in the statement of financial position are as follows:


2016 2015

Rs000’s Rs000’s

Present value of funded obligations (note 15(a)(iv)) 57,825 57,223

Fair value of plan assets (note 15(a)(v)) (40,842) (39,574)

Liability in the statement of financial position 16,983 17,649

15. RETIREMENT BENEFIT OBLIGATIONS (CONT’D)

(a) Pension schemes (cont’d)

(iii) The reconciliation of the opening balances to the closing balances for the net defined benefit liability is as follows:


2016 2015

Rs000’s Rs000’s

At July 1, 17,648 16,730

Charged to profit or loss 2,816 2,938

(Credited)/Charged to other comprehensive income (1,125) 472

Contributions paid (2,356) (2,492)

At June 30, 16,983 17,648

(iv) The movement in the defined benefit obligation over the year is as follows:


2016 2015

Rs000’s Rs000’s

At July 1, 57,223 53,600

Current service cost 1,060 1,078

Interest cost 3,758 4,065

Contributions by plan participants 651 664

Actuarial (gain)/loss (2,646) 103

Benefits paid (2,221) (2,287)

At June 30, 57,825 57,223

(v) The movement in the fair value of plan assets of the year is as follows:


2016 2015

Rs000’s Rs000’s

At July 1, 39,574 36,870

Expected return on plan assets 2,569 2,742

Actuarial losses (1,521) (369)

Scheme expenses (80) (85)

Cost of insuring risk benefits (486) (453)

Employer contributions 2,356 2,492

Employee contributions 651 664

Benefits paid (2,221) (2,287)

At June 30, 40,842 39,574







(vi) The amounts recognised in profit or loss are as follows:


2016 2015

Rs000’s Rs000’s

Current service cost 1,060 1,078

Interest cost 1,190 1,323

Scheme expenses 80 85Cost of insuring risk benefits 486 453Net periodic pension cost per IAS 19 2,816 2,939

Employer's contribution (2,356) (2,492)

Total included in employee benefit expense 460 447

(vii) The total charge for the year and previous year were included in administrative expenses.


2016 2015

Rs000’s Rs000’s

Actual return on plan assets 1,048 2,378

(viii) The amounts recognised in other comprehensive income are as follows:


2016 2015

Rs000’s Rs000’s

Remeasurements on the defined benefit liability:

Losses on pension scheme assets (1,521) (369)

Liability experience gains 2,646 1,261Actuarial losses arising from changes in assumptions underlying the present value of the scheme - (1,364)

1,125 (472)



(ix) The assets in the plan and the expected rate of return were:


2016 2015

Rs000’s Rs000’s

Cash and cash equivalents 933 942

Fixed income 5,999 5,083

Local Equities 3,199 2,058

Overseas Equities 3,199 2,354

Qualifying Insurance Policy 27,512 29,137

Total Market value of assets 40,842 39,574

(x) Most of the assets of the plan are invested in the Deposit Administration Policy. Since July 1, 2012, all new contributions are being invested in a dedicated investment vehicle. The Deposit Administration Policy is a pooled insurance product for Group Pension Schemes, underwritten by The Swan Life Ltd (formerly known as Anglo- Mauritius Assurance Society Limited).

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

As the fund is expected to produce a smooth return, a fairly reasonable indication of future returns can be obtained by looking at historical ones.

Therefore, the long-term expected return on asset assumption has been based on historical performance of the fund.

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

The fixed interest portfolio includes government bonds, debentures, mortgages and cash. The expected return for this asset class has been based on yields of government bonds at the measurement date.

The expected return on properties has been based on the rate of inflation prevailing at the measurement date.

Moreover, the Deposit Administration Policy offers a minimum guaranteed return of 4% p.a..

(xi) The weighted average duration of the liabilities as at June 30, 2016 is 4 years.







(xii) Sensitivity analysis on defined pension benefit obligations at end of the reporting date:


2016 2015

Rs000’s Rs000’s

Decrease in Defined Benefit Obligation due to 1% increase in Discount Rate

2,251 2,683

Increase in the Defined Benefit Obligation due to 1% in-crease in Future Long-term Salary assumption:

2,292 2,952

An increase/decrease of 1% in other principal actuarial asssumptions would not have a material impact on other post retirement benefit obligations at the end of the reporting period.

The sensitivity above have been determined based on a method that extrapolates the impact on the net post retirement benefit obligation a a result of reasonable changes in key assumptions occurring at the end of the reporting period. The present value of the other retirement defined obligation has been calculated using the projected unit credit method.

The sensitivity analysis may not be representative of the actual change in the post retirement 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.

The other post retirement benefit pension plan exposes the Group/Company to actuarial risks, such as longevity risk, currency risks, interest rate risk and market (investment) risk.

The funding requirements are based on the pension fund’s actuarial measurement framework set out in the funding policies of the plan.

(xiii) Expected contributions to post-employment benefit plans for the year ending June 30, 2017 are Rs.000’s 4,000.

(xiv) The principal actuarial assumptions used for accounting purposes were:


2016 2015

Rs000’s Rs000’s

Discount rate 6.5% 7.5%Future salary increases 5.0% 6.0%


(b) Other post retirement benefits

Other post retirement benefits comprise of gratuity on retirement payable under the Employees Rights Act 2008.

(i) The amounts recognised in the statement of financial position are as follows:


2016 2015

Rs000’s Rs000’s

Present value of unfunded obligations-Deficit 12,822 12,908

(ii) The reconciliation of the opening balances to the closing balances for the net defined benefit liability is as follows:


2016 2015

Rs000’s Rs000’s

At July 1, 12,908 11,798

(Credited)/charged to profit or loss (255) 1,170

Charged/(credited) to other comprehensive income 169 (60)

At June 30, 12,822 12,908

(iii) The amounts recognised in profit or loss are as follows:


2016 2015

Rs000’s Rs000’s

Current service cost 473 533

Past service cost (1,117) -

Service cost (644) 533

Net interest cost 834 937

Net periodic pension cost per IAS 19 190 1,470

Benefit paid (445) (300)

Total included in employee benefit expense (255) 1,170

(iv) The amounts recognised in other comprehensive income are as follows:


2016 2015

Rs000’s Rs000’s

Remeasurement on the defined benefit liability:

Liability experience gains/(losses) 169 (56)

Actuarial losses arising from changes in assumptions - (4)

169 (60)






(b) Other post retirement benefit (cont’d)

(v) Amounts for the current period are as follows:


2016 2015

Rs000’s Rs000’s

Present value of defined benefit obligations 12,822 12,908

Experience gains on plan liabilities 801 462

(vi) The principal actuarial assumptions used for the accounting purposes were:


2016 2015

% %

Discount rate 6.50% 7.75%

Future salary increases 5.00% 6.00%

(vii) The weighted average duration of the liabilities as at June 30, 2016 is 6 years..

(viii) Sensitivity analysis on other post retirement benefit obligations at end of the reporting date:


2016 2015

Rs000’s Rs000’s

Decrease in Defined Benefit Obligation due to 1% in-crease in Discount Rate 395 247

Increase in the Defined Benefit Obligation due to 1% increase in Future Long-term Salary assumption 515 410

An increase/decrease of 1% in other principal actuarial asssumptions would not have a material impact on other post retirement benefit obligations at the end of the reporting period.

The sensitivity above have been determined based on a method that extrapolates the impact on the net post retirement benefit obligation a result of reasonable changes in key assumptions occurring at the end of the reporting period. The present value of the other retirement defined obligation has been calculated using the projected unit credit method.

The sensitivity analysis may not be representative of the actual change in the post retirement 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 periods.

The other post retirement benefit pension plan exposes the Group/Company to actuarial risks, such as longevity risk, currency risks, interest rate risk and market (investment) risk.

The funding requirements are based on the pension fund’s actuarial measurement framework set out in the funding policies of the plan.

16. DEFERRED TAX LIABILITIES

Deferred income taxes are calculated on all temporary differences under the liability method at 15% (2015:15%).

(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:


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Deferred tax assets (5,924) (6,037) (4,472) (4,585)

Deferred tax liabilities 120,740 109,388 120,740 109,388

114,816 103,351 116,268 104,803

Disclosed as follows:

Deferred tax assets (1,452) (1,452) - -

Deferred tax liabilities 116,268 104,803 116,268 104,803

114,816 103,351 116,268 104,803

At the end of the reporting period, the Group had unused tax losses of Rs000’s 19,223 (2015:Rs000’s 8,940) available for the offset against future profits. A deferred tax asset has been recognised in respect of Rs’000 8,508 (2015: 8,508) of such losses. No deferred tax asset has been recognised in respect of the remaining Rs’000 432 (2015: nil) due to the unpredictability of future profit streams.

The Company had no unused tax losses as at June 30, 2016 (2015: nil).

(b) The movement on the deferred income tax is as follows:


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

At July 1, 103,351 78,281 104,803 78,281

Charged to other comprehensive income 143 15,476 143 15,476

Charged to profit or loss (note 18(b)) 11,322 9,594 11,322 11,046

At June 30, 114,816 103,351 116,268 104,803

(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:





16. DEFERRED TAX LIABILITIES (CONT’D)

(c) (i) Deferred tax assets

THE GROUP

Taxlosses

Retirement benefit

obligations Total

Rs000’s Rs000’s Rs000’s

At June 30, 2014 - 4,279 4,279

Charged to other comprehensive income - 62 62

Credited to profit or loss 1,452 244 1,696

At June 30, 2015 1,452 4,585 6,037

Credited to other comprehensive income - (143) (143)

Credited to profit or loss - 30 30

At June 30, 2016 1,452 4,472 5,924

THE COMPANY

Retirement benefit obligations

Rs000’s

At June 30, 2014 4,279

Charged to other comprehensive income 62

Credited to profit or loss 244

At June 30, 2015 4,585

Credited to other comprehensive income (143)

Credited to profit or loss 30

At June 30, 2016 4,472

16. DEFERRED TAX LIABILITIES (CONT’D)

(c) (ii) Deferred tax liabilities


Accelerated tax

depreciationRevaluation

of assets Total

Rs000’s Rs000’s Rs000’s

At June 30, 2014 27,424 55,136 82,560

Charged to profit or loss 11,290 - 11,290

Charged to other comprehensive income - 15,538 15,538

At June 30, 2015 38,714 70,674 109,388

Charged/(credit)to profit or loss 11,900 (548) 11,352

At June 30, 2016 50,614 70,126 120,740

(d) No deferred tax on revaluation of property, plant and equipment (2015: Rs000’s 15,539). Deferred tax of Rs000’s 548 (2015:Rs000’s 242) was transferred from other reserves to retained earnings. This represents the deferred tax on the difference between the actual depreciation on property, plant and equipment and the equivalent depreciation based on the historical cost of property, plant and equipment.

17. TRADE AND OTHER PAYABLES


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Trade payables 24,469 20,412 23,694 20,138

Accrued expenses 16,784 51,582 15,822 50,750

Other payables 68 4,459 25 4,553

Amounts due to related parties 8,565 16,448 7,878 9,271

49,886 92,901 47,419 84,712

The carrying amounts of trade and other payables approximate their fair value.

18. TAXATION

(a) Statement of financial position


2016 2015

Rs000’s Rs000’s

At July 1, 183 (226)

Current tax on the adjusted profit for the year at 15% (2015: 15%) 12,975 5,138

Less: paid during the year (4,016) (5,046)

(Over)/underprovision (12) 317

At June 30, 9,130 183





18. TAXATION (CONT’D)

(b) Statement of profit or loss and other comprehensive income


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Current tax on the adjusted profit for the year at 15% (2015:15%) 12,975 5,138 12,975 5,138

Movement in deferred taxation (note 16) 11,322 9,594 11,322 11,046

(Over)/underprovision (12) 317 (12) 317

24,285 15,049 24,285 16,501

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


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s


Tax calculated at 15% (2015:15% ) 25,842 13,372 21,235 13,226

Income not subject to tax (21,223) (16,784) (16,616) (16,915)

Expenses not deductible for tax purposes 8,356 8,550 8,356 8,827

Deferred taxation (note 16 (b)) 11,322 9,594 11,322 11,046

(Over)/underprovision (12) 317 (12) 317Tax charge 24,285 15,049 24,285 16,501

19. DIVIDENDS PER SHARE


2016 2015

Rs000’s Rs000’s

Amounts recognised as distributions to equity holders in the year:

Dividend on ordinary shares for the year ended June 30, 2016 of Rs.8 per share (2015: Rs.7 per share) 43,200 37,800

Dividend on preference shares for the year ended June 30, 2016 of Rs.20 per share (2014: Rs.20 per share)

6,000 6,000

49,200 43,800

20. OPERATING PROFIT THE GROUP THE COMPANY

2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Operating profit is arrived at after:

Crediting

Profit on disposal of property, plant and equipment 72 22 72 22Gain on disposal of available-for-sale investmentand charging:

31,518 - - -

Depreciation on property, plant and equipment (note 5) 47,589 49,453 45,544 48,432

Amortisation of intangible assets (note 6) 951 558 230 137

Employee benefit expense (note 20(a)) 84,619 78,352 77,656 74,842

20(a) Employee benefit expenseTHE GROUP THE COMPANY

2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Wages and salaries 76,905 69,309 70,516 66,080

Social security costs 5,945 6,114 5,619 5,972

Pension cost:

- Defined benefit obligation 205 1,616 205 1,616

- Defined contribution plan 1,564 1,313 1,316 1,174

84,619 78,352 77,656 74,842

21. FLUCTUATIONS IN EXCHANGE RATES

This represents the effect of changes in foreign exchange rates between the time wheat is purchased and the time when sale of flour is effected.

22. EXPENSES BY NATURE


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Depreciation (note 5) 47,589 49,453 45,544 48,432


Employee benefit expense (note 20(a)) 84,619 78,352 77,656 74,842

Cost of inventories recognised as expense (note 10(b)) 1,699,201 1,683,720 1,695,044 1,682,787

Direct expenses (electricity, water, diesel and consumables) 46,587 42,770 44,922 41,884

Export expenses 36,924 47,260 36,924 47,260

Repairs and maintenance 21,891 20,498 21,660 20,494

Operating lease rental - Property 4,251 3,110 4,251 3,110

Advertising costs 7,970 11,561 7,962 11,074

Management fees 30,165 30,145 30,088 30,078

Other expenses 54,175 51,789 49,767 49,999

Total cost of sales, selling and distribution, and administrative expenses 2,034,323 2,019,216 2,014,048 2,010,097





22. EXPENSES BY NATURE (CONT’D)


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Represented by:

Cost of sales 1,901,583 1,893,052 1,891,176 1,890,199

Selling and distribution costs 33,320 34,994 32,612 34,502

Administrative expenses 99,420 91,170 90,260 85,396

2,034,323 2,019,216 2,014,048 2,010,097

23. OTHER INCOME


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Dividend income

- DEM Quoted 2,401 2,384 2,401 2,384

- Listed 173 230 173 230

Gain on disposal of available-for-sale 31,518 - - -

financial asset

Sundry income 3,346 2,689 4,342 3,670

37,438 5,303 6,916 6,284

24. NET FINANCE INCOME


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Interest expense:

- Loan (3,031) (2,303) (3,031) (2,303)

- Bank overdrafts (10,499) (11,088) (10,380) (11,088)

(13,530) (13,391) (13,411) (13,391)

Net foreign exchange:

- Foreign exchange loss on turnoverreclassified (note 21) 6,547 75,645 6,547 75,645

- Other foreign exchange gain/(loss) 12,749 (38,414) 12,954 (43,082)

19,296 37,231 19,501 32,563

Net finance income 5,766 23,840 6,090 19,172

25. EARNINGS PER SHARE


2016 2015 2016 2015

Profit attributable to equity holders Rs000’s 140,081 71,855 117,281 71,672

Less: preference share dividends Rs000’s (6,000) (6,000) (6,000) (6,000)

Net profit attributable to ordinary shareholders Rs000’s 134,081 65,855 111,281 65,672

Number of ordinary shares in issue for full year 000’s 5,400 5,400 5,400 5,400

Earnings per share Rs. 24.83 12.20 20.61 12.16

26. NOTES TO THE STATEMENTS OF CASH FLOWS

(a) Cash generated from operations


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s


Adjustments for:

Depreciation on property, plant and equipment (note 5) 47,589 49,453 45,544 48,432


Property, plant and equipment scrapped (note 5) 677 218 677 218

Profit on sale of property, plant and equipment (72) (22) (72) (22)

Gain on disposal of available-for-sale assets (31,518) - - -

Provision for retirement benefit obligations (note 15) 205 1,617 205 1,617

Interest income (30) (389) (30) (389)

Dividend income (note 23) (2,574) (2,614) (2,574) (2,614)

Interest expense (note 24) 13,530 13,391 13,411 13,391

Unrealised exchange losses - 51,168 - 50,849

Net foreign exchange (loss)/gain (9,346) - (9,546) 56

Share of (profit)/loss of associates (9,349) 408 - -

Changes in working capital

- inventories 2,981 79,778 3,419 80,020

- trade and other receivables 8,150 519 38,712 5,387

- trade and other payables (43,015) 45,310 (37,293) 44,248

Cash generated from operations 150,462 328,541 194,249 329,503




Notes to the Financial Statements (cont'd)Notes to the Financial Statements (cont'd)

26. NOTES TO THE STATEMENTS OF CASH FLOWS (CONT’D)

(b) Cash and cash equivalents

Cash and cash equivalents include the following for the purpose of the statements of cash flows:


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Cash in hand and at bank 64,677 159,677 14,449 135,483

Bank overdrafts (note 14) (159,718) (351,378) (152,480) (351,378)

(95,041) (191,701) (138,031) (215,895)

(c) Non-cash transactions


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Issue of share Amigel - - - 45,000

Conversion of shareholders loan - - - (22,979)

- - - 22,021

27. RELATED PARTY TRANSACTIONS


Purchase of goods

and services

Sale of goods

and services

Amount owed to related

compa-nies

Amount owed by

related compa-

nies

Purchase of goods

and services

Sale of goods

and services

Loans receiv-

able

Amount owed to related

compa-nies

Amount owed by

related compa-

nies

Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s Rs000’s

2016

Majorityshareholders

11,175 133,725 51 17,957 11,175 133,725 - 51 17,957

Minority shareholders

26,178 1 1,502 - 26,077 1 - 1,416 -

Subsidiarycompanies

- - - - 11 1,847 - - 4,548

Enterprise with common directors

68,379 119,757 6,821 12,015 65,199 118,400 - 6,411 11,785

Associated companies

569 25 191 - - - - - -

106,301 253,508 8,565 29,972 102,462 253,973 - 7,878 34,290

2015

Majority shareholders

11,014 113,283 8,070 20,264 11,014 113,283 - 1,044 20,264

Minority shareholders

27,508 1 1,434 - 27,420 1 - 1,364 -

Subsidiary companies

- - - - 7 1,560 33,674 7 1,560

Enterprise with common directors

88,610 118,727 6,871 21,712 88,003 106,921 - 6,801 9,906

Associated companies

396 - 73 - 364 - - 55 -

127,528 232,011 16,448 41,976 126,808 221,765 33,674 9,271 31,730





27. RELATED PARTY TRANSACTIONS (CONT’D)

(a) The above transactions have been made at arm’s length, on normal commercial terms and in the normal course of business.

The sales to and purchases from related parties are made at normal prices. Outstanding balances at the year-end are unsecured, interest free and settlement occurs in cash.

There has been no guarantees provided or received for any related party receivables or payables.

(b) For the year ended 2016, the Group/Company has not recorded any impairment of receivables relating to amounts owed by the related parties (2015 : nil). This assessment is undertaken each financial year through examining the financial position of the related parties and the market in which they operate.

(c) Key management personnel compensation


2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Salaries and short-term employee benefits 12,685 12,538 9,924 9,815

28. COMMITMENTS Capital commitments

Capital expenditure contracted for at the end of the reporting year but not yet incurred equals to Rs.17.9 million.

Operating lease commitments - where the company is the lessee.

The Company leases land under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights.

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

2016 2015

Rs000’s Rs000’s

Not later than one year 3,356 3,356

Later than one year and not later than five years 9,511 10,441

Later than five years 6,303 8,730

19,170 22,527

29. SEGMENT INFORMATION

(a) Les Moulins de la Concorde Ltée’s reportable segments, which are those reported to the Board, are the operating businesses overseen by management teams responsible for their performance. All reportable segments derive their revenue from a single business activity, which is the milling of wheat and its main products, wheat flour and wheat brand.

29. SEGMENT INFORMATION (CONT’D)

(b) Segment results

THE GROUP

2016 2015

Rs000’s Rs000’s

Total segment revenue 2,160,600 2,155,272

Operating profit 157,168 65,714

Finance income 5,766 23,840

Share of (loss)/profit of associate 9,349 (408)

Profit before taxation 172,283 89,146

Income tax expense (24,285) (15,049)

Profit for the year 147,998 74,097

(c) Geographical information

Revenue Non-current assets

2016 2015 2016 2015

Rs000’s Rs000’s Rs000’s Rs000’s

Mauritius 1,857,565 1,780,792 1,249,290 1,241,347

Dubai 6,797 10,637 - -

Comores 39,274 43,883 - -

Kenya 689 - - -

Madagascar 72,596 125,924 - -

Mayotte 49,885 46,691 - -

Mozambique - - - 52,875

Reunion 56,236 62,104 - -

Seychelles 73,232 71,124 - -

South Africa 4,326 14,117 - -

2,160,600 2,155,272 1,249,290 1,294,222

(d) Revenue from a single customer of Les Moulins de la Concorde Ltée represents approximately Rs000’s 1,526,904 (2015: Rs000’s 1,487,050) of the Group’s total revenue.

30. CONTINGENT LIABILITIES

Bank Guarantees

At June 30, 2016, the Group/Company had contingent liabilities in respect of bank and other guarantees and other matters arising in the ordinary course of business from which it is anticipated that no material liabilities would arise. The Group had given guarantees in the ordinary course of business, amounting to Rs000’s 71,382 (2015: Rs000’s 70,814).

31. CLAIM FROM CUSTOMER

During the year ended June 30, 2015, one of the Company’s customers claimed US$ 819,044 for alleged damaged goods received. The matter is being referred to arbitration.

LMLC ANNUAL REPORT 2015/16 95LMLC ANNUAL REPORT 2015/1694 LMLC ANNUAL REPORT 2016LMLC ANNUAL REPORT 201694 95

Notes Proxy Form

I/We…………………………………………………………………….....................……………………………

of………………………………………………………………………………………………………………….............

being a shareholder of LES MOULINS DE LA CONCORDE LTEE do hereby appoint

………………………………………………………..........................................................................................

of ……………………………………………......................................................................................................

or failing him ………………………………………........................................................................................

of.................................................................................................................................................................

as my/our proxy to vote for me/us and on my/our behalf at the at the 29th Annual Meeting

of The Company to be held at Les Moulins de la Concorde Ltee, Cargo Peninsula, Quay D,

Port Louis, on Wednesday November 9, 2016 at 11.30 a.m. and at any adjournment

thereof.

I/We direct my/our proxy to vote in the following manner. Vote with a Tick.

Ordinary Resolutions For Against

3. To consider and approve the Annual Report of the Company for the year ended June 30, 2016.

4. To re-appoint the following persons who retire (i) by rotation as per the Constitution and (ii) in accordance with section 138 (6) of the Companies Act 2001 and who offer themselves for re-election:

• Mr Michel de Spéville C.B.E• Mr Pierre-Yves Pougnet• Mr Vincent Ah Chuen

5. To re-appoint Mr Petrus van Niekerk who retires by rotation as per the Company’s Constitution and offers himself for re-election.

6. To re-appoint :

• Mr Hansraj Ruhee• Mr Pierre Dinan

as Directors of the Company until the next Annual Meeting in accordance with section 138 (6) of the Companies Act 2001.

7. To ratify the payment of a dividend.

8. To re-appoint Messrs. BDO & Co. as Auditors of the Company who will hold office until the next Annual Meeting and to authorise the Directors to fix their remuneration.

Signed this …………… day of ………………. 2016.

………...............................................................................

LMLC ANNUAL REPORT 2015/16 97LMLC ANNUAL REPORT 2015/1696 LMLC ANNUAL REPORT 201696

Cargo Peninsula, Quay D,

11610 Port-Louis, Mauritius

T: (230) 217 9100 F: (230) 240 8171

E-mail: [email protected]

www.lesmoulinsdelaconcorde.com

Concept & design by Circus Advertising

Printing by Imprimerie et Papeterie Commerciale Ltée

LMLC ANNUAL REPORT 2015/1698

www.lesmoulinsdelaconcorde.com

Documents

Annual Report - LES MOULINS DE LA CONCORDE · 6 LMLC ANNUAL REPORT 2016 LMLC ANNUAL REPORT 2015/16 7 1. The directors have pleasure in submitting the Annual Report of Les Moulins