Group s Review 2 Mission Statement 4 Core Values 6 Chairman s Statement 10 Board of Directors 14 Chief Executive s Review 18 Senior Management 22 Organisational Structure 26 Chief Finance Officer s Message 28 Corporate Services 36 Corporate Energy Management 38 Corporate Social Responsibility 42 Property Management, Projects & Services 44 Financial Services Sector 48 Logistics, Engineering & Commerce Sector 54 Retail Sector 60 Seafood & Marine Sector 66 Corporate Governance Contents Financial Statements 74 Notice of Annual Meeting of the Shareholders 76 Certificate from the Company Secretary 77 Financial Summary 79 Value Added Statement 80 Other Statutory Disclosures 82 Subsidiaries of IBL 85 Auditors Report to the Shareholders 86 Balance Sheets 87 Income Statements 88 Statement of Changes in Equity 90 Cash Flow Statements 91 Notes to the Financial Statements 148 Proxy Form
Mission Statement 2
We recognise that our first responsibility is to our customers with whom we want to build a long-term business partnership by providing products and services that meet or exceed their expectations. We are responsible to our employees and are firmly committed to their development, advancement and involvement. As an equal-opportunity employer, we will reward merit and innovation fairly and will provide a safe and pleasant working environment. We will have competent management with the appropriate expertise, who will provide leadership, guidance and know-how and who will strive to best utilise resources to achieve corporate objectives. We are ultimately responsible for creating shareholder wealth at a rate sufficient for the Group to take full advantage of future market possibilities while satisfying the needs of customers, employees and principals. We will fully play our social role as a contributor towards the further development of Mauritius and of the region. We will continue to respect the environment and will act responsibly towards its improvement for future generations. 3
Core Values 4
Customer Focus External I am proactive in seeking customer feedback and I act upon it. I regularly involve my employees in listening and actioning customers feedback and take appropriate action. I implement customer-friendly procedures. Internal I treat my internal customers with respect and provide constructive feedback. I respect internal deadlines and dates on information requested. Quality I am committed to the development of my employees through regular coaching, training and appraising performance. I display leadership skills. I am open and fair; I promote teamwork involving my staff in decision making and business improvement; I empower my subordinates and give recognition. Think corporate I give preference to value for money Group services and products. I consider and discuss the corporate implications of my Business Unit decisions. Profitability I set challenging objectives, regularly monitor my performance and take timely corrective action. I conduct my business in the most cost-effective manner. Integrity I acknowledge my mistakes and do not look for scapegoats. I behave in a consistent manner towards bosses, colleagues and subordinates. I respect my commitments and am true to my word. I promote a clean, healthy, motivational and happy work environment. 5
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Chairman s Statement 7
Chairman s Statement Dear Shareholder, It is with pleasure that I am presenting to you the Annual Report 2008. One of the main features of the year under review has been the continuous growth of our Group turnover which reached Rs 12.9 billion, an increase of 10% over 2007. However, Group profits from operations decreased from Rs 663M last year to Rs 610M. The Group profit attributable to the shareholders amounted to a reduced Rs 300M compared to Rs 451M in 2007, thus decreasing the earning per share from Rs 6.32 to Rs 4.20. The main reason for this substantial drop in profits is the reduction in the share of associate results from Sun Resorts Ltd. Moreover, in 2008, IBL incurred an additional final loss of Rs 107M concerning the Catovair operations. In spite of the strategic partnership with Air Austral, the necessary permits to operate as the second national carrier to fly both regional and long haul routes were never obtained from the authorities. It has therefore been decided to stop this activity. Finally, the Seafood Hub operations once more have not delivered the expected results during the year under review. Thon des Mascareignes Ltd, after starting the year on a good note, had a disappointing second half of the year. At Board level, we expect an improvement for 2009. As the company was undercapitalized, it was decided to increase the share capital by Rs 400M; on the operational front the year has started well. The brand new marine biotechnology plant was successfully commissioned in 2008 and the production of its promising added value Omega oil will start during 2009. The other sectors of the Group, namely Financial Services, Logistics, Engineering & Commerce (LEC) and Retail performed satisfactorily, as more fully described in the executives reports. For 2009, the year has started reasonably well but prospects remain difficult to predict due to the negative impact of the world economic crisis on our local economy. The other important feature of the year under review was the cautionary announcements made by the Company on the 5 September and the 30 December whereby some major transactions were announced at the level of both the disposal of some of IBL Group operations and the shareholding of the company. Unfortunately, in view of the high volatility of the stock market and present economic conditions, we have been unable to conclude the transactions proposed. The Group however remains focused on its core sectors of activity and the management team is undertaking the maximum to deliver the anticipated results to all our stakeholders. Capt. François Brousse de Gersigny has resigned from the Board, after having taken his well earned retirement 8
as an executive of the company. I would like to place on record my appreciation for his contribution to the Board for the last four years. Mr Gaetan Lan has been appointed to replace him and we welcome him on the Board. I would like to thank my fellow Board members for their advice and support as well as the CEO, management and staff for their hard work and loyalty during 2008. Arnaud Dalais Chairman 30 March 2009 9
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Board of Directors 11
Board of Directors 12
DALAIS, Arnaud Non-Executive Chairman Group Chief Executive of CIEL Group. Director of Caudan Development Ltd, Promotion and Development Ltd, Sun Resorts Ltd and Alternate Director of Belle Mare Holding Ltd. DALAIS, Christian Non-Executive Director Previous Chief Executive Officer of the Company for the period 1978-1996. Chairperson of Sun Resorts Ltd and Director of Ipro Growth Fund Ltd. DALAIS, Jean Pierre MBA Non-Executive Director Chief Executive Officer of CIEL Investment Ltd since 2001. Alternate Director of Sun Resorts Ltd and Phoenix Beverages Ltd. d HOTMAN de VILLIERS, Patrice B. COM Chief Executive Officer Chief Executive Officer since 1996. Chairperson of Mauritian Eagle Insurance Co Ltd and Director of Sun Resorts Ltd. Previously Chief Operating Officer of Mauritius Tuna Fishing and Canning Enterprises Ltd. HARDY, Bertrand Independent Non-Executive Director Chairperson of Rentacolor (Mauritius) Ltd. LAGESSE, Arnaud Maîtrise de Gestion Non-Executive Director Chief Executive Officer Groupe Mon Loisir. Chairperson of Naiade Resorts Ltd, Director of Mauritius Stationery Manufacturers Ltd, Mauritius Union Assurance Co Ltd and Phoenix Beverages Ltd, Alternate Director of United Basalt Products Ltd. LAGESSE, Thierry Maîtrise des Sciences de Gestion Non-Executive Director and Chairperson of the Company on numerous occasions Founder and Executive Chairperson of the Palmar Group of Companies, an international textile and garment manufacturing group and also of Parabole Reunion SA, a direct to home Satellite TV company in the media and communication fields across the islands of the Indian Ocean. Director of Ipro Growth Fund Ltd, Mauritius Stationery Manufacturers Ltd, Phoenix Beverages Ltd, Sun Resorts Ltd, Swan Insurance Co Ltd and United Basalt Products Ltd. LAN HUN KUEN, Gaetan FCA Chief Finance Officer of IBL Joined IBL in 1977 as Financial Controller of Shipping and became Group Financial Controller in 1986. Chief Executive Officer of Mauritian Eagle Insurance Co Ltd for the period 2001 to 2004 and Head of Finance for the IBL Group as from 2005 to date. Director of Mauritian Eagle Insurance Co Ltd, The Stock Exchange of Mauritius Ltd, Central Depository & Settlement Ltd. RIBET, Jean B. COM, CA (SA) Non-Executive Director Group Chief Executive Officer of Constance. Director of Belle Mare Holding Ltd. RIVALLAND, Louis B.SC. (HONS.) (SA), F.I.A. (UK), F.A.S. (SA) Non-Executive Director Group Chief Executive, Swan Group and The Anglo- Mauritius Assurance Society Ltd, Director of Belle Mare Holding Ltd, Mon Desert Alma Ltd, Naiade Resorts Ltd, New Mauritius Hotels Ltd, Swan Insurance Company Ltd, The General Investment and Development Company Ltd and The Mauritius Development Investment Trust Company Ltd. LAGESSE, J. Cyril Non-Executive Director Chairperson of the Company on a number of occasions. Director of Mauritius Stationery Manufacturers Ltd, Naiade Resorts Ltd, Phoenix Beverages Ltd, Sun Resorts Ltd, Swan Insurance Ltd and United Basalt Products Ltd. 13
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Chief Executive s Review «The new organisation structure put in place in January 2007 has been performing well during 2008. Group turnover has reached Rs 12.9 billion (a 10% increase on 2007). This increase in turnover has occurred in all sectors.» 15
Chief Executive s Review Dear Shareholder, I am pleased to present to you hereunder the results of the various sectors of the Group for 2008. Group Turnover Group Profi t from Operations (Rs M) (Rs M) 2008 2007 2008 2007 Financial Services 1,297 1,209 171 100 Logistics, Engineering & Commerce 5,372 5,108 447 413 Retail* 2,938 2,465 81 83 Seafood & Marine 3,215 2,811 94 20 Corporate Services & Others** 88 101 ( 182 ) 47 12,910 11,694 611 663 Share of Associated Companies 321 391 * Including properties where Winner s operates (IBL Properties). ** Including losses suffered by Catovair s operations. The new organisation structure put in place in January 2007 has been performing well during 2008. Group turnover has reached Rs 12.9 billion (a 10% increase on 2007). This increase in turnover has occurred in all Sectors as reflected above. The detailed review of the operations is contained in each respective Chief Operating Officer s (COO) review and a financial overview which is covered in the Chief Finance Officer s (CFO) message. The Financial Services Sector has shown an outstanding growth in profits from operations from Rs 100M in 2007 to Rs 171M in 2008 (71% increase). During the year, the global business grew by the acquisition of a 51% stake in Knights & Johns Management Ltd (KJM) which operates mainly in the same sector but with a complementary client portfolio. The general and life insurance arm had a 31% increase in profitability, whilst leasing activities posted a reduced level of profitability due to additional provision for asset impairment. The Logistics, Engineering & Commerce Sector also performed well. Turnover increased by 5% and profits grew by 8%. 16
As for the Retail Sector, there have been two Winner s openings during 2008 Rose Hill and Rose Belle. We now operate a total of 16 Winner s supermarkets strategically located throughout the island. Turnover increased by 19% to Rs 2.9 billion and the results have been satisfactory. The Seafood & Marine Sector has shown an improvement in profitability in 2008. At Thon des Mascareignes, an average production of 175MT per day was produced which is below the capacity of 250MT per day. The shortage of supply of fish in 2007 was a great source of concern, but this has been re-established and our relationships with our two main co-packers have been strengthened. Our focus on the value-added products remains a priority. The reduction in the results of our associated companies is largely due to Sun Resorts Ltd. I would like to place on record my sincere appreciation to Capt. François Brousse de Gersigny, who retired in December 2008 after having been the Chief Operating Officer for Seafood & Marine Sector and previously responsible for our Shipping, Aviation and Other Services. My thanks also go to the management and employees of the Group for their hard work during 2008. In 2009, we will need the total dedication of each employee so that, together, we can grow stronger and reinforce our position as a leader in the market. Patrice d Hotman de Villiers 30 March 2009 On the Aviation side (Catovair), in spite of the strategic partnership with Air Austral, we have not obtained from the Authorities our permits to operate as the second national carrier to fly both regional and long haul routes. Thus, we have decided to stop this activity and have taken an additional final loss of Rs 107M. Our gearing ratio has improved from 52% last year to 50%. The tight monitoring of fund usage has yielded positive results and management is continuously striving at measures to reduce further the gearing. 17
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Senior Management 19
Senior Management 20
DESMARAIS, François Sc. Po, PMD Chief Operating Officer Property Management, Projects & Services Joined the Company in 1979 as Coordinator of the Commercial Division and subsequently became the Executive Director in charge of the Commercial Division. He was appointed Senior Executive of Large Projects, Services & Property Management. Since January 2007 he is dedicated to the development of the Group s properties. LAN HUN KUEN, Gaëtan FCA Chief Finance Officer Joined in 1977 as Financial Controller of Shipping and became Group Financial Controller in 1986. Chief Executive Officer of Mauritian Eagle Insurance Co Ltd for the period 2001 to 2004 and Head of Finance for the IBL Group as from 2005 to date. Director of Mauritian Eagle Insurance Co Ltd, The Stock Exchange of Mauritius Ltd, Central Depository & Settlement Ltd. MERLO, Fabrizio BComm, MBA Chief Operating Officer Logistics, Engineering & Commerce Joined in 1997 as Managing Director of Manser Saxon Co Ltd. In 2005, he became Senior Executive for Contracting and Agriculture & Construction. In 2006 he was also responsible for Scomat Ltee. In addition, and with effect from January 2007, he is the COO of Logistics, Engineering & Commerce Sector. MERVEN, Nicolas Diplôme Universitaire de Technologie Chief Operating Officer Retail Joined in 1994 as Manager to launch the Winner s chain of supermarkets. Then for 10 years was the Senior Executive of the Food and Distribution Business Unit. Since January 2007, he is responsible for the implementation of an important development plan for the chain of supermarkets which now comprises 16 units. REY, Simon-Pierre BA (Hons.) Econ, ACA Chief Operating Officer Corporate Services Joined in 1986 as Financial Controller Tourism and was Finance Director of the Group in 1989. Cumulated the position of Company Secretary as from 1997. As from January 2007, responsible for Legal & Secretarial, Human Resources & Communication and IT. Director of Mauritian Eagle Insurance Co Ltd, Sun Resorts Ltd and Mount Sugar Estates Ltd. VENPIN, Eric FCA Chief Operating Officer Financial Services Managing Director of Mauritian Eagle Insurance Co Ltd Joined in 2003 as Director of DTOS Ltd and moved to Mauritian Eagle Insurance Co Ltd in 2005. As from January 2008, he is Chief Operating Officer of Financial Services, responsible for DTOS, Mauritian Eagle Insurance and Mauritian Eagle Leasing. He is also a member of the Society of Trust and Estate Practitioners. 21
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Organisational Structure 23
Organisational Structure 24
CNOI Froid des Mascareignes Marine Biotechnology Global Business Mauritian Eagle Insurance Mauritian Eagle Leasing Winner s Mer des Mascareignes Thon des Mascareignes Ship Owning & Management Financial Services Retail Seafood & Marine Finance HEAD OFFICE Corporate Services Corporate Finance Forex Management Taxation Treasury Logistics, Engineering & Commerce Legal & Secretarial Human Resources & Communication Information Technology Property Management, Projects & Services Commerce Engineering Logistics Consumer Goods Frozen Foods Healthcare Blychem Construction & Material Handling Electrical & Commercial Supplies Manson Saxon Scomat Airline representations & Travel Agency Logidis Shipping Agencies Somatrans & Courrier Express 25
Finance Corporate Entity Management Team Gaëtan Lan Hun Kuen - Chief Finance Officer Derek Wong Wan Po - Group Finance Manager Nily Bunwaree - Senior Manager - Compliance Philippe Danré - Group Credit Controller Rajiv Gujjalu - Manager - Corporate Treasury Djilani Hisaindee - Group Taxation Manager Kersley Hong Lin - Head Office Accountant Message from the Chief Finance Officer The profit from operations of the Group for 2008 was not overly affected by the global financial crisis. However, earnings from the tourism activity through the associated investment Sun Resorts Limited encountered a drop following the downturn registered in this sector. In spite of the difficult economic conditions, the Group has maintained its investment strategy with notable capital expenditure during the year in two of the identified areas of development, namely Retail and Seafood. Further sites were acquired for the Winner's chain of supermarkets and two new shops were opened in the course of the year. The chain registered a 19% increase in its turnover which has now reached almost Rs 3 billion. In spite of the marginal result registered in the Seafood Sector following the poor fishing campaign of the second semester, additional investments were made in new equipment and technology to develop further the range of high value-added products. The production of fish protein from offals is now well under way and results are quite promising. The production of fish oil for its eventual use in the pharmaceutical industry is scheduled for the second half of 2009. This is expected to bring additional value to the enterprise which is already generating revenue in excess of Rs 3 billion. The planned restructuration which would have generated funds for these projects could not go through because of the volatile market conditions. Hence, additional borrowings were necessary which have resulted in an 26
increase of 6% to the finance charges. However, the outlook in the short to medium term is the Repo rate will drop further in an attempt to counteract the effects of the crisis. This would have a positive effect on the borrowing costs. Management has furthermore taken measures to mitigate the potential impact of the difficult business conditions ahead. Within such an economic environment, the Group has engaged itself in the vital exercise of driving down costs for more efficiency without damaging the business. Although the feeling of a "credit crunch" is not there yet banking institutions are more rigorous in granting credit which makes the optimisation of cash resources even more essential. The tight monitoring of fund usage has yielded positive results in 2008 with an improvement of the gearing to 50% from 52% last year. The effort is continual. On a short term perspective, the early part of 2009 should bring about satisfactory results. Assuming that the economic conditions attached to the activities of the Group do not suffer any further material deterioration, the performance for the coming year should meet management expectations. Gaëtan Lan Hun Kuen Chief Finance Officer Rs Group Share Price Rs billion Net Asset Value % Gearing 60 3.80 55 50 3.40 54 40 3.20 53 30 3.00 52 20 2.80 51 10 2.60 50 0 2006 2007 2008 0 2006 2007 2008 0 2006 2007 2008 27
Corporate Services Simon-Pierre Rey - Chief Operating Officer Management Team Doris Dardanne - Assistant Company Secretary Legal & Secretarial Sylvette Godère - General Manager Human Resources Sareeta Goundan - Senior Manager Information Technology Cécile Masson - Senior Manager PR & Communication Corporate Services mission is to cater professionally for the business needs of the Group in the following areas: 1. Legal & Secretarial 2. Human Resources 3. Information Technology 4. PR & Communication Legal & Secretarial All secretarial and legal duties for about 100 Group Companies, including three quoted entities on the Stock Exchange of Mauritius, are performed by a small dedicated and focused team. Human Resources 2008/2009 has been rich in new legislation: (a) Occupational Safety & Health Act 2005; (b) The Employees Right Act and Employees Relations Act; (c) Public Health (Restriction on Tobacco products) Regulations 2008. The Human Resources Corporate Unit is at the forefront in the implementation of the above laws together with the operational HR Managers. Training and development of our human resources remain critical in order to develop and retain our talents. I would like to refer you to the report done by Mrs Sylvette Godère, General Manager HR. 28
Information Technology (IT) With a team of about 45 highly skilled professionals, IT is an ISO 9001:2000 certified operation since 2003. We are concentrating our efforts in order to obtain the ISO 27001 Certification during 2009. Three key projects have been identified to be completed during 2009: Appreciation I would like to thank the management and staff of the Corporate Services Unit for their hard work during 2008. Simon-Pierre Rey Chief Operating Officer (a) IBL Network Infrastructure; (b) Information Security Management System (ISMS); (c) Business Continuity Plan (BCP). Please refer to the report done by Mrs Sareeta Goundan, Senior Manager Information Technology. PR & Communication This unit was strengthened at the beginning of 2008. The key result areas are as follows: (a) Promotion and management of IBL as a brand; (b) Improve Internal Communications; (c) Develop a Corporate Social Responsibility (CSR) programme; (d) Improve public relations. Please refer to the report done by Mrs. Cécile Masson, Senior Manager Communication. 29
Corporate Services (continued) Human Resources CORPORATE UNIT Review of Activities The Human Resources Corporate Unit has remained at the forefront of all the challenges, conscious of the changing requirements of the Group in an ever changing environment and conscious that it had to deal creatively and pragmatically with these emerging challenges. IBL has continued to show its commitment towards the safety and health of its employees and the public at large as stated in its Group Safety & Health Policy. With the Safety & Health Officers on board now, relevant on-site safety training and awareness sessions were held for employees in offices and other work premises with a view to increasing the level of Safety and Health Standards. Much emphasis was laid on the new provisions of the Occupational Safety & Health Act 2005 viz Fire Safety at work and Manual Lifting techniques; Practical Safety courses were organised on Defensive Driving, safe operation of forklifts and first aid at work. This year 35 more employees have been trained as first aiders, added to the already trained 32 they were taught how to use blood pressure monitors bought through out the Group. Last June, an awareness session on HACCP (Hazard Analysis & Control of Critical Ponts) was organised for all personnel working at L Ibeloise Restaurant in order to maintain high standard of food safety. 22 batches of new employees have undergone safety induction upon joining the company. With the collaboration of Safety & Health Officers in different sectors, Safety & Health Committees were held to set formal consultation between employees and management on safety and health matters. Fire drills were conducted to ensure safe evacuation of employees in case of fire. Following risk assessment carried out in hazardous operations mainly in the Engineering Sector, appropriate control measures have been implemented including the setting of a health surveillance programme to minimize health risks to employees. Some 1,400 employees of the Seafood Sector had their medical check up. Safety Rules and Guidelines have been devised for contractors working on IBL sites and premises to ensure good conduct of works and the safety of employees not in our employment. Even constrained by limited budget, we adopted a strategic approach to Training and Development, more focus has been laid on technical and on-the-job training across different sectors i.e. the acquisition and consolidation of specialised skills, techniques and knowledge to upgrade job competencies and performance in the workplace. With the assistance of one of our major training partners, the Charles Telfair Institute, emphasis has been put on the upgrading management and leadership skills of managers and team leaders to develop right people in the right leadership competencies with the right methodologies. Now fully functional, the Human Resource Information System (HRIS) gives not only to managers but to all employees convenient access to much data and information. The Employee Self Service operational through the IBL Portal gives general information and latest news on the Group and job opportunities among others. Two main modules are now running, namely: Employee Information System and the Training Management System. 30
Prospects In view of the difficult economic and financial situation and the major changes in our labour laws, there is more than ever a need to rethink the human resource strategy which should align itself to the business imperatives. We are increasingly being called upon to help implement business strategies and facilitate organisational change. With the promulgation of the new labour laws, The Employees Rights Act and The Employees Relations Act in February this year, increased challenges face both employer and employees. Flexibility introduced can be seen as an essential ingredient in the ERia for an effective workplace and can help companies survive the current economic crisis. However maturity should prevail to enhance harmonious relations through negotiation. Investing in training and development of staff is more important than ever in the current economic climate, say many experts. It is crucial to concentrate on developing and retaining the vital skills and knowledge in people, as well-trained and motivated staff improves the productivity of the business. When the economic climate improves, we should be ready to meet new challenges and develop business opportunities fast. We will turn training activities into development programmes that will make a lasting difference to the Company and to the individual. The employer s contribution to the HRDC levy has been raised from 1 to 1.5% which comprises only 0.5% to be refunded to the employers through the training levy system and the remaining 1% goes to the Empowerment Fund for unemployed people. It is therefore important to fully optimise the use of the HRDC levy in meaningful and job-related training and development programmes and at the same time management should invest more time in coaching and guiding staff. To strengthen our safety culture, safe working procedures are being reviewed not only to help management comply with new legal provisions but also to promote a risk free environment; a Safety & Health Manual for IBL employees will soon be released. With the recent promulgation of the Public Health (Restriction on Tobacco Products) Regulations 2008, every effort will be made to ensure strict adherence to No Smoking at the workplace. Appropriate locations have been identified for smokers. With the introduction of the concept of Maurice Ile Durable, the IBL Environment Charter will need to be revamped in line with the energy-saving measures being initiated across the Group. The Human Resources Corporate Unit is prepared to be THE Business Partner effective in its roles: to link business strategy to HR practices, to create efficient HR and business processes, to relate and meet the needs of employees and to create capacity for change. Appreciation The increased demands on HR have helped to knit more closely members of the HRCU team. Without their commitment and professionalism, it would have been difficult to face the challenges. Sylvette Godère General Manager 31
Corporate Services (continued) Information and Technology CORPORATE UNIT Review of Activities Year 2008 has been a year of sustained progress in line with our continuous improvement plan while maintaining our strategy to focus on the Group s IT requirements. Our organizational structure has been adapted to promote cross functionality which has created interdepartmental synergies as well as improvement of our processes and services with better focus on strategic imperatives, especially customer satisfaction. Projects, which have been successfully deployed, have enabled operations to derive the desired benefits by aligning business objectives with IT capabilities. A Treasury Management System, fully integrated with the Group s ERP, with the objective to better monitor daily asset and liability position, manage currency risks and exposure, track daily treasury flows, monitor inter-company facilities and assess forecasted funds requirements. Leasing & Deposit Management Systems. Taxi Online Services, a web-based application to process and manage on-line bookings, reservations including multi currency online payment facilities. Re-engineering of the Training Management System streamlined with the requirements of the Training Department as well as the roll-out of the Employee Information System, integral modules of the Employee Self Service. Payroll and Time & Attendance System in one of the Manufacturing Units. Re-engineering of the Cabling and Telephony infrastructure of the IBL House and Data Centre. Cabling, Networking and Telephony infrastructure in one of the new processing plants. As part of our R&D Policy, we have designed and developed an in-house Human Resource Management System which has enhanced our existing Payroll Package. In line with our objective to improve the efficiency and effectiveness of our systems and uplifting of our IT services and infrastructure, we have already embarked on the three key projects in year 2008 and which will be pursued in year 2009: IBL Network Infrastructure Project This project for a new secure, manageable, scalable and redundant network infrastructure, planned for 2008 but temporarily put on hold, has been re-initiated by end of 2008 with some changes brought in terms of technology preferences for WAN connectivity, as per current technological trends. Information Security Management System (ISMS) based on the ISO 27001 standard - This project is designed for building effective Security for business information. In today s competitive business environment, information which is considered as the organisation lifeblood, is constantly under threat from various sources internal, external, environmental or malicious. Protecting information assets has therefore become vital for any organisation future. 32
Business Continuity Plan (BCP) An extension of our current DRP, the BCP is aimed at developing and testing a structured and coherent plan and guide which will enable the organisation to recover as quickly and effectively as possible from an unforeseen disaster or emergency which may interrupt normal business operations. The ISO 9001:2000 Audit conducted in October 2008 by SGS has concluded that IBL IT has maintained its Quality Management System (QMS) in line with the requirements of the standard. This certification has continuously been awarded to IBL IT since October 2003 and we are satisfied that our staff has developed the necessary quality culture while aiming at continuous improvement of our QMS. We are firmly committed to the development and advancement of our employees. We have adhered to our 2008 training plan and all our technical, support, administrative, accounting and sales staff have benefited from at least one training programme during the course of the year. Prospects This year we will concentrate on our effort towards completion of the IBL Network Project, ISMS implementation & ISO 27001 certification and the BCP Project. We will also be launching a Web-based Help Desk System as well as sustaining the development of our Knowledge-Base System. in the development phase of our SDLC, have been targeted for release in 2009. We firmly believe that our employees are our greatest assets and we will continue to invest in carefully designed training programmes with the objective of fostering their development and helping them both in their advancement as well as preparing them for the new business challenges lying ahead. The ability to adapt promptly to technological innovations and change, while meeting customer demands and expectations, remains our key challenge and we will pursue our effort in this direction. Appreciation I would like to convey my sincere thanks and appreciation to all the IBL IT Management and staff for their continuous commitment, support, hard work and dedication in achieving the goals set for the Company. Sareeta Goundan Senior Manager We will further focus on our R&D activities with product development and diversification. A Time Attendance System and Access Control System, which are at present 33
Corporate Services (continued) PR & Communication CORPORATE UNIT Review of activities At the beginning of 2008, I was recruited as Senior Manager Communication in order to strengthen the communication unit and enhance internal as well as external communication to bring forward a positive company image through well-structured, efficient and consistent methods. The first necessary changes were mainly concerned with internal communication tools such as IBL News magazine, job advertisements and notifications. IBL News was completely remodelled visually and structurally after consultation with the editing team. The graphic presentation was modernised with new colours and formats. Since June 2008, we started to present specific topics in detail in each edition, i.e. Environment, Company culture & values, CSR. Job advertisements and notifications at the request of mainly HR were standardized and modernized. Following the results of an opinion poll survey among the Mauritian population and several meetings within the Group, the department developed a strategic plan and defined its priorities for 2009. The strategy encompasses internal communication, control over the IBL brand, promotion of the company s interests, public and media relations, crisis management plan and event management. Simultaneously, the department worked on and proposed a new CSR policy for the entire Group, the purpose of which is to bring IBL into the leading position in this field in the medium term. Prospects Since the beginning of 2009, the plan has undergone some modifications in order to adjust to the current 34
economic climate. However, considering the worldwide economic recession that also threatens our island, IBL is committed to keep in contact with its stakeholders through communication. As from April 2009, the department will implement its plan which consists of several corporate advertising campaigns and public relations, coupled with external and internal events to encourage trust in IBL by its stakeholders (employees, suppliers, customers, shareholders, etc.). Surveys will be done which will help us control the impact of such campaigns and will provide an accurate evaluation of the efficiency of our communication methods, which will be reviewed if necessary. In addition, as an internal service provider, the department will continue to furnish new communication tools to the operations in order to improve external and internal communication so that their objectives are met. Appreciation I would like to thank my colleague for her dedication this past year and all the participants who have helped us in the improvements described above as well as in the elaboration of the plan. Cécile Masson Senior Manager 35
Corporate Corporate Energy Management Review of Activities In September 2008, I was assigned by our CEO, Patrice d Hotman de Villiers, the responsibility of Energy Management and Sustainable Development at large in the IBL Group, with an initial focus on electricity savings at Froid Des Mascareignes (FDM), Thon Des Mascareignes (TDM), Marine Biotechnology Products (MBP), New Cold Stores (NCS), IBL Head Office and the Winner s outlets. Recent changes in electricity tariffs had led to an increase of some Rs 30M yearly for these units. The objective of energy management is to (i) minimise energy costs and wastage (without affecting the production and quality of goods and services and the comfort of employees) and (ii) to minimise the environmental impacts. Preliminary energy audits were carried out, with the close collaboration of the respective maintenance personnel, to determine how electrical power is being consumed in the various operations and categories of equipment. At four locations (Head Office, TDM, NCS and MBP), the power management devices are now fully operational and are used to provide a range of key information about power consumption, to avoid peak KVA demand and power factor penalties. Head Office A series of measures taken recently led to a reduction of some Rs 225,000 in the electricity costs, which had reached Rs 975,000 in December 08, mainly due to high air conditioning usage triggered by the abnormal increase in temperature. Actions taken include: (i) A closer monitoring of the main chiller and individual A/C units; (ii) A closer tracking of unnecessary lighting and equipment (e.g. at Ibeloise Restaurant); (iii) The progressive switching on of lights and A/C units, whenever required, by arriving employees in the morning; (iv) Full participation of staff members, with regular feedback about progress achieved. The commendable effort of all members of the Head Office needs to be recognized, as it resulted in a 21% reduction in the Kwh consumed by this building. 36
Prospects Seafood Hub At TDM, initial actions related to power factor regulation, and closer monitoring of the operation of the chillers and ovens. These measures contribute to a reduction of the order of Rs 100,000 i.e. 4% of the monthly electricity bill. Further investigations are being carried out to look into process changes that may yield power savings. At FDM, a closer monitoring of the operating temperatures of the cold rooms and of certain equipment contributed to a reduction of the power consumption of about 7% during the months of November 2008 to February 2009. Investigations have recently started at MBP to optimize its power consumption. Winner s Awareness campaigns will be carried out to sensitise employees about the energy savings opportunities, either by modifying human behaviour, technology upgrades or process changes. The awareness campaigns will promote the concept of sustainable development, so that we can reduce our environmental impact wherever possible. We will pursue electricity savings efforts at other IBL locations, and eco-lighting will be introduced to reduce the power consumption. In the industrial plants, the possibility of using inverters or other saving devices will be investigated. Investigations are being carried out about the energy (HFO) consumed by the boilers at TDM and MBP to achieve savings. We are also looking at renewable energy projects, in the form of solar photo-voltaic systems at a few locations, provided support from funding agencies render the projects feasible. The energy audit at Coromandel revealed that display freezers and chillers, and the cold rooms contribute to some 70% of the power consumption. Findings prove useful in the operations management decisions and in the sensitization of employees to optimize electricity consumption. The recent outlet at Rose Belle is equipped with display units fitted with sliding doors that contribute some 20% reduction in the power consumed. Madoo Desha General Manager 37
Corporate Social Responsibility Corporate Social Responsibility Review of Activities In line with government recommendations, IBL allocated 1% of its attributable profits to its CSR initiatives during 2008. A total of Rs 5.5M was used for social and environmental activities. Half of this amount was invested in education. IBL decided to grant Rs 2.5M to the Charles Telfair Institute, because we believe that appropriate education and training is essential for a qualified labour force that can meet the future needs of our developing economy. In addition, 30% was dedicated to environment. With a Rs 1.5M grant, IBL supported the Mauritian Wildlife Foundation s programme for the recovery of the Echo Parakeet (Grosse Cateau Verte), an endangered bird species specific to Mauritius. This programme is one of the world s most successful in endangered species conservation programmes, thanks to which the Echo Parakeet population increases each year. This will allow many patients on waiting lists to have eye surgery in the nearest future. Among the people concerned with such eye problems, 60% are young children. The construction will start shortly. In 2008, IBL became the first Mauritian company to sign the United Nations Global Compact. It consists of a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of labour rights, environment and anti-corruption. 38 In 2008, IBL launched a paper-recycling programme on some of its operations, and 4000 kg of used paper were collected and recycled into other paper products. The balance was spent on occasional activities in relation to sport, child welfare, poverty, aged people and healthcare. With reference to healthcare, IBL was one of the Lions Club major partners in the SightFirst II campaign, which aims at raising funds to build another operating theatre at the Subramania Bharati Eye Hospital in Moka.
Prospects Since the beginning of 2009, many changes have affected IBL s CSR strategy. One of the PR & Communication Department s missions in 2008 consisted in an overall review of the Group s CSR strategy. After a series of analyses, discussions and strategy thinking sessions, given that IBL promotes education, environment, health and sport, we have decided that underprivileged children will be at the centre of IBL s CSR policy. IBL has decided to increase the CSR budget to 1.5 % of its attributable profits. A CSR Committee has been formed and its mission is: To assist Ireland Blyth Limited in its economic role as a pillar of the Mauritian society supporting its stakeholders, and as an organisation committed to social responsibility, making good use of its resources in order to give Mauritian children the opportunity to grow and develop themselves within a safe environment as well as the necessary tools to face the economic challenges of tomorrow. IBL believes in the potential of the young generation and is convinced that it represents the richest and strongest resource on which all the hopes and the future of our country are built. The CSR Committee will only select and consider projects dealing with underpriviledged children. It may relate to issues such as health, education, sport, environment, lodging, social welfare or domestic violence, but as long as underprivileged children are at the core of the programme. The CSR Committee is made up of fifteen members representing all sectors of IBL, under the chairmanship of Mr Nicolas Merven, Chief Operating Officer of IBL Retail. It is the Committee s duty to select the national programmes that will receive IBL s support and to liaise with the operations in the implementation of the programme at the operation level after having received a budget. In addition, the sectors have their own CSR budgets which are used within the local communities in which they operate. With respect to environment and with the help of the General Manager - Energy Management & Sustainable Development, the Committee s major concern will be to increase employees awareness on this issue through internal campaigns and training sessions. As a result, each employee will be asked to behave in an eco-friendly way as an individual so that the firm s effects on the environment could be reduced on a general level. For example, our sectors will be concerned with the recycling of paper and other waste material such as plastic and also with reducing power consumptions in great proportions. 39
Corporate Social Responsibility IBL s Principles of Corporate Social Responsibility As an economic pillar in Mauritius, IBL attaches much importance to its social and environmental responsibilities towards its stakeholders; IBL gives back what it has received from the country by investing 1.5% of the benefits after tax in CSR activities aiming at improving the life of Mauritian people. IBL focuses on the future and believes that the future and the best hopes for our country lie in the potential of Mauritian children. Therefore, IBL s contributions to tackle child poverty are substantial, as it fosters most importantly the development and well-being of underpriviledged Mauritian children. IBL believes that its first social responsibility is towards its employees. Besides, IBL encourages its employees to take part in voluntary actions. For the sake of the generations to come, and regarding its commitment to Corporate Social Responsibility, IBL contributes to environmental protection by reducing its impact on environment and increasing its employees awareness on social and environmental issues. IBL provides support to national programmes on a medium or long term basis and to regional programmes through its Welfare Committees, which are responsible for the good conduct of local projects with the budget allocated by the CSR Committee. IBL favours long-term relations based on mutual trust with its stakeholders. Proximity between the operations and the regions that receive support from our Group is essential to build real bonds, to promote voluntary actions and to enhance our chances to be successful in the development of our projects in a collaborative approach. Therefore, IBL will endorse projects for the areas where IBL operations already operate and where employees of the Group live. The projects are selected by the CSR Committee and the Welfare Committees in a transparent way and based on clearly defined criteria, available on IBL s Website: www.iblgroup.com in «About IBL - Our Social Responsibility» section. IBL has signed the UN Global Compact, and thus advocates and implements good practices in respect of labour and human rights. IBL does not support any project related to religion or that is discriminatory against or in favour of a particular ethnic group. 40
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Property Management, Projects & Services Management Team François Desmarais - Chief Operating Officer Property Management, Projects & Services Deon Jacobsz - Manager Lloyd Martin - Manager Rajen Venketasamy - Finance Manager Ben Payen - Manager Danick Gueho - Manager Review of activities In 2008, IBL Property Management continued to focus on the property optimisation programme started the previous year. The priority remained the improvement of existing physical working conditions of the IBL staff, optimising the usage of the current property portfolio and identifying unneeded assets for re-letting or eventual disposal. Works carried out during the year included the relocation of the Shipping cluster s Head Office, within the Dr Ferrière Street complex, and the rationalisation, reengineering and subsequent complete renovations to the offices of UPS, IOL and IOL Express. External renovations were also carried out on various sites in order to allow for neater, safer and more pleasant working environments. Such renovations were carried out at the CMH building in Cassis, DML building, Medical Trading in Cassis and Scomat in Pailles. Buildings that are considered non-strategic to IBL were rented out to external clients. Among such clients, one can find Afrasia Bank, Destination Management Ltd, France Maritim Agencies, and Domestic Appliances. Furthermore, the team of Property Management was involved in the construction and post-construction phases of the new Marine Biotechnology plant and the new Blychem offices and factory, which are now both successfully commissioned and fully operational. On another front, Property Management has also contributed to the successful disposal of non-core assets i.e. Trianon Shopping Park, land in Riche Terre as well as Magic Entertainment Ltd. Prospects We will continue to actively pursue this multiple-fold property strategy for the forthcoming year. Our projects are well underway, and we have started marketing the Eden Garden residential development in Floréal, and will proceed with construction once the majority of units have been sold. 42
The projected Dr Ferrière Street mixed-use office development has now reached the stage where we are actively looking for a strategic development partner. It will only commence once a partner has been found, which could take time given the present worldwide economic conditions. Riche Terre Office Park Phase 1, which consists of the new offices of Logidis and Somatrans, situated next to the Logistics and Warehouse operations, will be completed in 2009. Work will commence on the planning of Phase 2 which will be launched when market conditions allow for it. The upgrading and renovations of the New Cold Storage office block will be completed by March 2009. The new Cervonics Fish Oil plant will also be commissioned during 2009. Approval from the Road Development Authority has been received, and we will be starting the works for a new access road of the main Northern Highway into Riche Terre. This will add considerable value to IBL s property found along the Northern Highway. Furthermore, in line with the Group s strategy, IBL Property Management will be collaborating closely with other divisions to investigate cost cutting and energy saving methods related to energy consumption of IBL Buildings. Appreciation All the above endeavours would not have been possible without the Property Management team and I would like to thank each and everyone for their dedication and hard work during this past year. François Desmarais Chief Operating Officer Continuing to build on the success of the IBL Gallery, and in order to promote local art and culture, we have co-hosted and sponsored various local artists and exhibitions during the course of the year, eg. Yeshen Gunnoo, Jano Couacaud and the National Art Gallery amongst others, and will continue to do so this year. IBL Property Management has also been actively involved in various projects and has financially assisted various organisations, with most of whom we have a long-time partnership. IBL Property Management has been an active partner of the Centre d Accueil de Terre-Rouge (CATR), a rehabilitation centre, for three years. This year, we donated furniture for the multipurpose hall built the previous year with our help. We participated in a Christmas project for children of the Chagossian community, in partnership with the Chagos Refugee Group. We also contributed to Foyer Namasté and a Mauritius Round Table project, for The APEIM Bonne Mere home for handicapped children. 43
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Financial Services Sector «2008 was a strong year for the Financial Services Sector as we started reaping the benefits of the investments made and strategies implemented in the previous three years. As a result, we achieved a turnover of Rs 1,297M whilst profits increased by 63% to reach Rs 147M.» 45
Financial Services Sector Management Team Review of activities Global Business Eric Venpin - Chief Operating Officer Yves Méyépa - Executive Director Mauritian Eagle Leasing Eric Venpin - Managing Director Mauritian Eagle Insurance Jimmy Wong Yuen Tien - Managing Director DTOS Mervyn Chan - General Manager Knights & Johns Management Insurance 46 Our global business operations showed appreciable growth both in terms of turnover and profitability and was enhanced in Rupee terms by the appreciation of the US Dollar. Our dedicated marketing and research department is enhancing value added services to our clients and our investment in the fund software Microgen has proved to be a valuable tool for asset valuation. In February 2008, we acquired a 51% stake in Knights & Johns Management Ltd (KJM) which in turn owns 100% in Legis International (Financial & Management) Services Ltd (now known as Interface International Ltd). Both companies are Global Business Management Companies, have been in operation for a long time and are licensed by the Financial Services Commission. This strategic acquisition fully complements our existing portfolio in terms of the nature of the clients and their geographical location and the operations have performed as per our expectations. At the same time, we acquired 51% of the shares of Interface Management Services Ltd which provides secretarial and ancillary services to local companies. Gross Insurance premiums decreased compared to last year, as in 2007 turnover for long term business was boosted by some Rs 120M following the launch of a new product. Gross premiums for general insurance increased by 16% and good underwriting results were achieved throughout the business cycle. As a result of the bad performance of stock markets worldwide since the last quarter of 2008, our investment returns were way below our expectations but were compensated by the gains crystallized as a result of the disposal of our investment in Highway Property Ltd. Overall, the company posted a profit before tax of Rs 56.8M representing an increase of 31% compared to last year and our general insurance fund was boosted by a further Rs 28.7M and stood at Rs 94.5M at the year end. Our associate in the Seychelles, H. Savy Insurance Co. Ltd performed well and despite the devaluation of the Seychelles Rupee, our share of profits was Rs 4.0M compared to Rs 2.5M in the previous year.
Contribution (Rs M) Rs M 150 147 Turnover (Rs M) Rs M 1297 1209 1200 120 90 90 900 60 600 30 300 0 2007 2008 0 2007 2008 Leasing Our portfolio stood at Rs 1.4 billion at 31 December 2008 which is similar to last year. We have witnessed a growing demand for operating leases for which some Rs 87M were disbursed during the year. Profits were lower than expected as additional provision for asset impairment has been made but we hope to see a turnaround in the current year. Whilst demand for leases is still high, we are experiencing a decrease in deposits which is most probably due to the economic downturn. Prospects As a result of the financial crisis, good rated reinsurers are becoming scarce and we foresee an increase in rates. Our aim is to contain reinsurance costs whilst ensuring that we have a panel of financially strong reinsurers. The downturn in the equity market in 2008 has so far shown no sign of recovery and investment income generated will probably be lower than previous years. Our mission for the current year is to provide value-added services to our clients. We have not yet felt the impact of the worldwide recession in our Global Business Sector but actions have already been taken to develop new products to attract different types of clients. We will continue the development of synergies for our new subsidiary which will lead to enhanced revenues for the Group. We have had some positive indications in 2008 concerning the India/Mauritius treaty, but at the same time the mounting pressures from various organizations in India are being closely monitored by the Government and operators. The demand for operating leases is still high although we expect a reduction due to the problems in the tourism and construction industries. Our challenge this year will be to monitor closely debtors collection. Appreciation In this versatile sector, staff dedication and loyalty is at the core of our operations. Thank you all team members for contributing in achieving these results and for the challenging year ahead, I depend more than ever on your commitment and hard work. Eric Venpin Chief Operating Officer In 2008, the staff of the Financial Services Sector had the opportunity to demonstrate their sense of purpose and solidarity by fully participating in the following activities: Donation of food and clothes to those affected by the torrential rains in September. This activity was organized with the collaboration of Caritas and was a huge success with everyone involved in all steps, from collecting to distribution of goods. Participating in the hugely emotional activity of sponsoring children of an orphanage. Each member of staff offered a gift personally to a child giving him the opportunity to celebrate Christmas; there is no better way to live the spirit of Christmas than to see a smile on the face of a child. We have witnessed an increased demand from employees wishing to join our sponsored study schemes. This demonstrates that staff are committed to their professional development and appreciate the need to be kept up to date in this fast growing sector. 47
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Logistics, Engineering & Commerce «The companies of the LEC Sector have not been spared by the worldwide economic crisis which started to affect us negatively in the second half of 2008. All the operations within the LEC Sector had a challenging yet strong year, thanks mainly to the managers aptitudes to strike the right balance between reducing costs and making the correct decisions to ensure the success of their operations. The turnover of the LEC Sector increased by 5.58%, and the profits by 7.66% to reach a figure of Rs 295.89M, making 2008 another year of record profits for the sector.» 49
Logistics, Engineering & Commerce Sector Fabrizio Merlo - Chief Operating Officer Vinod Gooroosawmy - General Manager Finance Management Team LOGISTICS ENGINEERING AIRLINE & TRAVEL AGENCY Alain Captieux - Manager - GSA Air Madagascar / Cathay Pacific / Dragon Air Irene Legris - Manager - GSA British Airways / Comair Fiona Rajah Gopal - Manager - IBL Travel Mario Heerah - Manager - GSA Cargo SHIPPING AGENCIES Linley Anthony - Manager - IBL Shipping / Lloyds Agency Mario Heerah - Manager - Blyth Brothers LOGISTICS Danny Ah Chong - General Manager - Logidis / Somatrans / UPS / IOL / IOL Express Eric Hardy - General Manager - Manser Saxon Contracting Himmunt Jugduth - Manager - Blychem Jocelyn Labour - General Manager - Scomat Patrick Webb - Manager - Construction & Material Handling Lindsay Edwards - General Manager - IBL Electrical & Commercial Supplies COMMERCE Din Jheelan - General Manager - Healthcare Jean-Michel Rouillard - General Manager - Consumer Goods / Frozen Foods (NCS) 50
Contribution (Rs M) Turnover (Rs M) Contribution (Rs M) Turnover (Rs M) Rs M 300 250 200 150 100 274 296 2007 2008 Rs M 5500 5000 4500 4000 3500 3000 5108 5372 2007 2008 160 140 120 100 80 60 40 20 0 6 37 149 163 119 96 Logistics Engineering Commerce 2500 2000 1500 1000 500 0 511 550 2568 2612 2029 2210 Logistics Engineering Commerce 2007 2008 Review of activities Somatrans SVD also performed very well despite a slow down and strong market pressure on rates. The courier service companies remained profitable despite turmoil in the latter part of the year due to changes in management. The same situation prevailed in the shipping cluster, with a reduced volume of sea freight, and freight rates at an unprecedented low figure during the latter part of the year. Still, the shipping agency cluster had a good year in 2008, with both turnover and profits above budget due to positive growth despite overall trends. Overheads have been kept under close scrutiny, and various initiatives were taken to diversify the operations source of income from commissions from shipping lines only to more value-added services. The logistics operations in Madagascar showed a turnaround in 2008 and registered a profit. Logistics The companies in the Logistics cluster had a challenging year given international trends, but still achieved total profits of Rs 36M. Logidis had a strong year in 2008, with numerous new clients. In order to increase significantly the capacity of our warehouse while remaining competitive, various improvements were made such as an investment in new Narrow Aisle Reach trucks. This initiative alone increased our storage capacity by 20%. The GSA operations performed well despite reduced air traffic and the reduction or cancellation of commission from principals, with a tight management of the cash flow and debtors as well as the introduction of new services such as the corporate package at Air Madagascar. IBL Travel managed to maintain its profits in 2008 despite the termination in commissions paid by airlines. 2008 was a challenging year as service fees that were introduced by all travel agencies were still an unknown concept for clients. 51
Logistics, Engineering & Commerce Sector (continued) Engineering The operations in the Engineering cluster had yet another good year, with profits amounting to Rs 163.61M, thus an increase of 9.8% in profit over 2007. Blychem had a good performance, with a turnover of Rs 310.5M and PAI of Rs 36.5M, with a growth in profitability of 21% over 2007. These results were achieved through a substantial growth in the market share of the Agrochemical activities of Blychem and a consolidation of our other services. Scomat increased its turnover marginally thanks mainly to growth in Power System and Marine projects, with profits of Rs 23.47M. New products, such as the CAT 226B Skid steers loaders, were introduced on the local market, and sales were kept on an upwards trend for all of Scomat s secondary lines, namely Scania, Fiori, Same and Montabert. Manser Saxon had a very strong year, with record profits of Rs 77.49M. This was achieved by taking advantage of the buoyant year in the construction industry, for the first three quarters of 2008. Commerce The three operations within the commerce cluster had yet another successful year with profits of Rs 96.19M. IBL Healthcare performed very well in 2008, with a turnover of Rs 825M and EBT of Rs 33.5M. The Wholesale operation s turnover increased by 9.3% in 2008, while retaining its market leadership position and securing new principals for generic products. The Medical Equipment division performed well above budget and also obtained its ISO 9001:2000 registration. Four new retail outlets were made operational in 2008, with an increased turnover in the retail division as well. Regional sales also improved, and new oncology products were launched in Madagascar. The food crisis at the beginning of 2008, the fluctuation in the strength of the rupee and the economic crisis resulted in a year of moderate growth on sales, but with good profitability for both IBL Consumer Goods and IBL Frozen Foods, of respectively Rs 43.85M and Rs 18.79M. IBL Consumer Goods partnered with new brands during 2008, among which Oreo and Chips Ahoy biscuits, LP & HP sauces from H.J. Heinz, as well as Montes wines from Chili, which gave a thrust to the sales. Other initiatives, such as the partnership with L Oréal for the new Charles Telfair Institute of Cosmetology, have further strengthened the position of IBL Consumer Goods. IBL Frozen Foods maintained its profitability through various measures such as searching for new suppliers who could bring best value for money. The focus was kept on cost control, optimized stock management and reinforcement of the partnerships with suppliers. 52
Prospects The 2009 operating environment will remain challenging for the LEC Sector, specifically the engineering cluster. Due to the world financial and economic crisis, forecasting to the end of 2009 is extremely difficult. It is a fact that many construction projects are already being downsized or postponed, that there will be a substantial reduction in cargo and passenger traffic, and that purchasing power of individuals will carry on decreasing, thus having a direct negative impact on LEC companies. We will focus our attention on balancing these negative trends with continued cost control on all expenses and capital expenditure. We will continue investing in business processes to enable growth and margin improvements, at the lowest possible cost structure. In these difficult times, we will focus more vigorously on our customers and on improving the working partnerships we develop with them. Our priority however remains on creating the environment to retain our top talents and therefore build a team that can help the LEC Sector s operations achieve their objectives. Appreciation I would like to congratulate the management and all employees of the sector for the good results achieved in 2008, and thank everyone for their continued commitment to IBL. Fabrizio Merlo Chief Operating Office The focus for this year remained on adding value to the lives of our employees, through, for example, the uplifting of the physical working environment. In 2008 Blychem s and IBL Frozen Foods employees got new or renovated premises; Manser Saxon is now in its third year for school bursaries going to children of employees; the services of a company doctor have been extended to all LEC employees in the Riche-Terre region. The LEC Sector continued with its participation in the alleviation of poverty in the communities around the LEC operations. An active collaboration with Caritas and other NGOs and Forces Vives of the region brought about various positive and sustainable initiatives. Some of them include providing weekly relief food to families who, without the LEC s support, would not be eating at all. The whole process is monitored both by the LEC employees and the field social workers. An average of 140 families are therefore helped monthly, among which a large percentage of children. Some of the many initiatives within the sector, include the organisation of a very well-attended Health Day in Roche-Bois, in collaboration with the Association of Private Medical Practitioners. A pre-primary school targeting mainly those children who were left out by the system because of their families lack of financial means, was built on the premises of the Roche-Bois church. Medical check-ups were also organized for children in Cite Vallijee and Cassis regions. 53
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Retail «The IBL Retail Sector had a very good year 2008 where growth initiatives have been implemented and also where two new Winner s were opened: Rose Hill and Rose Belle.» 55
Retail Sector Nicolas Merven - Chief Operating Officer Jean Philippe Venpin - General Manager Management Team Bernard Ah Ching - Marketing Manager Darrel Appou - Category Manager Shy Askoorum - IT Manager Mervyn Govind - Regional Manager Sayad Jaunbocus - Compliance Manager Shyam Ramlall - HR Manager Sunil Ramsurrun - Regional Manager Preetam Raumoo - Finance Manager Shah Nawaz Shakhun - Operations Manager Review of activities The IBL Retail Sector had a very good year 2008 with the further development of the Winner s chain while at the same time implementing the strategic plan and growth initiatives. We now operate 16 Winner s supermarkets strategically located around the country of which 13 commercial buildings are owned and managed by us. The year 2008 has been a year where growth initiatives have been implemented and also where two new Winners were opened: Rose Hill and Rose Belle. Total sales grew by 18.8% and have reached Rs 2.833 billion. The EBIT for the sector grew to Rs 85.698M which represents 3.0% on sales. Like all businesses in 2008, we had to face important increases of operating costs, particularly electricity and diesel. During the year, we continued to improve the standard of our supermarkets as well as the level and quality of service. We also continued to focus on Category Management and in general the results are satisfactory. In July and August 2008, we again held la foire Bel Bel Caddie with its very popular advertising song. Winner s 56
Contribution (Rs M) Rs M 50 43 40 32 30 20 10 Turnover (Rs M) Rs M 3000 2938 2800 2600 2465 2400 2200 0 2007 2008 2007 2008 attracted important crowds and achieved good sales during this period. This campaign was very well received and was memorable for the Mauritian population. Winner s is solicited all year round by many organisations who want to work with us to promote social and/or commercial activities. These activities are encouraging greater cooperation between Winner s and its customers and the populations around the supermarkets. The second half of 2008 saw prices stabilising and we even dropped the prices on a number of products for the benefit of our customers. Winner s has been battling hard to help the population to face the continuous pressure on the household budget. In this context, Winner s continued to import a range of products of good quality at competitive prices. The end of year promotion La Vie en Rose was a success in spite of the uncertain mood of consumers due to the world financial crisis which started to hit Mauritius. Our end of year lottery offered a Super Star Prize consisting of (1) A Savings account of Rs 300,000 at Bank One, (2) Rs 200,000 worth of Domestic Appliances and (3) a 42 flat Philips TV. On top of that, we had 47 other prizes plus the scratch card promo with 100,000 gifts. This was a way to say thank you to all our customers around the island. During 2008, our development team continued the upgrading of some of our supermarkets and the main projects were: 1. The construction of a bakery at Goodlands which opened end April; 2. The replacement of the chilled cabinets at Chemin Grenier; 3. The construction of a bakery at Terre Rouge which opened mid November; 4. Replacement and enlargement of cold rooms in several sites. These upgradings gave good results in terms of additional sales and service to our customers while increasing the range of products offered. We have also been actively looking at new sites and opportunities in strategic and growth areas. The relocation of our Head Office has been postponed but is still a priority to support our development and to better service our supermarkets and customers. 57
Retail Sector (continued) Prospects Given the absence of visibility and the possible effects of the world economic downturn, we have decided to delay the construction of the 17 th Winner s at St Paul to 2010. In the meantime, we have reviewed and reduced drastically our capex for 2009 and we have put in place a special action plan to control operating costs at all levels. Winner s is the leading supermarket chain in Mauritius and we are confident that the loyalty existing between our customers and our supermarkets will continue to grow in spite of an economic downturn. In this context, we have launched the Total Continuous Improvement initiative at all levels of our operations. Together with our company long term project Reaching New Heights, this will create a real focus on our common Vision. 2009 will also be the year of Winner s 15 th birthday and we will take this opportunity to thank our customers, stakeholders and our employees. We are confident that the IBL Retail Sector will be more competitive in helping the population to fight the possible economic crisis and we are sure that the Real Winners will be our Customers. The business plan for 2009 onwards is exciting and challenging and we rely on the dedication of each team member to achieve our goals. Appreciation I take this opportunity to thank all our staff for their dedication and loyalty. Together we will Reach New Heights. Nicolas Merven Chief Operating Officer 58
1. Winner s is sponsoring the Centenarian Club which has been set up by the Ministry of Social Security, National Solidarity & Senior Citizens Welfare and Reform Institutions. In that context, Winner s has offered a purchase voucher of Rs 1,000 to each of the 80 centenarians on the occasion of their birthdays. In addition, each month, Winner s has celebrated the birthday of one centenarian living in the region where the chain operates a supermarket. 2. Banners and gift vouchers have been donated to social and cultural associations in the regions where Winner s is present. 3. Other groups have also benefited from Winner s gift vouchers and assistance in their fund raising activities: Regional sporting clubs; NGO s; Senior Citizens Clubs; Youth Clubs and Groups; Forces Vives of the immediate vicinities; Charitable organisations; Religious cultural associations; School Fancy Fairs. 4. Winner s parkings have been used by SAFIRE for its fund raising activities and by various NGO s for their flag days. 5. Winner s Flacq organised an evening entertainment followed by a dinner for some 100 children of SOS Village. 6. In the context of the Noel de L Espoir operation and in collaboration with Expresso (Groupe Sentinelle), more than 1,000 Christmas gifts were collected in Winner s supermarkets and distributed to needy children. 7. In December, employees of Winner s Head Office organised a dinner for the residents of Abri de Nuit. 59
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Seafood & Marine «The Seafood & Marine Sector has shown an improvement in profitability in 2008. The shortage of supply of fish in 2007 was a great source of concern, but this has been re-established. Our focus on the value-added products remains a priority.» 61
Seafood & Marine Sector Patrice d Hotman de Villiers - Chief Executive Officer Patrice Robert - General Manager Thon des Mascareignes Management Team Maurice Rault - Managing Director Froid des Mascareignes Jean-Yves Ruellou - General Manager Chantier Naval de l Océan Indien Philippe Woo - Manager Sébastien Martial - Assistant Manager Marine Biotechnology Products Christopher Talbot - Manager Mer des Mascareignes Capt. Thierry Perrier - Marine Manager Mario Genevieve - Technical Manager Ship Owning, Ship Operation and Fishing Agency Claude Talbot - Managing Director Capt. Jacques Goilot - Manager Compagnie Thonière de l Océan Indien Review of activities At Thon des Mascareignes (TDM) low production levels have still impacted the company in 2008. An average of 175 T/day was produced which is below the production capacity of 250T/day. Nevertheless financial results at Thon des Mascareignes have improved by some Rs 96M on a PBT basis in 2008 as compared to 2007. The production of tuna pouches has doubled in 2008 as compared to 2007; this is in line with our strategy to continue to add value to our products whilst optimizing our distribution channels. Froid des Mascareignes (FDM) financial results have also improved by some Rs 34M on a PBT basis in 2008 as compared to 2007 thanks to higher average occupancy rates of 73% for the year. 62
Contribution (Rs M) Turnover (Rs M) Contribution (Rs M) Turnover (Rs M) Rs M Rs M 3215 Rs M Rs M 3200 200 100 0 3000 2800 2600 2400 2811 200 100 0-100 41-2 3000 2800 2600 2400 2799-100 -200-194 -171 2200 2006 2007-200 -300-235 -169 Seafood Marine 2200 12 15 Seafood Marine 2007 2008 In order to comply with the more stringent EU regulations and to carry on offering a world-class service, the Company invested Rs 30M in a Covered Sorting Shed and fish conveyors. The Company may soon be equipped with a 1000 MT - 40 Deg C cold room that will bring additional new business. At Marine Biotechnology we have proceeded to the soft start-up of our operations at the new plant further to the closure of the old Fish Meal Producers facility and we are currently completing the commissioning of the various equipment. Our production for the year was 9,588 MT of fish meal and 223 MT of fish oil, which is about 8% less than 2007, consequent to a shortfall in the supply of fish offal. Export of fish meal in 2008 amounted to 458 MT. Mer des Mascareignes (MDM) completed the installation of its processing equipment in April 2008. Export activities started at the beginning of July after receiving EU approval. Exports to the USA, France, Spain and Eastern Europe amounted to 400 tons of finished products for the first 6 months period. With a high quality finished product, many buyers from around the world are showing interest in our activities and products. The supply of raw material from the joint venture partner SAPMER will allow MDM to take up a bigger share of the European market in 2009. Exports of fillets in Jars from Indico Canning suffered some delay due to the late receipt of EU approval. Nevertheless, the Company has started exporting to Spain and Italy and is currently looking at signing longer term contracts with EU retailers. In 2008, the Chantier Naval de l Océan Indien (CNOI) has invested in major infrastructure works: 150 metres of additional quays have been built, thus bringing to 350 metres the total docking capacity, besides the dry dock. These 150 metres are not fully operational yet, since the dredging of the area is scheduled for the second quarter of 2009. In May 2008, CNOI also started the construction of a Boat Lift of a capacity of 1400 tons. This boat lift will also start to operate during the second quarter of 2009. Between 2007 and 2008, CNOI has increased its permanent staff to a total of 228 employees. The turnover has increased by 7%, from 11.5M to 12.3M. The production hours have also increased by 8%, from 376, 738 to 406, 213. This total number of hours can be split according to the different types of ships: 10 tuna fishing vessels 4 navy ships 5 toothfish fishing vessels 5 tugboats Various vessels (research, supply ) On the construction side, 2 skiffs were built. The Fishing Agency (IBL Fishing Company Ltd) registered a good year. In 2008, it handled 163 vessel calls, consisting of reefer carriers unloading tuna consignments for local fish processing plants and fishing vessels calling to unload their catch and/or for technical, dry-docking and maintenance purposes. 63
Seafood & Marine Sector (continued) Prospects The relocation of the Fishing Agency closer to operational areas, a move which has largely facilitated day to day activities and dealings with various stakeholders, has also been well appreciated by our Principals and customers. F/V Etelis, fishing vessel owned by Compagnie Thonière de l Océan Indien (CTOI) performed satisfactorily in 2008. A total of 209 tonnes of fish was caught during five fishing campaigns. On her part, F/V Sainte Rita achieved 26 tonnes of catches during her two campaigns. During the second part of the year, F/V Etelis obtained her HACCP Certification, thus qualifying the vessel for export purposes to the European Union. In 2008, IBL Shipowning & Management (Shipman) only managed vessel Pelamis which has carried 20,630 metric tons of frozen tuna from Mahé (Seychelles) and partly from Diego-Suarez (Madagascar) to Port-Louis. The Pelamis, which is chartered out to Thon des Mascareignes, effected 7 voyages throughout 2008, which represents a satisfactory average of about 50 days per voyage. The ship s cargo holds are progressively being upgraded to meet and even exceed the EU requirements. The management system of the M/V Pelamis meets the international standards and is certified / audited by Lloyds Register of Shipping. Reefer Operations Ltd, which is a subsidiary company of Shipman specialized in the management of reefer ships, has performed well in 2008 (with 3 reefer ships under its management) despite poor tuna catches in the South Indian Ocean. Seaways Marine Supplies Ltd is another subsidiary company of Shipman. SMS is a Freeport company acting as stockist and distributor of Jotun Marine Paints and Castrol Marine Lubricants. Profitability is affected by high local storage costs. Overall 2008 was a good and profitable year for Shipman despite the high bunker price and a generally morose market which exacerbated already stiff competition. At Thon des Mascareignes we will continue to work hand in hand with our two main co-packers of tuna loins namely Bumble Bee and Trimarine, to further strengthen our relationship for mutual benefit. Both clients have reiterated at the beginning of this year their full confidence in our operation. The focus on the value-added products will also remain. To date stock levels of raw materials are healthy and we are hoping that this situation will continue. We have reinforced the planning, logistics & procurement functions of our supply chain so as to ensure that we can maximize the supply of raw materials to the plant. We are positive as regards the further improvements that can be brought to the operation. With fish catches back to normal since late last year and processors increasing their stock levels to better cope with the low season, prospects for Froid des Mascareignes in 2009 are very good. Fish meal quality has definitely improved with the new Marine Biotechnology plant and close production monitoring is performed with a Near Infra Red Analyzer. We will shortly improve the quality further with the installation of equipment to process raw offal. Prospects are promising for year 2009 and we are heading towards substantial economic growth with the value-added products. In this view, we are planning to operate a new oil refinery starting in June 2009. Cervonic will be able to produce winterized fish oil, giving additional value to our production. In 2009, the capacity of the Chantier Naval de l Océan Indien will be increased with the availability of the additional 150 metres of quay and the boat lift. Our challenge will be to maintain a proper degree of filling for our dry dock and for the elevator. Considering the global situation it will be difficult since, even if ship-owners respect the technical maintenance of their vessels, their 64
orders are less important than before. They prefer to wait for better days before doing other types of repairs. IBL Fishing Company Ltd will move to new premises, but within the same compound, during the second quarter of 2009. The Company will focus on diversifying and expanding its customer base. Prospection of overseas (mainly European) markets for Compagnie Thonière de l Océan Indien will be strengthened in 2009 in order to exploit the export potential of our products. Deployment of both vessels will be reviewed with a view to achieving more optimal utilisation. Prospects for 2009 for IBL Shipowning & Management (Shipman) are good although dependent on a changing market. In the current global economic climate it will be important to look out for opportunities to expand our fleet of vessels. 2009 will be a demanding year and no efforts will be spared to meet the challenges ahead. Appreciation I would like to thank Captain Francois de Gersigny who has retired from the Group in 2008. He has been a key contributor to the Shipping, Marine & Seafood Sector of IBL for many years. His vision and hard work have enabled the IBL Group to be at the forefront of the development of this sector in Mauritius. We thank him for all the work and support given to all and wish him a very happy retirement. I also want to take this opportunity to thank all the employees of the Seafood & Marine Sector for all their work in 2008. Patrice d Hotman de Villiers Chief Executive Officer The Seafood & Marine Sector has carried on with its help to the Baie du Tombeau ZEP school, as it had done during previous years. The support provided to the school, this year, was based mainly on pedagogical visits and general follow up in the day to day running. The rate of success at the CPE is still very low, but new motivating projects have been established, together with the school management, for 2009, so as to encourage the children to attend school. With the start of Marine Biotechnology Products, the company has sponsored the feminine basketball team of Roche Bois which has performed quite well, almost making it to the 1 st Division. Marine Biotechnology has also sponsored school equipment for kids of Batterie Cassée, through a local association. Eid and Divali have been celebrated jointly with the employees of Thon des Mascareignes and Mer des Mascareignes, in an afternoon show where the employees, both expatriates and local, have shown their singing and dancing talents. The show was followed by a dinner. Among the VIP guests were the Consul of Bangladesh and the Minister s advisor, M. J. Babikanand Jugoo, who said that this was a première in Mauritius. At the end of the year, the Human Resources team of Thon des Mascareignes organized another party for their employees along with that of Mer des Mascareignes. More than 2000 people were present for a live show entertainment followed by dinner and dancing. 2009 will be the start of different Welfare Committees in this sector of activities. 65
Corporate Governance Shareholding Ireland Blyth Limited was incorporated in 1972 and admitted on the Official List of the Stock Exchange of Mauritius in 1994. The share capital of the Company consists of 71,438,333 ordinary shares of nominal value Rs 10 each. Compagnie d Investissement & de Développement Ltée (CIDL) 16.05% 32.24% CIEL Investment (CIL) The Anglo-Mauritius Assurance Society Ltd (AMAS) 13.14% Ireland Blyth Limited 10.88% Belle Mare Holding Ltd (BMH) 27.69% The Public The shareholders holding more than 5% of the ordinary shares of the Company at 31 December 2008 were: Ciel Investment Ltd (Cil) 32.24% Compagnie d Investissement et de Développement Ltee (Cidl) 16.05% The Anglo Mauritius Assurance Society Ltd (Amas) 13.14% Belle Mare Holding Ltd (Bmh) 10.88% 66
Common Directors The names of the common Directors within the holding structure are: CIL CIDL AMAS BMH DALAIS, Arnaud A DALAIS, Guy Christian DALAIS, Jean Pierre LAGESSE, Arnaud A LAGESSE, J Cyril LAGESSE, Thierry RIBET, Jean RIVALLAND, Louis A: Alternate Director Dividend Policy The dividend policy of the Company has been subject to its performance, taking into account funding requirements of new projects. It has been and will be at least 30% of Group attributable profits. Dividends are declared and paid twice yearly. Board, Directors and Committees The Board consists of 11 Directors, 2 of whom are executives. The role of the Chairman and that of the Chief Executive are separate. The Chairman has no executive or management responsibilities and acts as Chairman of meetings of Shareholders. The Board meets regularly and at such adhoc times as may be required. Members of the Senior Management are invited to attend Board Meetings to facilitate communication between the executive management and non-executive Board members. In 2008, the Board met 4 times. 67
Corporate Governance (continued) Board Attendance Audit & Risk Board Management Remuneration Strategic Directors Meeting Committee Committee Committee No. of Meetings during the year 4 1 1 - BROUSSE DE GERSIGNY, François 1 DALAIS, Arnaud (Chairman) 4 1 DALAIS, Guy Christian 4 1 DALAIS, Jean Pierre 4 1 DE FONDAUMIÈRE, Jean (resigned on 0 0 05/09/08) D HOTMAN DE VILLIERS, Patrice 4 LAGESSE, Arnaud 3 1 LAGESSE, J Cyril 3 LAGESSE, Thierry 4 1 HARDY, Bertrand 4 RIBET, Jean 4 RIVALLAND, Louis (appointed on 1 05/09/08) Directors Remuneration All non-executive Directors receive Rs 80,000 per annum except for the Chairman who receives Rs 160,000 per annum as Directors Fees. In addition, the Chairman of the Audit & Risk Management Committee receives Rs 75,000 per annum and other members of this Committee receive Rs 50,000 per annum. Emoluments paid by the Company and related corporations to: 2008 Rs 000 - Executive Directors 13,174 - Non-executive Directors 4,790 Our Associated Company, Sun Resorts Ltd, reimburses the Company Rs 2,000,000 towards the Chairman s costs (Mr G. C. Dalais). 68
Board Committees Audit & Risk Management Committee The Committee consists of: Mr Jean de Fondaumière (resigned on 5 September 08) Mr Jean Pierre Dalais Mr Arnaud Lagesse Mr Louis Rivalland The Committee met once during the year. The members of the Committee have scrutinized and communicated their views on all Financial Reports prior to publication, the Audited Financial Statements, as well as reports from the Internal and External Auditors. Remuneration Committee The Committee consists of: Mr Arnaud Dalais Mr Thierry Lagesse The Chief Executive attends these committees by invitation. The Committee met once during the year. The remuneration philosophy is to ensure that the senior management is appropriately rewarded for their individual and joint contribution to the Group s results, whilst also having due regard to market conditions, the interest of the shareholders and to the financial and commercial well being of the Group. Strategic Committee The Committee consists of: Mr Arnaud Dalais Mr Thierry Lagesse Mr Jean Pierre Dalais Mr Arnaud Lagesse Mr Jean Ribet Mr Patrice d Hotman de Villiers Agreements In 2001, the Company entered into management services agreements with Ciel Corporate Services Ltd (CCS), GML Services Financiers et Juridiques Ltée (GML) and Belle Mare Holding Ltd (BMH). The services provided include inter alia corporate and investment strategy, advisory support services bringing industry specifics expertise. In return for these services, the company pays Rs 2M per annum to each of CCS and GML and Rs 1M per annum to BMH. 69
Corporate Governance (continued) Directors Interests In Shares At 31 December 2008 the Directors Interests in the shares of the Company were: Name of Director Number of ordinary shares held at 31 December 2008 Direct Indirect BROUSSE DE GERSIGNY, François - - DALAIS, Arnaud 29,508 450 DALAIS, Guy Christian - 2,000 DALAIS, Jean Pierre 61,023 - D HOTMAN DE VILLIERS, Patrice 1,880 10,000 LAGESSE, Arnaud - 16,385 LAGESSE, J Cyril 14,773 1,000 LAGESSE, Thierry 3,300 - LAN HUN KUEN, Gaetan 5,410 - HARDY, Bertrand 175,481 148,477 RIBET, Jean - 232,319 RIVALLAND, Louis 4,400 - The Directors are fully aware of the contents of the Model Code of Securities Transactions by the Directors (Appendix 6 of the Listing Rules). Shareholders Calendar Financial Year End Annual Meeting of Shareholders Reports Preliminary Results First Quarter Second Quarter Third Quarter Dividends Declaration Payment December June March May August November August December April October 70
Shareholding Profile Ownership of ordinary share capital as at 31 December 2008 Number of Size of Shareholding Number of % shareholders No. of shares shares owned Holding 5,677 1-500 Shares 900,728 1.26% 1,330 501-1,000 Shares 1,211,958 1.70% 1,837 1,001-5,000 Shares 3,223,548 4.51% 128 5,001-10,000 Shares 906,983 1.27% 180 10,001-50,000 Shares 3,814,350 5.34% 26 50,001-100,000 Shares 1,718,855 2.41% 27 100,001 + Shares 59,661,911 83.52% 9,205 71,438,333 100.00% Number of Type of Number of % shareholders Shareholding shares owned Holding 8,918 Individuals 10,610,242 14.85% 9 Insurance and Assurance Companies 10,868,316 15.21% 32 Pensions and Provident Funds 1,648,584 2.31% 36 Investment and Trust Companies 37,572,290 52.59% 210 Other Corporate Bodies 10,738,901 15.03% 9,205 71,438,333 100.00% Simon-Pierre Rey Secretary 30 March 2009 71
72
Financial Statement 73
Notice of Annual Meeting 74 Notice is hereby given that the Thirty-seventh Annual Meeting of the Shareholders of the Company will be held at l Ibeloise, 6 th Floor, IBL House, Caudan, Port Louis on Friday 19 June 2009 at 10.00 hours to transact the following business: Special Resolution 1. That the Constitution embodied in a deed drawn up by Mr. Marie Joseph Bernard d Hotman de Villiers, notary, on the twenty-first day of January two thousand and nine, registered in Reg: A 737 No. 2275, and for the purpose of identification, subscribed by Mr. Pierre Bernard Arnaud Montagu Dalais, Chairman of the Board of Directors of the Company, be approved and adopted as the constitution of the Company in substitution for, and to the exclusion of, the existing memorandum and articles thereof. To consider and if thought fit to approve the following resolutions as Ordinary Resolutions: Ordinary Resolutions 2. To adopt the minutes of proceedings of the Thirty-sixth annual meeting held on 13 June 2008. 3. To receive and adopt the Company s and Group s Financial Statements for the year ended 31 December 2008 and the Directors and Auditors reports thereon. 4. To ratify the dividend paid in April 2009 as a final dividend. 5. To re-appoint Messrs Kemp Chatteris Deloitte as Auditors for the ensuing year and to authorise the Board of Directors to fix their remuneration. 6. To appoint Mr Jean Marie Gaetan Lan Hun Kuen as Director. 7. To appoint Mr Jean Michel Louis Rivalland as Director. 8. To re-appoint Mr G Christian Dalais as Director in compliance with Section 138(6) of the Companies Act 2001. 9. To re-appoint Mr Cyril Lagesse as Director in compliance with Section 138(6) of the Companies Act 2001. 10. To re-elect Mr Arnaud Dalais as Director.
11. To re-elect Jean Pierre Dalais as Director. 12. To re-elect Mr Patrice d Hotman de Villiers as Director. 13. To re-elect Mr Bertrand Hardy as Director. 14. To re-elect Arnaud Lagesse as Director. 15. To re-elect Mr Thierry Lagesse as Director. 16. To re-elect Mr Jean Ribet as Director. By Order of the Board Simon-Pierre Rey Secretary Port Louis, Mauritius 28 May 2009 The draft new constitution may be inspected at the Registered Office of the Company, 5 th Floor, IBL House, Caudan, Port Louis between 9.00 a.m. and 4.00 p.m. on weekdays. A member entitled to attend and vote at the meeting may appoint any person, whether a member or not, to attend and vote in his stead. Proxy forms must be lodged at the Registered Office of the Company not less than twenty-four hours before the meeting. A proxy form is included in this Annual Report and is also available at the Registered Office of the Company. 75
Certificate from the Company Secretary In terms of Section 166 (d) of the Companies Act 2001, I certify that the Company has filed with the Registrar of Companies all such returns as are required of the Company under the Companies Act. Simon-Pierre Rey Secretary 30 March 2009 76
Financial Summary Income Statements (GROUP) 2008 2007 2006 Rs 000 Rs 000 Rs 000 Turnover 12,909,578 11,693,781 10,028,505 Profit from operations 610,855 663,010 710,128 Share of profits less losses of associates 321,411 391,086 266,579 Net finance costs (533,400) (503,851) (461,529) Profit before tax 398,866 550,245 515,178 Income tax expense (62,928) (44,928) (33,555) Profit for the year 335,938 505,317 481,623 Attributable to: Equity holders of the parent 300,011 451,556 427,373 Minority interests 35,927 53,761 54,250 335,938 505,317 481,623 Earnings per share Rs 4.20 6.32 5.98 Balance Sheets (GROUP) 2008 2007 2006 Rs 000 Rs 000 Rs 000 ASSETS Non-current assets 7,772,686 7,589,650 6,741,496 Current assets 5,804,496 5,521,323 5,498,926 Total assets 13,577,182 13,110,973 12,240,422 EQUITY AND LIABILITIES Share capital 714,383 714,383 714,383 Share premium 192,097 192,097 192,097 Reserves 2,572,699 2,383,493 2,081,765 Equity attributable to equity holders of the parent 3,479,179 3,289,973 2,988,245 Minority interests 446,770 459,229 422,925 Total Equity 3,925,949 3,749,202 3,411,170 Non-current liabilities 2,114,018 2,742,490 2,777,741 Current liabilities 7,055,583 6,205,529 5,801,653 Life assurance fund 481,632 413,752 249,858 Total equity and liabilities 13,577,182 13,110,973 12,240,422 77
Value Added Statement Financial Highlights Reinvested in Group to maintain and develop operations 20% 34% Employees 2008 2007 2006 Turnover (Rs M) 12,910 11,694 10,029 Profit before Tax (Rs M) 399 550 515 Earnings per Share (Rs) 4.20 6.32 5.98 Dividends per Share (Rs) 1.20 1.65 1.65 Net Assets Employed (Rs M) 6,522 6,905 6,439 Government 24% 22% Providers of Capital 2008 % 2007 % Rs 000 Rs 000 Turnover including Value Added Tax 13,429,686 12,126,897 Other Income 905,024 1,153,610 14,334,710 13,280,507 Paid to suppliers for materials and services 11,498,952 10,523,995 TOTAL WEALTH CREATED 2,835,758 100 2,756,512 100 Distributed as follows: Group Statistics EMPLOYEES Wages, salaries, bonuses, commissions, pensions & other benefits 954,143 34 817,681 30 2008 2007 2006 Turnover (Rs M) 12,910 11,694 10,029 Turnover per Employee (Rs M) 2.22 2.19 2.09 Net Assets per Share (Rs) 48.70 46.05 41.83 Earnings per Share (Rs) 4.20 6.32 5.98 Profit before Tax (Rs M) 399 550 515 PROVIDERS OF CAPITAL Dividends to Ordinary Shareholders 85,726 3 117,873 4 Banks & other financials institutions 548,969 19 519,184 19 634,695 22 637,057 23 GOVERNMENT Income Tax 62,928 2 44,928 1 Value Added Tax 520,108 18 433,116 16 Duties, levies & licences 101,862 4 132,549 5 684,898 24 610,593 22 REINVESTED IN GROUP TO MAINTAIN AND DEVELOP OPERATIONS Depreciation & amortisation 311,810 11 303,737 11 Retained Profit 250,212 9 387,444 14 562,022 20 691,181 25 TOTAL WEALTH DISTRIBUTED AND RETAINED 2,835,758 100 2,756,512 100 78 79
Other Statutory Disclosures (PURSUANT TO SECTION 221 OF THE COMPANIES ACT 2001) Directors The Directors of the Company during the year ended 31 December 2008 were: Capt. François Brousse de Gersigny Mr Arnaud Dalais Mr G Christian Dalais Mr Jean Pierre Dalais Mr Jean de Fondaumière (resigned on 5 September 2008) Mr Patrice D Hotman de Villiers Mr Bertrand Hardy Mr Arnaud Lagesse Mr Cyril Lagesse Mr Thierry Lagesse Mr Jean Ribet Mr Louis Rivalland (appointed on 5 September 2008) The list of Directors of the subsidiaries during the year is on pages 82, 83 and 84. Significant contracts No contracts of significance subsisted during the period under review between the Company, its subsidiaries and any Director or controlling shareholder of the Company, either directly or indirectly. Substantial shareholders Shareholders who held 5% or more of the nominal value of the share capital of the Company as at 31 December 2008 are: Holding % CIEL Investment Ltd 32.24 Compagnie d Investissement et de Développement Limitée 16.05 The Anglo-Mauritius Assurance Society Ltd 13.14 Belle Mare Holding Ltd 10.88 Directors remuneration and benefits 2008 2007 Rs 000 Rs 000 Emoluments paid by the Company and related corporations to: Directors of Ireland Blyth Limited - Executive 13,174 28,228 - Non-executive 4,790 4,039 Directors of subsidiary companies (excluding those who are also Directors of Ireland Blyth Limited) - Executive 100,767 95,475 - Non-executive 782 461 Directors service contracts There are no service contracts between the Company and its Directors. Donations THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Political - - - - Others 5,747 4,510 3,764 3,538 Auditors remuneration THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Audit fees paid to: - Kemp Chatteris Deloitte 4,029 3,828 1,030 936 - Other firms 321 382 - - Fees paid for other services provided for: - Kemp Chatteris Deloitte 26 - - - - Ernst & Young 2,200 2,017 2,200 2,017 80 81
Subsidiaries of Ireland Blyth SCHEDULE OF DIRECTORS AT 30 MARCH 2009 Adam & Co Ltd Alkore Chemicals (Mauritius) Ltd Assainissement des Zones Urbaines et Rurales Ltee Blychem Ltd Blymetal Ltd Blyth Brothers & Co Ltd Blyth Export Ltd Blytronics Ltd Calendula Ltd Cassis Ltd Cervonic Ltd Clean Energy Ltd Colonial Hotel Boutiques Limited Construction & Material Handling Company Ltd DTOS Ltd DTOS International Ltd DTOS Trustees Egeco Ltd Egeria Fishing Co Ltd Emmanuel Cadet & Co Ltd Equip and Rent Company Ltd Fish Meal Producers Ltd Fit-Out (Mauritius) Ltd Froid des Mascareignes Limited Grapevine Ltd General Refuse Enterp.for Environ. Needs Ltd GSP Co Ltd Hall Geneve Langlois Ltd IBL Aviation SARL IBL Consumer Health Products Ltd IBL Energie Ltd IBL Entertainment Ltd IBL Entertainment Holding Ltd IBL Financial Services Holding Ltd IBL Fishing Company Ltd IBL Forex Company Ltd IBL Impex Ltd IBL International Ltd IBL Madagasikara SA IBL Properties Ltd IBL Regional Development Ltd IBL Santé SARL IBL Training Services Ltd IBL Travel Ltd IBL Travel SARL I-Consult Ltd I-Consult International Ltd Indian Ocean Dredging Limited Indian Ocean Logistics Limited Indico Canning Ltd Interface Management Services Limited Interface International Ltd Ireland Blyth (Engineering) Ltd Ireland Blyth (Informatics) Ltd Ireland Blyth (Seychelles) Ltd Ireland Fraser & Co Ltd Island Coal Ltd I-Telecom Ltd Knights & Johns Management Ltd Koho Boards Ltd Logidis Ltd Logidis Services Ltd Mada Aviation SARL Mad Courrier SARL Manufacturing and Industrial Development Corporation Ltd Manser Saxon Aluminium Ltd Manser Saxon Contracting Ltd Manser Saxon Environment Ltd Manser Saxon Export Ltd Manser Saxon Openings Ltd Manser Saxon Plumbing Ltd Marine Biotechnology Products Ltd Patrice d Hotman de Villiers François Desmarais Gaetan Lan Hun Kuen Fabrizio Merlo Nicolas Merven Simon Pierre Rey Eric Venpin Nick Beyers Dennis Burton Vikash Bissoonauthsing Ajay Chooroomoney Francois Dalais Victor Manuel de Arroyabe Daniel Delva Madookur Desha Antoine Domingue Kepa Echevarria Noel Julio François Jacques Goilot Robert Goupille Vinod Gooroosawmy Eric Hardy Ignacio Ibarra Robert Ip Gilbert Ithier Din Jheelan Subhash Lallah René Leclézio Alain Malliaté Yves Méyépa Capt. P Ponambalum B Guillaume Raffray Maurice Rault Michel Guy Rivalland Patrice Robert Elena Ruiz S. Suntah Amit Verma Jimmy Wong Natasha Wong 82 83
Subsidiaries of Ireland Blyth SCHEDULE OF DIRECTORS AT 30 MARCH 2009 (continued) Independent Auditors Report to the shareholders of Ireland Blyth Limited Patrice d Hotman de Villiers François Desmarais Gaetan Lan Hun Kuen Fabrizio Merlo Nicolas Merven Simon Pierre Rey Eric Venpin Nick Beyers Dennis Burton Vikash Bissoonauthsing Ajay Chooroomoney Francois Dalais Victor Manuel de Arroyabe Daniel Delva Madookur Desha Antoine Domingue Kepa Echevarria Noel Julio François Jacques Goilot Robert Goupille Vinod Gooroosawmy Eric Hardy Ignacio Ibarra Robert Ip Gilbert Ithier Din Jheelan Subhash Lallah René Leclézio Alain Malliaté Yves Méyépa Capt. P Ponambalum B Guillaume Raffray Maurice Rault Michel Guy Rivalland Patrice Robert Elena Ruiz S. Suntah Amit Verma Jimmy Wong Natasha Wong Mauritian Eagle Insurance Co Ltd Mauritian Eagle Leasing Co Ltd Medical Trading Company Ltd Medical Trading International Ltd New Cold Storage Co Ltd Pick & Buy Ltd Pines Ltd Plastic Recycling Co Ltd Riche Terre Development Ltd Riche Terre Electricals Ltd Rodrigues Speciality Products Ltd Scomat Ltee SCP Ltd Seafood Hub Ltd Seaways Marine Supplies Ltd Societe de Traitement et d Assainissement des Mascareignes Ltee Societe de Transit Aerien et Maritime SARL Societe Immobiliere IBL Tana SARL Societe Mauricienne de Navigation Ltee Societe Mauricienne d Exploitation des Eaux Ltee Somatrans SDV Logistics Ltd Somatrans SDV Ltd Southern Seas Shipping Co Ltd Star Cruise Ltd Strategic Supply Ltd Thon des Mascareignes Limited Tornado Ltd Tornado Engineering Ltd Tourism Services International Ltd Transfroid Limited Trianon Development Ltd Tuna Mascarene S.I. This report is made solely to the company s shareholders, as a body, in accordance with section 205 of the Mauritius Companies Act 2001. Our audit work has been undertaken so that we might state to the Company s shareholders those matters we are required to state to them in an auditor s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the company s shareholders 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 financial statements of Ireland Blyth Limited on pages 86 to 145 which comprise the balance sheets as at 31 December 2008 and the income statements, statements of changes in equity and cash flow statements for the year then ended and a summary of significant accounting policies and other explanatory notes. Directors responsibilities 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 Mauritius Companies Act 2001 and the Financial Reporting Act 2004. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor s 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 auditor s judgment, 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 auditor considers internal control relevant to the entity 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 entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, 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 86 to 145 give a true and fair view of the financial position of the Group and of the Company as at 31 December 2008, and of their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with the requirements of the Mauritius Companies Act 2001 and the Financial Reporting Act 2004. Report on other legal requirements In accordance with the requirements of the Mauritius Companies Act 2001, we report as follows: we have no relationship with, or interests in, the company or any of its subsidiaries, other than in our capacities as auditors and arm s length dealings in the ordinary course of business; we have obtained all information and explanations that we have required; and in our opinion, proper accounting records have been kept by the Company as far as appears from our examination of those records. 84 85
Balance Sheets AT 31 DECEMBER 2008 Income Statements FOR THE YEAR ENDED 31 DECEMBER 2008 THE GROUP THE COMPANY Notes 2008 2007 2008 2007 (Restated) Rs 000 Rs 000 Rs 000 Rs 000 ASSETS Non-current assets Property, plant and equipment 5 4,249,063 3,676,747 944,935 939,475 Investment property 6-665,000 - - Intangible assets 7 496,048 326,789 11,130 13,953 Investments in subsidiaries 8 - - 1,323,775 959,389 Investments in associates 9 1,811,075 1,623,568 1,547,904 3,869,397 Investments in securities 10 229,754 236,999 94,025 62,491 Finance lease receivables 11 986,746 1,060,547 - - 7,772,686 7,589,650 3,921,769 5,844,705 Current assets Inventories 12 1,754,267 1,423,962 494,842 413,341 Finance lease receivables 11 235,217 295,535 - - Trade and other receivables 13 3,539,127 3,372,895 3,339,233 3,421,157 Bank balances and cash 275,885 428,931 131,956 192,347 5,804,496 5,521,323 3,966,031 4,026,845 Total assets 13,577,182 13,110,973 7,887,800 9,871,550 EQUITY AND LIABILITIES Capital and reserves Share capital 14 714,383 714,383 714,383 714,383 Share premium 192,097 192,097 192,097 192,097 Retained profit 1,068,013 1,039,526 804,857 597,487 Revaluation reserves 437,334 494,466 1,226,560 3,545,187 Translation and other reserves 1,067,352 849,501 38,969 38,969 Equity attributable to equity holders of the parent 3,479,179 3,289,973 2,976,866 5,088,123 Minority interests 446,770 459,229 - - Total equity 3,925,949 3,749,202 2,976,866 5,088,123 THE GROUP THE COMPANY Notes 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Revenue 3(f), 21 12,909,578 11,693,781 2,201,600 2,050,258 Profit from operations 22 610,855 663,010 474,793 317,335 Share of profits less losses of associates 9 321,411 391,086 - - Net finance costs 23 (533,400) (503,851) (181,697) (156,038) Profit before tax 398,866 550,245 293,096 161,297 Income tax expense 24 (62,928) (44,928) - - Profit for the year 335,938 505,317 293,096 161,297 Attributable to: Equity holders of the parent 300,011 451,556 293,096 161,297 Minority interest 35,927 53,761 - - Earnings per share (Rs) 27 4.20 6.32 335,938 505,317 293,096 161,297 Non-current liabilities Obligations under finance lease 15 137,308 177,817 11,763 10,685 Long-term loans 16 1,864,106 2,420,510 511,033 697,083 Retirement benefit obligations 17 112,604 144,163 84,243 118,023 2,114,018 2,742,490 607,039 825,791 Current liabilities Bank overdrafts 18 2,474,688 1,983,958 2,305,981 1,831,805 Short-term loans 19 925,838 688,176 387,770 333,885 Obligations under finance lease 15 46,491 41,727 3,800 2,298 Trade and other payables 20 3,566,051 3,447,829 1,606,344 1,789,648 Tax liabilities 42,515 43,839 - - 7,055,583 6,205,529 4,303,895 3,957,636 Total liabilities 9,169,601 8,948,019 4,910,934 4,783,427 Life assurance fund 481,632 413,752 - - Total equity and liabilities 13,577,182 13,110,973 7,887,800 9,871,550 Approved by the Board of Directors and authorised for issue on 30 March 2009. Arnaud Dalais Patrice d Hotman de Villiers 86 Directors 87
Statement of Changes in Equity FOR THE YEAR ENDED 31 DECEMBER 2008 (a) THE GROUP Attributable Properties Investments Translation to equity Share Share revaluation revaluation and other Retained holders of Minority capital premium reserve reserve reserves profit the parent interests Total Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 (b) THE COMPANY Notes Properties Investments Translation Share Share revaluation revaluation and other Retained capital premium reserve reserve reserves earnings Total Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Balance at 1 January 2007 714,383 192,097 451,830 32,528 619,651 977,756 2,988,245 422,925 3,411,170 Share of retained earnings of associated companies - - - - 262,844 (262,556) 288 (288) - Increase in fair value - - - 22,522 - - 22,522-22,522 Realised gain on disposal of investments - - - (12,414) - - (12,414) - (12,414) Exchange differences arising on translation of foreign operations - - - - (39,333) - (39,333) - (39,333) Movement on retained earnings of associates - - - - (6,919) 6,919 - - - Reserves transferred from minority - - - - - - - (17,787) (17,787) Consolidation adjustments - - - - 13,258 (16,276) (3,018) (1,163) (4,181) Net income/(expense) recognised directly in equity - - - 10,108 229,850 (271,913) (31,955) (19,238) (51,193) Profit for the year - - - - - 451,556 451,556 53,761 505,317 Total recognised income/(expense) for the year - - - 10,108 229,850 179,643 419,601 34,523 454,124 Capital from minorities - - - - - - - 18,053 18,053 Dividends - - - - - (117,873) (117,873) (16,272) (134,145) Balance at 31 December 2007 714,383 192,097 451,830 42,636 849,501 1,039,526 3,289,973 459,229 3,749,202 Balance at 1 January 2008 714,383 192,097 451,830 42,636 849,501 1,039,526 3,289,973 459,229 3,749,202 Share of retained earnings of associated companies - - - - 188,499 (190,731) (2,232) (1,489) (3,721) Decrease in fair value - - - (43,375) - - (43,375) - (43,375) Realised gain on disposal of investments - - - (13,757) - - (13,757) - (13,757) Exchange differences arising on translation of foreign operations - - - - 10,288-10,288 246 10,534 Deficit transferred on rights issue - - - - - - - 70,243 70,243 Consolidation adjustments - - - - 19,064 4,933 23,997 (67,677) (43,680) Net (expense)/income recognised directly in equity - - - (57,132) 217,851 (185,798) (25,079) 1,323 (23,756) Profit for the year - - - - - 300,011 300,011 35,927 335,938 Total recognised (expense)/income for the year - - - (57,132) 217,851 114,213 274,932 37,250 312,182 Capital from minorities - - - - - - - 1,600 1,600 Dividends - - - - - (85,726) (85,726) (51,309) (137,035) Balance at 1 January 2007: - As previously reported 714,383 192,097 409,199 5,361 38,969 554,063 1,914,072 - Effect of change in accounting policy 36 - - - 1,222,053 - - 1,222,053 - As restated 714,383 192,097 409,199 1,227,414 38,969 554,063 3,136,125 Increase in fair value - - - 1,908,647 - - 1,908,647 Realised gain on disposal of investments - - - (73) - - (73) Net income recognised directly in equity - - - 1,908,574 - - 1,908,574 Profit for the year - - - - - 161,297 161,297 Total recognised income and expense for the year - - - 1,908,574-161,297 2,069,871 Dividends - - - - - (117,873) (117,873) Balance at 31 December 2007 714,383 192,097 409,199 3,135,988 38,969 597,487 5,088,123 Balance at 1 January 2008 714,383 192,097 409,199 3,135,988 38,969 597,487 5,088,123 Decrease in fair value - - - (2,318,550) - - (2,318,550) Realised gain on disposal of investments - - - (77) - - (77) Net income recognised directly in equity - - - (2,318,627) - - (2,318,627) Profit for the year - - - - - 293,096 293,096 Total recognised income and expense for the year - - - (2,318,627) - 293,096 (2,025,531) Dividends - - - - - (85,726) (85,726) Balance at 31 December 2008 714,383 192,097 409,199 817,361 38,969 804,857 2,976,866 Balance at 31 December 2008 714,383 192,097 451,830 (14,496) 1,067,352 1,068,013 3,479,179 446,770 3,925,949 88 89
Cash Flow Statements FOR THE YEAR ENDED 31 DECEMBER 2008 Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 THE GROUP THE COMPANY Notes 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 CASH GENERATED FROM OPERATIONS 26(a) 1,041,914 651,807 306,992 22,447 Interest paid (548,969) (519,184) (447,991) (392,559) Taxation paid (57,142) (45,967) - - Dividends paid to minorities (51,309) (16,272) - - Dividends paid by holding company (125,017) (117,873) (125,017) (117,873) Net cash generated from/(used in) operating activities 259,477 (47,489) (266,016) (487,985) CASH FLOWS FROM INVESTING ACTIVITIES 1. GENERAL INFORMATION Ireland Blyth Limited is a public company incorporated in Mauritius and listed on the Stock Exchange of Mauritius. Its registered office is situated at IBL House, Caudan, Port Louis, Mauritius. The main activities of Ireland Blyth Limited and of its subsidiary companies are carried out in four sectors of activities and supported by a corporate unit. Sectors of activities: - Financial Services - Logistics, Engineering and Commerce - Retail - Seafood & Marine 90 Proceeds from disposal of investments 69,942 173,637 95,922 4,790 Proceeds from disposal of property, plant and equipment 37,684 345,432 19,606 109,372 Proceeds from disposal of computer software - - - 320 Purchase of investments (132,432) (182,291) (429,275) (129,427) Purchase of property, plant and equipment (907,236) (740,250) (60,237) (54,401) Purchase of minority interests - (100,000) - - Decrease/(increase) in amounts due from related companies - - 13,702 (395,067) Purchase of computer software (19,087) (13,324) (2,840) (4,163) Dividends received 137,663 131,318 325,597 384,981 Interest received 15,569 15,333 266,294 236,521 Investment in finance leases (137,486) (424,432) - - Capital repayment on finance leases 265,805 229,021 - - Net cash inflow on disposal of subsidiaries 26(c) 390,300 33,959 - - Net cash outflow on acquisition of subsidiaries 26(d) (91,177) - - - Net cash (used in)/generated from investing activities (370,455) (531,597) 228,769 152,926 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares to minorities 1,600 18,053 - - Deposit 46,548 310,474 - - Loans received 405,344 388,597 190,000 100,000 Loans repaid (526,465) (633,379) (322,165) (320,675) (Decrease)/increase in bills payable (414,567) 217,675 (362,538) 275,144 Obligations under finance lease repaid (45,258) (55,098) (2,617) (10,118) Net cash (used in)/generated from financing activities (532,798) 246,322 (497,320) 44,351 Net decrease in cash and cash equivalents (643,776) (332,764) (534,567) (290,708) Cash and cash equivalents at start of the year 26(b) (1,555,027) (1,222,263) (1,639,458) (1,348,750) Cash and cash equivalents at end of the year 26(b) (2,198,803) (1,555,027) (2,174,025) (1,639,458) 2. ADOPTION OF NEW AND REVISED STANDARDS In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the International Accounting Standards Board ( IASB ) and the International Financial Reporting Interpretations Committee ( IFRIC ) of the IASB that are relevant to its operations and effective for accounting periods beginning on 1 January 2008. The adoption of these new and revised Standards and Interpretations has not resulted in changes to the Company s accounting policies. At the date of authorisation of these financial statements, the following Standards and Interpretations were in issue but effective on annual periods beginning on or after the respective dates as indicated. IAS 1 Presentation of Financial Statements - Comprehensive revision including requiring a statement of comprehensive income (effective 1 January 2009) IAS 1 Presentation of Financial Statements - Amendments relating to disclosure of puttable instruments and obligations arising on liquidation (effective 1 January 2009) IAS 1 Presentation of Financial Statements - Amendments resulting from May 2008 Annual Improvements to IFRSs (effective 1 January 2009) IAS 16 Property, Plant and Equipment - Amendments resulting from May 2008 Annual Improvements to IFRSs (effective 1 January 2009) IAS 19 Employee Benefits - Amendments resulting from May 2008 Annual improvement to IFRSs (effective 1 January 2009) IAS 20 Government Grants and Disclosure of Government Assistance - Amendments resulting from May 2008 Annual Improvements to IFRSs (effective 1 January 2009) IAS 23 Borrowing Costs - Comprehensive revision to prohibit immediate expensing (effective 1 January 2009) IAS 23 Borrowing Costs - Amendments resulting from May 2008 Annual Improvements to IFRSs (effective 1 January 2009) IAS 27 Consolidated and Separate Financial Statements - Consequential amendments arising from amendments to IFRS 3 (effective 1 July 2009) IAS 27 Consolidated and Separate Financial Statements - Amendment relating to cost of an investment on first time adoption (effective 1 January 2009) IAS 27 Consolidated and Separate Financial Statements - Amendments resulting from May 2008 Annual Improvements to IFRSs (effective 1 January 2009) IAS 28 Investments in Associates - Consequential amendments arising from amendments to IFRS 3 (effective 1 July 2009) IAS 28 Investments in Associates - Amendments resulting from May 2008 Annual improvements to IFRSs (effective 1 January 2009) 91
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 2. ADOPTION OF NEW AND REVISED STANDARDS (continued) IAS 29 Financial Reporting in Hyperinflationary Economies - Amendments resulting from May 2008 Annual Improvements to IFRSs (effective 1 January 2009) IAS 31 Interests in Joint Ventures - Consequential amendments arising from amendments to IFRS 3 (effective 1 July 2009) IAS 31 Interests in Joint Ventures - Amendments resulting from May 2008 Annual Improvements to IFRSs (effective 1 January 2009) IAS 32 Financial Instruments: Presentation - Amendments relating to puttable instruments and obligations arising on liquidation (effective 1 January 2009) IAS 36 Impairment of Assets - Amendments resulting from May 2008 Annual Improvements to IFRSs (effective 1 January 2009) IAS 38 Intangible Assets - Amendments resulting from May 2008 Annual Improvements to IFRSs (effective 1 January 2009) IAS 39 Financial Instruments: Recognition and Measurement - Amendments resulting from May 2008 Annual Improvements to IFRSs (effective 1 January 2009) IAS 39 Financial Instruments: Recognition and Measurement - Amendments for embedded derivatives when reclassifying financial instruments (effective for annual periods ending on or after 30 June 2009) IAS 39 Financial Instruments: Recognition and Measurement - Amendments for eligible hedged items (effective 1 July 2009) IAS 40 Investment Property - Amendments resulting from May 2008 Annual Improvements to IFRSs (effective 1 January 2009) IAS 41 Agriculture - Amendments resulting from May 2008 Annual Improvements to IFRSs (effective 1 January 2009) IFRS 1 First-time Adoption of International Financial Reporting Standards - Amendment relating to cost of an investment on first-time adoption (effective 1 January 2009) IFRS 2 Share-based Payment - Amendment relating to vesting conditions and cancellations (effective 1 January 2009) IFRS 3 Business Combinations - Comprehensive revision on applying the acquisition method (effective 1 July 2009) IFRS 5 Non-current Assets Held for Sale and Discontinued Operations - Amendments resulting from May 2008 Annual Improvements to IFRSs (effective 1 July 2009) IFRS 7 Financial Instruments: Disclosures - Amendments enhancing disclosures about fair value and liquidity risk (effective 1 January 2009) IFRS 8 Operating Segments (effective 1 January 2009) IFRIC 13 Customer Loyalty Programme (effective 1 July 2008) IFRIC 15 Agreements for the Construction of Real Estate (effective 1 January 2009) IFRIC 16 Hedges of a Net Investment in a Foreign Operation (effective 1 October 2008) IFRIC 17 Distributions of Non-Cash Assets to Owners (effective 1 July 2009) IFRIC 18 Transfer of Assets from Customers (effective 1 July 2009) The Directors anticipate that the adoption of these Standards and Interpretations at their effective dates in future periods will have no material impact on the financial statements of the Group and the separate financial statements of the Company. 3. ACCOUNTING POLICIES The principal accounting policies adopted by the Group and the Company are as follows: (a) Basis of preparation The financial statements have been prepared under the historical cost convention as modified by the revaluation of freehold land and buildings, investment property and certain available-for-sale investments, and are in accordance with International Financial Reporting Standards (IFRS). (b) Basis of consolidation The consolidated accounts include the results of the Company and of its subsidiaries. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statements from the date of their acquisition or up to the date of their disposal. Inter-group transactions are eliminated on consolidation. Minority interests in the net assets of consolidated subsidiaries are identified separately from the Group s equity therein. Minority interests consist of the amount of those interests at the date of the original business combination and the minority s share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority s interest in the subsidiary s equity are allocated against the interests of the group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses. (c) Investments in subsidiaries In the Company s financial statements, investments in subsidiaries are stated at cost. The carrying amount is reduced if there is any indication of impairment in value. (d) Investments in associates Associates are those companies which are not subsidiaries or joint ventures, over which the Group exercises significant influence and in which it holds a long-term equity interest. Investments in associates are accounted for at cost or fair value in the company s accounts and under the equity method of accounting in the Group accounts. The Group s share of the associates profit or loss for the year is recognised in the income statement and the Group s interest in the associate is carried in the balance sheet at an amount that reflects its share of the net assets of the associates. Any excess of the cost of acquisition over the Group s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment on an annual basis as part of the investment. Any excess of the Group s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in the income statement. (e) Business combinations The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair values at the acquisition date. 92 93
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 3. ACCOUNTING POLICIES (continued) (e) Business combinations (continued) Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the group s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group s interest in the net fair value of the acquiree s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in the income statement. (f) Revenue recognition Revenue is measured at the fair value of the consideration received or receivable and represents sales of goods and services, commissions, gross insurance premiums and gross finance lease receivable. Sales of goods are recognised upon delivery of products and customer acceptance and are net of value added tax and discounts. Revenue from services are recognised when the services have been performed and are billable. Commissions are recognised upon performance of services. Insurance premiums from general insurance business are recognised on a pro-rata basis over the terms of the policy coverage. Life Insurance premiums are recognised on a received basis. Gross income receivable under finance lease are accounted for in the year in which they are receivable. Other operating income earned by the group are recognised as follows: Rental income - on an accruals basis Dividend income - when the right to receive payment is established Interest income - on a time proportion basis. (g) Property, plant and equipment Freehold land and buildings are stated at their revalued amounts. Revaluations are performed such that the carrying amount does not differ materially from that which would be determined using fair values at the balance sheet date. Any revaluation increase is credited to properties revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in income statement, in which case the increase is credited to the income statement to the extent of the decrease previously charged. A decrease in carrying amount arising on revaluation is charged to income statement to the extent that it exceeds the balance, if any, held in properties revaluation reserve relating to a previous revaluation of that asset. Depreciation on revalued buildings is charged to income statement. On the subsequent disposal or retirement of a revalued property, the attributable revaluation surplus remaining in the properties revaluation reserve is transferred directly to retained profits. 3. ACCOUNTING POLICIES (continued) (g) Property, plant and equipment (continued) Plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is calculated to write off the cost or revalued amount of the assets to their estimated residual values on a straight line basis over their expected useful lives as follows: Freehold properties Leasehold properties Plant and machinery Shipping vessels Furniture and fittings Computer equipment Motor vehicles - 50 years - over period of lease - 5 to 10 years - 8 to 9 years - 5 years - 3 to 7 years - 6 years The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis. Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease. The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss. (h) Investment property Property held to earn rentals and/or for capital appreciation, is stated at its fair value at the balance sheet date. Gains or losses arising from changes in the fair value of investment property are included in income statement for the period in which they arise. (i) Intangible assets Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the Group s share of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose of impairment testing. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period. Leasehold land is carried at cost. No depreciation is provided on freehold land. 94 Computer software Computer software that is not considered to form an integral part of any hardware equipment is recorded as intangible assets. The software is capitalised at cost and amortised over its estimated useful lives of 3 to 7 years. 95
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 3. ACCOUNTING POLICIES (continued) 3. ACCOUNTING POLICIES (continued) (j) Inventories Inventories are stated at the lower of cost (determined on a weighted average price basis) and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less all estimated costs of completion and costs necessary to make the sale. (l) Foreign currencies (continued) For the purpose of presenting consolidated financial statements, the assets and liabilities of foreign operations are expressed in Mauritian rupees using exchange rates prevailing at the balance sheet date. Their results for the period are translated into Mauritian rupees at average exchange rates for the period. The exchange differences arising from translation of the foreign operations are taken to the Group s translation reserve. (k) Leasing Leases are classified as finance leases whenever 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. The Group as lessee Assets held under finance leases are recognised as assets of the Group at their fair value at the date of acquisition. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are charged to the income statement over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period. Rentals payable under operating leases are charged to income statement on a straight-line basis over the term of the relevant lease. The Group as lessor Amount due from lessees under finance leases are recorded as receivables at the amount of the group s net investment in the leases. Finance lease income is allocated to the accounting period so as to reflect a constant periodic rate of return on the group s net investment outstanding in respect of the leases. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. (l) Foreign currencies The individual financial statements of each Group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each entity are expressed in Mauritian rupees, which is the functional currency of the company, and the presentation currency for the consolidated financial statements. In preparing the financial statements of the individual entities, transactions in currencies other than the entity s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities denominated in foreign currencies are retranslated into the entity s functional currency at the rates of exchange prevailing on the balance sheet date. Exchange differences arising on the settlement and the retranslation of monetary items are recognised in the income statement. (m) Taxation Income tax expense represents the sum of the tax currently payable and deferred tax. Current tax The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years but it further excludes items that are never taxable or deductible. The Group s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all deductible temporary differences and deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. (n) Retirement benefit obligations Defined benefit pension plan The cost of providing benefits are actuarially determined using the projected unit credit method. The present value of funded obligations is recognised in the balance sheet as a non-current liability after adjusting for the fair value of plan assets, any unrecognised actuarial gains and losses and any unrecognised past service cost. The valuation of these obligations is carried out annually by a firm of consulting actuaries. The current service cost and any recognised past service cost are included as an expense together with the associated interest cost, net of expected return on plan assets. 96 97
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 3. ACCOUNTING POLICIES (continued) 3. ACCOUNTING POLICIES (continued) 98 (n) Retirement benefit obligations (continued) A portion of the actuarial gains and losses will be recognised as income or expense if the net cumulative unrecognised actuarial gains and losses at the end of the previous accounting period exceeded the greater of: (i) 10% of the present value of the defined benefit obligation at that date; and (ii) 10% of the fair value of plan assets at that date. Other retirement benefits The present value of other retirement benefits in respect of Labour Act gratuities is recognised in the balance sheet as a non-current liability. The rate used to discount the retirement benefits is assumed to be the same as that which reflects future salary increases. State plan and defined contribution pension plan Contributions to the National Pension Scheme and defined contribution pension plan are expensed to the income statement in the period in which they fall due. (o) Provisions Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the Directors best estimate of the expenditure required to settle the obligation at the balance sheet date. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. (p) Financial instruments Financial assets and liabilities are recognised on the balance sheet when the Group has become party to the contractual provisions of the financial instruments. Except where stated separately, the carrying amounts of the Group s financial instruments approximate their fair values. These instruments are measured as set out below: (i) Financial assets Financial assets are classified into the following specified categories: financial assets at fair value through profit or loss (FVTPL), held-to-maturity investments, available-for-sale (AFS) financial assets and loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. (a) Financial assets at fair value through profit or loss (FVTPL) Financial assets are classified as at FVTPL where the financial assets are either held for trading or are designated as at FVTPL. (p) Financial instruments (continued) (i) Financial assets (continued) (a) Financial assets at fair value through profit or loss (FVTPL) (continued) A financial asset is classified as held for trading if: it has been acquired principally for the purpose of selling in the near future; or it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or it is a derivative that is not designated and effective as a hedging instrument. A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if: such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or the financial asset forms part of a Group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or it forms part of a contract containing one or more embedded derivatives, and IAS 39 permits the entire combined contract (asset or liability) to be designated as at FVTPL. Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset. (b) Held-to-maturity investments Bills of exchange and debentures with fixed or determinable payments and fixed maturity dates that the Group has the positive intent and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are recorded at amortised cost using the effective interest method less impairment, with revenue recognised on an effective yield basis. (c) Available-for-sale (AFS) financial assets Listed shares and listed redeemable notes held by the Group that are traded in an active market are classified as being AFS and are stated at fair value. Gains and losses arising from changes in fair value are recognised directly in equity in the investments revaluation reserve with the exception of impairment losses, interest calculated using the effective interest rate method and foreign exchange gains and losses on monetary assets, which are recognised directly in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in the investments revaluation reserve is included in profit or loss for the period. Available-for-sale investments which do not have a quoted market price and whose fair value cannot be reliably measured, are carried at cost, less any impairment loss. 99
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 3. ACCOUNTING POLICIES (continued) 3. ACCOUNTING POLICIES (continued) (p) Financial instruments (continued) (i) Financial assets (continued) (d) Loans and receivables Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. (e) Effective interest method The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or, where appropriate, a shorter period. (f) Derecognition of financial assets The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received. (ii) Financial liabilities (a) Classification as debt or equity Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement. (b) Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs. (p) Financial instruments (continued) (ii) Financial liabilities (continued) (c) Financial liabilities (continued) Financial liabilities are classified as at FVTPL where the financial liability is either held for trading or it is designated as at FVTPL. A financial liability is classified as held for trading if: it has been incurred principally for the purpose of repurchasing in the near future; or it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or it is a derivative that is not designated and effective as a hedging instrument. A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if: such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or it forms part of a contract containing one or more embedded derivatives, and IAS 39 Financial Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL. Financial liabilities at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability. Fair value is determined in the manner described in note 31. (d) Other financial liabilities Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period. (c) Financial liabilities Financial liabilities are classified as either financial liabilities at FVTPL or other financial liabilities. 100 101
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 3. ACCOUNTING POLICIES (continued) 3. ACCOUNTING POLICIES (continued) (p) Financial instruments (continued) (ii) Financial liabilities (continued) (e) Derecognition of financial liabilities The Group derecognises financial liabilities when, and only when, the Group s obligations are discharged, cancelled or they expire. (iii) Impairment of financial assets Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. For unlisted shares classified as AFS, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment. For all other financial assets, including redeemable notes classified as AFS and finance lease receivables, objective evidence of impairment could include: significant financial difficulty of the issuer or counterparty; or default or delinquency in interest or principal payments; or it becoming probable that the borrower will enter bankruptcy or financial re-organisation. For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period of 60 days, as well as observable changes in national or local economic conditions that correlate with default on receivables. For financial assets carried at amortised cost, the amount of the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount and the present value of estimated future cash flows, discounted at the financial asset s original effective interest rate. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. With the exception of AFS equity instruments, 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. (p) Financial instruments (continued) (iii) Impairment of financial assets (continued) In respect of AFS equity securities, impairment losses previously recognised through profit or loss are not reversed through income statement. Any increase in fair value subsequent to an impairment loss is recognised directly in equity. (q) Construction contracts Revenue and costs from construction contracts, the outcome of which can be reliably estimated, are recognised by the percentage of completion method. The stage of completion of a contract is determined by surveys of work performed. Revenue is recognised only to the extent of contract costs incurred that it is probable will be recoverable on contracts, the outcome of which is uncertain. Losses are recognised immediately on contracts where they are foreseen. (r) Impairment of tangible and intangible excluding goodwill At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset cash-generating unit is reduced to its recoverable amount. An impairment loss is recognised immediately in the income statements, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognised immediately in the income statements, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. (s) Comparative figures Comparative figures have been regrouped or restated, where necessary, to conform to the current year s presentation. (t) Related parties For the purpose of these financial statements, parties are considered to be related to the Group if they have the ability, directly or indirectly, to control the Group or exercise significant influence over the Group in making financial and operating decisions, or vice versa, or where the Group is subject to common control or common significant influence. Related parties may be individual or other entities. 102 103
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY In the application of the Group s accounting policies, which are described in note 3, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. (a) Critical judgements in applying accounting policies The following are the critical judgements, apart from those involving estimations (see below), that management has made in the process of applying the entity s accounting policies and that have the most significant effect on the amounts recognised in financial statements. Determination of functional currency of the group entities As described in Note 3, the determination of the functional currency of each group entity is critical since the way in which every transaction is recorded and whether exchange differences arise are dependent on the functional currency selected. In making this judgement, the Directors have considered the currencies in which revenue is received, the currency of the country whose competitive forces and regulations matter, the currencies in which labour, material and other costs are settled, the currencies in which the funds from financing activities are generated and the currency in which receipts from operating activities are usually retained. The Directors have determined that the functional currency of the company as well as that of most subsidiaries is the Mauritian rupee, except for the following subsidiaries. Subsidiary Southern Seas Shipping Company Limited Tuna Mascarene S.L. Mada Logistics SARL Ireland Fraser (Madagascar) SARL Société de Transit Aérien et Maritime SARL Société Madcourier SARL IBL Santé SARL DTOS Ltd Legis (International Financial & Management) Services Ltd Functional currency US Dollar Euro Ariary Ariary Ariary Ariary Ariary US Dollar US Dollar 4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (continued) (b) Key sources of estimation uncertainty The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Estimated impairment of goodwill Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash-generating units and a suitable discount rate in order to calculate present value. The carrying amount of goodwill at the balance sheet date was Rs 456.7M for which details are provided in note 7. Unquoted investments in subsidiaries Determining whether investments in subsidiaries are impaired requires an estimation of the value in use of the investments. In considering the value in use, the Directors have taken into account management accounts and cash flow projections. The actual results could, however, differ from the estimates. Financial crisis The global financial crisis may impact negatively on the financial results and position of the Group and financial position of the Company in the following ways: Quoted investment in an associate The Company has investment in Sun Resorts Limited (SRL), a quoted associated company operating within the hotel industry. Due to a potential fall in tourist arrival in Mauritius, SRL s financial results may be adversely affected. Consequently, the Company may suffer from long term decrease in its investment revaluation reserves due to fall in share price as these investments are classified as Available-For-Sale (AFS). The Group may, however, encounter sustained fall in net income for future financial years as it accounts for the investment using the equity method of accounting. Unquoted investments in overseas investment funds The Group has AFS investments in overseas unquoted investment funds. It may experience severe sustained falls in its investment revaluation reserves should the global financial crisis keep the net assets value of these funds down enough to make them go out of business in the long term. 104 105
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 5. PROPERTY, PLANT AND EQUIPMENT (a) THE GROUP Land and buildings Plant and Furniture Computer Motor Freehold Leasehold machinery and fittings equipment vehicles Total Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Cost or valuation At 1 January 2007 1,592,899 622,237 1,675,684 640,728 197,328 485,467 5,214,343 Adjustments 64 3,454 (34,319) (1,757) (563) 385 (32,736) Additions 100,460 37,628 479,451 64,291 30,155 61,552 773,537 Assets scrapped - - - (12,505) (5,753) (672) (18,930) Deconsolidation of subsidiaries - - (47,186) (21,737) (4,270) (125,877) (199,070) Disposals (52,111) - (320,108) (26,259) (9,322) (58,183) (465,983) At 31 December 2007 1,641,312 663,319 1,753,522 642,761 207,575 362,672 5,271,161 Additions 123,090 123,981 479,361 82,463 33,567 71,281 913,743 Acquisition of subsidiaries - - 863 1,428 2,088 7,772 12,151 Adjustments - - (22) 184 656 202 1,020 Exchanges - - 9,145 1,242 1,487 714 12,588 Reclassifications - 26 3,950 (3,844) (132) - - Assets scrapped - - (54) (473) - - (527) Deconsolidation of subsidiaries - - (85,446) (44,069) (515) (2,640) (132,670) Disposals (7,482) - (106,713) (1,842) (1,343) (44,596) (161,976) At 31 December 2008 1,756,920 787,326 2,054,606 677,850 243,383 395,405 5,915,490 Accumulated depreciation At 1 January 2007 108,402 30,090 545,856 449,561 155,706 317,212 1,606,827 Adjustments 2 517 (10,409) 1,990 (857) 783 (7,974) Depreciation charge for the year 14,133 11,074 135,707 58,495 25,537 43,262 288,208 Deconsolidation of subsidiaries - - (16,825) (13,743) (1,157) (109,532) (141,257) Assets scrapped - - - (12,498) (5,752) (672) (18,922) Disposals (1,912) - (54,687) (23,229) (8,271) (44,369) (132,468) At 31 December 2007 120,625 41,681 599,642 460,576 165,206 206,684 1,594,414 Charge for the year 16,857 11,941 141,423 54,282 27,239 46,308 298,050 Acquisition of subsidiaries - - 663 414 1,523 2,936 5,536 Adjustments - - 2,639 1,134 (119) (17) 3,637 Exchanges - - 3,374 731 709 283 5,097 Reclassifications - 231 2,212 (2,414) (29) - - Assets scrapped - - (56) (471) - - (527) Deconsolidation of subsidiaries - - (78,284) (41,479) (452) (1,338) (121,553) Disposals - - (83,957) (1,006) (1,035) (32,229) (118,227) At 31 December 2008 137,482 53,853 587,656 471,767 193,042 222,627 1,666,427 Carrying amount At 31 December 2008 1,619,438 733,473 1,466,950 206,083 50,341 172,778 4,249,063 At 31 December 2007 1,520,687 621,638 1,153,880 182,185 42,369 155,988 3,676,747 (i) The adjustments arise on the translation of the financial statements of foreign subsidiaries to Mauritian rupees, reclassification of assets, and other adjustments. 5. PROPERTY, PLANT AND EQUIPMENT (continued) (a) THE GROUP (continued) (ii) Freehold land and buildings were revalued in November 2001 at their open market values, by Gexim Land Consultants, Property Valuers. The valuation was taken as being effective as at 31 December 2001. The surplus of Rs 101.4M arising on revaluation was credited to revaluation reserve. The Directors are of opinion that the carrying amount does not materially differ from the fair value. (iii) The carrying amount of assets held under finance leases is as follows: THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Plant and machinery 169,606 180,728-3,610 Motor vehicles 30,734 43,009 14,389 14,434 (b) THE COMPANY 200,340 223,737 14,389 18,044 Land and buildings Plant and Furniture Computer Motor Freehold Leasehold machinery and fittings equipment vehicles Total Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Cost or valuation At 1 January 2007 927,945 51,761 36,452 322,802 85,944 144,455 1,569,359 Adjustments - - - (214) (435) 931 282 Additions 2,224-36,093 12,514 7,343 8,482 66,656 Assets scrapped - - - (10,344) (1,790) (672) (12,806) Disposals (88,908) (1,872) (7,228) (20,634) (10,713) (32,798) (162,153) At 31 December 2007 841,261 49,889 65,317 304,124 80,349 120,398 1,461,338 Additions 18,413-25,717 10,269 4,439 6,596 65,434 Assets scrapped - - (55) (35) - (198) (288) Disposals (3,977) - - (596) (640) (16,297) (21,510) At 31 December 2008 855,697 49,889 90,979 313,762 84,148 110,499 1,504,974 Accumulated depreciation At 1 January 2007 64,416 7,572 26,858 268,634 75,678 100,617 543,775 Adjustments - - - (214) (428) 931 289 Depreciation charge for the year 7,803 1,760 2,535 19,808 7,606 11,842 51,354 Assets scrapped - - - (10,337) (1,788) (672) (12,797) Disposals (1,912) (16) (4,410) (17,554) (9,972) (26,894) (60,758) At 31 December 2007 70,307 9,316 24,983 260,337 71,096 85,824 521,863 Depreciation charge for the year 9,783-7,166 19,460 5,916 10,152 52,477 Assets scrapped - - (56) (34) - (198) (288) Disposals - - - (225) (591) (13,197) (14,013) At 31 December 2008 80,090 9,316 32,093 279,538 76,421 82,581 560,039 Carrying amount At 31 December 2008 775,607 40,573 58,886 34,224 7,727 27,918 944,935 106 At 31 December 2007 770,954 40,573 40,334 43,787 9,253 34,574 939,475 107
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 6. INVESTMENT PROPERTY THE GROUP 2008 2007 Rs 000 Rs 000 At 1 January 665,000 505,364 Surplus on revaluation - 159,636 Deconsolidation of subsidiary (665,000) - At 31 December - 665,000 Rental income including common charges - 77,904 Direct operating expenses generating rental income - 23,247 Investment property was revalued in November 2007 at its open market value of Rs 665M by Gexim Real Estate Ltd, property valuers. The surplus on revaluation of Rs 159.6M was credited to the income statement. During the year, the Group disposed its investment in Highway Properties Limited, which held the above investment property. 7. INTANGIBLE ASSETS The Group Computer Goodwill software Total Rs 000 Rs 000 Rs 000 Cost At 1 January 2007 236,871 127,857 364,728 Scrapped - (4,798) (4,798) Deconsolidation of subsidiaries - (3,382) 3,382) Additions 82,213 13,324 95,537 At 31 December 2007 319,084 133,001 452,085 Additions 185,704 19,087 204,791 Scrapped - (421) (421) Deconsolidation of subsidiaries (23,751) (82) (23,833) At 31 December 2008 481,037 151,585 632,622 Accumulated amortisation and impairment At 1 January 2007 26,344 90,476 116,820 Charge for the year - 15,529 15,529 Scrapped - (4,798) (4,798) Deconsolidation of subsidiaries - (2,255) (2,255) At 31 December 2007 26,344 98,952 125,296 Charge for the year - 13,760 13,760 Scrapped - (421) (421) Deconsolidation of subsidiaries (1,979) (82) (2,061) At 31 December 2008 24,365 112,209 136,574 Carrying amount At 31 December 2008 456,672 39,376 496,048 7. INTANGIBLE ASSETS (continued) The Company Computer software Rs 000 Cost At 1 January 2007 75,177 Additions 4,163 Scrapped (2,263) At 31 December 2007 77,077 Additions 2,840 Scrapped (239) At 31 December 2008 79,678 Amortisation At 1 January 2007 58,307 Charge for the year 6,760 Scrapped (1,943) At 31 December 2007 63,124 Charge for the year 5,663 Scrapped (239) At 31 December 2008 68,548 Carrying amount At 31 December 2008 11,130 At 31 December 2007 13,953 Goodwill has been allocated for impairment testing purposes to the following cash generating units (CGU s): THE GROUP 2008 2007 Rs 000 Rs 000 Financial Services 274,522 156,996 Seafood & Marine 97,536 27,293 Engineering 84,614 86,679 Projects and Property Management - 21,772 456,672 292,740 The Group tests goodwill annually for impairment, or more frequently if there are indicators that goodwill might be impaired. At 31 December 2007 292,740 34,049 326,789 108 109
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 7. INTANGIBLE ASSETS (continued) The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets approved by management. Cash flows are extrapolated using the estimated growth rates stated below. The growth rate does not exceed the long-term average growth rate of the respective sector in which the CGU operates. The discount rates used are pre-tax and reflect specific risks relating to the relevant segments. Key assumptions used for value-in-use calculations: Growth rate Discount rate Financial services 3% 3% Others 5% 10% 8. INVESTMENTS IN SUBSIDIARIES THE COMPANY 2008 2007 Rs 000 Rs 000 At 1 January 959,389 845,912 Additions 400,000 129,427 Disposals (35,614) (15,950) At 31 December 1,323,775 959,389 Investments are analysed as follows: Quoted 800 800 Unquoted 1,322,975 958,589 Market values 1,323,775 959,389 At 31 December 2008, the market value of quoted investments amounted to Rs 218.4M (2007: Rs 264M). Details of subsidiaries Details of subsidiary companies are set out on pages 141 to 143. 9. INVESTMENTS IN ASSOCIATES THE GROUP THE COMPANY Note 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 At 1 January - As previously reported 1,623,568 1,356,856 3,869,397 751,667 - Effect of change in accounting policy 36 - - - 1,222,053 1,623,568 1,356,856 3,869,397 1,973,720 Additions 2,600 47,794 - - Disposals - (43,926) - (40) Adjustment (3,721) - - (5,697) Share of profits less losses 321,411 391,086 - - Dividend (132,783) (128,242) - - Change in fair value - - (2,321,493) 1,901,414 At 31 December 1,811,075 1,623,568 1,547,904 3,869,397 Investments are analysed as follows: THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 (Restated) Quoted 1,094,121 969,901 1,160,747 3,482,240 Unquoted 716,954 653,667 387,157 387,157 Details of associates Details of main associated companies are set out on page 144. Summarised financial information in respect of the group s associates is set out below: 1,811,075 1,623,568 1,547,904 3,869,397 2008 2007 Rs 000 Rs 000 Total assets 13,387,989 10,674,425 Total liabilities (7,261,584) (5,337,270) Net assets 6,126,405 5,337,155 Group s share of associates net assets 1,811,075 1,623,568 Total revenue 8,307,918 7,396,765 Total profit for the year 1,077,150 1,301,572 Group s share of associates profit for the year 321,411 391,086 110 111
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 9. INVESTMENTS IN ASSOCIATES (continued) Summarised financial information of associates that are not accounted for using the equity method: 2008 2007 Rs 000 Rs 000 Total assets 217,491 186,452 Total liabilities (362,582) (313,871) Net liabilities (145,091) (127,419) 11. FINANCE LEASE RECEIVABLES THE GROUP Minimum lease Finance payments income Total 2008 Rs 000 Rs 000 Rs 000 Amounts receivable: - within one year 348,693 113,477 235,216 - in the second to fifth years inclusive 1,255,574 245,556 1,010,018 1,604,267 359,033 1,245,234 Less: Allowance for credit losses (23,271) Total revenue 754,424 611,444 Total loss for the year (17,672) (23,376) Analysed as: 1,221,963 Unrecognised share of losses of associates: 2008 2007 Rs 000 Rs 000 Share of loss for the year 8,659 11,454 Share of unrecognised accumulated losses 71,094 62,435 10. INVESTMENTS IN SECURITIES Available-for-sale investments THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 At 1 January 236,999 181,161 62,491 49,695 Additions 129,832 134,497 29,275 - Disposals (80,544) (101,181) (684) (134) Transfer - - - 5,697 Exchanges (13,158) - - - (Decrease)/increase in fair value (43,375) 22,522 2,943 7,233 At 31 December 229,754 236,999 94,025 62,491 Current finance lease receivables 235,217 Non-current finance lease receivables 986,746 1,221,963 2007 Amounts receivable: - within one year 435,744 134,827 300,917 - in the second to fifth years inclusive 1,311,023 238,387 1,072,636 1,746,767 373,214 1,373,553 Less: Allowance for credit losses (17,471) 1,356,082 Analysed as: Current finance lease receivables 295,535 Non-current finance lease receivables 1,060,547 1,356,082 The average term of finance leases entered into is five to six years. The average effective interest rate contracted is 13.5% p.a. (2007: 14% p.a.). Finance lease receivable balances are secured over the assets leased. The fair value of the finance lease receivables at 31 December 2008 is estimated at Rs 1,215M (2007: Rs 1,221M) based on discounted estimated future cash flows at market rate. The fair value of the collaterals of the finance lease receivables at 31 December 2008 is estimated at Rs 1,356M (2007: Rs 1,409M), based on the assets depreciated value. 112 113
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 12. INVENTORIES THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Raw materials 345,548 111,271 - - Work-in-progress 30,890 42,185 19,834 25,194 Finished goods 1,377,829 1,270,506 475,008 388,147 1,754,267 1,423,962 494,842 413,341 At cost 1,466,803 1,110,678 494,842 413,341 At net realisable value 287,464 313,284 - - 1,754,267 1,423,962 494,842 413,341 13. TRADE AND OTHER RECEIVABLES THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Trade receivables 2,123,481 1,954,080 488,100 392,430 Allowance for doubtful debts (123,701) (56,538) (81,353) (20,030) 13. TRADE AND OTHER RECEIVABLES (continued) Movement in the allowance for doubtful debts: THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 At 1 January 56,538 45,150 20,030 19,065 Impairment losses recognised on receivables 83,084 18,537 68,296 4,144 Amounts written off as uncollectible (9,736) (3,429) (5,572) (1,719) Amounts recovered during the year (1,657) (3,310) (971) (1,460) Impairment losses reversed (4,528) (410) (430) - At 31 December 123,701 56,538 81,353 20,030 In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date the credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the Directors believe that there is no further credit provision required in excess of the allowance for doubtful debts. 1,999,780 1,897,542 406,747 372,400 Other receivables and prepayments 1,539,347 1,475,353 480,408 588,781 Amounts due from related companies - - 2,452,078 2,459,976 14. SHARE CAPITAL Authorised Issued and fully paid 3,539,127 3,372,895 3,339,233 3,421,157 Amounts due from related companies bear interest at 11% p.a. (2007: 13.5% p.a.). They are unsecured and do not have any fixed terms of repayment. The average credit period on sales of goods is 2 months. Allowance for doubtful debts is normally determined by the Group as 1% of debts due for more than 1 year. No interest is charged on the trade receivables. Before accepting any new customer, the Credit Control Department of each sector of activity assesses the credit quality of the customer and defines the terms and credit limits accordingly. Ageing of past due but not impaired THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 60-90 days 246,264 304,842 11,701 16,111 90-120 days 74,575 50,285 17,469 2,590 Total 320,839 355,127 29,170 18,701 Shares Rs 000 Shares Rs 000 Ordinary shares of Rs10 each At 1 January and 31 December 2008 71,440,139 714,401 71,438,333 714,383 15. OBLIGATIONS UNDER FINANCE LEASE The Group Present value Minimum of minimum lease payments lease payments 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Within one year 65,230 68,110 46,491 41,727 In the second to the fifth years inclusive 157,085 217,248 136,676 174,803 After five years 669 3,344 632 3,014 157,754 220,592 137,308 177,817 222,984 288,702 183,799 219,544 Less: Future finance charges (39,185) (69,158) - - 114 Present value of minimum lease payments 183,799 219,544 183,799 219,544 115
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 15. OBLIGATIONS UNDER FINANCE LEASE (continued) The Company Present value Minimum of minimum lease payments lease payments 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Within one year 5,691 3,718 3,800 2,298 In the second to the fifth years inclusive 13,950 12,607 11,360 10,002 After five years 444 882 403 683 14,394 13,489 11,763 10,685 20,085 17,207 15,563 12,983 Less: Future finance charges (4,522) (4,224) - - 15,563 12,983 15,563 12,983 For the year ended 31 December 2008, the average effective borrowing rate was 10.7% p.a. (2007: 10.7% p.a.). Leasing arrangements Finance leases relate to motor vehicles and plant and machinery with lease terms of 3 to 5 years on average. The Group has options to purchase the assets for a nominal amount at the conclusion of the lease arrangements. The Group s obligations under finance leases are secured by the lessors title to the leased assets. 16. LONG TERM LOANS THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Repayable by instalments: Within one year (see note 19) 540,162 473,069 387,770 333,885 In the second year 361,289 328,411 228,662 219,914 In the third to the fifth years inclusive 573,562 780,406 282,371 437,413 After five years 175,642 235,736-39,756 1,110,493 1,344,553 511,033 697,083 Deposits repayable: In the second to the fifth years inclusive 745,613 877,634 - - After five years 8,000 - - - 753,613 877,634 - - Other loans - 198,323 - - 1,864,106 2,420,510 511,033 697,083 17. RETIREMENT BENEFIT OBLIGATIONS Amounts recognised in the Balance Sheets: THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Defined benefit plan (Note (a)) 84,243 118,023 84,243 118,023 Other retirement benefits (Note (b)) 28,361 26,140 - - (a) Defined benefit plan 112,604 144,163 84,243 118,023 The Group operates a defined benefit plan for some of its employees and the plan is wholly funded. The assets of the funded plan are held independently and administered by The Anglo-Mauritius Assurance Society Ltd. Amounts recognised in the Income Statements: THE GROUP AND THE COMPANY 2008 2007 Rs 000 Rs 000 Current service cost 15,552 15,518 Scheme expenses 1,785 1,777 Cost of insuring risk benefits 5,486 5,548 Interest cost 61,295 54,131 Expected return on plan assets (62,408) (52,437) Actuarial gain (5,707) (2,994) Effect of curtailments/settlements (22,253) - Net periodic pension cost included in staff costs (6,250) 21,543 Actual return on plan assets 94,073 111,042 Movements in liability recognised in the Balance Sheets: THE GROUP AND THE COMPANY 2008 2007 Rs 000 Rs 000 At 1 January 118,023 125,367 Total expenses as per above (6,250) 21,543 Employer contributions (27,530) (28,887) 116 The loans are secured by fixed and floating charges on the assets of the group and the rates of interest vary between 6% and 13.5% p.a. (2007: 6% and 13.5% p.a) and 4.4% p.a (2007: 5.4% p.a.) for a Euro loan. The weighted average rate of interest (excluding Euro loan) is 9.4% p.a. (2007: 11.6% p.a.). The deposits bear interest at rates ranging from 7.4% to 13.75% p.a. (2007: 9.5% to 13.5% p.a.). At 31 December 84,243 118,023 At 31 December 2008 the fund had no investment in loans to Ireland Blyth Limited (2007: 12%). 117
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 17. RETIREMENT BENEFIT OBLIGATIONS (continued) (a) Defined benefit plan (continued) Movements in the present value of the defined benefit obligations in the current period were as follows: THE GROUP AND THE COMPANY 2008 2007 2006 2005 Rs 000 Rs 000 Rs 000 Rs 000 At 1 January 579,049 534,016 490,809 456,758 Current service cost 15,552 15,518 14,928 14,550 Interest cost 61,295 54,131 49,869 46,483 Actuarial gains/(losses) 27,073 8,113 1,818 (3,394) Benefits paid (46,148) (32,729) (23,408) (23,588) At 31 December 636,821 579,049 534,016 490,809 Movements in the present value of the plan assets in the current period were as follows: THE GROUP AND THE COMPANY 2008 2007 2006 2005 Rs 000 Rs 000 Rs 000 Rs 000 At 1 January 602,997 503,122 390,830 338,540 Expected return on plan assets 62,408 52,437 40,521 35,466 Actuarial gains (156,482) 58,606 73,286 18,361 Contributions from the employer 27,530 28,887 28,160 27,928 Benefits paid (46,148) (32,730) (23,408) (23,588) Cost of insuring risk benefits (5,486) (5,548) (4,822) (4,589) Scheme expenses (1,785) (1,777) (1,445) (1,288) At 31 December 483,034 602,997 503,122 390,830 17. RETIREMENT BENEFIT OBLIGATIONS (continued) (a) Defined benefit plan (continued) The major categories of plan assets, and the expected rate of return at the balance sheet date for each category, is as follows: Expected rate of return at Fair value of plan assets 31.12 31.12 31.12 31.12 2008 2007 2006 2005 2008 2007 2006 2005 % % % % Rs 000 Rs 000 Rs 000 Rs 000 Local equities 13 16 16 16 198,044 301,499 212,834 117,249 Overseas equities 13 14 14 14 159,401 186,929 181,071 58,624 Fixed interest 10 10 10 10 125,589 114,569 109,217 195,415 Properties - - - 6 - - - 19,542 Total market value of assets 483,034 602,997 503,122 390,830 Present value of plan liability (636,821) (579,049) (534,016) (490,809) Surplus/(deficit) (153,787) 23,948 (30,894) (99,979) Unrecognised actuarial loss 69,544 (141,971) (94,473) (23,005) (84,243) (118,023) (125,367) (122,984) The overall expected rate of return is a weighted average of the expected returns of the various categories of plan assets held. The Directors assessment of the expected returns is based on historical return trends and analysts predictions of the market for the asset in the next twelve months. The assets of the plan are invested in funds managed by Confident Asset Management (CAM) and IPRO. The asset value managed by each fund manager reflects the actual performance of the underlying assets. The breakdown of the assets above correspond to the actual allocation of the monies managed by both CAM and IPRO. 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 history of experience adjustments is as follows: 2008 2007 2006 2005 Rs 000 Rs 000 Rs 000 Rs 000 Present value of defined benefit obligation (636,821) (579,049) (534,016) (490,809) Fair value of plan assets 483,034 602,997 503,122 390,830 Surplus/(deficit) (153,787) 23,948 (30,894) (99,979) Experience losses on plan liabilities (27,073) (8,113) (1,818) 3,394 Experience gains on plan assets (156,482) 58,606 73,286 18,361 The Group expects to make a contribution of Rs 19.3M to the defined benefit plans during the next financial year. 118 119
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 17. RETIREMENT BENEFIT OBLIGATIONS (continued) (a) Defined benefit plan (continued) The principal actuarial assumptions used for accounting purposes were: 2008 2007 Discount rate 10.5% 10.0% Expected return on plan assets 10.5% 10.5% Future long-term salary increases 8.0% 8.0% Post retirement mortality tables increases age 90 age 90 Retirement benefit obligations have been based on the report dated 20 January 2009 submitted by The Anglo-Mauritius Assurance Society Ltd. (b) Other retirement benefits Other retirement benefits comprise of Labour Act gratuities. Amounts recognised in the Balance Sheets: THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Present value of unfunded obligations 28,361 26,140 - - Amounts recognised in the Income Statements: THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Amount expensed 2,507 1,550 - - 17. RETIREMENT BENEFIT OBLIGATIONS (continued) (c) Defined contribution pension fund THE GROUP AND THE COMPANY 2008 2007 Rs 000 Rs 000 Contributions expensed 25,865 23,082 (d) State pension plan THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 National Pension Scheme contributions expensed 18,591 16,762 5,076 4,958 18. BANK OVERDRAFTS THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Secured 168,707 152,153 - - Unsecured 2,305,981 1,831,805 2,305,981 1,831,805 2,474,688 1,983,958 2,305,981 1,831,805 The bank overdrafts of subsidiary companies are secured by floating charges on their assets. The bank overdrafts are arranged at floating interest rates and the interest rates at 31 December 2008 are in note 31. Movements in the liability recognised in the Balance Sheets: THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 At 1 January 26,140 24,590 - - Total expense as above 2,507 1,550 - - On disposal of subsidiaries (286) - - - At 31 December 28,361 26,140 - - 19. SHORT-TERM LOANS THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Loans repayable by instalments within one year (see note 16) 540,162 473,069 387,770 333,885 Deposits within one year 385,676 215,107 - - 925,838 688,176 387,770 333,885 120 121
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 20. TRADE AND OTHER PAYABLES THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Bills payable 598,762 1,013,329 543,659 906,197 Trade payables 1,944,367 1,507,324 473,186 289,687 Other payables and accruals 972,915 837,878 317,277 288,055 Amount owed to subsidiaries - - 222,215 216,411 Dividend payable 50,007 89,298 50,007 89,298 3,566,051 3,447,829 1,606,344 1,789,648 The average credit period of trade payables is 2 months. The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe. 22. PROFIT FROM OPERATIONS The profit from operations is arrived at after: (a) Crediting THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Dividends from subsidiaries - - 191,330 257,433 Dividends from associates - - 132,783 126,442 Dividends from available-for-sale investments 4,880 3,076 1,484 1,106 (Loss)/profit on disposal of property, plant and equipment (6,065) 11,917 12,109 7,977 Profit/(loss) on disposal of subsidiaries 20,022 (63,501) 60,308 (13,148) Profit/(loss) on disposal of associates - 14,959 - (40) Profit/(loss) on disposal of available-for-sale investments 707 13,683 (607) 1,927 Surplus on revaluation of investment property - 159,636 - - Other operating income 419,994 504,702 323,808 295,987 Net foreign exchange gain 128,506 102,719 112,873 88,697 21. REVENUE Revenue is analysed as follows: THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 (b) Charging Cost of sales 10,653,468 9,886,240 1,705,263 1,589,420 Operating expenses - Administrative expenses 1,426,048 1,277,100 572,132 477,473 - Other operating expenses 787,251 614,622 283,500 432,411 Sale of goods 10,603,922 9,543,084 1,951,445 1,827,405 Rendering of services 2,085,556 1,938,399 167,740 130,760 Commissions 220,100 212,298 82,415 92,093 12,909,578 11,693,781 2,201,600 2,050,258 Included in cost of sales are: Cost of inventories expensed 8,501,391 7,835,488 1,508,413 1,401,553 Included in operating expenses are: Depreciation and amortisation 311,810 303,737 58,140 58,114 Staff costs 964,143 817,681 393,061 339,219 23. NET FINANCE COSTS THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Interest payable on: Bank loans 161,772 154,271 104,042 105,345 Bank overdrafts 360,259 309,495 304,195 264,899 Other loans 26,938 55,418 39,754 22,315 548,969 519,184 447,991 392,559 Interest receivable on loans and receivables (15,569) (15,333) (266,294) (236,521) 533,400 503,851 181,697 156,038 122 123
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 24. TAXATION (a) Current tax THE GROUP 2008 2007 Rs 000 Rs 000 Subsidiary companies 62,928 44,928 (b) Tax reconciliation THE GROUP THE COMPANY 2008 2007 2008 2007 % % % % Normal rate of tax applicable to the group/company 15.00 15.00 15.00 15.00 Tax effects of: - Depreciation on revaluation surplus and on non-qualifying property, plant and equipment 0.44 0.40 0.36 0.71 - Depreciation on assets not qualifying for capital allowances 0.11 - - - - Profit on disposal of non-qualifying assets (0.39) (0.18) (0.52) (0.63) - Income exempt from tax (0.72) (6.74) (13.93) (35.80) - Investment allowances (net of clawback) 0.17 (0.28) - - - Expenses that are not deductible for tax purposes 7.15 12.73 5.17 17.27 - Expenses attributed to exempt income 0.75 - - - - Income not considered as taxable income 0.37 (2.76) (2.77) 9.53 - Share of profits of associates (11.24) (10.66) - - - Under/(over) provision of tax liability 3.89 0.78 - - - Revaluation reserve realised 0.18 - - - - Deferred tax not recognised (2.43) (4.44) (7.43) (32.15) Miscellaneous adjustments 4.17 (2.91) 4.12 1.09 Change in tax rate from 22.5% to 15% - 8.56-24.98 Tax rate differential of subsidiary and associated companies in Mauritius (1.67) (1.33) - - 0.78 (6.83) (15.00) (15.00) Effective rate of taxation 15.78 8.17 - - Rs 000 Rs 000 Rs 000 Rs 000 The estimated tax losses at the end of the year available to reduce future taxation is: 252,644 427,734 228,023 343,239 (c) Deferred tax Computations for deferred taxation for the Group and the Company show a deferred tax asset which arises from the excess tax losses available to reduce future taxation over taxable temporary differences. Deferred tax asset has not been recognised due to uncertainty regarding availability of taxable profit. 25. DIVIDENDS 2008 2007 Rs 000 Rs 000 Interim dividend of 50 cents per share (2007: 40 cents per share) in respect of current year 35,719 28,575 Final dividend of 70 cents per share (2007: Rs 1.25 per share) in respect of current year 50,007 89,298 26. CASH FLOW INFORMATION 85,726 117,873 (a) Reconciliation of profit before taxation to cash generated from operations THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Profit before taxation 398,866 550,245 293,096 161,297 Adjustments for: Depreciation and amortisation 311,810 303,737 58,140 58,114 Share of profits less losses of associated companies (321,411) (391,086) - - Surplus on revaluation of investment property - (159,636) - - Loss/(profit) on disposal of property, plant and equipment 6,065 (11,917) (12,109) (7,977) Loss/(profit) on sale of investments (21,336) 34,859 (60,308) 11,261 Investment income (4,880) (3,076) (325,597) (384,981) Interest expense 548,969 519,184 447,991 392,559 Exchange difference 15,532 (22,498) - - Interest receivable (15,569) (15,333) (266,294) (236,521) Net life insurance fund 67,880 163,894 - - Adjustment to opening balances 2,617 600-7 Investment written off/impaired 607-607 - Assets scrapped - 8-9 Operating profit/(loss) before working capital changes 989,150 968,981 135,526 (6,232) Increase/(decrease) in trade and other payables 452,079 (11,882) 178,941 (58,810) (Increase)/decrease in trade and other receivables (68,536) (250,255) 74,026 76,108 (Increase)/decrease in inventories (330,779) (55,037) (81,501) 11,381 Cash generated from operations 1,041,914 651,807 306,992 22,447 124 125
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 26. CASH FLOW INFORMATION (continued) (b) Cash and cash equivalents are analysed as follows: THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Cash resources 275,885 428,931 131,956 192,347 Bank overdrafts (2,474,688) (1,983,958) (2,305,981) (1,831,805) (c) Disposal of subsidiaries (2,198,803) (1,555,027) (2,174,025) (1,639,458) 2008 2007 Rs 000 Rs 000 Property, plant and equipment 11,117 57,813 Investment property 665,000 - Goodwill 21,772 - Computer software - 1,127 Stocks 474 94,679 Trade and other receivables 13,434 46,711 Bank overdrafts net of balances and cash 53,811 (9,157) Trade and other payables (8,533) (95,457) Finance lease obligations - (6,186) Taxation (200) - Loans (244,168) (780) Minority interests (88,618) (447) 424,089 88,303 Profit/(loss) on disposal 20,022 (63,501) Total consideration 444,111 24,802 Net cash inflow arising on disposal: Cash consideration 444,111 24,802 Bank overdrafts net of balances and cash, disposed of (53,811) 9,157 390,300 33,959 26. CASH FLOW INFORMATION (continued) (d) Acquisition of subsidiaries and minorities (i) Subsidiaries acquired Effective Effective proportion of Cost of Principal activities dates acquired shares acquired acquisition 2008 2007 Rs 000 Rs 000 Knights and Johns Management Ltd (KJM) Offshore Management 22 February 2008 40.80% 74,772 - Interface Management Services Ltd Offshore Management 22 February 2008 40.80% 517 - Legis (International Financial & Management) Services Ltd (Legis) * Offshore Management 22 February 2008 40.80% - - Fit-Out (Mauritius) Ltd *Legis was acquired through acquisition of KJM. (ii) Minorities acquired Scomat Limitée Manufacture of furniture and roof structure 26 June 2007 60.40% - - 75,289 - Sale and servicing of caterpillars and parts 21 December 2007 49.00% - 100,000 (iii) Analysis of assets and liabilities acquired Book and fair value on acquisition 2008 2007 Rs 000 Rs 000 Current assets Debtors and prepayments 117,105 - Taxation 266 - Non-current assets Property, plant and equipment 6,615 - Current liabilities Creditors and accruals (100,327) - Bank overdraft (15,888) - Obligations under finance leases (3,006) - 4,765 - Share of minority interests (44,937) - Purchase of minority interests (70,243) 17,787 Goodwill 185,704 82,213 126 Total consideration 75,289 100,000 127
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 26. CASH FLOW INFORMATION (continued) (d) Acquisition of subsidiaries and minorities (continued) (iv) Net cash outflow on acquisition of subsidiaries 2008 2007 Rs 000 Rs 000 Cash consideration 75,289 100,000 Bank balances, net of bank overdrafts 15,888-91,177 100,000 (v) Impact of acquisition on the results of the Group Included in the profit for the year is Rs 28M attributable to the additional business generated by Knights & Johns Management Ltd, Interface Management Services Ltd, Fit-Out (Mauritius) Ltd and Legis (International Financial & Management) Services Ltd. Had the business combination been effected at 1 January 2008, the revenue and profit of the Group for the year ended 31 December 2008 would not have changed significantly. 27. EARNINGS PER SHARE Earnings per share is based on earnings attributable to ordinary shareholders of Rs 300M (2007: Rs 451.6M) and on 71,438,333 ordinary shares in issue during the two years ended 31 December 2008. 28. SEGMENTAL INFORMATION - GROUP Primary reporting format - business segments 28. SEGMENTAL INFORMATION - GROUP (continued) Primary reporting format - business segments (continued) 2008 BALANCE SHEET Logistics, Corporate Financial Engineering Seafood services services & Commerce Retail & Marine & Others Total Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 ASSETS Segment assets 2,437,131 3,481,704 996,346 3,595,023 1,255,903 11,766,107 Investments in associates 1,811,075 Consolidated total assets 13,577,182 LIABILITIES Segment liabilities 2,137,683 2,695,688 832,523 3,726,192 216,632 9,608,718 Shareholder s fund 3,479,179 Minority interests 446,770 Taxation 42,515 13,577,182 OTHER INFORMATION Capital additions (including computer software) 104,411 131,316 241,493 440,596 8,507 926,323 Depreciation and amortisation 46,376 81,804 41,709 90,361 51,560 311,810 2008 Logistics, Corporate Financial Engineering Seafood services services & Commerce Retail & Marine & Others Total Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 2007 Logistics, Corporate Financial Engineering Seafood services services & Commerce Retail & Marine & Others Total Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 REVENUE 1,296,803 5,371,965 2,937,659 3,215,499 87,652 12,909,578 RESULTS Segment result 171,286 447,404 80,959 93,499 (182,293) 610,855 Net finance costs (533,400) Share of profits less losses of associates 321,411 Profit before taxation 398,866 Taxation (62,928) REVENUE 1,208,739 5,107,652 2,464,893 2,810,398 102,099 11,693,781 RESULTS Segment result 100,461 412,857 82,850 19,538 47,304 663,010 Net finance costs (503,851) Share of profits less losses of associates 391,086 Profit before taxation 550,245 Taxation (44,928) 128 Profit for the year 335,938 Profit for the year 505,317 129
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 28. SEGMENTAL INFORMATION - GROUP (continued) Primary reporting format - business segments (continued) 2007 BALANCE SHEET Logistics, Corporate Financial Engineering Seafood services services & Commerce Retail & Marine & Others Total Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 ASSETS Segment assets 2,288,734 3,217,172 747,858 3,188,618 2,045,023 11,487,405 Investments in associates 1,623,568 Consolidated total assets 13,110,973 LIABILITIES Segment liabilities 1,985,382 2,671,180 626,349 3,144,331 890,690 9,317,932 Shareholder s fund 3,289,973 Minority interests 459,229 Taxation 43,839 13,110,973 OTHER INFORMATION Capital additions (including computer software) 48,515 110,647 28,322 557,226 42,151 786,861 Depreciation and amortisation 34,148 84,256 36,072 65,567 83,694 303,737 Secondary reporting format - geographical segments The Group s operations are located in Mauritius, Madagascar, Seychelles and Comoros. The following table provides an analysis of the Group s sales by geographical market, irrespective of the origin of the goods/services: Sales revenue 2008 2007 Rs 000 Rs 000 Mauritius 10,053,552 9,190,459 Europe 2,707,660 2,329,490 USA 108,936 134,713 Madagascar 39,430 39,119 12,909,578 11,693,781 28. SEGMENTAL INFORMATION - GROUP (continued) Secondary reporting format - geographical segments (continued) The following is an analysis of the carrying amount of segment assets, and additions to property, plant and equipment analysed by the geographical area in which the assets are located: Segment assets Capital additions 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Mauritius 11,706,927 11,134,436 945,148 772,263 Madagascar 63,991 102,793 4,608 11,956 Seychelles 16,009 18,306 - - Comoros 23,590 65,500-2,642 Europe 17,590 166,370 - - 29. OPERATING LEASE ARRANGEMENTS 11,828,107 11,487,405 949,756 786,861 The Group as lessee THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Minimum lease payments under operating lease recognised as an expense in the year 22,260 21,994 4,920 3,660 At the balance sheet date, the Group has outstanding commitments under non-cancellable operating leases, which fall due as follows: THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 - Within one year 22,712 21,584 8,649 6,351 - In the second to fifth years inclusive 55,919 65,578 27,189 24,153 - After five years 333,711 276,313 42,654 41,364 412,342 363,475 78,492 71,868 Operating lease payments represent rentals payable by the Group for its leasehold properties (lease terms of between 1 to 70 years) and plant and equipment (lease terms of 6 years). All operating lease contracts contain market renew clauses in the event that the Group exercises its option to renew. The Group does not have an option to purchase the leased asset at the expiry of the lease period. 130 131
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 29.OPERATING LEASE ARRANGEMENTS (continued) The Group as lessor The Group rents out the following plant and equipment under operating leases: Accumulated Net Book Cost depreciation value Rs 000 Rs 000 Rs 000 Plant and machinery 51,324 9,800 41,524 Motor vehicles 76,275 25,937 50,338 127,599 35,737 91,862 Rental income earned during the year was Rs 46,768,669 (2007: Rs 33,456,236) and no direct operating expenses were incurred for both years. The plant and equipment are expected to generate a yield of 11.5% to 14% for plant and machinery and 9.5% to 14% for motor vehicles on an ongoing basis. All of these plant and equipment held have committed tenants for the next 3 to 6 years. At the balance sheet date, the Group has contracted with tenants for the following future minimum lease payments: 30. RELATED PARTY TRANSACTIONS (i) Sales of goods and services THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Sales of goods: Subsidiaries - - 291,933 245,617 Associates 394,324 118,763 56,871 46,408 Corporate groups having significant influence 16,475 13,472 15,734 12,465 Sales of services: Subsidiaries (Corporate services) - - 167,683 145,142 Subsidiaries (Interest) - - 250,725 204,720 Associates (Secretarial and other services) 19,822 16,847 19,822 16,847 (ii) Purchases of goods and services Purchases of goods: Subsidiaries - - 223,730 192,191 Associates 25 20 25 20 Purchases of services: Subsidiaries - - 38,073 33,870 Corporate groups having significant influence (management services) 4,000 4,000 4,000 4,000 (iii) Compensation of key management personnel 2008 2007 Rs 000 Rs 000 - Within one year 24,176 11,785 - In the second to the fifth years inclusive 70,937 40,840 95,113 52,625 Operating lease contracts contain market review clauses. The lease terms vary between 5 and 6 years with an option for renewal. Key management personnel (including Directors): Short-term benefits 114,007 134,941 114,007 134,941 Post-employment benefits 8,680 7,153 8,680 7,153 Provision for incentive bonus (see note below) 11,150 12,000 11,150 12,000 133,837 154,094 133,837 154,094 (iv)outstanding balances Receivables from related parties: Subsidiaries - - 2,452,078 2,459,976 Associates 31,544 10,643 31,544 10,643 Payables to related parties: Subsidiaries - - 222,215 216,411 (v) Pension contributions to pension plans 53,395 51,969 53,395 51,969 132 Note Incentive bonus relates to remuneration calculated by reference to the increase in the company s share price during the period. Amounts receivable from subsidiaries bear interest at 11% p.a. (2007: 13.5% p.a.), are unsecured and do not have any fixed terms of repayment. Amounts receivable from associates and payables to subsidiaries are interest free, unsecured and do not have any fixed terms of repayment. 133
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 31. FINANCIAL INSTRUMENTS Capital risk management The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group s overall strategy remains unchanged from 2007. 31. FINANCIAL INSTRUMENTS (continued) Categories of financial instruments THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 The capital structure of the Group consists of debt, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings. Gearing ratio The Group has a target gearing ratio of 100% determined as the proportion of net debt to equity and life insurance fund. Financial assets Loans and receivables (including cash and cash equivalents) 4,987,240 5,126,256 3,435,483 3,525,878 Available-for-sale financial assets 229,754 236,999 94,025 62,491 Investments in associated companies 1,811,075 1,623,568 1,547,904 3,869,397 Investments in subsidiary companies - - 1,323,775 959,389 The gearing ratio at the year end was as follows: THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Debt (i) 2,266,815 2,966,257 1,458,025 1,950,148 Cash and cash equivalents 2,198,803 1,555,027 2,174,025 1,639,458 Net debt 4,465,618 4,521,284 3,632,050 3,589,606 Equity 3,925,949 3,749,202 2,976,866 5,088,123 Life insurance fund 481,632 413,752 - - 4,407,581 4,162,954 2,976,866 5,088,123 Net debt to equity ratio 1.0 1.1 1.2 0.7 (i) Debt is defined as long and short term borrowings excluding borrowings relating to the Group s leasing operations. Financial liabilities Borrowings carried at amortised cost 8,983,717 8,735,424 4,795,960 4,527,717 Financial risk management The Group operates a Corporate Treasury function which provides services to the sectors of activity within the Group. It also manages the Group s exposure to market risk (including currency risk and interest rate risk), credit risk and liquidity risk. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. Market risk The Group s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Group manages its exposure to interest rate and foreign currency risk by use of a proper mix in fixed and floating rate borrowings and use of natural hedging. Significant accounting policies Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 3 to the financial statements. Foreign currency risk management The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. 134 135
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 31. FINANCIAL INSTRUMENTS (continued) Financial risk management (continued) Foreign currency risk management (continued) The currency profile of the financial assets and financial liabilities is summarised as follows: THE GROUP THE COMPANY Financial Financial Financial Financial 2008 assets liabilities assets liabilities Rs 000 Rs 000 Rs 000 Rs 000 Currency Mauritian rupee 5,488,879 7,392,649 6,168,164 4,442,582 United States dollar 737,304 697,694 181,202 143,427 Euro 654,216 670,468 47,007 116,164 Others 147,670 222,906 4,814 93,787 7,028,069 8,983,717 6,401,187 4,795,960 THE GROUP THE COMPANY Financial Financial Financial Financial 2007 assets liabilities assets liabilities Rs 000 Rs 000 Rs 000 Rs 000 Currency Mauritian rupee 5,873,544 7,855,793 8,132,101 3,967,621 United States dollar 356,345 313,397 102,375 245,407 Euro 590,557 397,303 149,844 239,237 Others 166,377 168,931 32,835 75,452 The Group is mainly exposed to USD and Euro. 6,986,823 8,735,424 8,417,155 4,527,717 The following table details the Group s sensitivity to a 5% increase and decrease in the Rupee against the relevant foreign currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. A positive number below indicates an increase in profit and other equity where the Rupee strengthens 5% against the relevant currency, there would be an equal and opposite impact on the profit and other equity, and the balances below would be negative. US DOLLAR IMPACT THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 31. FINANCIAL INSTRUMENTS (continued) Financial risk management (continued) Foreign currency risk management (continued) EURO IMPACT THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Profit or loss (1,295) 9,747 (3,458) (4,470) Other equity 628 2,703 - - The above is mainly attributable to: (i) the exposure in relation to the net working capital in USD and Euro. (ii) the translation of subsidiary companies whose functional currencies are in USD and Euro. Interest rate risk management The Group is exposed to interest rate risk as entities in the Group borrow funds at both fixed and floating interest rates. The interest rate profile of the group at 31 December 2008 was: Financial assets Balances Mortgage Finance lease with banks and policy loans receivables Interest rate Interest rate Interest rate % % % GBP LIBOR 1 Mth - 1% - - EURO LIBOR 1 Mth - 1% - 6% USD LIBOR 1 Mth - 0.75% - - MRs - 9-14% 12.0-13.5% Financial liabilities Bank overdrafts Deposits and loans Floating Fixed Floating interest rate interest rate interest rate % % % 136 Profit or loss 3,852 (3,619) 1,889 (7,152) Other equity 4,277 8,258 - - GBP LIBOR 1 Mth + 0.75% to 1.5% - - EURO LIBOR 1 Mth + 0.75% to 1.5% - - USD LIBOR 1 Mth + 0.75% to 1.5% - EURIBOR 1 Mth + 1.75% MRs 9.1-10.5% 13.5% 9.1-10.7% 137
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 138 31. FINANCIAL INSTRUMENTS (continued) Financial risk management (continued) Interest rate sensitivity analysis The sensitivity analysis below have been determined based on the exposure to interest rates at the balance sheet date. For floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the balance sheet date was outstanding for the whole year. If interest rates had been 25 basis points higher, the effect on Profit would have been as follows: THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Profit/(loss) (11,121) (10,965) (3,254) (3,333) Other price risks The Group is exposed to equity price risks arising from equity investments. Equity investments are held for strategic rather than trading purposes. The Group does not actively trade these investments. The sensitivity analyses below have been determined based on the exposure to equity price risks at the reporting date. If equity prices had been 5% higher/lower: net profit for the year ended 31 December 2008 would have been unaffected as the equity investments are classified as available-for-sale and no investments were disposed of or impaired; and other equity reserves would decrease/increase by Rs 6,459,366 (2007: other equity reserves would increase/ decrease by Rs 8,418,137) for the Group as a result of the changes in fair value of available-for-sale shares. Credit risk management Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group uses publicly available financial information and its own trading records to rate its major customers. The Group s exposure and the credit ratings of its counterparties are continuously monitored. Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable and, where appropriate, credit guarantee insurance cover is purchased. The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar charateristics. The Group defines counterparties as having similar characteristics if they are related entities. The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the Group s maximum exposure to credit risk without taking account of the value of any collateral obtained. 31. FINANCIAL INSTRUMENTS (continued) Financial risk management (continued) Liquidity risk management Ultimate responsibility for liquidity risk management rests with the board of Directors, who monitors the Group s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Liquidity and interest risk tables The following tables detail the Group s remaining contractual maturity for its non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows. THE GROUP Less than 1 year 1-5 years 5+ years Total Rs 000 Rs 000 Rs 000 Rs 000 2008 Non-interest bearing 2,935,892 - - 2,935,892 Finance lease liability 46,491 137,308 632 184,431 Variable interest rate instruments 3,611,994 934,351 79,762 4,626,107 Fixed interest rate instruments 387,926 754,113 95,248 1,237,287 6,982,303 1,825,772 175,642 8,983,717 2007 Non-interest bearing 3,080,008 - - 3,080,008 Finance lease liability 41,727 174,803 3,014 219,544 Variable interest rate instruments 2,798,005 1,106,067 113,665 4,017,737 Fixed interest rate instruments 217,357 880,384 320,394 1,418,135 6,137,097 2,161,254 437,073 8,735,424 THE COMPANY Less than 1 year 1-5 years 5+ years Total Rs 000 Rs 000 Rs 000 Rs 000 2008 Non-interest bearing 1,031,953 - - 1,031,953 Finance lease liability 3,800 11,045 718 15,563 Variable interest rate instruments 3,235,161 510,533-3,745,694 Fixed interest rate instruments 2,250 500-2,750 4,273,164 522,078 718 4,795,960 2007 Non-interest bearing 745,764 - - 745,764 Finance lease liability 2,298 10,002 683 12,983 Variable interest rate instruments 3,069,637 654,577 39,756 3,763,970 Fixed interest rate instruments 2,250 2,750-5,000 3,819,949 667,329 40,439 4,527,717 139
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 31. FINANCIAL INSTRUMENTS (continued) 34. (a) SUBSIDIARY COMPANIES Fair value of financial instruments Except where stated elsewhere, the carrying amounts of the Group s and the Company s financial assets and financial liabilities approximate their fair values due to the short-term nature of the balances involved. The fair values of financial assets and financial liabilities are determined as follows: the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets is determined with reference to quoted market prices; the fair value of other financial assets and financial liabilities (excluding derivative instruments) is determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar instruments. Quoted price Financial assets in this category include available-for-sale investments. Fair value using discounted cash flow analysis The financial statements do not include financial assets and financial liabilities measured at fair value using discounted cash flow analysis. 32. CAPITAL COMMITMENTS THE GROUP THE COMPANY 2008 2007 2008 2007 Rs 000 Rs 000 Rs 000 Rs 000 Authorised but not contracted for 217,556 222,406 56,197 70,693 33. CONTINGENT LIABILITIES There are contingent liabilities for bank guarantees given by the Company to third parties in the normal course of business amounting to Rs 317M (2007: Rs 191M). The Directors consider that no liabilities will arise as the probability for default in respect of the guarantees is remote. Other Group Ireland Blyth Companies Class of Limited Effective shares held Main activity % Holding % Holding Adam and Company Limited Ordinary Dormant - 100.00 Airdata Communications Ltd* Dormant 100.00 - Alkore Chemicals (Mauritius) Ltd Dormant 100.00 - Assainissement des Zones Urbaines et Rurales Limitée* Dormant - 100.00 Blyth Brothers and Company Limited Dormant 100.00 - Blyth Cruise Co Ltd* Dormant - 100.00 Blyth Export Limited* Dormant 100.00 - Blychem Limited Dormant 100.00 - Blymetal Limited* Dormant 100.00 - Blytronics Limited Dormant 100.00 - Calendula Limited* Dormant 100.00 - Cassis Limited Dormant 100.00 - Cervonic Ltd Manufacturing - 80.00 Colonial Hotel Boutiques Limited* Dormant 100.00 - Construction & Material Handling Company Ltd Handling equipment 100.00 - DTOS Ltd Global business - 80.00 services DTOS International Ltd Global business - 80.00 services DTOS Trustees Ltd Global business - 80.00 services Egeco Limited* Dormant - 100.00 Egeria Fishing Co Ltd* Dormant 100.00 - Emmanuel Cadet and Company Limited Dormant - 100.00 Equip and Rent Company Ltd Rental of equipment 100.00 - Fish Meal Producers Limited Manufacturing 75.00 - Fit-Out (Mauritius) Ltd Manufacturing - 60.40 Froid des Mascareignes Limited Storage - 56.00 Grapevine Limited IT Services 100.00 - General Refuse Enterprise for Environmental Needs Ltd Waste removal - 100.00 G S P Co Ltd Manufacturing - 100.00 Hall Geneve Langlois Limited* Dormant 100.00 - IBL Aviation SARL Dormant - 100.00 IBL Consumer Health Products Ltd Healthcare 100.00 - IBL Energie Ltée* Dormant 67.00 - IBL Entertainment Ltd Dormant - 100.00 IBL Entertainment Holding Ltd Investment 100.00 - IBL Environment Ltd Dormant - 80.00 IBL Financial Services Holding Ltd Investment 100.00 - IBL Fishing Company Ltd Shipping 100.00 - IBL Forex Company Ltd Dormant 100.00-140 141
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 34. (a) SUBSIDIARY COMPANIES (continued) 34. (a) SUBSIDIARY COMPANIES (continued) 142 Other Group Ireland Blyth Companies Class of Limited Effective shares held Main activity % Holding % Holding IBL Impex Ltd* Ordinary Dormant 100.00 - IBL International Ltd Dormant 100.00 - IBL Madagasikara S.A. Commerce 90.00 - IBL Properties Ltd Property 100.00 - IBL Regional Development Ltd Investment 100.00 - IBL Santé SARL Healthcare 90.00 10.00 IBL Training Services Ltd Dormant 100.00 - IBL Travel Limited Travel agency 100.00 - IBL Travel SARL Dormant - 100.00 Indian Ocean Dredging Ltd Dormant 100.00 - Indian Ocean Logistics Ltd Clearing & forwarding 100.00 - Indico Canning Ltd Manufacturing - 54.40 Interface Management Services Ltd Global business services - 40.80 I-Consult Limited IT Services 100.00 - I-Consult International Ltd* Dormant 100.00 - Ireland Blyth (Engineering) Ltd Dormant - 100.00 Ireland Blyth (Informatics) Ltd Dormant - 100.00 Ireland Blyth (Seychelles) Ltd Dormant 100.00 - Ireland Fraser and Company Limited Dormant 100.00 - Ireland Fraser (Madagascar) SARL Dormant - 100.00 I-Telecom Ltd IT Services 100.00 - Island Coal Ltd Dormant 78.43 - Knights & Johns Management Ltd Global business services - 40.80 Koho Boards Ltd Dormant - 80.00 Interface International Ltd Global business - 40.80 services Logidis Limited Warehousing 100.00 - Logidis Services Ltd Dormant 100.00 - Madcourrier SARL Courrier Services - 100.00 Mada Aviation SARL GSA - 100.00 Manser Saxon Aluminium Ltd Manufacturing - 80.00 Manser Saxon Plumbing Ltd Manufacturing - 80.00 Manser Saxon Contracting Ltd Manufacturing & 80.00 - Contracting Manser Saxon Export Ltd* Dormant - 80.00 Manser Saxon Openings Ltd Manufacturing - 80.00 Manufacturing and Industrial Development Corporation Limited* Dormant - 100.00 Marine Biotechnology Products Ltd Manufacturing - 80.00 Mauritian Eagle Insurance Company Limited Insurance 60.00 - Mauritian Eagle Leasing Co Ltd Leasing & deposit 49.00 30.60 taking Medical Trading Company Ltd Healthcare 100.00 - Other Group Ireland Blyth Companies Class of Limited Effective shares held Main activity % Holding % Holding Medical Trading International Ltd Ordinary Healthcare 100.00 - New Cold Storage Company Limited Distribution 100.00 - Pick and Buy Limited Supermarkets 100.00 - Pines Ltd Global business services - 80.00 Plastic Recycling Co Ltd Dormant 100.00 - Riche Terre Development Limited Property 100.00 - Riche Terre Electricals Ltd* Dormant - 80.00 Rodrigues Speciality Products Ltd Dormant 100.00 - Scomat Limitée Industrial & Mechanical 100.00 - SCP Ltd* Dormant - 99.00 Seafood Hub Ltd Investment 80.00 - Seaways Marine Supplies Ltd Shipping 100.00 - Société de Traitement et d Assainissement des Mascareignes Ltée Dormant 100.00 - Société de Transit Aérien et Maritime SARL Dormant - 100.00 Société Immobilière IBL Tana SARL Dormant - 100.00 Société Mauricienne d Exploitation des Eaux Ltée* Dormant - 80.00 Société Mauricienne de Navigation Limitée Dormant 100.00 - Somatrans SDV Ltd Clearing & forwarding 75.00 - Somatrans SDV Logistics Ltd Clearing & forwarding - 75.00 Southern Seas Shipping Company Limited Shipping 100.00 - Star Cruise Ltd* Dormant 100.00 - Strategic Supply Ltd* Dormant 100.00 - Thon des Mascareignes Ltée Manufacturing - 80.00 Tornado Engineering Ltd * Dormant - 80.00 Tornado Limited Manufacturing - 80.00 Tourism Services International Limited Tourism 100.00 - Transfroid Limited Clearing & forwarding - 56.00 Trianon Development Ltd Dormant 100.00 - Tuna Mascarene S.l. Dormant - 100.00 *in process of winding up NOTE: All subsidiaries are incorporated in Mauritius except Ireland Blyth (Seychelles) Ltd, incorporated in the Seychelles, IBL Madagasikara S.A, IBL Aviation SARL, IBL Santé SARL, IBL Travel SARL, Madcourrier SARL, Mada Aviation SARL, Ireland Fraser (Madagascar) SARL, Société de Transit Aérien et Maritime SARL and Société Immobilière IBL Tana SARL, incorporated in Madagascar and Tuna Mascarene S.I., incorporated in Spain. 143
Notes to the Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2008 (continued) 34. (b) ASSOCIATED COMPANIES Country of Class of Incorporation Shares Held % Holding 35. CONSTRUCTION CONTRACTS The Group is making the following disclosures in respect of construction contracts: Air Mascareignes Limitée Mauritius Ordinary 49.00 Chantier Naval de l Océan Indien Ltd 50.00 Cie Thonière de l Ocean Indien Ltée 50.00 Clean Energy Ltd* 30.00 Equity Aviation Indian Ocean Ltd 50.00 Fish Protein Producers Ltd 50.00 Industrie et Services de l Océan Indien Limitée 50.00 La Mascareignes des Eaux Ltée* 20.00 Marine Electronics Co Ltd 50.00 Mauritius Coal and Allied Services Co Ltd 49.00 Mer des Mascareignes Limitée 50.00 Princes Tuna (Mauritius) Ltd 29.33 Profilage Ocean Indien Ltée 20.00 Scimat Ltée Reunion 50.00 Shoprite (Mauritius) Limited Mauritius 49.00 Shoprite (Mauritius) Limited Preference 49.00 Sun Resorts Limited Ordinary 29.36 Trois Ilots Ltée 33.33 *in process of winding up (c) OTHER INVESTMENTS Details of those companies other than subsidiary and associated companies, in which Ireland Blyth Limited holds a 10% interest or more, are: Class of Shares Held % Holding Nouvelle Clinique du Bon Pasteur Ordinary 12.50 2008 2007 Rs 000 Rs 000 (i) Contract revenue 218,970 617,084 (ii) In respect of construction contracts in progress at Balance Sheet date: (a) Retentions held by customers (included in trade and other receivables) 10,941 26,778 (b) Advances received from customers (included in trade and other payables) 43,743 150,348 (c) Net amount due for contract works: Amount due from customers (included in trade and other receivables) 90,428 287,397 Amount due to customers (included in trade and other payables) (43,743) (150,348) 46,685 137,049 Contracts cost incurred plus recognised profits less recognised losses to date 218,970 617,084 Less: Progress billings (172,285) (480,035) 36. CHANGE IN ACCOUNTING POLICY 46,685 137,049 In order to better represent the net worth of the Company s investments in associates, the Board of Directors approved a change in the accounting policy in their carrying value from cost to fair value for quoted investments. The change has been applied retrospectively and the impact is as follows: 2006 As previously reported Adjustments As restated Rs 000 Rs 000 Rs 000 Balance sheet Investment in associate 751,667 1,222,053 1,973,720 Investment revaluation reserve: At 1 January 2006 (633) 1,100,451 1,099,818 Movement for the year 5,994 121,602 127,596 At 31 December 2006 5,361 1,222,053 1,227,414 144 145
Notes 146 147
Proxy Form I/ We, of, being a member of IRELAND BLYTH LIMITED do hereby appoint of, or in his absence of, as my/our proxy, to vote for me/us and on my/our behalf at the Annual Meeting to be held on Friday 19 June 2009 and at any adjournment thereof. I/We desire my/our vote(s) to be cast on the Ordinary Resolutions as follows: Special Resolution: 1. That the Constitution embodied in a deed drawn up by Mr. Marie Joseph Bernard d Hotman de Villiers, notary, on the twenty-first day of January two thousand and nine, registered in Reg: A 737 No. 2275, and for the purpose of identification, subscribed by Mr. Pierre Bernard Arnaud Montagu Dalais, Chairman of the Board of Directors of the Company, be approved and adopted as the Constitution of the Company in substitution for, and to the exclusion of, the existing memorandum and articles thereof. Ordinary Resolutions: 2. To adopt the Minutes of the Thirty-sixth Annual Meeting of the shareholders held on 13 June 2008. 3. To receive and adopt the Company s and Group s Financial Statements for the year ended 31 December 2008 and the Directors and Auditors reports there on. 4. To ratify the dividend paid in April 2009 as a final dividend. 5. To re-appoint Messrs Kemp Chatteris Deloitte as Auditors for the ensuing year and to authorise the Board of Directors to fix their remuneration. 6. To appoint Mr Jean Marie Gaetan Lan Hun Kuen as Director. 7. To appoint Mr Jean Michel Louis Rivalland as Director. 8. To re-appoint Mr G Christian Dalais as Director in compliance with Section 138(6) of the Companies Act 2001. 9. To re-appoint Mr Cyril Lagesse as Director in compliance with Section 138(6) of the Companies Act 2001. 10. To re-elect Mr Arnaud Dalais as Director. 11. To re-elect Mr Jean Pierre Dalais as Director. 12. To re-elect Mr Patrice d Hotman de Villiers as Director. 13. To re-elect Mr Bertrand Hardy as Director. 14. To re-elect Mr Arnaud Lagesse as Director. 15. To re-elect Mr Thierry Lagesse as Director. 16. To re-elect Mr Jean Ribet as Director. For Against 148 Signed this day of 2009 Signature/s NOTES 1. A member of the Company entitled to attend and vote at this meeting may appoint a proxy of his own choice (whether a member or not) to attend and vote on his behalf. 2. Please mark in the appropriate box how you wish to vote. If no specific direction as to voting is given, the proxy will exercise his discretion as to how he votes. 3. This form of proxy, duly signed, to be effective must reach the Company Secretary at the Registered Office of the Company, IBL House, Caudan, Port Louis, at least twenty-four hours before the day of the Meeting.