investing and engaging

INVESTINGAND

ENGAGINGANNUAL REPORT 2015

Alteo Limited - ANNUAL REPORT 2015

CONTENTSNotice of Annual MeetingCorporate InformationGroup StructureChairman’s StatementExecutives’ ReportCorporate Social Responsibility Group Environmental DataStatement of ComplianceCorporate Governance ReportStatutory DisclosuresCompany Secretary’s CertificateIndependent Auditors’ Report to the MembersStatements of Financial PositionStatements of Profit and Loss and other Comprehensive IncomeStatements of Changes in EquityStatements of Cash FlowsNotes to the Financial StatementsProxy FormPostal Vote

0203

04 - 05 06 - 0708 - 5752 - 5758 - 61

6364 - 8788 - 96

979899

100 - 101102 - 103

104105 - 175

179180

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Dear Shareholder,

The Board of Directors of Alteo Limited (“ALTEO” or “the Company”) is pleased to present its Annual Report for the year ended June 30, 2015. This report was approved by the Board of Directors at a meeting held on September 24, 2015.

On behalf of the Board of Directors of ALTEO, we invite you to go through the Annual Report, which is also published in full on the Company’s website, and join us at the Annual Meeting of the Company which will be held:

Date: Friday, December 18, 2015Time: 14.00 hoursPlace: Hennessy Park Hotel Ebony Conference Room 65 Ebène Cybercity, 72201 Ebène

We look forward to seeing you.

Yours sincerely,

P. Arnaud DalaisChairman

INVESTINGANDENGAGING


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MANAGEMENT TEAM

Patrick de L. d’ArifatChief Executive OfficerFabien de Marassé EnoufChief Finance ExecutiveChristian MarotCOO Agricultural ActivitiesSébastien LavoipierreCOO Industrial ActivitiesJean-Robert LincolnGroup Agricultural Development ExecutiveSophie StraussHuman Resources ExecutiveRobert BaissacCEO of TPC LtdStéphane IsautierDevelopment Executive of Sucrière des Mascareignes LtdPatrice LegrisCEO of ALTEO Properties LtdStan RauCEO of Transmara Sugar Company Ltd

REGISTERED OFFICE

Vivéa Business Park81406 Saint PierreMauritiusBRN: C06000012Tel: (230) 402 9050Fax: (230) 432 0729Website: www.alteogroup.com

ALTEO - BEAU CHAMP

Beau Champ40903 Grand River South EastMauritiusTel: (230) 417 6000Fax: (230) 417 6481

ALTEO - UNION FLACQ

41903 Union FlacqMauritiusTel: (230) 402 3300Fax: (230) 413 2699

COMPANY SECRETARY

Navitas Corporate Services LtdNavitas HouseRobinson Road74111 FloréalMauritiusTel: (230) 605 1700Fax: (230) 698 5351

SHARE REGISTRY & TRANSFER OFFICE

If you are a shareholder and have inquiries regarding your account, wish to change your name or address, or have questions about lost share certificates, share transfers or dividends, please contact our Share Registry and Transfer Office:

MCB Registry & Securities Limited2nd Floor, MCB Centre9-11, Sir William Newton Street11328 Port-LouisMauritiusTel: (230) 202 5397Fax: (230) 208 1167

EXTERNAL AUDITORS

BDO & Co.

INTERNAL AUDITORS

EY

BANKERS

ABC Banking CorporationAfrAsia Bank LimitedBarclays Bank PLCBank of BarodaBanque des Mascareignes LtéeBank One LimitedState Bank of Mauritius LtdThe Hong Kong and Shanghai Banking Corporation LtdThe Mauritius Commercial Bank Ltd

CORPORATEINFORMATION

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NOTICE OF ANNUAL MEETINGTO SHAREHOLDERS Notice is hereby given that the Annual Meeting (“the Meeting”) of the Shareholders of Alteo Limited (“the Company”) will be held at Hennessy Park Hotel, Ebony Conference Room, 65 Ebène Cybercity, 72201 Ebène on Friday, December 18, 2015 at 14.00 hours to transact the following business in the manner required for the passing of ORDINARY RESOLUTIONS:

AGENDA1. To consider the Annual Report 2015 of the Company.2. To receive the report of BDO & Co, the auditors of the Company.3. To consider and adopt the Group’s and Company’s audited financial statements for the year ended June 30, 2015.4. To elect, on the recommendation of the Corporate Governance, Nomination, Remuneration & Ethics Committee,

as Director of the Company to hold office until the next Annual Meeting, Mr. Fabien de Marassé Enouf1 who has been nominated by the Board of Directors on June 24, 2015 and who offers himself for election.

5-14.To re-elect, on the recommendation of the Corporate Governance, Nomination, Remuneration & Ethics Committee, as Directors of the Company to hold office until the next Annual Meeting, the following persons1 who offer themselves for re-election (as separate resolutions):5. Mr. P. Arnaud Dalais 6. Mr. Jean-Claude Béga7. Mr. Jan Boullé8. Mr. Jean-Pierre Dalais9. Mr. Amédée Darga10. Mr. Jérôme De Chasteauneuf11. Mr. Jean de Fondaumière12. Mr. Patrick de L. d’Arifat13. Mr. Arnaud Lagesse 14. Mr. Thierry Lagesse

15. To re-appoint BDO & Co as auditors of the Company for the ensuing year and to authorise the Board of Directors to fix their remuneration.

16. To ratify the remuneration paid to the auditors for the financial year ended June 30, 2015.

Nathalie Gallet, ACISFor Navitas Corporate Services LtdCompany Secretary

November 13, 2015

Notes1. A shareholder of the Company entitled to attend and vote at this Meeting may appoint a proxy of his/her own choice to attend

and vote on his/her behalf. A proxy need not be a member of the Company.2. A proxy form and a postal vote are included in the Annual Report and are also available at the registered office of the Company,

Vivéa Business Park, 81406 Saint Pierre.3. The instrument appointing a proxy or any general power of attorney shall be deposited at the Share Registry and Transfer Office of

the Company, MCB Registry & Securities Ltd, 2nd Floor, MCB Centre, 9-11, Sir William Newton Street, 11328 Port-Louis, not less than twenty-four (24) hours before the start of the Meeting and in default, the instrument of proxy shall not be treated as valid.

4. Postal votes shall be deposited at the Share Registry and Transfer Office of the Company, MCB Registry & Securities Ltd, 2nd Floor, MCB Centre, 9-11, Sir William Newton Street, 11328 Port-Louis, not less than forty-eight (48) hours before the start of the Meeting and in default, the postal vote shall not be treated as valid.

5. For the purpose of this Annual Meeting, the Directors have resolved, in compliance with Section 120(3) of the Companies Act 2001, that the shareholders who are entitled to receive notice of the meeting shall be those shareholders whose names are registered in the share register of the Company as at November 20, 2015.

6. The minutes of the Annual Meeting held on December 18, 2014 are available for consultation by the shareholders during office hours at the registered office of the Company, Vivéa Business Park, 81406 Saint Pierre.

7. The minutes of the Annual Meeting to be held on December 18, 2015 will be available for consultation and comments during office hours at the registered office of the Company, Vivéa Business Park, 81406 Saint Pierre from February 1 to 12, 2016.

Footnote 1: The profiles and categories of the Directors proposed for election and re-election are set out at pages 68 to 70 of the Annual Report.


100%

100%

74.9%

100%

50%

51%

75%

99.89%

100%

100%

80%

100%

27.27%

32.5%

50.63%

32.5%

13.13%

50%

Transmara InvestmentLimited

Sukari Investment Company Limited

Transmara SugarCompany Limited

TPC Ltd

Trianon Estates Limited

Société Gonin

Société Ducomet

Deep River Beau Champ Milling Company Ltd

Anahita Centre for Excellence Limited

BluefrogLimited

Alteo Refinery Ltd

Alteo Planters Services Ltd

Anahita Golf Ltd

Compagnie Usinière de Mon Loisir Ltée

Consolidated Energy Co. Ltd.

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GROUPSTRUCTURE AS AT SEPTEMBER 24, 2015

CIEL LIMITED20.96%

OTHER SHAREHOLDERS

52.12%

GMLINvESTISSEMENT LTéE

26.92%

64.23%

65.19%

61.72%

100%

57.15%

60%

50%

100%

33.3%

100%

65.10%

76.50%

85.72%

100%

100%

99.99%

42.03%

50%

7.57%

99.99%

ALTEO LIMITED

Alteo Astonfield Solar Limited50%

100%

33.33%

Anahita World Class Sanctuary Ltd

Trois Ilots Limited

Anahita Estates Limited

Fondation Nouveau Regard

Alteo Energy Ltd

Constance La Gaiété Company Limited

Ferney Aquaculture Limited

Refinest Limited

Anahita Residences and villas Limited

Société Beauregard

Alteo Milling Ltd

Compagnie de la vigie Limitée

Eastern Energy Company Limited

Usinest Limited

Schoenfeld Co. Ltd

Island Fresh Ltd

Alteo Properties Ltd

Sena Development Ltd

Sucrière des Mascareignes Limited

West East Limited

Domaine de L’Etoile Ltd

Alcohol & Molasses Export Limited


An interim dividend of Rs 0.35 per share (2015: Rs 0.35) and a final dividend of Rs 0.45 per share (2015: Rs 0.45) were declared during the financial year.

PROSPECTS

Agri and Sugars

Our cane growing and sugar milling operations in Mauritius are expected to benefit from a good sugarcane crop, but will be affected by the prevailing low sucrose content of the cane and still-depressed EU sugar prices.

In Tanzania, above-average cane yields are again anticipated and strong results are expected despite the likely adverse effect of low world prices on the domestic market.

In Kenya, a planned increase in production and stable prices for the current year are expected to translate into positive results.

Energy

CEL’s power plant is currently undergoing a major overhaul and is expected to be back on the grid in October 2015 under the terms of an improved Power Purchase Agreement to December 2018. Results for Alteo Energy Ltd are expected to remain in line with the previous year on the basis of stable coal prices for the foreseeable future.

Property and Hospitality

The gain in sales momentum registered at Anahita this year should positively impact the results in the first semester of the current financial year as construction works progress on phase two of the Amalthea development. The launch of the next development phase is expected in the second quarter.

ENVIRONMENTAL AND SOCIAL RESPONSIBILITY

This year’s edition of the annual report provides additional information on ALTEO’s environmental and social initiatives as well as on projects to continuously improve Health & Safety standards. This new ‘sustainability’ focus reflects the importance that ALTEO attributes to these issues and is a first step towards developing a future integrated report.

ALTEO’s commitment in this area is viewed as both a group responsibility and a priority for business success. Indeed, the quality of our products is increasingly assessed by our environmental and social standards. It is ALTEO’s belief that its various clusters can only progress if the environment in which they operate also benefits.

ALTEO’s total contribution to community projects in Mauritius reached Rs 10.6m this year (2015: Rs 11.3m). This was focused on social welfare, education and training, childcare and health. ALTEO continues to be active through the Fondation CIEL Nouveau Regard and the GML Fondation Joseph Lagesse, as well as through direct contributions to a number of other activities. In Tanzania, ALTEO is also actively involved in community development through a joint venture with a Dutch NGO.

APPRECIATION

At a Board meeting held on June 24, 2015, Mr. Arnaud Lagesse tendered his resignation as Chairman of the company, while nonetheless remaining a member of the Board. In the name of the Board, I would like to express our gratitude to Mr. Lagesse for having acted as Chairman since August 2013.

I would also wish to thank my colleagues on the Board of Directors for their contribution to the affairs of the company throughout the year.

We also seize this opportunity to welcome Mr. Fabien de Marassé Enouf, who was appointed to the Board on June 24, 2015.

Finally, we also extend our appreciation to the management and staff, under the leadership of our Chief Executive Officer, Patrick de L. d’Arifat, for their valuable contributions throughout the year.

P. Arnaud DalaisChairman

September 24, 2015

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CHAIRMAN’SSTATEMENTDear Shareholder,

On behalf of the Board of Directors of ALTEO, I am pleased to present the company’s annual report for the financial year 2014-15.

During the year under review, ALTEO made significant additional headway towards achieving its mission of being “a competitive regional reference in the cane industry and its numerous derivatives, in renewable energy production and in sustainable property development”.

On the financial side, the ALTEO Group reported improved results for the year, mainly driven by:

• The sustained performance of its sugar operations in Tanzania;

• A marked turn-around in the property sector in Mauritius; and

• Gains realised on the disposal of its shareholding in Anahita Hotel Limited (“AHL”).

At the same time, our sugar operations in Mauritius operated under very challenging conditions owing to the combined effect of reduced production and a significant additional drop in prices. The energy cluster continued to post satisfactory results. These were achieved through improved efficiency and relatively low coal prices, despite a reduced tariff.

OVERALL REVIEW

On the strategic and operational front, the Group’s main achievements during the year were:

• The acceleration of the mechanisation of agricultural operations and launch of a garage and transport master plan in order to optimise synergies and efficiency gains;

• The completion of an ambitious investment programme at Alteo Milling Ltd (“AML”) to operate sustainably above the capacity target of 400 tonnes of cane per hour (“TCH”);

• The extension of the Consolidated Energy Ltd (“CEL”) power purchase contract for 3 years and the completion of a pre-feasibility study of a new, high-efficiency 2 X 45MW power plant by Alteo Energy Ltd;

• The successful completion of the development of the southern part of Anahita and the start of works on the first phase of an exclusive product range on the northern part of the estate;

• In Tanzania, the decision to increase the factory capacity from 170 to 190 TCH from 2016-17 onwards, in order to match increased cane production; and

• The completion of the acquisition of a 51% stake in Transmara Sugar Company Ltd (“TSCL”) in Kenya and the decision to increase the factory capacity from 90 to 180 TCH.

GROUP FINANCIAL RESULTS

The Group turnover for the year under review reached Rs 6,735m, up by 14% compared to the previous year. This increase has been largely achieved by the encouraging performance of the property cluster, resulting from the progress of works on phase 1 of the Amalthea development at Anahita. The increase in turnover of our Tanzanian sugar operations has unfortunately been offset by the poor performance of our local sugar operations, where both lower tonnage and lower sugar prices have had a significant and adverse impact on results.

Despite a 6% improvement in absolute terms, the Group’s Earnings before interest, tax, depreciation and amortisation (“EBITDA”) margin in the year under review went down compared to the previous year to reach Rs 2,091m. The lower sugar price, coupled with an increase in labour costs following the agreement reached with trade unions in November 2015, has had a negative impact on the EBITDA margin of the Group’s Mauritian sugar operations.

Group profit after tax increased significantly to reach Rs 1,157m, compared to Rs 569m in the previous financial year. This was largely explained by the gain of Rs 305m realised on the disposal of a 50% shareholding in AHL in 2015-15, and by the fact that last year’s results were adversely affected by a loss of Rs 225m on the disposal of a 50% shareholding in Novelife. Moreover, finance costs dropped by 20% due to foreign exchange gains and to the lower average gearing level of the Group during the financial year under review.

The share of results from associates and joint ventures dropped to Rs 21m compared to Rs 55m in the previous year, as the results of AHL have been excluded from these following its disposal in December 2014.

CHAIRMAN’S STATEMENT


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9EXECUTIvES’ REPORT

Operational results have globally been quite encouraging despite the reduction in sugar production and lower sugar prices in Mauritius. On the property front, the strengthened performance anticipated this time last year is reflected in this year’s results.

Additional executive resources have been recruited during the year with the aim of putting into place the optimum management structure to enable us to achieve our global sustainability objectives, including the expansion of our production base in Africa.

ALTEO continued to demonstrate its environmental and social responsibility by maintaining its

ongoing focus on initiatives to improve the environmental and Health & Safety standards

of its operations and by engaging in local communities through its CSR funds.

In that vein, this year ALTEO welcomed exchanges relating to sustainability with GML and CIEL and will be pursuing efforts to remain visionary yet practical, to focus on incremental steps that are ‘well done’, and to maintain regular and genuine communications with its stakeholders.

During the year, Mr. P. Arnaud Dalais expressed the wish to retire as Group Chief Executive of the company as from June 30, 2015. The Board of Alteo placed on record its highest appreciation of his role as Group Chief Executive of Deep River Beau Champ Ltd since 1991 and subsequently of Alteo Limited from 2012 onwards. Similarly, the ALTEO executive team acknowledged Mr. Dalais’ inspired leadership throughout those years.

We are pleased to announce that Sophie Strauss and Stéphane Isautier joined the executive team of ALTEO during the year to fill the newly-created positions of Human Resources Executive of Alteo Ltd and Development Executive of Sucrière des Mascareignes Ltd respectively.

Sophie joins us after close to 10 years at Nestlé Waters UK, the last five of which she was Head of HR and Board Director; while Stéphane has had a rich operational and executive experience at an international level with Tereos.

In the aftermath of the acquisition of the Kenyan sugar milling operation, Stan Rau also joined Alteo’s Executive team as Chief Executive Officer of Transmara Sugar Company Ltd. Stan has had an extensive career at managerial level in the African sugar industry.

We extend a special welcome to Sophie, Stéphane and Stan as they join the ALTEO Group and wish them a very fruitful collaboration with us.

We are pleased to present hereunder an extensive review of the different lines of activity in which the Group operates, namely:

a) Cane growing;b) Sugar manufacturing;c) Sugar refining;d) Energy production;e) International operations; andf) Property & Hospitality.


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ALTEO AGRI

ALTEO SUGARS

ALTEO ENERGY

ALTEO INTERNATIONAL

ALTEO PROPERTY & HOSPITALITY

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8 EXECUTIvES’REPORT

We are pleased to submit our executives’ report for the year 2014-15.

The main achievements and landmarks of the year are contained in the present report, which summarises the operational and strategic ambitions of your company.

The year under review was mainly characterised by a new investment in Kenya in direct line with Alteo’s regional development strategy. It is a significant step towards achieving the group’s declared objective of becoming an emerging market player in the region. The company also finalised the prefeasibility of a highly efficient and more environmentally friendly alternative to its current electricity generation installations.


in a mill stoppage of 12 days in November 2014. Furthermore, excessive rainfall during the month of December 2014 had a very disruptive effect on cane transport and harvest operations.

In view of the above, Alteo’s cane production was of only 787,252 tonnes for the period under review, compared to an initial estimate of 853,354 tonnes. Moreover, some 70,000 tonnes of cane were left in the fields to be carried over for the 2015 crop, as only 8,900 hectares were harvested compared to the originally planned 10,000 hectares. Average cane yield reached 88.4 tonnes per hectare, a significant increase over the crop 2013 yield of 75.8 tonnes per hectare.

translates into an average of 8.7 tonnes of sugar per hectare for the crop. As depicted in Graph 3, which shows daily and cumulative extraction rate trends for the 2013 and 2014 crops, the main cause of this lower performance for the 2014 crop was the extension of the harvest to January 2015 coupled with the excessive rainfall and high temperatures recorded during the crop.

CANE GROWING

Review of Operations

2014 Crop

Following the closure of DRBC Milling sugar factory at the end of the 2013 crop, the entirety of the cane produced in its factory area for the 2014 crop was crushed at the Alteo Milling sugar factory. The 2014 crop’s duration was initially scheduled to last 170 days, but due to a number of exceptional events and circumstances the harvest was extended to the end of January 2015, thus totalling 188 crushing days. This situation was mainly caused by an industry-wide industrial action that resulted

The cumulative rainfall recorded in the north and eastern regions during the vegetative period of October 2013 to March 2014 was of 803 mm and 1,707 mm respectively. This represented 99% and 141.3% of the Long Term Mean (LTM) and was conducive to cane growth.

The extraction rate (commercial sugar recovered relative to cane harvested) attained 9.81%. This

EXECUTIvES’ REPORTCANE GROWING

Table 1: 2014 crop cane production

RegionsArea (hectares) Cane Production (tonnes) Yield (tonne/hectare)

Estimate Actual Estimate Actual Estimate Actual

Beau Champ

Olivia 1,164 1,081 105,430 103,776 90.6 96.0

Belle Rive 1,475 1,157 123,566 103,523 83.8 89.5

Ferney 860 759 78,500 70,414 91.3 92.8

Union Flacq

Q.Victoria 2,864 2,467 258,858 227,122 90.4 92.1

Bel Etang 1,897 1,701 147,000 148,745 77.5 87.4

Mon Loisir Mon Loisir 1,746 1,741 140,000 133,672 80.2 76.8

TOTAL 10,006 8,906 853,354 787,252 85.3 88.4


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EXECUTIvES’ REPORT

and cost control. Transport billing has also been upgraded and standardised to provide more accurate information about vehicles and equipment utilisation. Furthermore, a 24-hour roster system has been implemented for cane transport and land preparation activities.

Capital expenditure for the financial year amounted to Rs 180m, a significant reduction compared to the Rs 307m spent in the previous financial year. This decision was prompted by the company’s deteriorating cash flow situation following the substantial decline in cane and sugar production for crops 2014 and 2015, coupled with an additional drop in sugar prices this year. Capital expenditure was only undertaken where it was essential, urgent and related to core activities such as the refurbishment of two centre pivot irrigation systems at Union Flacq and Beau Champ. At the same time, the yearly cane-replanting programme was reduced by some 400 hectares from the usual 1,300. A number of other projects have unfortunately also been put on hold until sugar prices rise to a healthier level.

Financial results 2014-15

In the year under review, the price of sugar for the 2014 crop fell further to reach Rs 14,694 per tonne, inclusive of a special payment of Rs 2,000 per tonne from the Sugar Insurance Fund Board. This is a reduction of 7.18% from the Rs 15,830 per tonne of the previous year. For its part, the price of molasses rose by 17.55% to Rs 2,317 per tonne, up from Rs 1,971 in 2013. Table 3 shows the trend in prices over recent years.

On the operational side, 493,400 tonnes of cane were mechanically harvested, representing 61% of the total harvest of 812,652 tonnes. The proportion of mechanically-harvested cane would have been higher had there been no carried-over cane.

Throughout the year, the Cane Pro strategic decision making tool, operational since June 2014, provided management with a regular flow of information about daily harvest monitoring, varietal performance, fertiliser and herbicide progress, meteorology, weighbridge deliveries, etc. Cane Pro has definitely enabled its 44 direct users within the Agri cluster to make precious time savings by providing up to date information and enabling better decision-making while facilitating teamwork.

Given ever-increasing labour costs, reducing dependency on manual operations was the focus of particular attention in the year under review. A 19% reduction in contractual labour was achieved in 2014-15, with the use of only 146,000 man-days, compared to 180,000 in 2012-13. Activities such as cane plantation, stone removal, earthing up, filter-cake application and harvest are gradually being mechanised. The objective is to bring contractual labour down to 80,000 man-days per year in the coming five years, a further reduction of 43%.

Since January 2015, management of the three garage and transport facilities situated at Union Flacq, Beau Champ and Mon Loisir has been centralised. Priority has been given to the implementation of a new, harmonised expense coding structure in the aim of improving budgeting

CANE GROWING

Table 3: Selling price of sugar and molasses (2008 to 2015) in rupees per tonne

Crop years 2015 (est.) 2014 2013 2012 2011 2010 2009 2008

Sugar 14,500 14,694 15,830 17,573 16,020 13,536 14,612 17,427

Molasses 2,125 2,317 1,971 2,235 1,982 2,689 3,016 2,181

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EXECUTIvES’ REPORT CANE GROWING

A total of 812,652 tonnes was thus finally harvested during the 2014-2015 financial year. Extraction reached 9.68%.

Considering the 70,000 tonnes of cane carried over from the 2014 crop, it had been initially planned to harvest 170,000 tonnes of cane at the beginning of the 2015 crushing season, i.e. prior to the financial year end. However, again due to bad weather conditions, only 126,000 tonnes of cane were harvested, with an extraction rate of 8.15%, well below the forecast of 9.0%

Graph 1: Daily extraction trends for 2013 and 2014 crops

Table 2: Cane harvested during financial year 2014-2015

RegionsCane production (tonnes)

July 2014- February 2015 May-June 2015 TOTAL Estimate

Beau Champ 230,414 53,931 284,345 302,414

Union Flacq 324,153 71,924 396,077 424,153

Mon Loisir 132,182 48 132,230 133,682

Total 686,749 125,903 812,652 860,249

5.5

26 M

ay

02 J

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09 J

un

16 J

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23 J

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30 J

un

07 J

ul

14 J

ul

21 J

ul

28 J

ul

04 A

ug

11 A

ug

18 A

ug

25 A

ug

01 S

ep

08 S

ep

15 S

ep

22 S

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29 S

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06 O

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13 O

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6.5

7.5

8.5

9.5

10.5

Extraction

Poly. 2013 2014 Poly. 20142013



and 2015 and provides an overview of the combined trend of average tonnes of cane per hectare for the regions of Beau Champ, Union Flacq and Mon Loisir over the past 15 years.

well as for future major irrigation projects. These plans will pave the way towards the objective of reducing costs through economies of scale and by increasing cane production in the years to come.

Based on the 2016 to 2020 business plan, and considering the expected difficulty of the company’s cash flow situation, the estimated capital expenditure programme for the next financial year consists of additions to fixed assets of Rs 130m compared to Rs 180m for 2014-15. This mainly comprises the urgent replacement of two centre pivots at Union Flacq; the expansion of the de-rocking and land improvement programmes to further increase the mechanised area; and essential fleet and equipment renewals. In addition, the cane-replanting programme has been maintained at a similar level to that of last year. This represents only two thirds of the normal replantation expenditure level.

The forecast for cane harvested during financial year 2015-16 has been set at 881,000 tonnes. Graph 4 below outlines average yield between 2001

Average yield (tonnes of cane per hectare) between 2001 and 2015

Owing to still-depressed EU market prices and to a lack of more positive prospects, the sugar price for the financial year 2015-16 has been estimated at Rs 14,500 per tonne, including an expected Rs 2,000 per tonne special contribution from the Sugar Insurance Fund Board.

Future prospects

During the year under review, a five-year business plan for the period to 2020 was completed. Given the prevailing adverse market conditions and the already loss-making situation of the sector, the business plan focuses on investments and operational measures aimed at directly curtailing operational costs and at increasing efficiency and yields. In addition, a master plan is being drawn up for the garage and transport operations as

CANE GROWING

Table 5: Cane estimates, financial year 2015-16

RegionsCane production

(tonnes)

Jul-Dec 2015

May-June 2016 TOTAL Harvest

area TCH TOTAL2014/15

Beau Champ 263,800 62,400 326,200 3,745 87.1 284,345

Union Flacq 354,430 67,600 422,030 4,872 86.6 396,077

Mon Loisir 132,769 - 132,770 1,745 76.1 132,230

TOTAL 751,000 130,000 881,000 10,362 85.0 812,652

Graph 2: ALTEO average yield, 2001 to 2015

90

83.75

77.5

71.25

652001

88.1

2009

82.9

2005

77.2

2013

75.7

2003

79.8

2011

78.5

2007

67.8

2015

(estimate)

2002

73.1

2010

77.6

2006

73.4

2014

88.484.8

2004

80.3

2012

80.1

2008

78.1

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calendar year 2017. The combined impact of the above has seen the 2014-15 wage bill increase by Rs 47.8m relative to the previous financial year.

Savings of Rs 40m were achieved due to a premium holiday granted by the Sugar Insurance Fund Board.

Globally, the company sustained a loss on agricultural operations of Rs 228m in the year under review, compared to a loss of Rs 140m in the previous year.

2015 crop

Based on cane growth measurements, the climatic conditions that prevailed during the vegetative period, and an increase in the total area planned to be harvested to 10,315 hectares compared to 8,906 hectares in 2014, the 2015 crop harvest is estimated at 875,091 tonnes of cane. This represents an increase of 11.2% on the previous crop year. An average cane yield of 84.8 tonnes per hectare is thus anticipated, compared to 88.4 tonnes per hectare for the previous crop year.

This year, Alteo aims to mechanically harvest 545,000 tonnes of cane. This is an increase of 26.7% compared to last year’s harvest of 430,000 tonnes. An extraction rate of 10.30% has been budgeted, resulting in a forecast yield of 9.0 tonnes of sugar per hectare.

For the July 2014 to January 2015 period, the company realised sugar revenues of Rs 782m. An additional Rs 116m was generated from sugar produced at the start of the 2015 crop. Consequently, sugar turnover amounted to Rs 898m for the financial year, down from Rs 1,108m of the previous financial year. This decrease is a direct consequence of the reduction in cane harvested – 812,652 tonnes compared to the previous year’s tonnage of 858,731 – and of a much lower extraction rate, as previously mentioned. Revenues from molasses sales and from the levy on potable alcohol amounted to Rs 81m, up Rs 3m from the previous year.

On the operational expenditure side, the aborted industry collective bargaining exercise and the ensuing industrial action in November 2014 resulted in a wage increase of 7% effective retroactively as from January 2014; and in set future wages increases of 3% for calendar years 2015 and 2016 respectively. A final arbitration also awarded an additional of 4.5% wage increase for

Table 4: 2015 crop cane estimates

RegionsManual Harvesting Mechanical Harvesting Total

2015 2014 2015 2014 2015 2014

Olivia 21,314 24,080 85,420 79,696 106,734 103,776

Belle Rive 59,080 41,700 68,208 61,823 127,288 103,523

Ferney 33,175 36,211 50,376 34,203 83,551 70,414

Q.Victoria 86,000 92,244 188,500 134,878 274,500 227,122

Bel Etang 118,401 146,513 32,117 2,232 150,518 148,745

Mon Loisir 12,500 17,158 120,000 116,514 132,500 133,672

TOTAL 330,470 357,906 544,621 429,346 875,091 787,252



2014 as part of FORIP’s eighth phase. The table below summarises the areas replanted under the FORIP scheme between 2006 and 2014 in the three different geographical regions of the Alteo Factory Area.

scheme will be resumed in 2016, its continuation beyond 2017-18 is unclear. Unfortunately, this may result in further land abandonment.

À la carte services

APS also provided à la carte services to 32 planters cultivating an area of around 95 ha. Services included planting, manual weeding, application of fertilisers and herbicides, and trash lining.

Field Operations Regrouping and Irrigation Project (FORIP)

During the period under review, APS completed the handing over of planters’ fields replanted in

During the year, the activities of APS were marked by the unexpected postponement of the ninth phase of the FORIP scheme. Although it is expected that the

As has been the case since 2011, APS provided Harvest Services to planters within the factory areas. A total of almost 80,000 tonnes of cane were harvested over an area of around 1,100 hectares belonging to 800 planters.

CANE GROWING

Table 6: Area replanted (ha) under the eighth phase of FORIP, by region

Table 7: Harvest services provided by APS

Phase

Replanted area (ha) per region under Alteo Factory Area

YearArea replanted (ha)

TOTALUnion Flacq Beau Champ M. D. Alma

I 2006/07 120 106 40 266

II 2008 242 31 53 326

III 2009 184 15 87 286

IV 2010 198 99 30 327

V 2011 201 8 77 285

VI 2012 232 18 120 370

VII 2013 176 13 163 352

VIII 2014 420 17 220 657

TOTAL 1,773 306 789 2,868

Year

Semi-mechanised harvest Fully mechanised harvest

Union Flacq Union Flacq Beau Champ

Tonnage harvested

No. Planters concerned

Tonnage harvested


Tonnage harvested


2011 34,428 324 6,688 1 cooperative - -

2012 47,704 445 - - 6,450 -

2013 50,886 569 4,850 1 cooperative 17,070 62

2014 56,838 720 2,615 1 cooperative 19,300 65

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Recycling of by-products and waste as inputs

By-products and waste from cane processing are recycled and used as inputs for agricultural activities. Filter press impurities known as ‘filter cake’ are used in planting at a standard rate of 24 tonnes per hectare to restore organic matter and phosphorous to the soil. Another potassium-rich by-product, Concentrated Molasses Solids (CMS), is mixed with inorganic nitrogen and phosphorus and used in sugar cane fields. Around 70% of Alteo’s land uses CMS.

Water use

Alteo agricultural land is found in a number of different micro-climatic zones with an annual rainfall ranging from 1,000 mm to 4,000 mm. About 4,500 hectares of the total area are found in the low rainfall region, where annual rainfall averages 1,500 mm. Irrigation is applied as a complement to rainfall in some areas to enhance cane yield. The water used comes mainly from adjacent rivers, to which the company has water rights. More modern irrigation systems with lower pressure requirements are also used, such as central pivot and drip systems. This approach has resulted in irrigation efficiency of 85%, making better use of available water and reducing electrical consumption. On average, approximately 4.2 million cubic meters of water are used for the company’s agricultural activities per year.

Alteo Planters Services

The activities of Alteo Planters Services (APS) remain focused on services to sugar cane planters. The objective is to ensure that they have access to the most efficient agricultural services and that their operations continue to yield positive financial returns. This mission is proving extremely challenging against the backdrop of prevailing sugar price reductions. Despite much effort having been put into the FORIP scheme (see section below) in order to promote replanting of small planters’ sugarcane fields over the past eight years, land abandonment remains a major concern for the industry.

ALTEO AGRI

ENvIRONMENTAL IMPACT MANAGEMENT

Alteo Ltd manages some 11,250 hectares of land dedicated to sugar cane cultivation in Mauritius. The remaining area is mainly marginal land found on mountain slopes and very rocky soils of which about 2,000 hectares are used for extensive deer farming. In addition, approximately 150 hectares are dedicated to palm tree cultivation, with a total annual production of 33,000 palm hearts aimed at the local market.

Alteo has a clear commitment to sound agricultural practices. These include applying natural soil conservation techniques, using natural and recycled inputs for fertilisation, adopting Integrated Pest Management techniques and optimising water use.

Green Cane Harvesting

70% of Alteo Agri land is currently harvested mechanically. On most of this land, ‘Green Cane Harvesting’ is applied. This practice involves leaving a ‘Green Cane Trash Blanket’ (GCTB) on the soil after the harvest to recycle organic matter back into the soil. The practice contributes to maintaining soil fertility, thus reducing the need for inorganic fertilisers; protects soil structure, thus limiting run-off and erosion; and reduces water loss by evaporation, thus minimising irrigation needs.

Integrated Pest Management

On average, sugar cane is replanted every eight years, using varieties released by the Mauritius Sugar Industry Research Institute (MSIRI). The company is bound by the recommendations of the MSIRI, and sugarcane varieties are bred to be disease resistant and drought tolerant for dry regions. Fungicides are used only to treat cane setts prior to planting. Integrated Pest Management is promoted using bio-agents such as parasitic wasps and lady beetles or mina birds for insect pest control. Insecticides approved by the Pesticide Control Board and recommended by the MSIRI, are seldom applied, and then only as a last resort.


EXECUTIvES’ REPORTCANE GROWING

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Mon Loisir Farm produced a total of 896 tonnes of live weight chicken, i.e. a deficit of 7.9% relative to the 973 tonnes forecast for the year. This poor performance is attributable to a mortality rate of 5.05%, compared to the 3.0% forecast in the initial budget; a reduced live weight of 1.960 kg at killing age; and an increase in the FCR to 2.32.

Financial forecast

Island Fresh Ltd generated a turnover of Rs 167m, with Rs 113m originating from the Mérandon Farm and Rs 54m from the Mon Loisir Farm. Given the farms’ combined cost of sales of Rs 142m, administrative expenses of Rs 9m and the value of closing stock of live birds, the company realised an operating profit of Rs 33m before taxes and financial charges. The company made Rs 26m in net profit for the year, up Rs 2m from the last estimate due to an indexation to the selling price of live birds. Compared to the previous year, the company’s profitability rose by 35.83%.

Future prospects

Mérandon Farm’s focus for 2015-16 is to reduce the killing age from 41 to 38 days, thus increasing the number of batches from 6 to 7 per annum; to reduce the mortality rate to 5%; and to improve farm management as a result of the recent installation of closed-circuit television (CCTV).

With respect to Mon Loisir Farm, the learning curve over the last two years has been steep. The company has notably had teething issues with the introduction of a new breed of chicken. Management is fairly confident that a number of steps taken recently will yield improved results in future. The objectives are to reduce mortality rates to 3%; reach an average live weight of 2.15 kg at killing age; and reduce the FCR to 2.25. In so doing, the company aims to achieve 1,168 tonnes in annual production.

Outlook: meeting the challenges

In order to enhance its services to planters so that they may better face the challenges of sugarcane production, APS will focus on the following:

• Maximising its commitment to the Planters’ Participation Scheme, under the aegis of the Mauritius Cane Industry Authority (MCIA), for the provision of contractual services to planters to promote the replanting of their sugarcane fields.

• A more sustained communications strategy to ensure that planters are better informed of the services that APS is able to provide. This will be done through networking with Credit Cooperative Societies (CCSs) and various planters’ associations/organisations, as well as with the assistance of Alteo’s field staff.

• Encouraging more planters to take advantage of the Fair Trade premium which benefits those affiliated with FLO-certified CCSs.

• Engaging with MCIA so that planters’ funds set up in the context of the sugar mills’ centralisation become active as soon as possible; and initiate activities to support small growers’ cane production.

POULTRY

Island Fresh

During the year under review, the broiler chicken-growing activities at Mérandon recorded very encouraging results. Unfortunately, this was not the case at the Mon Loisir Farm. The latter’s production was hampered by slow-growing broiler chicken for the second year running, as described below.

Mérandon Farm and Mon Loisir Farm

Total production at Mérandon Farm reached 2,098 tonnes of live weight chicken, comparing favourably to the 1,902 tonnes forecast. These results were achieved thanks to a reduction in the mortality rate, of 6.39% relative to the 8.00%, budgeted; a better average live weight at killing age of 2.315 kg per chick; and a slightly better food conversion ratio (FCR) of 1.97.


EXECUTIvES’ REPORTSUGAR MANUFACTURING

SUGAR MANUFACTURING

Review of Operations

ALTEO MILLING LIMITED

Table 8: 2014 crushing season

2010-2011 2011-2012 2012-2013

2013July 2013-June 2014

2014July 2014- June 2015

Cane crushed 888,033 846,018 848,214 951,253 1,380,231

TCH 289 285 307 360 378

Cane/day (tonnes) 6,001 6,000 6,575 6,645 7,368

Purity mixed juice (%) 86.6 85.9 86.7 85.8 85.3

Sugar produced (tonnes) 93,826 86,036 89,382 96,914 131,360

Extraction (%) 10.57 10.16 10.54 10.19 9.54

OR (%) 87.66 87.4 87.96 86.33 84.74

Special sugar (tonnes) 11,573 14,999 14,602 13,278 32,624

7.90

7.70

7.50

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 2923 3024 3125 3226 3327 3428 35

Week number

8.308.10

8.70

8.50

9.108.90

9.509.30

9.909.70

10.30

10.70

10.10

10.50

Extraction

2012 20152010 20132011 2014

Graph 3: Extraction from 2010 to 2015 crops

10.40

9.70

10.06

10.47

Cane crushing

During the 2014-15 financial year, a total of 1,380,231 tonnes of canes were crushed at Alteo Milling Ltd. This activity took place over two distinct periods totalling 187 days within the financial year: from July 1, 2014 to February 4, 2015 and from May 27, 2015 to June 30, 2015.


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Future prospects

For the coming year, due to the adverse effects of very wet climatic conditions on sucrose content in cane, Alteo Milling Ltd is expected to produce only some 130,000 tonnes of sugar despite very good cane production.

It is foreseen that the difficult market conditions prevailing in Europe will remain the same for the financial year and that the export prices will be on par with last crop prices. The sales of special sugars will unfortunately follow the same trend in terms of volume and prices.

The 2015-16 investment programme will see a further consolidation of the mill tandem and installation of a massecuite re-heater for the back end of the factory. The replacement of the rotary vacuum filter with a vacuum belt filter to reduce sucrose losses in scums is under study and would eliminate the use of fine bagasse which could instead be used for the production of green energy.


The year’s results rest on the increased throughput of 45.1% in cane tonnage, compared to the previous year. Henceforth they will also rely on a substantial increase in production of very high polarisation sugar and special sugars.

Turnover stood at Rs 511.1m (Rs 360.4m in 2013-14). This increase took place despite a significant drop in the sugar price from Rs 15,830 in 2013-14 to Rs 12,694 in 2014-15 due to the unfavourable market conditions prevailing in Europe. The increase is mainly attributable to the increased production of both very high polarisation sugars and special sugars, and to a one-off payment of Rs 57.8m received from the Sugar Insurance Fund Board. Other operating income increased to Rs 62.8m (Rs 26.8m in 2013-14).

As a result of the additional 429,000 tonnes of cane crushed, the industrial action and the collective bargaining exercise during the year, the cost of operation increased to Rs 503.8m (Rs 370.9m in 2013-14). The collective bargaining exercise resulted in a wage increase of 7% backdated to January 2014, of 3% from January 2015 and of an additional 4.5% as of January 2017. This is an increase of Rs 14m for the current financial year. The industrial action led to an extended crushing period to February 2015, which had an additional financial impact of Rs 6m. Finance costs increased to Rs 43.3m (Rs 26.7m in 2013-14) as a result of increased loan financing for the factory expansion.

The company posted a profit after tax of Rs 28.8m, compared to the previous year’s loss of Rs 15.7m.

No dividend was declared for year under review (2013-14: nil).

SUGAR MANUFACTURING

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EXECUTIvES’ REPORT SUGAR MANUFACTURING

• The replacement of mill no 6 by a 42 x 84 Fletcher mill;

• The placing of low-duty pressure feeders on two mills and of four heavy-duty intermediate rake carriers on four mills; and

• The increase in centrifugal capacity on C massecuite resulting from the installation of a K3300 centrifugal.

Following the transfer of the special sugar plant from DRBCM and its subsequent upgrading, the plant was successfully accredited in line with British Retail Consortium (BRC) food safety norms. Employees are fully trained to work according to these stringent food safety guidelines.

The construction of the waste water treatment plant was completed at the end of August 2015 and the process commissioning of the plant is in progress. The treatment plant will treat approximately 50 cubic meters of effluents with a high organic load per hour, and the treated effluent will be used for irrigation purposes.

2015 crop: May to June 2015

The off-crop period was shorter than the previous years. It has been a real challenge to consolidate and upgrade the existing plant within such a limited period. The assistance of local and foreign contractors was necessary to help Alteo Milling’s team implement various projects. The dedication of the whole team ensured that the works were completed on May 26, 2015, in time for the start of the crushing season.

The carried-over canes from the previous season were milled at the start of the crushing season. This resulted in a lower extraction rate of 7.99% and in poorer cane quality. Some 202,716 tonnes of cane were milled during this period to produce 16,200 tonnes of sugar. The production of special sugars was minimal, with 1,848 tonnes of special sugars produced.

These measures, coupled with the equipment installed during the off-crop period, resulted in an increased crushing capacity to above 400 TCH at the time of writing.

2014 crop: July 2014 to February 2015

The 2014 crop was an excellent one. Crop duration was the longest ever at 157 crushing days. The extended period is attributable to the large tonnage of cane to be crushed following the centralisation of DRBCM at Alteo Milling Ltd; much higher cane production than average; and a two-week industrial action that affected the sugar industry.

1,177,515 tonnes of canes were milled at Alteo Milling, compared to 744,096 tonnes the previous year. However, some 107,000 tonnes of canes had to be exceptionally diverted to the other factories. About 70,000 tonnes could not be harvested and were carried over to the next season. The hourly throughput was increased to 375.8 tonnes of cane per hour compared to 358 tonnes of cane per hour in the previous year. This represents a new performance record. 115,160 tonnes of sugar were produced, of which 30,776 tonnes were converted into special sugars. With the special sugar plant newly operational, the production of special sugars increased by 145%. It is with success that new types of sugar, including muscovados and demeraras, were produced for the first time at Alteo Milling Ltd.

The long crushing season was detrimental to the sugar recovery, which, at 9.78%, was lower at than last year’s 10.07%. The low sugar recovery was mainly due to the unfavourable climatic conditions prevailing at the time and to high levels of extraneous matter in the cane supplied to the factory.

Mechanical downtimes were mainly due to the intermediate carriers and to the failure of the bearing of the bull gear of mill no.1. This resulted in a reduction of crushing capacity. It was necessary to consolidate the mill tandem, Major works were undertaken at the front end of the factory during the 2015 off-crop to reduce downtimes and ensure that the target factory capacity of 400 TCH is sustained.

New installations of note were as follows:

• Extension of the main cane carrier to allow a better levelling of cane;

• The installation of a feeder table and a de-rocking table to run at higher throughput; of a cane chopper to improve levelling and densifying of cane on main cane carrier; and of a 4.8MW motor on the shredder;



sugar of EEC Grade II and Bottler’s grade delivered to the MSS. The new contract will ensure that the feedstock is allocated fairly and equitably to the refineries and that their capacity is optimised with the blending of non-originating sugar.

ALTEO SUGARS


Water use and waste water management

The water used for the milling, refinery and energy plants at the industrial site of Union Flacq comes from on-site rivers to which Alteo has historical usage rights. Water extraction over the last three years has declined despite the increased capacity of the factory. During the last year, reduction was achieved through the optimisation of condensate usage and the installation of pumping stations to recycle water for washing and cooling.

The table below provides a summary of water extraction over the last 3 years:

Future prospects

The unfavourable climatic conditions affecting the 2015-16 crop will result in lower sucrose content in the cane. It is therefore anticipated that there will be a decrease in the availability of originating sugar. The production forecast is maintained at 165,000 tonnes, with an increased blending of non-originating sugar.

Following the termination in September 2015 of the long-term partnership agreement between the MSS and Suedzucker, the former finalised a new four-year contract to supply two major European sugar producers and distributors, British Sugar and Cristal Co. The contract will start in October 2015.

The Refining Service Agreement between the company and the MSS terminates at the end of September 2015. Negotiations with the MSS have been initiated and are still ongoing for the renewal of the refining service agreements. These will determine the remuneration for the white refined

SUGAR REFINING

The stream with the low organic load is sent to a pond (the Shanghi pond) and then pumped for the irrigation of sugar cane fields. The characteristics of this stream are well below the permissible levels for irrigation use.

The high organic load stream is sent to another pond (the Queen irrigation pond) and then pumped for irrigation. At present, approximately 10 cubic meters per hour are being diverted from this stream to a newly built waste water treatment plant. The waste water treatment plant has a capacity to treat 50 cubic meters per hour of waste water with a high organic load and should be fully commissioned by early November 2015.

Alteo Milling Ltd and Alteo Refinery Ltd have embarked on a waste water management programme. The following measures have been implemented over the past year:

- Segregation of effluent in different streams;

- Measurement of flow and of water characteristics;

- Development of a waste water abatement programme; and

- Construction of a wastewater treatment plant.

Effluents have been segregated into two streams, one with a high organic load and the other with a low organic load.

2013 2014 2015

m3/hr 750 595 457

Approximate total m3 6,400,000 3,550,000 3,400,000

Table 10: Water extraction in cubic meters

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EXECUTIvES’ REPORT SUGAR REFINING

The consumption of electricity and steam per tonne of white refined sugar has been reduced to 0.9 tonne of steam per tonne of sugar and to 56 kWh per tonne of sugar. The previous year, consumption stood at 1.0 tonne of steam per tonne of sugar and 61 kWh per tonne of sugar.


Despite an increase in the tonnage of sugar refined, turnover stood at EUR 7,5m, EUR 0,2m lower than the previous year. This is due to the lower commercial premium received from the MSS as a result of unfavourable market conditions in Europe.

The cost of operations decreased by EUR 0,4m.

Profit after tax for the year was EUR 2,8m, on par with the previous year.

SUGAR REFINING

Alteo Refinery Ltd

This year marks the refinery’s sixth year of operation. Its levels of production of white refined sugar have increased gradually in this time to reach a record 166,587 tonnes in 2014-15. The refinery now operates at 98% of its full capacity.

This year has seen the centralisation of DRBCM’s milling operations at Alteo Milling Ltd and a two-week industrial action in the sugar industry. Following the centralisation, the amount of feedstock produced at Alteo Milling nearly doubled. In addition to the 99,740 tonnes of raw sugar produced by Alteo Milling Ltd, the refinery received 30,588 tonnes of non-originating sugar and 37,114 of originating sugar from the Mauritius Sugar Syndicate (MSS) to be blended with the very high polarisation sugar produced at Union Flacq.

The refined sugar of EEC Grade II was mainly exported to Europe in 25 tonne liners. Some 20,000 tonnes were packed in 50kg bags for the regional market. The white refined sugar is produced under British Retail Consortium (BRC) food safety norms and benefits from a full traceability system.

The refinery installed a 22 kV substation in 2014 to import energy from the Central Electricity Board (CEB). This investment allowed the refinery to reduce its demand for electricity from the Alteo Energy Ltd power plant while securing additional steam energy to increase its production capacity.

2010/2011 2011/2012 2012/2013 2013/2014 2014/2015

Originating PWS produced by Alteo Milling Ltd, less recovery (tonnes) 75,676 70,162 73,880 72,573 102,767

Originating PWS received from other factories (tonnes) 49,293 80,396 77,217 66,602 37,114

Non-originating PWS received (tonnes) - 20,650 16,582 21,136 30,588

White refined sugar exported (tonnes) 125,698 147,208 160,326 161,577 166,587

White refined sugar for local market (tonnes) 5,316 6,310 2,791 - -

Steam/tonne sugar (kg) 1.9 1.7 1.1 1.0 0.9

Electricity/tonne sugar (kWh) 63 63 62 61 56

Table 9: Review of operations



- Energy efficient equipment is purchased and variable frequency devices are installed on equipment to improve efficiency; and

- LED technology has been favoured for lighting and is gradually replacing less efficient lamps.

In order to reduce its steam consumption and to increase its throughput to 400 tonnes of cane per hour, AML has installed a first effect evaporator and juice heaters. The reduction in steam consumption is outlined in the tables below.

Energy management

Alteo Milling and Alteo Refinery are continually evaluating energy-efficient solutions for their operations. The following actions have been implemented:

- Processes have been automated so that values are continually monitored and controlled to reduce energy consumption;

SUGAR REFINING

The electricity consumption has also been reduced to 20.7 kWh/tonne cane at the milling plant.

Moreover, this season, the refinery has benefited from a longer crop period with a continuous availability of steam. This has allowed it to run at its optimal capacity with increased throughput, thereby reducing its steam and electricity consumption.

2012 2013 2014

kWh/tonne cane 21.4 21.7 20.7

Kg steam/tonne cane 378 366 344

2012 2013 2014

kWh/tonne sugar 62 61 56

Kg steam/tonne sugar 1.1 1.0 0.9

Table 13: Alteo Milling Ltd steam and electricity consumption

Table 14: Alteo Refinery Ltd steam and electricity consumption

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EXECUTIvES’ REPORT SUGAR REFINING

There is no solid waste produced in the manufacturing and refining of sugar. The filter mud is recycled as a fertiliser and spread in the cane fields; bagasse is burnt to produce electricity; and molasses are used as animal feed or in the production of alcohol.

The redirection of 1,400,000 tonnes of cane to Alteo Milling Ltd from 2014 onwards generated a substantial increase of by-products over the past three financial years, as shown below:

of the Environment, Sustainable Development, and Disaster and Beach Management. A monitoring report covering the post centralisation phase is submitted monthly. The physical parameters being monitored are:

Emissions and waste

The by-products of the milling and refinery operations are filter mud, molasses and bagasse. The filter mud results from the preliminary settling of the limed juice and filtration of settled muds. Molasses are the end product after sugar crystallisation and contain a substantial amount of sucrose. The bagasse is the fibre contained in the cane which results from the milling process.

Following the Environmental Impact Assessment (“EIA”) clearance for the centralisation of operations on Alteo Milling Ltd, an Environment Monitoring Plan was submitted and approved by the Ministry

The results of the monitoring show that Alteo Milling and Alteo Refinery are in full compliance with the EIA requirements.

A Pollution Committee has been set up to ensure that proper monitoring of solid and liquid effluent, noise and air pollution is conducted. In addition, the Committee ensures that wastes are recycled or disposed of as per the law.

Filter mud Molasses Bagasse

2013 46,815 22,394 245,872

2014 56,387 29,588 307,905

2015 78,398 42,885 447,447

Parameters Monitoring

Air Stack emissions and ambient air monitoring, twice a year

Noise Ambient noise monitoring, twice a year

Effluent Monthly monitoring by an accredited laboratory

Odour Monitoring of any offensive odour every 3 months

Mud/Silt/Oil Monthly inspection and submission of returns

Table 11: By-products, cubic meters

Table 12: Pollution parameters monitored


EXECUTIvES’ REPORTENERGY

ENERGY

ALTEO ENERGY LTD

2015 Crushing Season

Table 15: Alteo Refinery Ltd steam and electricity consumption

2010/2011 2011/2012 2012/2013 2013/2014 2014/2015

Bagasse (tonnes) 280,099 240,195 250,534 303,644 435,059

Coal (tonnes) 79,351 83,352 86,313 77,353 47,357

Export bagasse (GWh) 55.8 47.7 50.2 62.2 97.9

Export coal (GWh) 109.8 110.6 116.6 104.0 63.9

Total exports to the grid (GWh) 165.6 158.3 166.8 166.2 161.8

kWh/tonne bagasse 199 198 201 205 225

kWh/tonne coal 1,383 1,327 1,351 1,343 1,348

Mill electricity consumption (kWh)/tonne cane 22.2 21.8 21.4 21.7 20.7

Mill steam consumption (kg)/tonne cane 380 380 378 366 344

• Lower energy exported during the extended crop, up to mid-February 2015. As per the PPA, export is limited to 20 MW during the crop season instead of 27 MW during the intercrop season;

• Higher bagasse energy exported as a result of the early start of the 2014 sugar harvest and centralisation of milling activities;

• Lower energy exported to the refinery due to improved efficiency at Alteo Refinery and to the latter importing energy from the CEB; and

• Improved bagasse combustion efficiencies of 225 kWh per tonne of bagasse in 2014-15, compared to 205 kWh in 2013-14.

During the 2014-15 maintenance stoppage, the rotor insulating plates and upper coil support screws of the 18.8 MW alternator rotor were successfully replaced; as were the gear box bearings of the 21.7 MW turbo alternator, which now operates with excellent low vibration levels.

The travelling grates of both boilers were inspected and found to be in good condition. Thirty bends were inspected and replaced on the superheaters of the two boilers.

The power plant located at Union Flacq exports electricity to the national grid under the terms of a Power Purchase Agreement (“PPA”) with the CEB. It also supplies the sugar cluster with the steam and electricity required for the production of raw sugar and refined sugar.

The centralisation of DRBCM operations at Alteo Milling Ltd increased the latter’s annual throughput to 1,380,000 tonnes of cane. At a fibre content for the cane of 16.5%, this resulted in 435,000 tonnes of bagasse available for electricity production.

During the year, the power plant performed satisfactorily with improved bagasse quality and combustion efficiency, allowing Alteo Energy Ltd (“AEL”) to produce 97.9 GWh of green energy, out of the total 179.2 GWh exported. This brings the amount of renewable energy exported to an unprecedented level of more than 54% of total energy exported, while reducing the coal usage from 77,353 tonnes in 2013-14 to 47,357 tonnes in 2014-15.

The main features of the 2014-15 season were:

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CONSOLIDATED ENERGY CO. LIMITED

2014 crushing season

Table 16: Overview of 2015 cane crushing season

2010/2011 2011/2012 2012/2013 2013/2014 2014/2015

Bagasse (tonnes) 228,029 199,916 222,647 190,702 -

Coal (tonnes) 24,812 55,990 46,629 58,959 112,149

Export bagasse (GWh) 50.6 42.5 50.9 46.0 -

Export coal (GWh) 31.8 81.6 67.5 89.5 169.1

Total exports (GWh) 82.4 124.1 118.4 135.5 169.1

kWh/tonne bagasse 222 212 229 241 -

kWh/tonne coal 1,280 1,458 1,447 1,518 1,508

Mill electricity consumption (kWh)/tonne cane 28 29 29 28 -

Mill steam consumption (kg)/tonne cane 455 453 421 431 -

Financial results 2014 to 2015

The company turnover stood at Rs 475.8m compared to Rs 364.1m in 2013-14 due to higher coal energy exported to the grid at a marginally lower tariff.

Despite a reduction of Rs 17.1m in operating expenses and a one-off additional income of Rs 24.8m, the company recorded a loss after tax of Rs 20.6m, compared to a profit of Rs 36.1m for the corresponding period the year before.

These poor results are due to the marginally lower tarif of exported energy and the absence of contribution from bagasse energy, as the plant has been running only on coal.

Further to the centralisation of DRBCM operations at Alteo Milling Ltd at Union Flacq, Consolidated Energy Co. Ltd (CEL) signed an amendment to the existing PPA with the CEB so as to run on coal mode only as from July 2014 until the end of the PPA in July 2015. During that period, the energy previously required by the sugar factory was exported to the grid. The electricity off-take from the CEB increased to 169.1 GWh, compared to 135.5 GWh in 2013-14.

Hence, the main features of the 2014 season were:

• No export of bagasse energy due to the closure of the Deep River Beau Champ Milling Company factory; and

• Higher total energy exported, above the minimum off-take obligations of 159.4 GWh by the CEB, due to reduced maintenance stoppage of 26 days instead of the 45 days planned.

During the shorter 2014-15 maintenance stoppage, the 24 MW and 3.8 MW alternator bearings were removed for inspection and found to be in good condition. The 24 MW turbine controller was also reprogrammed for quicker start-up.

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EXECUTIvES’ REPORT ENERGY

The proposed boilers of the new power plant will be high pressure and high temperature units. They will be equipped with a spreader stocker designed to produce 200 tonnes steam per hour at 535°C and 90 bars when burning bagasse; and 170 tonnes of steam per hour at 535°C and 90 bars when burning coal.

The two 46 MW condensing/extraction turbo generators will include multi-stage steam turbines, gearboxes and 11 kV generators running at 1500 RPM. The power plant will be mainly fuelled with bagasse coming from the sugar mill and cane trash collected on the mechanised fields of the factory area during the cane harvest season. During the intercrop season the power plant will run on coal.

The total export capacity of the new power plant will be 66 MW during the crop season and 75 MW during the intercrop season.

Flue gases will be treated to conform to European emission levels. Organic ashes will be returned to fields as soil nutrients. Ashes from coal combustion will be treated so as to reduce their carbon content and enable their use as an additive to cement and concrete. Alteo presented this project to the Ministry of Energy on July 9, 2015 and as a result expects to start discussions with the authorities in the coming year.


AEL fulfilled its contractual obligations to the CEB and exported 161.8 GWh of electricity to the grid (166.1 GWh in 2013-14). In addition 17.4 GWh (27.1 GWh in 2013-14) was exported to Alteo Refinery. This represents a shortfall of 9.7 GWh, with the result that the turnover for the year reached only Rs 650.0m compared to Rs 757.7m in 2013-14. Operating expenses dropped by Rs 83.8m due to lower usage of coal coupled with falling coal prices. This was partly offset by the higher cost of bagasse handling.

The company recorded a profit after tax of Rs 96.5m, compared to Rs 109m in 2013-14.

The company maintained the same dividend policy as the previous year at Rs 101m, representing a dividend per share of Rs 5.50.

Future prospects

Further to the centralisation of sugar milling operations at Alteo Milling Ltd and in view of the termination in 2018 of the present PPA, Alteo has been studying alternatives to optimise the use of the very significant quantities of bagasse newly available at Union Flacq. This project will see the implementation of the most efficient techniques of bagasse combustion. In addition to these efficiency improvements, which will contribute to the generation of more electricity from the same quantity of bagasse, the addition of cane trash will bring the quantity of green energy exported to unprecedented levels anywhere in the world.

Alteo Limited - ANNUAL REPORT 2015Alteo Limited - ANNUAL REPORT 2015


Two types of combustion by-products, bagasse and coal ash, are generated on site. The bagasse ash is re-used as a fertiliser spread. Coal ash is disposed of as per the Technical Advisory Committee (TAC) report on coal ash management.

Environmental benefits of new prospects

In order to optimise the very significant quantities of bagasse available at Union Flacq, Alteo intends to install a new 90 MW power plant to replace both the existing ones.

This project will see the implementation of the most efficient techniques of bagasse combustion, which will both contribute to the production of more green energy and be more environmentally friendly.

The rationale behind this biomass cogeneration plant is:

• To produce more than 50% of electricity from biomass;

• To minimise fossil fuel imports; and

• To contribute to the government’s objective of achieving 35% renewable energy in 2025.

The project will produce 40% more electricity using 15% less coal. The comparison between the existing power plants and new project in terms of usage of combustibles and electricity exported is shown below.

The combustion efficiency at AEL has improved from 205 kWh/tonne bagasse to 225 kWh/tonne bagasse in 2015, which resulted in more electricity produced from bagasse being exported and less coal being used. This has brought about a substantial reduction in carbon monoxide and sulphur dioxide emissions. The amount of electricity produced from bagasse and exported to the grid increased to 63% of total electricity exported in 2014, compared to 37% in 2013.

On the other hand, CEL has been operating on coal only. All of its 160 GWh production was exported to the grid.

An Environmental Monitoring Plan has been implemented and a monthly environmental report is submitted to the Ministry of Environment, Sustainable Development, Disaster and Beach Management, as per the recommendations of the EIA Licence.

Stack emissions monitoring is conducted regularly at AEL and CEL. The results show that stack emissions are within the permissible limits during crop and intercrop seasons.

The quality of coal used is monitored closely to ensure that the sulphur content and fine particles are low. Coal fines are collected in a grid collector and re-injected in the boiler to improve efficiencies and reduce emissions. The wet scrubbers at AEL and electrostatic precipitator at CEL have ensured that the flue gases are well within the limits of stack emissions, as per the Environment Protection Act.

Table 17: Combustibles and electricity exported

Existing plants

New project

CEB export 320 GWh 450 GWh

Bagasse 393 KT 460 KT

Straw - 50 KT

Coal 160 KT 140 KT

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Alteo Limited - ANNUAL REPORT 2015Alteo Limited - ANNUAL REPORT 2015



Water use and waste water management

At AEL, the water originating from onsite rivers is used mainly for boiler make-up, loss due to drift and evaporation in cooling towers and scrubbers, and blowdown of boilers.

A closed circuit system with a new cooling tower was installed last year to minimise the generation of effluents. Only 10 m3/hr of blowdown water are now being sent for irrigation purposes.

At CEL, on average 125 m3/hr of river water is used and 85 m3/hr of effluents is generated as illustrated on the chart below:

Emissions

With the centralisation of milling operations at Union Flacq in 2014, AEL has been running with an increased amount of bagasse to supply steam and electricity to the sugar cluster and to supply 160 GWh to the grid.

Diagram 1: Generation of effluents at CEL

Future prospects

In view of the increasing demand for energy in the coming years, the CEB requested that CEL continue its operations for a period of three years ending December 31, 2018. A new PPA was signed with the CEB in June 2015. This new contract stipulates a minimum off-take obligation of 160 GWh per year with a new tariff mechanism on July 31, 2015. The Ministry of Environment, Sustainable Development and Disaster and Beach Management extended the company’s EIA licence to cover the period of the contract.

The power plant will be shut down for a complete boiler refurbishment for a period of two months as of September 2015. The capital expenditure budgeted for this maintenance is Rs 50m.

It is foreseen that despite this longer than usual shutdown, CEL will register positive financial results for the next financial year, owing to the better efficiency expected from the refurbishment and the improved terms of the new agreement.

The effluents from the power plant are diverted to a sedimentation pond where suspended solids are allowed to settle, and are then directed to a chlorine contact tank before being pumped to the Île aux Cerfs golf course for irrigation. The treated effluents are monitored continuously by an accredited laboratory and are well below the permissible limits for irrigation use.

CELPower Plant

Cooling Tower Blowdown40 m3/hr

River water125 m3/hr

Treated Effluents45 m3/hr

Evaporation / Drift from Cooling Tower40 m3/hr



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NEWPROJECT

EXISTINGSITUATION

Thermal Power(44 bar / 430oC)

Thermal Power(90 bar / 530oC)

NOx Emitted1288 T

NOx Emitted645 T

PM20 Emitted592 T

PM20 Emitted255 T

SO2 Emitted1821 T

SO2 Emitted432 T

CEB320 GWh

CEB450 GWh

160 KT Coal 140 KT Coal

The project will ensure a 50% reduction in stack emissions while increasing electricity exports by 40%. The flue gas cleaning system will be very efficient, with the result that the quantity of sulphur dioxide will be reduced by 75%. The level of particulate and nitrous oxide emissions will also be halved compared to current levels. The diagram below contrasts stack emissions in the present situation and with new project.

There will be zero solid and liquid effluents, as the bagasse ash will be reused as a fertiliser, coal ash will be further processed in a carbon burnout for addition to cement, and all effluents will be treated in accordance with irrigation norms and used for that purpose.


EXECUTIvES’ REPORTHUMAN RESOURCES

Industrial relations

During the year, the Employers’ Association, Alteo’s social partners and the trade unions were consulted on a new collective agreement. This negotiation had a tripartite dimension, as government institutions were also involved. The new collective agreement was implemented in January 2014.

Talent management, training and development

As part of the ongoing strategy for talent management, much emphasis has been placed on acquiring, retaining and developing people and their skills, thus building an internal pipeline of human capital for the future. Each new employee now takes part in an induction programme. The aim is to equip them with the skills and knowledge they need to deliver in their new roles and to help them integrate into the organisational culture.

Furthermore, there continues to be a strong focus on training and development to enable employees to grow and perform optimally in their current roles. The Alteo Group is particularly committed to assessing and enhancing the competencies of all its employees on an ongoing basis to meet the challenges presented by rapid technological change.

Throughout the year, employees attended a variety of courses targeting technical advancement (agronomy) and compliance (Health & Safety, food security and internal audit). Managers have also been encouraged to participate in various leadership workshops and seminars such as SASTA Congress, ISSCT Congress and MBA programmes. Alteo Agri, Sugars and Energy clusters spent a total of Rs 3,6m on training and development, with over 513 employees attending local and overseas training programmes.

In addition to eye check-ups for welders and sheet metal workers, audiometric tests have been recommended for all employees exposed to high levels of noise (greater than 85 decibels) as shown below:

In October 2015, mandatory pulmonary function tests will be implemented for all employees exposed to coal and bagasse dust.

Various safety signs are now in place in the cane yard, factory and storage areas at Union Flacq. The purpose of these is to raise awareness of potential hazards among the employees and contractors on site and to reinforce the use of the personal protective equipment (PPE) required in specific areas. Moreover, handrails have been improved in the factory with toe guards and paint.

The work permit system has been reviewed and each permit has now been allocated a colour code: for example red for hot work permits, yellow for confined space permits and green for general work.

A chemical compatibility chart has been devised for the storage area to ensure chemical products are safely stored as per Material Safety Data Sheet (MSDS) standards. An emergency shower and eyewash unit has also been installed in the vicinity so as to be available in the event of an incident.

A new rest area will soon be made available at the Union Flacq site. It will accommodate around 300 workers for lunch and meal breaks. The rest area will also include sanitary facilities. Other new sanitary facilities and drinking water points for all employees have also been provided.

Compliance

The entities within the Alteo Agri, Sugars and Energy clusters continue to adopt an equitable and fair approach towards employees. The various external audits that have been conducted throughout the year under review have enabled us to work to the required international standards of compliance.

Table 19: Number of audiometric tests carried out 2014-15

No of audiometric tests carried out Year 2014 As at Sept 2015

Alteo Milling Ltd 377 88

Alteo Energy Ltd 289 83

Alteo Refinery Ltd 300 64

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EXECUTIvES’ REPORT HUMAN RESOURCES

Prior to the crop season, the Police Road Safety Unit and Fire Services were invited onsite to raise awareness of road safety among both employees and contractors. Alteo also continues to be committed to its health surveillance programme to ensure that employees are medically fit. This programme was put into place with the collaboration of the Ministry of Health and other partners who ran sessions to screen employees for diabetes and hypertension.

The Alteo Sugars and Energy clusters continue to place considerable emphasis on raising awareness of Health & Safety issues on their industrial sites, particularly in light of the recent accident at the Union Flacq factory. Training programmes are run to sensitise employees to the risks they are exposed to on a daily basis. This contributes towards the company’s commitment to decrease incident rates, though it recognises that there is still a lot of work to do to change the mindset of its employees.

The table below summarises the training received by staff over the last year:

ALTEO AGRI, SUGARS AND ENERGY

Human Resources

As at June 30, 2015, the number of employees in the Alteo Agri, Sugars and Energy clusters totaled 1,985 employees, including 1,768 permanent employees and 217 temporary employees. The temporary employees are mainly involved in agricultural activities in the harvesting season. In addition, certain activities such as cane cutting, construction, etc. are partially carried out by contractors.

Health & Safety

The Alteo Agri cluster has focused on improving work environment Health & Safety for its employees and contractors. It has put into place a Health & Safety committee consisting of employees from various departments. The committee is very active during the year, implementing key initiatives such as its safety awareness campaign. The latter consists of a number of presentations aimed at sensitising employees to and educating them about safety, first aid and security at work.

Table 18: Training received by Alteo staff 2014-15

Training TitleNo of employees/staff trained/attended

AML AEL ARL CEL

1. Basics of OSH management and legal requirements 16 5 5 1

2. General safety and health awareness 63 63 39 -

3. Safe erection and use of scaffolds - - - 2

4. Work at height with basics of industrial rope access 4 5 1 9

5. Safe manual handling 53 - 9 -

6. Personal protective equipment (standards) 10 4 - 23

7. Electrical safety for electricians 2 3 4 2

8. Health surveillance and hearing conservation 8 31 - -

9. Fire safety training 15 - 14 7

10. Chemical safety - - 29 -

11. Risk assessment 16 - - -

In 2014, a formal health surveillance programme was launched with Dr Ben Veeraragoo. As an occupational physician, he has been helping with the assessment and monitoring of health hazards and their impact on employee health.

A noise assessment exercise was conducted in January 2015 to assess the risk to which factory and refinery-based employees were exposed. This study identified areas exceeding 85 decibels and led to employees being provided with suitable hearing protection devices and relevant behavioural coaching to ensure buy-in.


EXECUTIvES’ REPORTINTERNATIONAL

2014-15 crop

Cane production

During the 2014-15 crop, a total of 910,234 tonnes of cane were produced from a harvested area of 6,269 hectares. Average cane age at harvest was of 14.19 months and excellent cane yields of 144 tonnes per hectare were achieved, with an average productivity of 10.08 tonnes per hectare per month. Sucrose content averaged 13.15%, an increase of 0.43% compared to that of the previous season. The table below presents the various production parameters for each area of the estate.

having to be reduced to process cane with high sucrose content. A number of new performance records were established for the season, among which:

• Highest: mill extraction, boiling house recovery, overall recovery and sugar extraction as a percentage of the cane; and

• Lowest: bagasse, filter cake and total losses.

Despite the shorter season and the crushing rate being lower than budgeted and than that of the previous crop, the improved factors outlined above along with the cane’s higher sucrose content resulted in total sugar production of 99,373 tonnes. This is just above budget and close to the record of the 2013-14 crop. The improved mill extraction attributable to the additional mill installed in the previous intercrop period resulted in the production of an additional 1,100 tonnes of sugar. The table below presents the main factory parameters for the 2014-15 season.

REGIONAL DEVELOPMENT

TPC Limited (“TPC”)

TPC is a sugar estate consisting of about 8,000 hectares under cane and situated in Northern Tanzania, roughly 50km south of Mount Kilimanjaro. TPC produces about 100,000 tonnes of sugar per annum that is sold exclusively on the local market. The harvest season lasts about nine months from mid-June to mid-March. All of the estate’s cane is irrigated and manually harvested. TPC also produces electricity for its own use and exports the surplus to the grid.

The area replanted during the 2014-15 season amounted to 923 hectares. Implementation of improved cultural practices is continuing on a commercial scale. The use of 1.8 metre row spacing, GPS guidance and lighter implements for soil tillage has been intensified. Such practices will result in lower land preparation costs and reduced soil compaction, soil structure destruction and stool damage while preparing TPC for a future increase in the mechanisation of field operations.

Commercial application of chemicals for control of white grubs over 493 hectares has shown promising results. TPC plans to increase the treated area to 1,000 hectares in the 2015-16 season.

Sugar production

At 170.9 tonnes, the amount of cane crushed per hour for the 2014-15 season was both lower than in the previous year (176.1 tonnes) and lower than budget (179.7). This is due to the crushing rate

Table 20: Number of audiometric tests carried out 2014-15

AreaArea

harvested (ha)

Average age

(months)

Average estimated

productivity (t/ha/

month)

Average actual

productivity (t/ha/

month)

Official estimated tonnage (tonnes)

Tonnage produced (tonnes)

Average yeld (t/ha)

North 1,198 14.52 10.72 10.63 180,038 185,415 154.70

West 1,261 14.49 11.52 10.30 202,100 189,502 150.24

South 1,320 13.14 9.96 8.83 163,612 154,237 116.84

East 1,715 14.06 10.84 10.72 254,771 258,484 150.64

Kahe 773 15.24 10.69 9.56 117,861 113,592 146.82

TOTAL 6,269 14.19 10.75 10.08 918,384 901,233 143.75

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controls over illegally imported sugar, resulting in a correction of market prices that saw the average local-currency price for the year increase by 8.9%. A record of 103,092 tonnes of sugar was sold during the year, compared to 98,396 tonnes the previous year. Molasses demand for the year was strong once again with 40,756 tonnes sold, some 3,441 tonnes more than in the previous year despite a price increase of 18.5% in local currency.

Sales in local currency increased by 14.8% during the year under review. However, due to an accelerated depreciation of the Tanzanian Shilling, the increase in USD was reduced to 3.2% with overall sales at USD 75.5m. The overall impact of the increases in selling price and sales volume, once the lower value of the Shilling taken into account, resulted in a net increase in turnover of USD 2.3m. However, this was offset by a lower gain in fair value of biological assets. Other income increased by USD 0.7m compared to the previous year, as a result of the proceeds from an insurance settlement following last year’s factory breakdown. On the costs side, the lower value of the Shilling saw the cost of sales for the year decrease by 1.1% in USD terms, although in local currency it increased by 10%. Similarly, operating expenses decreased by 0.3% in USD terms but in local currency increased by 11%. Finance costs reflected a positive variance of USD 0.26m, mainly as a result of favourable exchange variances on foreign currency positions held during the year. Even though the turnover gains were negated by a lower gain in biological assets for the year, the combined impact of the lower USD costs and exchange gains resulted in net profit before tax for the year of USD 35.6m, a 3.0% or USD 1.0m increase. The tax charge for the year (USD12.6m) reflects both the increase in profitability and the impending settlement of a tax dispute with the Tanzanian Revenue Authority in relation to certain disallowed expenses. Though the final details of the settlement require further discussion, USD 1.85m has been provided for in the 2014-15 year in settlement of these long standing disputes for the financial years up to 2010. Net profit after tax therefore stood at USD 23m, a decrease of USD 1.0m, or 4.2%. The net cash position for the year decreased by USD 1.1m, compared to last year’s USD 0.9m increase, mainly as a result of lower trade payables and higher dividend payments.

In the aim of making good use of the company’s marginal lands and producing more clean energy from biomass for export to the grid, the company has initiated woody biomass production trials. Under the guidance of CIRAD scientists from France, 14 hectares were planted with various species of trees in December 2014 and March and April 2015. While waiting for the results of the trials, available species that have shown good early growth will be planted in bare areas during the rainy season every year.

Miscellaneous

Heavy rains in the catchment areas of the Kikuletwa, and Kikafu Rivers during the first part of May 2015 caused the rivers to overflow their dyke and flood large areas of the estate. Some disruption and a limited amount of damage were caused to the fields, infrastructure, factory, offices and housing. Nobody was injured but a number of the residents had to evacuate their houses. As a result they lost some of their personal effects and suffered considerable inconvenience. Fortunately, the water receded within 24 hours and life returned to normality within a few days. During the crisis, the affected residents were offered meals at the TPC canteen and housed within the community. They were later provided with food rations to at least partially replace their lost stocks. In order to try and mitigate the impact of floods in the future, the river dyke will be raised and/or consolidated in appropriate places, a new dyke will be built to protect the eastern part of Moshi road, and the identified flood path will be cleared from obstructions. It is to be noted however that the TPC estate is situated in a natural flood plain and that it may not be possible to completely avoid disruption in cases of extreme climatic events.

Financial results

As was the case in the previous two financial years, the local sugar market was again affected by the prevalence of significant quantities of illegally imported sugar, a situation made worse by low world market prices and VAT evasion. Following extensive lobbying, the Tanzanian government introduced and has started to enforce stricter

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is planned that the additional installed capacity would be ready for the 2016-17 season. The project will be funded by a medium term loan from a domestic bank.

Future phases of the aforementioned business plan will be considered and approved by the Board one step at a time and when market conditions are deemed appropriate.

A feasibility study for the distillery was carried out by De Smet Engineers and Contractors. Although the project seems attractive, the treatment of the vinasse remains a challenge. Spreading it in the fields is problematic due to the already high potassium content of the soils. Additional investigation showed that it is possible to concentrate the vinasse further, then incinerate or dry the dissolved solids it contains. In both cases, the potassium ends up as a powder that can be marketed as fertiliser. Further studies are required to examine the feasibility and viability of transforming the vinasse into a solid.

Electricity production

Over and above the production of electricity for irrigation and other internal requirements, exports of power to the national grid amounted to 12.4 GWh by the end of June 2015. This is an increase of 9% relative to the previous year.

Projects

Despite having put its five-year business plan on hold in November 2013 as a result of the sluggish market conditions, the company decided, in January 2015, to implement the first phase of its factory expansion project. This would see its crushing capacity increased from 170 to 190 tonnes of cane per hour. This initial investment of USD 5.7m represents the first phase of a 10-year business plan. It aims to address the immediate challenge of excess cane production under current conditions. The project is well underway and it

Table 21: Factory parameters 2014/15 season

FACTORY PARAMETERSCROP 2014-2015

ACHIEVEDCROP 2013-2014

ACHIEVEDCROP 2014-15

ORIGINAL BUDGET

@ 23-Mar-15 @ 21-Mar-14 @ 15-Mar-15

TONNES CANE CRUSHED (t) 901,233 962,371 929,108

No. OF CRUSHING DAYS 274 284 266

AVERAGE CANE CRUSHED PER DAY (t) 3,289 3,389 3,493

AVERAGE CRUSHING RATE (TCH) 170.9 176.1 179.7

SUCROSE % CANE 13.15% 12.72% 12.87%

MILL EXTRACTION (%) 97.2% 96.4% 96.9%

BOILING HOUSE RECOVERY (%) 85.4% 84.9% 84.7%

OVERALL RECOVERY (%) 83.1% 81.8% 82.1%

SUGAR PRODUCED % CANE 11.03% 10.52% 10.67%

MIXED JUICE PURITY (%) 84.3% 85.7% 85.3%

OVERALL TIME EFFICIENCY (%) 80.6% 80.4% 81.0%

FACTORY TIME EFFICIENCY (%) 87.2% 89.4% 92.1%

TOTAL SUGAR PRODUCTION (t) 99,373 101,229 99,120

BAGASSE LOSS % CANE 0.36% 0.46% 0.40%

FILTER CAKE LOSS % CANE 0.03% 0.04% 0.04%

MOLASSES LOSS % CANE 1.57% 1.48% 1.55%

UNDETERMINED LOSS % CANE 0.25% 0.33% 0.32%

TOTAL LOSS % CANE 2.23% 2.31% 2.31%

EXECUTIvES’ REPORT INTERNATIONAL



The cooling water meets irrigation needs on the estate downhill from the factory, and the surplus is used by independent farmers south of the estate, again for irrigation purposes.

Irrigation water usage

Irrigation water for the 8,000 hectares under cultivation comes from rivers running along the western boundary of the estate, a spring on the eastern side, and boreholes. Since 2006, TPC has embarked on a canal-lining programme in order to reduce water lost through seepage. Canals are lined in either concrete or HDPE, depending on their locations and use. Abstractions are monitored using flow meters installed on all the pumps and measuring devices on the canals. The irrigation systems are continuously improved in order to reduce losses and improve efficiency. TPC has commissioned a detailed study of the aquifer beneath the estate and is closely monitoring its levels in order to ensure the sustainable use of this underground water resource.

Emissions and waste

The TPC boiler is fitted with mechanical fly ash removers. The fly ash recovered is currently not put to use and is piled in non-agricultural saline lands. The filter cake from juice clarification is reused in the fields before replanting, while the molasses are sold to a nearby distillery.

Energy management

Currently, processing cane at TPC requires about 400kg of low-pressure steam per tonne of cane. The factory capacity project increase to 190 tonnes of cane per hour, that will be ready for the 2016-17 season, will entail savings of 15% in steam consumption. The replacement of the old low-pressure mill turbines with highly efficient electric drives in the 2015 off-crop resulted in additional power generation and export to the grid. The power consumption at the factory is currently estimated at 26 to 27 kWh per tonne of cane, which is around 30% of the power generated.

These were mainly teething problems related to the installation of new equipment, the April floods that had affected some of the electrical cabling, and the poor quality of the carried-over cane. The factory has subsequently been running well although the cane sucrose level has been particularly low since the start of the crop.

For the first 12 weeks of the season, cane yields have been 10% higher than budget, reaching an average of 176 tonnes of cane per hectare. Average age at harvest was 16.1 months, resulting in an average productivity of 10.92 tonnes of cane per hectare per month. This was mostly from carried-over fields that were not harvested last season.

Sales volumes in the first nine weeks of the financial year have been over 14% lower than estimated. Furthermore, due to unusually intense competition from both legal and illegal imports in the context of extremely low world market sugar prices, TPC had to lower its price, bringing its actual selling price to 2% lower than budgeted. Unfortunately, it is expected that pressure on the market will remain until after the general elections of 25th October 2015 due to the continued presence of illegally imported sugar in the country.


Factory water use

The factory uses river water for cooling. It uses borehole water as make-up for the cooling tower, and as raw water for the demineralised water plant that provides boiler make-up water. The installation of a reverse osmosis facility in 2015 considerably reduced the boiler and cooling tower make-up and by extension reduced consumption of borehole water. All other water needs are met by condensate recovered from cane juice evaporation, except the make-up for fly ash handling, which is covered by the reject from the reverse osmosis plant. The factory generates effluents from excess condensate, demineralised water plant regeneration, and boiler and cooling tower blow downs. These effluents are collected in a reservoir before being recycled for irrigation on the estate.

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in additional power export. The commissioning of the back-up turbo alternator set has been delayed as a defect was found in the gearbox’s low-speed gear. This had to be sent back for repair and the commissioning will resume by end of September 2015.

Outlook 2015-16

Estimated production for the 2015-16 season amounts to 945,574 tonnes from 7,219 hectares (131 tonnes per hectare). This in all likelihood will not all be crushed. Average age for the season is estimated at 12.69 months (2013-14: 12.04 months, 2014-15: 14.19) with approximately 170,000 tonnes of cane carried over from the 2014-15 season. Average estimated productivity is estimated at 10.43 tonnes per hectare per month. This is 3.5% higher than productivity achieved in 2014-15, mainly due to better climatic conditions – higher radiation and rainfall for most of the estate except North Area; higher water availability, resulting in reduced irrigation rationing; and positive effects of white grub control over some 493 hectares. Graph 1 below sets out comparative cumulative rainfall for the South Area over the last three years and against the long-term average.

season started on June 11, 2015 and is planned to end on March 15, 2016. However, the new season started with some delays and a number of issues negatively affected the factory time efficiency in the first weeks of crushing.

Total assets reflected a decrease of USD 15.4m, primarily as a result of the Shilling’s depreciation. In local currency terms, total assets increased by TSh 10.7bn following increases in property, plant and equipment, receivables and biological assets. Similarly, on the liabilities side the non-current portion decreased by USD 3.8m due to the depreciated Shilling but showed increases in local currency on the deferred tax liability and retirement benefit obligations.

2015 OFFCROP

The long rains season started in March. The rains received from April to June were slightly lower than the long-term mean but generally higher than last season’s, except in the North Area.

In order to avoid too much carried-over cane at the end of the 2015-16 season and to maximise production in the 2016-17 season (by which time the factory capacity will have been increased) 350 hectares of cane were fallowed at the end of the 2014-15 season, planted with a break crop where possible, and will be put back under cane by the end of September 2015.

On the factory side, the last two steam turbines have been replaced with electric drives, which will result

Cane crushed is budgeted at 928,078 tonnes for the season. This is 27,000 more than previous year when the exceptionally high sucrose content forced a reduction in crushing. Sugar production has been budgeted to the level of 101,134 tonnes. The


875

700

525

350

175

0

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Mon. Cum 12-13

Mon. Cum 13-14

Mnth. Cum LTM

Mon. Cum 14-15

Graph 4: Comparative cumulative rainfall, South Area



TSCL’s current financial year ends in December. It is expected that sugar production will be around 60,000 tonnes, slightly above 2014 production levels. Financial results will be consolidated with those of Alteo and a positive contribution is expected for the year.

The acquisition of TSCL is directly in line with Alteo’s regional development strategy and is a significant step towards achieving the group’s declared objective of becoming an emerging market player in the region.

Other prospects

Other opportunities also identified and investigated on the African continent during the year under review will be reported upon in due course, as and when they reach a concrete potential project stage.

This investment will enable the mill to crush more than 4,000 tonnes of cane per day. It will further support the local farming community, which pioneered sugar cane development in the area over the last four years.

Investment in road infrastructure and maintenance in parallel with the mill’s expansion has also contributed to the region’s development.

At the time of writing, a newly appointed Chief Executive Officer had already started to work on site. With over 30 years of experience in the sugar industry, Stanley Rau’s operational experience and expertise lend itself to the focus required to make a success of the start-up operation at Transmara Sugar. The recruitment of the management team is being finalised under Stan’s leadership.

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Occupational Health, Safety and the Environment (OHSE)

A detailed and comprehensive OHSE Statement of Intent has been written and approved, and is now being implemented throughout the company. The emphasis is on ensuring that the OHSE system is effective, practical and realistic. An OHSE Supervisor was recruited in February 2015 to improve the health and safety situation on the estate and ensure regulatory compliance. The process of introducing or strengthening OHSE committees across all departments of the company is progressing well. Several improvements to the Waste Disposal System are being explored, and a plastic recycling project in partnership with a proactive local NGO and FD Kilimanjaro is to be launched in October 2015.

Kenya

During the year under review, Alteo strengthened its position in regional growth markets with the acquisition of a controlling interest (51%) in Transmara Sugar Company Limited (TSCL) through its subsidiary Sucrière des Mascareignes Limited (SML). However, as the transaction was only finalised in August 2015, there is no impact on Alteo’s financial statements for the year 2014-15. This acquisition was financed with debt and equity from SML’s shareholders, with Alteo injecting equity of USD 13.2m and maintaining its 60% shareholding in SML.

TSCL is a Kenyan company operating a sugar mill in the Transmara region. The current annual installed milling capacity of TSCL is 600,000 tonnes of sugar cane over a 300-day crop. It is the intention of SML to support TSCL on its current expansion program in order to reach a capacity of over 1,000,000 tonnes of sugar cane in the next two to three years.

Irrigation, Drainage and Mechanisation Master Plan

An Irrigation, Drainage and Mechanisation Master Plan is being finalised and the implementation of recommended measures has started. These measures are all aimed at ensuring the long-term sustainability of cane production at TPC, through good management of soil and water. Lighter soil preparation, controlled traffic, introduction of break crops, water-efficient irrigation systems and adequate drainage methods are among the measures which are being implemented.

HUMAN RESOURCES

As at June 30, 2015, TPC had 1912 permanent employees and 1078 temporary employees on its payroll. The temporary employees are mainly involved in agricultural activities in the harvesting season. In addition, some activities such as cane cutting, guarding, construction etc. are partially carried out by contractors, thus increasing the total number of people in some form of employment at TPC by about another thousand.

TPC has devised and started implementing a Management Training Plan involving all 108 management staff. The plan will mainly cover soft skills such as communication, supervisory skills, and performance management over a three-year period starting in 2014-15. In addition, each department has its annual training programme covering the specialised skills required for the department’s activities. This training is conducted either internally or externally.

Industrial relations continued to be cordial during the course of the year. The annual wage negotiation between management and TASIWU, the workers’ union, was successfully conducted and an agreement was signed on May 23, 2015.



EXECUTIvES’ REPORTPROPERTY & HOSPITALITY

to manage the existing developments at Anahita, devise a strategy for the future and suggest ways forward with regard to Alteo’s forthcoming land developments.

Below is a map depicting Anahita that outlines the northern parcel, whose first phase will shortly be launched.

Similarly, the management teams of Anahita The Resort and Anahita Golf seek to support the implementation of energy-saving measures and to encourage the recycling of green waste in the day-to-day running of their respective operations. The Golf for example has recently initiated a composting project onsite.

On the human resources front, much emphasis is placed on providing a positive working environment for the dedicated teams based at Anahita. As a result, outstanding service is achieved, to the benefit of the Resort and Golf Club.

The Property and Hospitality cluster

The Property and Hospitality cluster comprises a number of entities located at Anahita. These are Anahita Estates Ltd, Anahita Golf Ltd and Anahita Residences & Villas Ltd. For its part, Alteo Properties Ltd is based at Vivéa Business Park in Saint Pierre. The main purpose of this cluster is

The environmental aspects of the Anahita master plan were taken into consideration from the project’s inception. All necessary permits and authorisations have been acquired. A priority from the start of the project has been to preserve the original site’s biodiversity. This now contributes to Anahita’s appeal.

As the project continues to evolve and grow, newly available technologies are being looked at, and where possible implemented, in an effort to develop a more environmentally-friendly estate. As an example, the recent suites of the Amalthea phase feature LED lighting, solar heating and latest energy efficient equipment.

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LuneaTheGardens

AmaltheaL’Adamante

LesRésidences

Four Seasons

Resort Mauritius at

AnahitaSolana La Place Belgath NORTHERN PARCEL



“Building Packages” to owners of serviced plots of land at Anahita, who can then choose the APL team to project manage the construction of their villas. At time of writing there were seven units for which APL was managing construction via a Building Package. A number of resales have also taken place through APL in the year, with a record USD 7m resale for a single Lunea villa. The commissions earned through the resales have contributed to APL’s earnings and it is expected that further resales will take place going forward given the appetite of buyers for new as well as existing units.

Alteo has appointed a master planner to assist with a development strategy for the Group’s land. The work initiated by the master planner is ongoing: AECOM’s London-based team has provided initial suggestions that are now being reviewed and modified in the context of the Property Development Scheme and Smart City Scheme recently introduced by the new government. In particular, Beau Rivage – located north of Anahita and covering a vast area of land – will be an integrated project taking into account the numerous dimensions of the Smart City Scheme. It will thereby contribute to the growing significance of the east coast of the island. It is expected that AECOM will finalise their propositions shortly, and that these will act as a guide to Alteo Properties for the future development of the land surrounding Anahita and other earmarked sites.

On the local front, a number of land development projects are ongoing and have received positive feedback from buyers. The majority of plots have been reserved with deposits at Balnea and Providentia, located in Trou d’Eau Douce and Quartier Militaire respectively. Going forward, further sites have been identified for future morcellements. The objective is to have projects spanning various geographical locations and targeting different segments of the population. These projects, which cater mainly for the local market, will be developed in phases over the coming five years. On a financial front, APL’s turnover for the year was of over Rs 70m, a 10% increase on the previous year.

Four Seasons Golf Club Mauritius at Anahita (“the golf course”) positions itself as a “must-play” golf course in Mauritius. It endeavours to maintain the green to a high standard in order to attract increasing numbers of golfers. The golf agreement with Anahita The Resort and Four Seasons Resort contributes to about two thirds of all golfers. Strong incentives are being devised to attract players from other hotels, local golfers, and golfers from other international golf clubs with which affiliate programmes have been established.

During the year under review, the restaurant “Le Club” was refurbished and has now been rebranded “Il Forno Trattoria”. Its newly devised Italian theme is attractive to residents of the two resorts as well to visiting tourists. This innovative element, together with a number of strategies such as the introduction of new membership categories, are expected to improve the financial situation of the company, which suffered a higher loss than budgeted for during the year.

The year to June 2015 generated a turnover in excess of Rs 97m, while a net loss of Rs 23m was recorded. This represents a worsening of the golf course’s financial position by Rs 9m compared to the previous year, which ended with a loss of Rs 13m. In order to further strengthen this financial position, a number of new strategies are being put in place.

Over and above the forthcoming tri-sanctioned ABMO, the golf course will host the MGM. These two golf activities are expected to reinforce the reputation of the golf club and eventually contribute to improving the company’s finances.

Alteo Properties Ltd (“APL”)

APL continues to fulfil its role of providing strategic guidance to AEL and of acting as the developer of Anahita. It has consolidated its human resources, its core asset, in order to offer an even better level of service to AEL in the fields of strategy, asset management, development, project management, sales, marketing, finance and administration.

APL’s main revenue stream remains the commissions earned on AEL’s sales of land and villas to homeowners and the development fee payable by AEL to APL. The company also offers

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(iv) Going forward, Anahita is looking at the development and commercialisation of its northern phase. This phase comprises a total of 102 plots that are expected to be developed over a number of years. The first section will consist in 27 plots of serviced residential land and villas. The development aims to be even more exclusive than Anahita’s existing neighbourhoods in order to attract very high net worth homeowners. The project was recently initiated with the establishment of a team of local consultants. Renowned French architect Jean Michel Wilmotte’s imminent appointment to be project is expected to bring added clout to this new phase. Positive feedback has been obtained so far regarding Anahita’s decision to bring further exclusivity and high market properties to the domain.

AEL’s hosting and sponsorship of golf events

In May 2015, Anahita was one of the main sponsors of the highly successful tri-sanctioned AfrAsia Bank Mauritius Open (ABMO). This year, it will host the second edition of this golf competition on the island. It is expected that this widely publicised sporting event will further compound Anahita’s fame. Every effort is being made to ensure this event is a rewarding and positive experience for those who take part in it in order to enhance Anahita’s exposure and visibility abroad as a result.

Additionally, AEL, together with the CIEL Group, will sponsor the Mauritius Golf Masters (MGM). This golfing event is scheduled to take place in December 2015 and will further add to media coverage of Anahita. It has proved successful and popular with both homeowners and outside guests over the years.

Anahita Golf Ltd

ALTEO, through AEL, owns 74.9% of Anahita Golf Ltd (“AGL”). AGL operations are managed by Four Seasons.

Anahita Hotel Ltd (“AHL”)

AHL, a joint venture between Alteo and KHI, is located at Anahita. The management of its operations is entrusted to Four Seasons. During the year under review, Alteo ceded its 50% stake in AHL to Sun Resorts Ltd. This transaction was successfully completed in December 2014.

Anahita Estates Ltd (“AEL”)

AEL is a fully owned subsidiary of Alteo.

The momentum gained from the uptick in activities at Anahita over the past two years has had a notable impact on the financial results of this past year. As a result of the high number of sales for this ninth year of operation, the company generated a turnover in excess of Rs 1.1bn and a profit of Rs 91m.

Anahita has established itself even further as the market leader in the Integrated Resort Scheme (IRS) sector by recording a noteworthy number of sales this year while initiating the development of new phases.

(i) The company is on its way to completing the southern half of the development of the domain. The plots of serviced land marketed as The Gardens and Fairways Woodview, put on sale last year, were acquired within a few months. Only three of these units are still to be signed for, and even these have been reserved with deposits.

(ii) Additionally, the first phase of Amalthea is nearing completion, with all 17 villas having been sold and 12 villas having been satisfactorily delivered at the time of writing. The second phase of Amalthea, for which construction works started in April 2015 and are progressing well, has been mostly sold or reserved with deposits. Of the inventory of residences, only a handful are left at the time of writing and the company is hopeful that these last few residences will be sold by end of 2015 to beginning 2016.

(iii) The achievements outlined above have enabled the company to further reduce the project’s loan financing, thus lowering interest and improving the company’s gearing.

EXECUTIvES’ REPORT PROPERTY & HOSPITALITY



Talent management, training and development

As part of its ongoing strategy for talent management, the Alteo Property and Hospitality cluster is committed to acquiring, retaining and developing people and their skills, thereby building an internal pipeline of human capital for the future. Each new employee is now part of an induction programme that aims to equip them with the skills and knowledge to deliver in their new roles and to help them integrate into the organisation’s culture.

Furthermore, the Alteo Property and Hospitality cluster continues to focus on training and development to enable employees to grow and perform optimally in their current roles. To meet the challenges of the tourism industry at a national level, the cluster is particularly committed to assessing and enhancing the competencies of all of its employees on an ongoing basis by providing continuous on-the-job training and regularly evaluating staff performance.

Compliance

The Alteo Property and Hospitality cluster also continues to adopt an equitable and fair approach towards employees. The various external audits conducted during the year have enabled the cluster to work to the relevant international standards of compliance.

Industrial relations

The Alteo Property and Hospitality cluster is not unionised. However, a Comité d’Entreprise meeting is conducted every three months to ensure effective communication and sharing of ideas between team members and management and in order provide an agreeable working environment for both parties.

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A study is ongoing to evaluate the building of a spa at La Place Belgath and to enhance the set-up of the village. Additional amenities and a revamp of the existing structures should ensure more vibrancy in the common areas while catering to the growing number of homeowners and clients on the estate, whose northern phase is about to be developed.

Human Resources

As at June 30, 2015, the Alteo Property and Hospitality cluster had 343 permanent employees and 6 temporary employees on its payroll. In addition, activities such as gardening and landscaping, security, boathouse facilities, air-conditioning maintenance work and woodworking are outsourced to contractors.

Health & Safety

The Property and Hospitality cluster has been focusing on improving Health & Safety for its employees and contractors in the working environment. It has done this by implementing procedures as prescribed by the law (OSHA) and by providing continuous training in Health & Safety as part of hotel induction and departmental orientation. Key initiatives such as monthly Health & Safety meetings have been introduced to ensure that best practice is adhered to and recommendations acted upon. Moreover, club car licences, fire, cyclone and accident at work procedures, preventive health and safety audits and risk assessments have been also developed to ensure the safety of all employees and clients.

Moreover, we are committed to our yearly health surveillance programme to ensure that employees are medically fit. The programme is run in collaboration with several partners who provide basic fitness tests and who screen employees for diabetes, hypertension and heart disease.

Anahita Residences & villas Ltd (“ARvL”)

ARVL is a joint venture between Alteo and CIEL. Anahita The Resort’s (ATR) property rental programme and the hospitality facilities offered at the waterfront village, La Place Belgath, are operated by ARVL.

Building on its now well-established reputation as a five star resort, ATR has successfully diversified its market sources and is proud to receive guests from a wide range of countries. Its visitors, mainly from Europe, China, the Middle East and South Africa, are still enamoured by the beauty of the site: the wide spaces, the irreproachable service, the exclusive beach at Île aux Cerfs and of course the golf amenities. Indeed, most visitors are golfers, thereby contributing to a high capture ratio for the Four Seasons Golf Club and the course at Ile aux Cerfs, the two golf courses to which they have access.

In the wake of a commercial arrangement between ARVL and AGL, and following the re-opening of Il Forno Trattoria at the golf club, ATR has offered a half board rate to all of its clients since January 2015. Whereas previously the proportion of half board clients was restrained due to the limited restaurant capacity, the introduction of this new offer is facilitating the sale of ATR as a holiday venue on the same terms as competing hotels in its category.

As a result of higher homeowner occupancy and reduced villa inventory, ATR could unfortunately not always take advantage of the high demand for real estate, particularly during the peak months. This situation had a negative impact on the company’s turnover, though this was mitigated by successful cost-containment measures. In order to address the issue of reduced units available for rental, the shareholders of the company have approved the acquisition of 12 two-bedroom suites at Amalthea from AEL by ARVL. The inclusion in the rental programme of a number of villas from Amalthea’s first phase, as well as the suites mentioned above, is expected to enable the resort to improve its offering not only in terms of product but also in terms of availability during peak periods.

EXECUTIvES’ REPORT PROPERTY & HOSPITALITY


EXECUTIvES’ REPORTCORPORATE SOCIAL

RESPONSIBILITY

Integration of individuals with disabilities

Alteo has always been involved in initiatives aimed at those with disabilities in the areas surrounding our areas of operation. We continue to house the Eastern Welfare Association for Disabled (EWAD) in a company building at Beauchamp. We also finance the Association de Parents d’Enfants Inadaptés de l’Île Maurice (L’APEIM) of Bonne Mère, Flacq. This year we have gone a step further by also funding the École des Enfants Handicapés in Laventure.

Advancement of education for individuals from vulnerable groups

Alteo continued to support educational opportunities for individuals from vulnerable groups, particularly children, by providing funding to College Technique Saint Gabriel, charitable organisations such as Étoile de la Mer and Maison Familiale Rurale de L’Est, and primary schools in the region.

Health care

Alteo also helps fund activities aimed at improving low-income families’ access to medical treatment, via NGOs such as Link to Life, the Rotaract Club of Flacq and Friends In Hope.

Promotion of sports

Alteo, together with other economic partners, continues to promote sports in the eastern region through multidisciplinary club Faucon Flacq Sports Club.

ANAHITA CENTRE FOR EXCELLENCE

In the last financial year, the Anahita Centre for Excellence (ACE) dedicated Rs 4.6m to community projects in the eastern region of Mauritius. The centre focused on the following three areas: education and empowerment; training and employment; and the environment.

Community engagement is an important business responsibility for Alteo. We are actively involved in community projects in both Mauritius and Tanzania.

In Mauritius, a total of Rs 10.6m was invested in community projects over the last financial year. Of this, Rs 2m were dedicated to initiatives in the areas surrounding Alteo industrial operations; an additional Rs 4.6m were channelled into the eastern region of Mauritius via the Anahita Centre for Excellence; and Rs 2m were contributed to each of the GML Fondation Joseph Lagesse and the Fondation CIEL Nouveau Regard, of which Rs 500,000 were awarded to the Faucon Flacq Sporting Club.

DIRECT CONTRIBUTIONS IN AREAS OF INDUSTRIAL OPERATIONS

Alteo’s direct contribution to initiatives in the communities local to its areas of industrial operations focused on:

• Poverty alleviation and social integration;

• Integration initiatives geared towards individuals with disabilities;

• The advancement of the education of individuals from vulnerable groups; and

• The promotion of sports.

Poverty alleviation and social integration

Over the last year, Alteo was particularly invested in a community development project whose aim was to create a community centre in Olivia. The initiative, La Caze Lespwar Olivia, is run by Caritas. It includes a backyard gardening project benefitting 30 families and a new centre which welcomes and assists local residents. Alteo also participated in a harm reduction programme initiated by Collectif Urgence Toxida (CUT), a local non-governmental organisation (NGO) working to improve the lives of people who use drugs and live with HIV/AIDS.

CORPORATESOCIAL RESPONSIBILITY

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RESPONSIBILITY

At the end of 2014, FTK was running two village projects in Mtakuja and Mikocheni villages. Since the beginning of 2015, FTK has been exploring the viability of a third project in Chemchem village.

Mtakuja village project

The management of the first of these village projects, the Mtakuja project, was gradually handed over to the Mtakuja Development Organisation (MDO). However, FTK stayed very involved in the management of a 120 acre irrigated farm during 2014. The farm was created by FTK for the villagers six years ago and now successfully grows maize, green peppers, watermelons and okra. A third borehole was drilled specifically to ensure a sufficient supply of clean drinking water in the village.

Each month, 40 to 60 children under five years of age are screened for health issues and their data recorded during TPC hospital outreach clinics. The children also receive a meal of fortified porridge. During these clinics, pregnant women are seen by health professionals and mothers receive health education lessons.

After six years of medical camps in Mtakuja, a final two-day camp was organised during which 510 children under 10 years old were checked. The doctors were very pleased with the health of the children as it has dramatically improved over the years.

Mikocheni village project

In 2014, FTK became fully operational in Mikocheni village. A growing number of activities are now ongoing.

Agriculture, forestry, livestock-keeping and environmental issues

Mikocheni’s degraded natural environment, the threat of annual floods and the presence of a larger pastoralist community mean that agriculture and the environment are important early focal points for FTK’s work in the region.

In the area of community development, GML FJL continued to engage with and support 22 families living in extreme poverty at Chemin Rail, a small village located in Rivière du Rampart, as part of a social housing project. The project’s key achievements include: securing title deeds for five families who previously had no legal claim to their homes; building houses for four of the families; and making good progress towards building another 11 houses for the remaining families. A number of other projects are also underway, including the setting up of a women’s centre and the development of small-scale organic farming and aquaponics projects.

The environmental activities run through the GML THINK GREEN programme are mainly national projects focusing on waste management and cleanliness. Among these was the awareness-raising campaign “A Nou Gard Nou Pei Prop Ek Zoli”, which seeks to change local attitudes towards the environment. GML FJL also funded two new containers for waste recycling through the NGO Mission Verte. Finally, a new project is being launched to restore the shorelines of La Rivière Sèche at Ebène with a view to improve cleanliness and local biodiversity.

TANZANIA CSR PROJECT: FT Kilimanjaro

Alteo is also actively involved in community development in Tanzania through local NGO FT Kilimanjaro (FTK). FT Kilimanjaro is a joint initiative of TPC Ltd and of the FEMI Foundation, a Dutch funding body. The objective of FTK is to carry out projects that support communities in the areas surrounding TPC operations in their fight against poverty. The focus is on providing access to basic health care, educational development, improvement of infrastructure and sustainable income generation. A population of about 100,000 people spread over three wards in the Kilimanjaro region and in a few villages in the adjacent Manyara region live in the zone covered by FTK’s activities. FTK’s “village project” approach is to establish strong relationships with specific villages, and to work with the inhabitants and other stakeholders in defining sustainable projects with specific goals. These are then run by the villagers themselves in the long term. Outside of the village projects, FTK also supports the populations in Lower Moshi to provide health and education.

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another 1000 people having benefited indirectly. As outlined above, the success of this project inspired the development of La Caze Lespwar at Olivia. The latter benefits from FCNR’s support and from other direct funding from Alteo.

FCNR’s other social integration projects include the Training in Craft project, an initiative run by Open Mind, a day care centre for those experiencing psychological distress in Quatre Bornes.

In the area of education, the organisations funded by FCNR include: the Adolescent Non Formal Education Network (ANFEN), which helps parents and pupils through a network of social workers; the Society for the Welfare of the Deaf, which provides secondary schooling for hearing-impaired children; the Groupe Noyau Social of Cité La Cure, which runs the Teen Hope project, providing non-formal schooling to adolescents; and the Institut Cardinal Jean Margéot, particularly their counselling and psychological support unit and their targeted at young children.

In the area of sport, the FCNR continues to support the Curepipe Starlight Sports Club.

THE GML FONDATION JOSEPH LAGESSE

The GML Fondation Joseph Lagesse (“GML FJL”) received total funding of Rs 16.3m over the last financial year. Alteo funds represented Rs 2m of this sum. On the occasion of the tenth anniversary of the Foundation, priority areas were confirmed as follows: education, health, community development and the environment.

In the area of education, GML FJL continues to support vulnerable groups from early childhood and kindergarten onwards via its 13 dedicated centres across Mauritius. At the tertiary level, GML FJL continues to fund scholarships for 13 students from Rodrigues and 24 Mauritian students studying at the University of Mauritius. Alteo’s portion of the funding supports the Complexe Éducatif de Bois Marchand, an education project dedicated to kindergarten children.

Over the past year, ACE has been involved in projects including the refurbishment of a primary school at Clemencia, whose aim is to improve the setting in which students study and play. ACE has also committed to assisting with the revamp of three schools over five years, and has already identified the next school to receive help.

ACE sponsored William Bouton, a young sportsperson from the Olivia region, over the last year. William went on to win a number of competitions including the Kickboxing Junior World Championship. Kickboxing as a sport was introduced to Olivia village by an ACE initiative in 2011, and the club has since contributed a handful of young sportspeople to the Fédération mauricienne de Kickboxing et des Disciplines Assimilées. William’s story is one of heart-warming perseverance and dedication and he has already inspired other young people from the region to follow in his footsteps. His sponsorship has been renewed for the coming financial year.

ACE also directed part of its funds to La Caze Lespwar Olivia, a new community centre run by Caritas which recently opened in Olivia village. The centre was created in the wake of the success of La Caze Lespwar in Solitude, which Caritas, Fondation CIEL Nouveau Regard and other funders set up to provide a range of services to local families.

FONDATION CIEL NOUvEAU REGARD

The Fondation CIEL Nouveau Regard (“FCNR”) received a total of Rs 12m in contributions over the last financial year. Alteo contributed just over Rs 1.5m to the foundation’s general budget.

The FCNR continues to be actively involved in the fight against poverty as well as in the areas of disability, education and health. A highlight of the year was the celebration of the foundation’s tenth anniversary in November 2014.

One of the FCNR’s flagship projects, the Caritas-run La Case Lespwar at Solitude, continued to receive significant funding. Over 200 persons are estimated to have directly benefited from the support services offered by the centre, with

EXECUTIvES’ REPORTCORPORATE SOCIAL RESPONSIBILITY



RESPONSIBILITY

Finances

FTK’s total expenses in Tanzania for the year were TSh 565.84m (equivalent to approximately EUR 270,000). Total programme expenses were TSh 450.52m (equivalent to approximately EUR 215,000). TPC contributed TSh 140m in direct support (funds and direct expenses) to FTK for the 2014-15 financial year. In addition, TPC contributes management time through the involvement of TPC’s Corporate Affairs Executive Officer and PR and CSR officers; and provides in-kind support in the form of offices, training rooms, internet connectivity, etc.

Conclusion and outlook

In Mauritius, ALTEO is now well engaged in the path of optimising the synergies from its sugar and property operations whilst launching new energy projects. At the same time, the group’s further regional expansion is becoming a reality and augurs well for the future.

Globally, the group results for the year 2015-16 are likely to be affected by the low sugar extraction rate in Mauritius and Tanzania and stable results for energy operations. Recently acquired Transmara Sugar Company Ltd in Kenya is expected to have a positive contribution in the year. The recent dynamism observed in the property sector should be sustained.

Patrick de L. d’ArifatChief Executive Officer

September 24, 2015

Improving teaching methods in primary schools

Many schools in the Lower Moshi region suffer from a range of problems that affect their ability to adequately educate their pupils. In 2014, FTK partnered with Education East Africa, a local NGO, to address some of the challenges that teachers face, particularly in teaching English and maths. With the permission and support from the district, Education East Africa hosted a number of workshops throughout the year, bringing teachers from different schools together and leading them through a program to improve their teaching methods.

Deworming of school-age children

In close coordination with the district and local primary schools, a first deworming campaign in Lower Moshi reached more than 1,500 children aged 5 to 14.

Transportation for school children in Lower Moshi

Langasani and TPC Secondary Schools are located roughly a kilometre south and north of the TPC factory and offices. These two schools take in students from all of the surrounding villages, some as far as 20km away. TPC, FTK and the Buffalo bus company, which provides transport to the TPC staff, currently subsidise the transport to and from school of more than 300 students on a daily basis.

Scholarship program

FTK manages a scholarship fund to increase local students’ access to post-primary education. The fund provides students from the Lower Moshi area with vocational training, secondary education, college and university scholarships. At the moment there are 128 scholarship recipients. 64 recipients have already completed their studies.

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At the village primary school, FTK supported the construction of a teacher’s house and of a building with sanitary facilities. It also funded the creation of a school lunch program. The lunches will be the first ever for the school and are of much-needed assistance to pupils and parents.

Chemchem village Project

Chemchem village is a small village southwest of Mikocheni that FTK is currently targeting as the next candidate for its integrated development program. According to a 2012 census, Chemchem has 2,166 inhabitants. The biggest part of Chemchem is very difficult to reach and roads are very poor. FTK’s first effort in this area was therefore to renovate – and where needed to construct – the village’s main access and through roads. With support from TPC, 11.5km of road were constructed in coordination with the local district. Chemchem now needs a bridge to further improve access and connect the northern and southern parts of the village. Possibilities are currently being looked at with the help of TPC’s building section and factory workshop.

Lower Moshi

In addition to the village projects outlined above, FTK is involved in a number of initiatives to support communities in Lower Moshi. A few examples are presented below.

Creating access to energy-saving products

FTK, in partnership with a small local company, supported the sale of highly efficient wood-burning cooking stoves. These were made available to the community at affordable prices through a credit scheme. Thanks to this initiative, a number of sales jobs were also created.

With the support of Trees for the Future, FTK distributed 1,400 tree seedlings to the residents of four sub-villages in the Mikocheni area, for the seedlings to be planted locally. Trees for the Future also led on training and development to enable groups of villagers to create their own nurseries. The TPC nursery donated another 300 tree seedlings to the village.

FTK also supported the construction of a cattle dip to treat livestock for parasites. This initiative was in support of the Maasai community in Mikocheni and its surrounding areas.

For parents of children with disabilities, FTK worked in partnership with local NGO Comprehensive Community Based Rehabilitation in Tanzania (CCBRT) to organise training in dairy goat rearing. Fifteen families from Mikocheni Village are currently taking part in the project and were each given a goat.

A group of six students from the Delft University of Technology in the Netherlands spent two and a half months with FTK to analyse the flood risk in Lower Moshi. The team presented their findings to TPC management team and recommended a combination of measures including dikes, spillways and the reopening of old riverbeds to control future flooding. The next step is to develop an implementation plan.

Health and education

FT Kilimanjaro received 10 bicycles from international NGO Global Bike for use in the Mikocheni project. The bicycles will vastly improve the mobility of both the project committee and community health workers.

FTK, in partnership with MCC and TPC, conducted a five-day medical camp in Mikocheni in July, targeting children under the age of eight. This was the first full medical camp in Mikocheni, after a pilot in one sub-village in 2013. The exercise was conducted at three different locations around the village and benefitted over 600 children. CCBRT’s team also took part in order to provide support to children with disabilities.

EXECUTIvES’ REPORTCORPORATE SOCIAL RESPONSIBILITY

GROUPENVIRONMENTAL DATA

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GROUP ENVIRONMENTAL DATA

TOTAL WATER CONSUMPTION (per origin of water) (in cubic meters)

6,873,535 5,517,392

4,735,422 4,987,730

73,365,721 84,553,542

33,243,559 35,694,561

Mauritius

Tanzania

Mauritius

Tanzania

20152014

Public water distribution system

Own water basins or water collection systems Boreholes


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GROUP ENVIRONMENTAL DATAGROUP ENVIRONMENTAL DATA

Clusters 2014 2015Sugar & Energy 86,586,546 76,512,787Agri 1,239,991 1,174,631Property and Hospitality 5,421,578 5,532,807International 63,700,000 69,100,000

2014 2015

ELECTRICITY CONSUMPTION PER CLUSTER (in KW/H)

2014 2015

TOTAL DIESEL, PETROL AND COAL CONSUMPTIONELECTRICITY CONSUMPTION (in KW/H)

170,000,000

156,948,115152,320,225

130,000,000

150,000,000

110,000,000

160,000,000

120,000,000

140,000,000

100,000,000

ELECTRICITY PRODUCTION (in KW/H)

2014 2015

400,000,000

Tanzania

68,700,000

387,060,652

Mauritius

401,062,348

78,900,000

200,000,000

300,000,000

100,000,000

350,000,000

150,000,000

250,000,000

50,000,000

2014 2015

156,728 172,519

COAL COAL

122,297 121,986

PETROL PETROL

2,252,553 2,404,139

149,520 166,357

DIESEL DIESEL

1,500,000

2,500,000

(in co

mpany v

ehicu

les)

(in co

mpany v

ehicu

les)

(in co

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STATEMENT OFCOMPLIANCE


Name of the Public Interest Entity: ALTEO LIMITED

Reporting Period: June 30, 2015

On behalf of the Board of Directors of ALTEO, we confirm that, to the best of our knowledge, the Company has complied with all its obligations and requirements under the Code of Corporate Governance (“the Code”) except with respect to sections 2.8.2 (Remuneration of Directors), 2.10.3 (Board and Directors Appraisal) and 7.3.1 (Ethics) of the Code.

Reasons for non-compliance with these sections are given on pages 84, 67 and 87 respectively.

P. Arnaud Dalais Jean de FondaumièreChairman Director

September 24, 2015

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

page

62


CORPORATE GOvERNANCE REPORT


ShareholdersNumber of Shares

Owned%

HoldingGML Investissement Ltée 85,742,078 26.92CIEL Limited 66,755,299 20.96

SHAREHOLDERS’ AGREEMENT

To the best knowledge of the Company, there has been no such agreement with any of its Shareholders for the year under review.

SUBSTANTIAL SHAREHOLDERS

The shareholders holding more than 5% of the share capital of ALTEO at the date of reporting were as follows:

COMMON DIRECTORS

The names of the common Directors are as follows:

Directors ALTEO CIEL GMLIP. Arnaud Dalais √* √*Jan Boullé √ √*Jean-Pierre Dalais √ √Jérôme De Chasteauneuf √ √Arnaud Lagesse √ √Thierry Lagesse √ √

* Chairman

page

64 CORPORATE GOvERNANCEREPORT


COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE

ALTEO is a public company incorporated on April 18, 1913 and listed on the Official Market of the Stock Exchange of Mauritius Ltd (“SEM”).

ALTEO is committed to the highest standard of business integrity, professionalism and transparency in all its activities to ensure that the activities within the Company and the Group are managed ethically and responsibly to enhance business value for all stakeholders.

The Board of Directors and management of ALTEO reiterate their commitment to ensuring and maintaining a high standard of corporate governance to ensure protection and transparency of the interests of ALTEO’s shareholders and all its stakeholders at large. They also recognise the need to adapt and improve the principles and practices in light of their experience, regulatory requirements and investor expectations.

This report describes, among others, the main corporate governance framework and compliance requirements of the Company with its Constitution, the Companies Act 2001, the Securities Act 2005, the Listing Rules of the SEM, the disclosures required under the Code of Corporate Governance for Mauritius (the “Code”) and the Terms of Reference of the Board Committees.

HOLDING STRUCTURE

The stated capital of ALTEO is currently Rs 8,991,595,000.- divided into 318,492,120 ordinary shares of no par value.

The holding structure of ALTEO as at reporting date is as follows:

CIEL Limited(“CIEL”)

ALTEO LIMITED

GML Investissement Ltée(“GMLI”) Others

20.96% 26.92% 52.12%

The Group’s shareholding is found on pages 4 and 5 of the Annual Report.



BOARD COMPOSITION

ALTEO’s Constitution provides that, unless otherwise determined by the shareholders in an Annual or Special Meeting, the Board shall consist of a minimum of 7 Directors and a maximum of 15 Directors.

The composition of the Board is reviewed by the Corporate Governance, Nomination, Remuneration & Ethics Committee, in its role as Nomination Committee, to ensure that the Board has the appropriate combination of expertise and experience, and collectively possesses the necessary core competencies for effective functioning and informed decision-making. The said Committee is responsible for identifying and recommending potential directors to the Board.

In accordance with ALTEO’s Constitution, the Board has the power to appoint any person to be a Director, either to fill a casual vacancy or as an addition to the existing Directors but so that the total number of Directors shall not at any times exceed the number fixed by its Constitution. The Director so appointed shall hold office only until the following Annual Meeting of Shareholders and shall then be eligible for re-election.

On appointment to the Board and any Committees, Directors receive a complete induction pack and are invited to meet members of the management team in order to rapidly acquire a comprehensive view of the Company’s current operations practises, acceptable risks level and medium and long term strategy.

The Board also acknowledges the requirement to ensure that all Non-Executive Directors are fully aware of the annual workload to be committed to ALTEO. As a consequence, an estimate of the amount of work which shall be dedicated annually to the Company is communicated to each newly appointed Non-Executive Director to the Board of ALTEO.

ALTEO is currently managed by a unitary Board of 11 members, who are all ordinarily residents of Mauritius.

The Board is composed of:

- 7 Non-Executive Directors;

- 2 Independent Non-Executive Directors; and

- 2 Executive Directors.

On June 24, 2015, Mr. P. Arnaud Dalais expressed the wish to retire as Group Chief Executive of ALTEO with effect from June 30, 2015. On that same date and upon recommendation of the Corporate Governance, Nomination, Remuneration & Ethics Committee, the Board appointed Mr. Fabien de Marassé Enouf as Director of the Company.

Mr. Fabien de Marassé Enouf has joined ALTEO in January 2014 as Chief Finance Executive and his business experience and exposure to the financial evaluation of projects and monitoring of operations will certainly prove very useful to the Board of Directors of the Company. The profile of Mr. de Marassé Enouf is set out on page 70.

The Board believes that its overall composition is appropriate, having regard in particular to the independence of character and integrity of all of its directors, and the experience and skills which they bring to their duties.

BOARD EVALUATION

The Directors being now fully conversant and familiar with ALTEO’s structure and business activities (following the amalgamation of ex-Flacq United Estates Limited (“FUEL”) with and into the Company), it has been agreed that an evaluation of the effectiveness of the Board and its committees will be conducted by an independent external evaluator during the financial year 2015/2016.

page

66CORPORATE GOvERNANCE REPORT


BOARD OF DIRECTORS

ALTEO is headed by a highly forward looking and skilled Board, which is collectively accountable for the success of the Company and for the overall corporate governance of the Group. The central role of the Board of Directors of ALTEO is to provide entrepreneurial leadership to the Company and the Group within a framework of prudent and effective controls which enables risk to be assessed and managed.

The Board of Directors is aware of its responsibility to ensure the stewardship of ALTEO and the supervision of the management of the business and affairs of the Company.

The Board also acknowledges its responsibility to ensure that the Company adheres to all relevant legislation, complies with the Listing Rules of the SEM and applies the principles of good governance throughout the Group.

The key functions of the Board include inter alia:

- providing direction for the Group;

- assuming responsibility for leading and controlling the Company and meeting all legal and regulatory requirements;

- monitoring the effectiveness of the Group’s governance practices and making changes as needed;

- overseeing the conduct of the Company’s business, to evaluate whether the business is being properly managed at all levels;

- reviewing and, where appropriate, approving risk policy, financial statements, annual budgets, business plans and Committees’ reports;

- overseeing major capital expenditure, acquisitions and divestments;

- ensuring the precision and integrity of the Company’s accounting and financial reporting systems, including the independent audit;

- overseeing the process of disclosure and communication;

- ensuring that the Company’s business is conducted with the highest standards of ethical conduct and in conformity with applicable laws and regulations in Mauritius at all times;

- selecting, compensating and monitoring key executives and overseeing management succession planning; and

- ensuring that the appropriate systems of control are in place to prevent any malpractices.

The Board of Directors of ALTEO is considering the adoption of a Board Charter in order to clearly define its responsibilities and governance role.

Besides, the Board considers that its members should be continuously developing themselves. To this effect, the Board believes that its members should not be prohibited from serving on boards of other organisations provided that each Director has a duty to act in the best interests of the Company and is expected to ensure that his other responsibilities do not impinge on his responsibilities as a Director of ALTEO.

Board members have unrestricted access to the records of the Company. They also have the right to seek independent professional advices at the expense of the Company to enable them to discharge their responsibilities at their upmost abilities.

The Directors of ALTEO hereby confirm that they are aware of their legal duties and that they perform their responsibilities, duties and powers to the extent permitted by law.

CHAIRMAN, GROUP CHIEF EXECUTIVE AND CHIEF EXECUTIVE OFFICER

During the year under review, the duties and responsibilities of the Non-Executive Chairman, Group Chief Executive and Chief Executive Officer have been kept separate to ensure proper balance of power, increased accountability and greater capacity of the Board for independent decision-making.

The post of Non-Executive Chairman is held by Mr. P. Arnaud Dalais following the decision of Mr. Arnaud Lagesse to resign from the said function on June 24, 2015.

The function of Group Chief Executive has been held by Mr. P. Arnaud Dalais until his resignation which took effect on June 30, 2015. The post of Chief Executive Officer is held by Mr. Patrick de L. d’Arifat.



Amédée DARGA

Independent Non-Executive Director – first appointed to the Board in 2012

Amédée Darga, born in 1951, is a Fellow of the Royal Society of Arts. He is also a Fellow of the Institution of Engineers of Mauritius. He is the Managing Partner of Straconsult, a Social Science Researcher, a Trustee of SEATINI (Southern & Eastern Africa Trade Information Network Initiative) since 2003 and Chairman of the Mauritius Africa Business Club. Amédée Darga has served as Minister of Housing, Lands, Town and Country Planning for two years and previously occupied numerous positions such as Mayor of Curepipe. He was a Member of Parliament since the age of 26 and from 1976, Trade Union Negotiator and Adviser. He is a regular resource person to the United Nations on matters of governance. Amédée Darga is a member of the Audit & Risk Committee of the Company.

Directorship in other companies listed on the Official Market of the SEM:

- CIM Financial Services Ltd

Jérôme DE CHASTEAUNEUF

Non-Executive Director - first appointed to the Board in 2014

Jérôme De Chasteauneuf, born in 1966, is qualified as Chartered Accountant of England and Wales. He also holds a BSc honours in Economics from the London School of Economics and Political Science (1989). He joined the CIEL Group in 1993 as Project Financier and became Head of Finance of the CIEL Group in 2000. He has been closely involved with the sugar industry by acting as Head of Finance of DRBC (now ALTEO Limited) for a number of years. He is an Executive Director of CIEL Limited.

Directorships in other companies listed on the Official Market of the SEM:

- CIEL Limited- Harel Mallac & Co. Ltd- Sun Resorts Limited

Jean DE FONDAUMIÈRE

Independent Non-Executive Director - first appointed to the Board in 1996

Jean de Fondaumière, born in 1953, is a Chartered Accountant of Scotland. He worked in Australia for eleven years and he retired as the CEO of the Swan Group at the end of 2006 after fifteen years. He is a past Chairman of The Stock Exchange of Mauritius and his former directorships include companies operating in the African, Indian Ocean and Asia Pacific regions. Jean holds a portfolio of directorships in Mauritius for companies operating in commerce, finance, power generation, sugar and tourism. He is the current Chairman of the Audit & Risk Committee and of the Corporate Governance, Nomination, Remuneration & Ethics Committee of the Company.


- LUX* Island Resorts Ltd

Patrick DE L. D’ARIFAT

Executive Director – first appointed to the Board in 2012

Patrick de L. d’Arifat, born in 1958, holds a BSC degree in Economics and Accountancy from City University, London. He started his career with the Mauritius Chamber of Agriculture in 1982 and in 1991 he was appointed Director of the Mauritius Sugar Producers Association. He has chaired that same association for four years and that of the Mauritius Sugar Syndicate for two years. He joined CIEL Agro-industry as Chief Executive Officer in July 2001. Patrick de L. d’Arifat has, throughout those years, been closely associated with the policy formulation and implementation of the modernization process of the sugar industry in Mauritius and in the region. Patrick de L. d’Arifat is the Chief Executive Officer of ALTEO Limited.


- Rogers and Company Limited

page

68



DIRECTORS’ PROFILE

The names of the Directors, their categories, their profiles and the list of their directorships in other listed companies are provided hereafter.

P. Arnaud DALAIS

Non-Executive Chairman - first appointed to the Board in 1984 and Chairman as from June 24, 2015

P. Arnaud Dalais, born in 1955, has been appointed as Chairman of the Company on June 24, 2015, following his wish to retire as Group Chief Executive of the Company with effect from June 30, 2015. Under his leadership as Group Chief Executive since November 1991, the Company has gone through an important development both locally and on the international front. He has been leading his team to successfully conclude the amalgamation of ex-Flacq United Estates Ltd with and into ex-Deep River-Beau Champ Limited which has since been renamed ALTEO Limited. He is also the Chairman of the CIEL Group and as such chairs the Boards of CIEL Limited, CIEL Textile Ltd and Sun Resorts Ltd. He plays an active role at the level of the Mauritian private sector and has assumed the Chairmanship of a number of organizations including the Joint Economic Council from 1999 to 2001.


- Caudan Development Limited (Non-Executive Vice Chairman) - CIEL Limited (Chairman)- Promotion and Development Limited- Sun Resorts Limited (Non-Executive Chairman)

Jean-Claude BéGA

Non-Executive Director – first appointed to the Board in 2012

Jean-Claude Béga, born in 1963, is a Fellow of the Association of Chartered Certified Accountants. He joined GML in 1997 and is the Chief Financial Officer of GML Management Ltée. He is a member of the Mauritius Institute of Professional Accountants and a Fellow of the Mauritius Institute of Directors. Jean-Claude Béga is the Chairman of Phoenix Beverages Limited and Director of a number of companies including AfrAsia Bank Limited, LUX* Island Resorts Ltd, ALTEO Properties Ltd, Anahita

Estates Limited, Anahita Golf Ltd and Anahita Residences & Villas Limited. He is also a member of the Audit & Risk Committee of the Company.


- LUX* Island Resorts Ltd- Phoenix Beverages Limited (Non-Executive Chairman)

Jan BOULLé

Non-Executive Director – first appointed to the Board in 2012

Jan Boullé, born in 1957, is an ‘Ingénieur Statisticien Economiste (France)’ and holds a diploma of ‘3ème cycle de Sciences Economiques, Université Laval, Quebec (Canada)’. He joined the Constance Group in 1984 and is currently Head of Projects and Development. Jan Boullé has recently been appointed as Non-Executive Chairman of GML Investissement Ltée and is also a Director of several major companies of the country.


- Belle Mare Holding Limited- Phoenix Beverages Limited

Jean-Pierre DALAIS


Jean-Pierre Dalais, born in 1964, obtained his MBA from the International University of America, San Francisco. He started his career with Arthur Andersen, working in both Mauritius and France. He joined the CIEL Group in 1990 as General Manager of Aquarelle Clothing Ltd, before proceeding to the head office where he played a key role in developing the affairs of the group in Mauritius and internationally. Jean-Pierre Dalais is now the Executive Director of CIEL Limited. He also assumes directorships in several companies.


- CIEL Limited- Ipro Growth Fund Limited (Non-Executive Chairman)- Phoenix Beverages Limited (Alternate Director)- Sun Resorts Limited



PROFILES OF THE SENIOR MANAGEMENT TEAM

Christian MAROT – COO Agricultural Activities

Christian Marot, born in 1958, holds a Master in Business Administration from the University of Surrey, England. He joined the Deep River-Beau Champ Ltd in 1983 as Section Manager and occupied successively the post of Assistant Field Manager (1987) and Field Manager (1991) until his nomination as General Manager in 2002. As from July 2012, Christian Marot is the Chief Operations Officer of the Agricultural Activities of the Company.

Sébastien LAvOIPIERRE – COO Industrial Activities

Sébastien Lavoipierre, born in 1972, holds a Bsc. degree in Chemical Engineering from University of Natal and an MBA from Heriot Watt University, Edinburgh Business School. He joined Les Gaz Industriels in 1998 as Production Manager and then held a senior management position at Ireland Blyth Limited from 2003 to 2006. He was the Project Manager of the MCFI Group from 2007 to 2008 and Business Development Manager of the Harel Mallac Group in 2009. In 2010, he was promoted as the Managing Director of the Chemical arm of the Harel Mallac Group. Sébastien Lavoipierre joined ALTEO Limited in August 2013 and he is currently the Chief Operations Officer of the Industrial Activities.

Jean-Robert LINCOLN – Group Agricultural Development Executive

Jean-Robert Lincoln, born in 1959, joined the Company in 1985. Initially involved with sugarcane operations in Mauritius, he occupied various responsibilities within Agronomy and R&D. He has, over the last fifteen years, been playing a more active role in evaluating and developing agricultural opportunities abroad and is currently Group Agricultural Development Executive. He holds a BSc in Crop Science from Natal University, South Africa (1983), a Certificate in Sugar Agriculture from the South African Sugar Association (1984), a Certificate in Agricultural Water Management from Cranfield University, UK (1990), and an MBA from the University of Surrey, UK (1997).

Sophie STRAUSS – Human Resources Executive

Sophie Strauss, born in 1970, holds a Masters in Human Resource Management from the University of Guildhall in the UK and has a Fellow Membership of the Chartered Institute of Personnel and Development. She joined the group in August 2015 after spending 10 years with the Nestlé Group based in the UK. She was appointed as the Head of Human Resources for Nestle Waters UK in 2010. Prior to this, her role was Lead Human Resources Business Partner in the beverage category. Before her time in FMCG, Sophie spent 7 years with Compass Group Plc based in the UK - focusing on HR management in contract catering and the food retail sector in both railway stations and airports. Her operational experience and expertise lends itself to the focus required in terms of the overall human resources strategy for the group.

Robert BAISSAC – CEO of TPC Ltd

Robert Baissac, born in 1960, holds a BSc honours in Agriculture from the University of Natal, Pietermaritzburg, RSA. He joined the group in 1984 as Assistant Agronomist of Deep River Beau Champ Ltd and was then appointed Agronomist in charge of diversification in 1985. In 1987, he joined Mon Trésor Mon Désert S.E as Agronomist and in 1991, was appointed Field Manager of Compagnie de Beau Vallon Ltée. Since 2000, Robert Baissac is the CEO of TPC Ltd in Tanzania.

Stéphane ISAUTIER – Development Executive of Sucrière des Mascareignes Ltd

Stéphane Isautier, born in 1970, holds a Masters degree in Agronomy from the Institut National Agronomique, Paris (1993). Stéphane thereafter spent 5 years in the audit department of Arthur Andersen Paris, where he acquired a strong financial and corporate background. Over the last fifteen years, Stéphane pursued his career in the sugar industry and occupied various executive functions in cane and beet sugar processing units successively in Vietnam, Czech Republic, Reunion Island, Mozambique, Brazil and France. Stéphane joined ALTEO Group in February 2015 as Development Executive and will henceforth lead the group’s initiatives to become a regional player in the cane and sugar industry.

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70



Fabien DE MARASSé ENOUF

Executive Director – appointed to the Board on June 24, 2015

Fabien de Marassé Enouf, born in 1977, holds a Bcom (Accounting and Finance) from Curtin University and qualified as a member of the Institute of Chartered Accountants in England and Wales in 2004. He joined the Corporate Finance practice of PwC Mauritius in 2005. As Senior Manager, he has advised clients on several M&A projects, finance raising projects and business valuations both locally and in the region and has regularly been involved on stock market related work. Fabien joined ALTEO Limited in January 2014 as Chief Finance Executive.

Arnaud LAGESSE

Non-Executive Director - first appointed to the Board in 1995 and Chairman from August 13, 2013 to June 24, 2015

Arnaud Lagesse, born in 1968, has acted as Chairman of the Company from August 13, 2013 to June 24, 2015. He holds a “Maitrise de Gestion” from the University of Aix-Marseille III, France and is a graduate of “Institut Supérieur de Gestion”, France. He also completed an Executive Education Program at INSEAD, Fontainebleau, France and an Advanced Management Program (AMP180) at Harvard Business School, Boston, USA. He joined GML in 1993 as Finance and Administrative Director before becoming in August 2005 its Chief Executive Officer. He also participated in the National Corporate Governance Committee as a member of the Board. He is a member of the Board of Directors of several of the country’s major companies (Phoenix Beverages, The United Basalt Products Ltd) and is the Chairman of BlueLife Limited, Ireland Blyth Limited, LUX* Island Resorts Ltd, inter alia.

Arnaud Lagesse is an ex-president of the Mauritius Chamber of Agriculture, the Mauritius Sugar Producers Association and the Sugar Industry Pension Fund. Arnaud Lagesse is the Chairman of GML Fondation Joseph Lagesse since July 2012. He has also recently been appointed as Chairman of the National Committee on Corporate Governance.


- BlueLife Limited (Non-Executive Chairman)- Ireland Blyth Limited (Non-Executive Chairman)- LUX* Island Resorts Ltd (Non-Executive Chairman)- Phoenix Beverages Limited- The United Basalt Products Ltd

Thierry LAGESSE


Thierry Lagesse, born in 1953, holds a ‘Maîtrise des Sciences de Gestion’ from the University of Paris Dauphine. Up to 12 August 2013, he was the Non-Executive Chairman of GML Investissement Ltée. He was the past chairman and is presently the Director of the following listed companies, ALTEO Limited, Ireland Blyth Limited, Phoenix Beverages Limited and The United Basalt Products Ltd. He is also the Executive Chairman and founder of Palmar Group of Companies and the Chairman of Parabole Réunion SA.


- Ireland Blyth Limited - Phoenix Beverages Limited- The United Basalt Products Ltd



DIRECTORS’ AND OFFICERS’ DEALINGS IN ALTEO’S SHARES

The Directors of ALTEO use their best endeavours to abide by the absolute prohibition principles and notification requirements of the Model Code on Securities Transactions by Directors as stipulated in Appendix 6 of the Listing Rules of the SEM.

ALTEO has set up a procedure whereby any Director wishing to deal in the shares of the Company should first notify the Chairman of the Company and receive a dated written acknowledgement prior to any dealings. In his own case, the Chairman of the Company should first notify the Board at a Board meeting and receive a dated written acknowledgement prior to dealing.

The Directors and Officers of the Company are strictly prohibited from dealing in the shares of ALTEO at any time when in possession of unpublished price-sensitive information, or for the period of one month prior to the publication of the Company’s quarterly and yearly results and to the announcement of dividends and distributions to be paid or passed, as the case may be, and ending on the date of such publications/announcements.

Moreover, Directors and Officers of ALTEO are required to observe the insider trading laws at all times even when dealing in securities within permitted trading periods.

The Directors and Officers of ALTEO have also been made aware of their responsibilities in disclosing to the Company any acquisition or disposal in the Company’s securities, as per the Securities Act 2005 and the Listing Rules of the SEM.

During the year under review, save for Mr. Robert Baissac, CEO of TPC Ltd, who sold 4,300 shares directly, the Directors and other Officers of ALTEO did not deal with the shares of the Company either directly or indirectly.

DIRECTORS’ AND OFFICERS’ INTERESTS IN SHARES OF ALTEO LIMITED (Continued)

Direct Interest Indirect Interest

Officers No. of shares % %

Christian Marot - - -

Sébastien Lavoipierre - - -

Jean-Robert Lincoln 14,421 0.00 -

Robert Baissac 7,560 0.00 -

Stéphane Isautier - - -

Patrice Legris - - -

None of the Directors and Officers had any interest in the equity of subsidiaries of ALTEO.

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72



Patrice LEGRIS – CEO of Alteo Properties Ltd

Patrice Legris, born in 1957, holds a Masters in Economic and Social Administration from Sorbonne – Paris, as well as a Diploma in Personnel Management from the University of Mauritius. CEO of Alteo Properties Ltd since April 2012, Patrice was previously CEO of l’AHRIM (Association des Hoteliers et Restaurateurs de l’Ile Maurice) and former director of the Mauritius Sugar Producers Associations (MSPA).

Stan RAU – CEO of Transmara Sugar Company Ltd

Stan Rau, born in 1951, holds a Bachelor of Science (Agric) as well as a Diploma in Business Management. He joined Transmara Sugar Company Ltd in September 2015 after spending more than 33 years in the sugar milling industry working for Illovo Sugar Limited and Hulletts Sugar South Africa. As the Director for Grower Affairs (2011-2014), he was responsible to the Board for developing sufficient cane supplies to fill the milling capacity of four sugar mills in South Africa. Prior to this, as General Manager Raw Sugar Mills, he was responsible for the operational performance and profitability for various raw sugar mills (1981-2011). His deep operational experience and expertise lend itself to the focus required in terms of the start-up operation at Transmara Sugar.

DIRECTORS’ AND OFFICERS’ INTERESTS IN SHARES OF ALTEO LIMITED

Written records of the interests of the Directors and their closely related parties in shares of ALTEO are kept in a Register of Directors’ Interests. Accordingly, as soon as a Director becomes aware that he is interested in a transaction, or that his holdings or his associates’ holdings have changed, this should be reported to the Company in writing. The Company Secretary then ensures that the Register of Interests is updated accordingly.All new Directors are required to notify in writing to the Company Secretary their direct and indirect holdings in shares of ALTEO. According to ALTEO’s Constitution, a Director is not required to hold shares in the Company.

Moreover, pursuant to the Securities Act 2005, ALTEO registered itself as a reporting issuer with the Financial Services Commission (“FSC”) and makes every effort to follow the relevant disclosure requirements. The Company keeps a Register of its insiders and the said register is updated with the notification of interest in securities submitted by the Directors, the Officers and the other insiders of ALTEO. The interests register is available to shareholders upon written request to the Company Secretary.

The Directors and Officers of ALTEO having direct and/or indirect interests in the ordinary shares of the Company at June 30, 2015 were as follows:

Direct Interest Indirect Interest

Directors No. of shares % %

P. Arnaud Dalais 632,128 0.20 0.00

Jean-Claude Béga - - -

Jan Boullé - - 0.03

Jean-Pierre Dalais 18,648 0.01 -

Amédée Darga 1,075 0.00 -

Jérôme De Chasteauneuf - - -

Jean de Fondaumière - - -

Patrick de L. d’Arifat - - 0.00

Fabien de Marassé Enouf - - -

Arnaud Lagesse - - 1.02

Thierry Lagesse 33,577 0.01 0.93



- the unaudited quarterly & nine months consolidated results at March 31, 2015 for publication;

- the amalgamation of the wholly-owned subsidiary Commercial and Industrial Enterprises Ltd with and into ALTEO effective as from June 1, 2015;

- the declaration and payment of a final dividend for the year ended June 30, 2015;

- the operating budgets for 2015/2016;

- the appointment of Mr. Fabien de Marassé Enouf as Executive Director of the Company; and

- the appointment of Mr. P. Arnaud Dalais as Chairman of the Company and as a member of the Corporate Governance, Nomination, Remuneration & Ethics Committee.

The minutes of the proceedings of each Board meeting are recorded by the Company Secretary and are entered in the Minutes Book of the Company. The minutes of each Board Meeting are submitted for confirmation at its next meeting and these are then signed by the Chairman and the Company Secretary.

BOARD COMMITTEES

In line with the Code, and in order to facilitate effective management, the Board has constituted an Audit & Risk Committee and a Corporate Governance, Nomination, Remuneration & Ethics Committee. These Committees operate within defined terms of reference and independently to the Board.

The Chairmen of the Board Committees report on the proceedings of the Committees at each Board meeting of the Company and the Committees regularly recommend actions to the Board.

The Company Secretary acts as secretary to the Board Committees. The minutes of each Board Committee meeting are submitted for confirmation at the following meeting and then signed by the Chairman of the Board Committee and the Company Secretary.

The Board Committees are authorised to obtain, at the Company’s expense, professional advice both within and outside the Company in order for them to perform their duties.

Audit & Risk Committee

The core responsibilities of the Audit & Risk Committee are namely the:

- monitoring of the integrity of the financial statements of the Company and the Group and any formal announcements relating to the Company’s financial performance, before submission to the Board;

- recommendation to the Board of the condensed unaudited quarterly financial statements;

- review of the effectiveness of the Company’s internal control and risk management systems;

- monitoring and review of the effectiveness of the Company’s internal audit function;

- approval of the appointment and/or termination of the internal auditors;

- monitoring and supervision of the effective function of the internal audit;

- monitoring of the objectivity and independence of the external auditors;

- recommendation to the Board on the appointment, re-appointment, removal of the external auditors and their fees;

- reviewing of the external auditors’ management letter; and

- conduct of investigations into any matters within its scope of responsibilities.

In line with the Code, the Board has nominated an Independent Non-Executive Director to chair the Audit & Risk Committee and the said Committee comprises 4 members namely, 2 Independent Non-Executive Directors and 2 Non-Executive Directors.

The Audit & Risk Committee operates under the terms of reference approved by the Board. The Committee meets at least once each quarter and reports on its activities to the Board. A quorum of 2 members is currently required for an Audit & Risk Committee meeting.

page

74



DIRECTORS’ AND OFFICERS’ INDEMNITIES AND INSURANCE

A Directors’ and Officers’ liability insurance policy has been subscribed to by the Company. The policy provides cover for the risks arising out of the acts or omissions of the Directors’ and Officers’ of the Company. The cover does not provide insurance against fraudulent, malicious or wilful acts or omissions.

BOARD MEETINGS

The Board of Directors of ALTEO meets quarterly and at any additional times as the Group’s business requires. Decisions taken between meetings are confirmed by way of resolutions in writing, agreed and signed by all the Directors then entitled to receive notice of meeting.

Board meetings are convened by giving appropriate notice after obtaining approval of the Chairman and of the Chief Executive Officer. As a general rule, detailed agenda, management reports and other explanatory statements are circulated in advance amongst the Directors to facilitate meaningful, informed and focused decisions at the meetings. To address specific urgent business needs, meetings are at times called at shorter notice.

Any Director may ask for explanations or the production of additional information and, more generally, submit to the Chairman any request for information or access to information which might appear to be appropriate to him.

A quorum of 7 Directors is currently required for a Board meeting of ALTEO and in case of equality of votes, the Chairman does not have a casting vote.

A Director of ALTEO who has declared his interest shall not vote on any matter relating to the transaction or proposed transaction in which he is interested, and shall not be counted in the quorum present for the purpose of that decision.

During the year under review, Board meetings of ALTEO have also been attended by the Chief Finance Executive as well as the Chief Operations Officers of both the Agricultural and Industrial clusters. Other key management personnel and outside consultants are invited to attend Board meetings when deemed necessary.

During the financial year ended June 30, 2015, the Board met 7 times with an attendance rate of 86%. The particulars of attendance at the Committee meetings are given on page 82. Decisions were also taken by way of resolutions in writing, agreed and signed by all the Directors then entitled to receive notice of the meeting.

Throughout the year under review, the Board considered and approved the following, amongst other items, namely:

- the reports and the recommendations of the Audit & Risk Committee and of the Corporate Governance, Nomination, Remuneration & Ethics Committee;

- the annual financial statements at June 30, 2014 and the relevant abridged audited consolidated results for publication;

- the Annual Report 2014;

- the convening of the Shareholders’ Annual Meeting 2014;

- the unaudited quarterly & three months consolidated results at September 30, 2014 for publication;

- the review of the operations;

- the disposal by ALTEO of its 50% stake in Anahita Hotel Limited, which owned the Four Seasons Resort Mauritius at Anahita, to Sun Resorts Limited for a total consideration of MUR 926.4 million;

- the declaration and payment of an interim dividend for the year ended June 30, 2015;

- the unaudited quarterly & half-yearly consolidated results at December 31, 2014 for publication;

- the abandonment of the development of a sugar project in Swaziland as the expected financial return did not meet the required level to justify the investment;

- the signature by ALTEO’s subsidiary company, Sucrière des Mascareignes Limited, of a binding Share Purchase Agreement for the acquisition of an effective stake of 51% in the ordinary share capital of Transmara Sugar Company Limited, a Kenyan company operating a sugar mill in the Transmara region;



Corporate Governance, Nomination, Remuneration & Ethics Committee

The Corporate Governance, Nomination, Remuneration & Ethics Committee is responsible for:

- making recommendations to the Board on all corporate governance provisions to be adopted so that the Board remains effective and follows prevailing corporate governance principles;

- in its role as Nomination Committee, reviewing the structure, size and composition of the Board, identifying and recommending to the Board possible appointees as Directors, making recommendations to the Board on matters relating to appointment or re-appointment of Directors and succession plans for Directors whilst assessing the independence of the Independent Non-Executive Directors;

- in its role as Remuneration Committee, determining and developing the Company’s and Group’s general policy on executive and senior management remuneration and making recommendations to the Board on all the essential components of remuneration whilst determining the adequate remuneration to be paid to Directors and senior management; and

- in its role as Ethics Committee, helping to define the code of conduct underpinning corporate behaviour applicable to senior management and employees, making recommendations or giving an opinion on initiatives aimed at promoting best practices in this area, and ensuring that the Group’s values and rules of good conduct are respected.

In line with the Code, the Board has nominated an Independent Non-Executive Director to chair the Corporate Governance, Nomination, Remuneration & Ethics Committee and the said Committee comprises 4 members namely, 1 Independent Non-Executive Director and 3 Non-Executive Directors.

The Committee considers an “Independent” Director as one who:

- is not a representative or member of the immediate family of a shareholder who has the ability to control or significantly influence the Board or management;

- has not been employed by ALTEO or the group of which ALTEO currently forms part, in any executive capacity for the preceding three financial years;

- is not a professional advisor to ALTEO or the group of which ALTEO currently forms part other than in a Director capacity;

- is not a significant supplier to, debtor or creditor of, or customer of ALTEO or the group of which ALTEO currently forms part, or does not have a significant influence in a group related company in any one of the above roles;

- has no significant contractual relationship with ALTEO or the group of which ALTEO currently forms part; and

- is free from any business or other relationship which could be seen to materially impede the individual’s capacity to act in an independent manner.

The Corporate Governance, Nomination, Remuneration & Ethics Committee operates under the terms of reference approved by the Board and a quorum of 2 members is currently required for a meeting of the said Committee.

The composition of the Corporate Governance, Nomination, Remuneration & Ethics Committee has changed during the year under review and at the date of this report, the membership of the said Committee is as follows:

Members CategoryJean de Fondaumière - Chairman Independent Non-Executive DirectorP. Arnaud Dalais Non-Executive ChairmanJérôme De Chasteauneuf Non-Executive DirectorArnaud Lagesse Non-Executive DirectorIn attendance (when deemed appropriate)

Patrick de L. d’Arifat Chief Executive Officer - Executive DirectorFabien de Marassé Enouf Chief Finance Executive - Executive Director

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The composition of the Audit & Risk Committee has not changed during the year under review. At the date of this report, the membership and attendance of the said Committee is as follows:

Mr. P. Arnaud Dalais has ceased to attend the Audit & Risk Committee meetings as from July 1, 2015 following his resignation as Group Chief Executive of ALTEO on June 30, 2015.

The Board of Directors is of the view that the members of the Audit & Risk Committee have sufficient financial management expertise and experience to discharge their responsibilities properly. The financial literacy of each member of the said Committee is disclosed in their respective profiles which are set out on pages 68 to 70.

The Committee met 5 times during the year under review with an attendance rate of 75%. The particulars of attendance at the Committee meetings are given on page 82.

During the year under review, the Audit & Risk Committee has, amongst other things:

- reviewed ALTEO’s Disaster Recovery Plan

- examined the management letter submitted by the external auditors and followed up on their recommendations;

- reviewed and recommended to the Board for approval, the annual financial statements at June 30, 2014 and the relevant abridged audited consolidated results for publication;

- reviewed and recommended to the Board for approval, the unaudited quarterly & three months consolidated results at September 30, 2014 for publication;

- examined the reports of the internal auditors on internal control systems arising from the

fieldwork performed by them and ensured that their recommendations be implemented;

- requested the assistance of the internal auditors for the elaboration of a Risk Monitoring Framework;

- reviewed and recommended to the Board for approval, the unaudited quarterly & half-yearly consolidated results at December 31, 2014 for publication;

- reviewed and recommended to the Board for approval, the unaudited quarterly & nine months consolidated results at March 31, 2015 for publication; and

- examined the estimated results for the year ended June 30, 2015.

The external auditors have been systematically called to all meetings at which the Committee has considered interim or annual financial statements.

The Committee met on September 16, 2015 to recommend to the Board the approval of the annual financial statements at June 30, 2015 and the relevant abridged audited consolidated results for publication.

The Audit & Risk Committee confirms that it has fulfilled its responsibilities for the year under review, in accordance with its terms of reference.

In 2015/2016, the Audit & Risk Committee will maintain its focus on the continued examination and review of the internal control environment and risk management system within the Group.

Members CategoryJean de Fondaumière - Chairman Independent Non-Executive DirectorJean-Claude Béga Non-Executive DirectorAmédée Darga Independent Non-Executive DirectorJérôme De Chasteauneuf Non-Executive DirectorIn attendance (when deemed appropriate)

Patrick de L. d’Arifat Chief Executive Officer - Executive DirectorFabien de Marassé Enouf Chief Finance Executive - Executive DirectorEY Internal Auditors - Independent Service ProviderBDO & Co External Auditors - Independent Service Provider



The areas reviewed by the internal auditors during the financial year 2014/2015 were as follows:

- ALTEO – Store Management- ALTEO – Procurement Management Process- ALTEO – Human Resource & Payroll (Industrial Cluster)- ALTEO – Follow up in respect of the following:

• Post Merger Operations Alignment• Treasury Management • IT General Controls

- TPC Ltd – The following processes were reviewed:• IT General Controls;• Garage and Motor Vehicles Maintenance;• Follow up on Accounts Receivable, Purchases

and Payables

EXTERNAL AUDIT

BDO & Co was re-appointed as external auditors of the Company for the financial year ended June 30, 2015 at the last Annual Meeting of the shareholders of the Company held on December 18, 2014.

The audit fees of BDO & Co for the financial year ended June 30, 2015 amounted to Rs 1.2m (2014: Rs 1,1m) and no non-audit services were carried out by BDO & Co during the year under review.

Upon the recommendation of the Audit & Risk Committee, shareholders will be asked at the forthcoming Annual Meeting to approve the re-appointment of BDO & Co as external auditors and to authorise the Board of Directors to fix the remuneration of the auditors for the ensuing year.

INTERNAL CONTROL

The Board is satisfied that a continual process for identifying, evaluating and managing significant risks has been in place for the financial year and up to the date of this Annual Report. The effectiveness of the internal control systems is reviewed by the Audit & Risk Committee and the Board receives assurance from the Audit & Risk Committee, which derives its information from regular internal and external audit reports.

To date, no material financial problems have been identified that would affect the results reported in these financial statements. The Board confirms that if significant weaknesses had been identified

during this review, the Board would have taken the necessary steps to remedy them.

RISK MANAGEMENT

The Board maintains full control and direction over appropriate strategic, financial, operational and compliance issues and has put in place an organisational structure with formally defined lines of responsibility, delegated authorities and clear operating processes. The systems that the Board has established are designed to safeguard both the shareholders’ investment and the assets of the Group.

The Board of ALTEO has empowered the Audit & Risk Committee to ensure that the Risk Management and Internal Control framework and systems are adequate to promote transparency and good governance practice across the various lines of activity. In discharging its responsibility towards the Board members, the Audit & Risk Committee relies upon the reports of the internal auditors and of the management to provide assurance on the effectiveness of the Internal Control framework.

In its effort to further strengthen the ALTEO risk management framework to better respond to the risks in its changing environment, the Audit & Risk Committee mandated EY to conduct a Business Risk Identification and Assessment exercise across the Group in 2013. This exercise covered all activity clusters and culminated in the establishment of a Group Risk Register which summarises the following for the priority areas within each cluster:

- Associated exposure (corresponds to the inherent risk);

- Mitigating controls in respect of each of these areas, if any;

- Associated residual risk (which factors in the likelihood, impact and controllability of the risk);

- Actions to be taken in order to address aspects which are not sufficiently covered including details relating to who will be the responsible person, timeframe for implementation and other relevant information such as key performance indicators that will indicate successful mitigation of the risk; and

- Acceptance level for each risk (unacceptable, needs improvement and acceptable).

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In his capacity as new Chairman of the Board of Directors, Mr. P. Arnaud Dalais has been nominated as member of the Corporate Governance, Nomination, Remuneration & Ethics Committee on June 24, 2015.

During the year under review, the Committee met 3 times with an attendance rate of 89%. The particulars of attendance at the Committee meetings are given on page 82.

During its meetings, the Corporate Governance Committee has:

- examined corporate governance issues;

- approved the corporate governance section of the Annual Report 2014;

- recommended to the shareholders the election of the two Directors appointed by the Board in replacement of a casual vacancy;

- recommended to the shareholders the re-election of the other Directors of the Company through separate resolutions;

- reviewed the Board and Board Committees’ fees for the year ended June 30, 2015;

- reviewed the remuneration and benefits of the Executive Directors and of the key management personnel, after taking into consideration the market norms and practices, the Company’s results and their better performance and additional responsibilities;

- recommended the recruitments of a Development Executive for Sucrière des Mascareignes Ltée (“SML”) and a Human Resources Executive; and

- organised a workshop for the Directors and members of the management team of ALTEO on “Developing an Ethical Work Culture – the role of the Board”.

The Corporate Governance, Nomination, Remuneration & Ethics Committee reviewed and approved the present corporate governance section.

The Committee also confirms that it has met its responsibilities for the year under review, in compliance with its terms of reference.

INTERNAL AUDIT FUNCTION

The role of the Internal Audit Function is to provide to management, the Audit & Risk Committee and the Board of Directors independent objective assurance and advice aiming at identifying cost efficiencies, providing strategic insights that improve business performance and providing key insights that focus on the risks that matter. It also plays a key role in the maintenance of a sustainable and fit for purpose risk management framework, which provides the right balance between risk, cost and value, in line with ALTEO’s overall business strategy and risk appetite.

The Internal Audit function is outsourced to Ernst & Young Ltd (“EY”). As internal auditors, they have unrestricted access to the records, management and employees of all operating units within the Group. They report to the Audit & Risk Committee and maintain an open and constructive line of communication with management at all times. This kind of collaboration reaps multiple benefits for the organisation, including enhanced efficiency, and the ability to make informed decisions on how to manage risk.

The Internal Audit coverage is determined through a systematic and collaborative risk based approach which involves members of the Audit & Risk Committee and senior management of each cluster of the Group in the identification of risk areas and the levels of risk within each of them. The overall audit plan is approved by the Audit & Risk Committee and regularly reviewed in light of changes to the risk landscape.

In line with its mandate to be a value adding partner to the business, EY discusses its findings with management and provides advisory support in the development of risk mitigation action plans. Regular follow-ups are performed by EY to assess the status of implementation of these action plans. Reports detailing all internal audit findings are submitted to the Audit & Risk Committee and all high risk areas are presented by EY through face to face meetings with the Audit & Risk Committee members on a periodic basis.



The development of ALTEO’s human resources strategy and the recruitment of key resources at corporate level is currently a priority for the Company.

Moreover, the Communication Committee together with the HR managers review the change management process on a regular basis. Team building initiatives are also planned and rolled out in accordance with the change management plan.

RISK REGISTER AND RISK MITIGATING ACTION PLAN

Following the risk assessment exercise done at ALTEO, a total of 89 risks, regrouped in the four quadrants mentioned above, were identified and assessed. These risks were further classified by business segments of the Group and have been logged into a Risk Register.

The Risk Register also contains the corresponding mitigating actions relating to the risks. Regular monitoring is exercised by top management and the Audit & Risk Committee regarding the implementation of the mitigating actions.

The risks identified are presently being managed in silos by the various Line Managers; and there is no consolidated repository and/or framework to drive a centralised risk monitoring function.

In view of the above, EY has been mandated to assist in the development of a risk monitoring framework which will enable a continual process for identifying, evaluating and monitoring significant risks identified.

COMPANY’S CONSTITUTION

ALTEO’s Constitution is in conformity with the provisions of the Companies Act 2001 and the Listing Rules of the SEM.

There are no clauses of the Constitution deemed material enough for special disclosure.

A copy of ALTEO’s Constitution is available on the Company’s website (www.alteogroup.com) and can also be obtained upon request in writing to the Company Secretary at the registered office of the Company, Vivéa Business Park, Saint Pierre.

COMPANY SECRETARY

ALTEO has a service agreement with Navitas Corporate Services Ltd for the provision of company secretarial services.

All Directors have access to the advice and services of the Company Secretary who is responsible for providing detailed guidance to the Chairman and the Directors as to their fiduciary duties, responsibilities and powers. The Company Secretary also ensures that the Company is at all times complying with its Constitution, terms of reference, applicable laws, rules and regulations.

Moreover, the Company Secretary assists the Chairman and the Board in implementing and strengthening good governance practices and processes with a view to enhance long-term stakeholders’ value. The Company Secretary also administers, attends and prepares minutes of all Board meetings, Board Committee meetings and Shareholders’ meetings.

The Company Secretary is also the primary channel of communication between the Company and its shareholders as well as the regulatory bodies.

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80



Priorities were identified according to the following four (4) risk quadrants of the EY Risk Radar:

Quadrant 1: Cost Competitiveness

This quadrant relates to market risks as well as cost-cutting and pricing pressure faced by businesses. Market risks present immediate challenges in the current economic context, particularly in view of the limited diversification of the ALTEO group revenue and the threats to the preferential EU markets beyond 2017.

The volatility of the world sugar prices and the need for the group to readjust to reduced sugar prices and reduced market access means that improving efficiency has become key to sustainability as well as the internal capacity to look for diversified markets and investment opportunities.

ALTEO has also put in place a dedicated strategic development team consisting of resources with complementary backgrounds, i.e. agricultural, industrial, project management and project finance. This ensures that ongoing projects are appropriately managed and that new projects are continuously being screened.

Quadrant 2: Stakeholder Confidence

Government involvement in business, particularly with regard to regulation and compliance, is expanding. Shareholders’ business awareness has increased, emphasising the need to provide more detailed and transparent information. Goals and objectives of the organisation need to be clearly communicated to stakeholders.

Other local stakeholders welcome innovative ways to do business which comply with the green ethics that protect national interest, social goals and the environment. Internal stakeholders provide for the engine of the organisation. All these stakeholders are regarded as business partners that have to be carefully managed. Companies of the group need to ensure compliance with regulatory requirements as well as environmental and Health & Safety norms, both locally and internationally in order to acquire and maintain stakeholders’ confidence.

A strategic business plan for ALTEO was prepared at the time of the merger and communicated to senior management as well as board members. Actual performance is constantly monitored against the said business plan and an update process is launched if deemed necessary. Within ALTEO, same is managed by the senior management at cluster level under the supervision of the Group CEO, and the performance results are then reported to the Board.

Quadrant 3: Customer Reach

Organisations need to prioritise their overall customer reach and cultivate enriched and sustainable client relationships. This is especially relevant for ALTEO’s property cluster, as demand for its products is highly sensitive to changes in the global market dynamics.

The following measures are expected to positively impact on the trading activities of the property cluster, namely:

- customer reach efforts are on-going through business partners (increased network of brokers and connectors);

- Mix of products offered by Anahita Estates (different sizes of villas, land for sale, customization of villa through building package); and

- Products are being developed based on market feedback solicited from existing and prospective buyers, brokers and other partners.

Quadrant 4: Operational Agility

How well the organisation is adapting to the ever changing landscape of the Cane Industry is a direct result of the organisation’s operational agility. It relates to people, processes and systems in place to run the business. It also relates to the ability of the group to maintain updated and relevant systems to meet group objectives and to clearly communicate its HR strategies impacting on the recruitment and retention of talented staff.



STATEMENT OF REMUNERATION PHILOSOPHY

The Board has delegated to the Corporate Governance, Nomination, Remuneration & Ethics Committee the responsibility of determining the adequate remuneration to be paid to the Non-Executive Chairman of the Board, the Independent Non-Executive Directors, the Non-Executive Directors, the Executive Directors and the senior management staff.

The Group’s underlying philosophy is to set remuneration at an appropriate level to retain, motivate and attract high calibre personnel and Directors, and to reward them in accordance with their individual as well as collective contribution towards the achievement of the Company’s objectives and performance, whilst taking into account current market conditions and/or other factors which may be determined from time to time.

A management committee, consisting of the Chief Executive Officer, the Chief Finance Executive and the Human Resource Officer, handles remuneration matters related to the Company’s personnel. A Human Resources Executive has recently been recruited to fulfil, amongst others, the HR function at both strategic and Group level. Her wide experience in the field will certainly prove very useful to the Company with respect to the overseeing of the remuneration philosophy.

Besides, the Independent and Non-Executive Directors do not receive remuneration in the form of share options or bonuses associated with ALTEO’s performance.

During the year under review, the Corporate Governance, Nomination, Remuneration & Ethics Committee has retained outside consultants to provide independent market information and advice relating to the regular review of executive performance and remuneration.

BOARD AND BOARD COMMITTEES’ FEES

The fees are approved by the Board of Directors following recommendation of the Corporate Governance, Nomination, Remuneration & Ethics Committee.

The Board has decided to maintain the same fixed fees payable to the Non-Executive Chairman as well as the Independent and Non-Executive Directors as the preceding financial year. In addition, the Directors who are Board Committee members receive a further fixed fee, with the Chairman of each Board Committee being remunerated at a higher rate.

The Directors and members of the Board Committees are aware of their duty to consistently attend Board meetings and Board Committee meetings.

The Board and Board Committees’ fees at June 30, 2015 were as follows:

Board Service Meeting Fees

Annual Chairman’s fixed fee Rs 750,000

Annual Independent and Non-Executive Director’s fixed fee Rs 250,000

Audit & Risk Committee Service

Chairman’s fee Rs 250,000

Member’s fee (except if the member is an Executive Director) Rs 150,000

Corporate Governance, Nomination, Remuneration & Ethics Committee Service

Chairman’s fee Rs 125,000

Member’s fee (except if the member is an Executive Director) Rs 75,000

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82



BOARD AND BOARD COMMITTEES ATTENDANCE

A Director of ALTEO is expected to spend the time and effort necessary to properly discharge his responsibilities. Accordingly, he is expected to regularly prepare for and attend meetings of the Board and all Committees on which he sits, with the understanding that, on occasion, he may be unable to attend a meeting.

* In attendance – not a member

ED = Executive Director NECB = Non-Executive Chairman of the BoardINED = Independent Non-Executive Director NED = Non-Executive Director

(1) On June 24, 2015, following the wish of Mr. P. Arnaud Dalais to retire as Group Chief Executive of the Company with effect from June 30, 2015, the Board nominated the latter as Chairman of the Company in replacement of Mr. Arnaud Lagesse. On that same date, Mr. P. Arnaud Dalais was also nominated as member of the Corporate Governance, Nomination, Remuneration & Ethics Committee.

(2) On June 24, 2015, Mr. Fabien de Marassé Enouf was appointed as Director of the Company in addition to the existing Directors.

A Director who is unable to attend a meeting is expected to notify either the Company Secretary or the Chairman of the Board or the Chairman of the appropriate Committee, in advance of such meeting.

The attendance record of the Directors for the year ended June 30, 2015 is set out below:

Directors Category

Board of

Directors

Audit & Risk

Committee

Corporate Governance,

Nomination & Remuneration

Committee

Annual Meeting of

Shareholders(held on

December 18, 2014)

P. Arnaud Dalais(1) NECB 7 out of 7 *5 out of 5 *3 out of 3 yes

Jean-Claude Béga NED 6 out of 7 4 out of 5 yes

Jan Boullé NED 5 out of 7 no

Jean Pierre Dalais NED 6 out of 7 yes

Amédée Darga INED 6 out of 7 1 out of 5 yes

Jérôme De Chasteauneuf NED 5 out of 7 5 out of 5 2 out of 3 yes

Jean de Fondaumière INED 6 out of 7 5 out of 5 3 out of 3 yes

Patrick de L. d’Arifat ED 7 out of 7 *5 out of 5 *3 out of 3 yes

Fabien de Marassé Enouf (2) ED *7 out of 7 *5 out of 5 yes

Arnaud Lagesse(1) NED 6 out of 7 3 out of 3 yes

Thierry Lagesse NED 6 out of 7 yes

In attendance

Christian Marot 4 out of 5 yes

Sébastien Lavoipierre 5 out of 5 yes

Internal Auditors 4 out of 4 no

External Auditors 3 out of 3 yes



SHAREHOLDERS’ COMMUNICATION

The Board of Directors of ALTEO places great importance on an open and transparent communication with all shareholders. The Board also endeavours to keep the shareholders regularly informed on matters affecting the Company.

ALTEO communicates to its shareholders through its Annual Report, publication of unaudited quarterly and audited abridged financial statements of the Group, dividend declaration, press announcements and the Annual Meeting of Shareholders to which all shareholders are encouraged to attend.

The Company’s website www.alteogroup.com is also an important means of effectively communicating with all stakeholders, keeping them abreast of developments within the ALTEO Group. Indeed, all publication of unaudited quarterly and audited abridged financial statements of the Group as well as dividend declaration and press announcements are uploaded on the Company’s website in a timely manner.

DIVIDEND POLICY

No formal dividend policy has been determined by the Board. Dividend payments are determined by the profitability of the Company, its cash flow, its future investments, its ability to meet future expenses, its growth opportunities and its visibility on the medium and long term.

Dividends are normally declared and paid twice yearly. Directors ensure that the Company satisfies the solvency test for each declaration of dividend

The Annual Meeting of shareholders provides an ideal opportunity for shareholders to raise and discuss matters with the Board of Directors and the management team relating to the Company and to the Group’s strategy and goals. The external auditors are also present at the meeting to answer any queries.

In accordance with the ALTEO’s Constitution, the quorum for a meeting of the shareholders of the Company is at least 5 members present in person or proxy together holding shares representing at least 30% of the total voting rights. In case of equality of votes at a Shareholders’ meeting, the Chairman of the meeting is not entitled to a casting vote.

SHAREHOLDERS’ CALENDAR

The Company has planned the following forthcoming events:

and a certificate of compliance with the solvency test is signed by all Directors when a dividend is declared by the Board.

An interim dividend of Rs 0.35cs per share and a final dividend of Rs 0.45cs per share were declared during the financial year under review. The said dividends were paid on January 9, 2015 and July 20, 2015 respectively.

November 2015 Publication of first quarter results to September 30, 2015December 2015 Mailing of the Annual Report for the year ended June 30, 2015December 2015 Declaration of an interim dividend*December 2015 Annual Meeting of the ShareholdersJanuary 2016 Payment of the interim dividendFebruary 2016 Publication of half-year results to December 31, 2015May 2016 Publication of third quarter results to March 31, 2016June 2016 Declaration of a final dividend*July 2016 Payment of the final dividendSeptember 2016 Publication of abridged end-of-year results to June 30, 2016

* Subject to the approval of the Board of Directors.

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84



DIRECTORS’ REMUNERATION AND BENEFITS

The Board of Directors has resolved not to disclose the remuneration paid to each Director on an individual basis due to the commercial sensitivity of the information.

For the remuneration and benefits received, or due and receivable, by the Directors from the Company and its subsidiaries as at June 30, 2015, please refer to page 89 of the Statutory Disclosures.

EMPLOYEE SHARE OPTION PLAN

ALTEO has no Employee Share Option Plan.

The above number of shareholders is indicative due to consolidation of multi-portfolios for reporting purposes. The total number of active shareholders as at June 30, 2015 was 3,363.

SHARE REGISTRY AND TRANSFER OFFICE

ALTEO’s Share Registry and Transfer Office is administered by MCB Registry & Securities Limited. For any queries regarding an account and/or change in name or address, and/or questions about lost share certificates, share transfers or dividends, the shareholder is invited to contact the Share Registry and Transfer Office.

SHARES IN PUBLIC HANDS

In accordance with the Listing Rules of the SEM, at least 25% of the shareholding of ALTEO is in the hands of the public.

SHAREHOLDING PROFILE

The share ownership and categories of shareholders at June 30, 2015 were as follows:

Number of Size of Number of % of TotalShareholders Shareholding Shares Owned Issued Shares

564 1 - 500 shares 109,636 0.03298 501 - 1,000 shares 226,304 0.07851 1,001 - 5,000 shares 2,284,003 0.72401 5,001 - 10,000 shares 2,927,488 0.92689 10,001 - 50,000 shares 15,526,737 4.88181 50,001 - 100,000 shares 12,689,866 3.98130 100,001 - 250,000 shares 21,286,493 6.68

58 250,001 - 500,000 shares 20,032,788 6.2929 500,001 – 1,000,000 shares 19,093,072 6.0032 Above 1,000,000 224,315,733 70.43

3,233 318,492,120 100.00

Number of Size of Number of % of TotalShareholders Shareholding Shares Owned Issued Shares

2,739 Individuals 84,199,973 26.4418 Insurance and Assurance Companies 12,607,488 3.9666 Investment and Trust Companies 106,055,575 33.3053 Pensions and Provident Funds 11,711,264 3.67

357 Other Corporate Bodies 103,917,820 32.633,233 318,492,120 100.00



ETHICAL BUSINESS CONDUCT

The ALTEO Group, together with its employees, is committed to the highest standards of ethical and professional integrity. This commitment, which is actively endorsed by the Board and the management team, is based on a fundamental belief that business should be conducted honestly, fairly and legally whilst preserving the environment.

As such, ALTEO is in the process of developing a Code of Ethics which will apply to all Directors, officers, employees and suppliers of the Group. In this respect, the Directors and members of the management team of ALTEO have attended in March 2015 a workshop on “Developing an Ethical Work Culture – the role of the Board” with the assistance of the Mauritius Institute of Directors.

ALTEO’s Code of Ethics will outline the responsibilities and guidelines that describe the ethical standard expected of all employees including how to deal with conflicts of interest and the disclosure required of actual or potential conflicts.

The Code of Ethics will also define what is regarded as acceptable and not acceptable for the Group as a whole.

HEALTH AND SAFETY POLICY

The ALTEO Group aims to act as a good employer in providing and maintaining a safe and healthy work environment for all its employees. The objective being the optimisation of work efficiency and the prevention of accidents at work, through the implementation of safety standards in all its operations across the Group.

The Group has set out a culture whereby health and safety are of equal importance as productivity and quality. The said culture is implemented consistently throughout the business by having an accident-free company and ensuring employee safety by reducing risks in the working environment, providing and maintaining safe working practices and equipment which undergo regular inspections in compliance with the law.

The Group recognizes that it cannot achieve these aims and responsibilities by management actions alone. Consequently, regular consultations with employee and employer representatives are conducted throughout the year.

SOCIAL CONTRIBUTION

The Company is committed to Corporate Social and Environmental Responsibility (“CSER”) activities and will continue to support socio-economic development, education and training, childcare and health, through Fondation CIEL Nouveau Regard and GML Fondation Joseph Lagesse.

CHARITABLE DONATIONS AND POLITICAL CONTRIBUTIONS

Please refer to page 89 of the Statutory Disclosures.

RETIREMENT BENEFIT OBLIGATION

The details of the total amount of provisions booked or otherwise recognised by the Company for payment of pensions are provided in the Notes to the Financial Statements.

ENVIRONMENT AND SUSTAINABILITY

ALTEO believes that growth should not be at the expense of the environment and remains sensitive to the climatic change to which the globe is subject to.

In its endeavour to preserve the integrity of natural heritage, ALTEO continuously aims at improving processes in its various operations.

ALTEO is currently evaluating a new project which shall reiterate its commitment to sustainable development.

Jean de Fondaumière Chairman of the Corporate Governance,Nomination, Remuneration& Ethics Committee

September 24, 2015

Nathalie Gallet, ACISFor Navitas Corporate Services LtdCompany Secretary

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86



SHARE PRICE INFORMATION

The share price of ALTEO decreased by 3.96% from Rs 34.10 at June 30, 2014 to Rs 32.75 at September 15, 2015, with the Semdex decreasing by 7.75% for the same period.

MANAGEMENT AGREEMENTS

The following agreements have been entered into by ALTEO, namely:

- service agreements with two related companies, namely Ciel Corporate Services Ltd and GML Management Ltée, for the provision of legal, financial, secretarial services and administrative support to the companies of the ALTEO Group;

- a service agreement with Navitas Corporate Services Ltd for the provision of company secretarial services;

- a treasury agreement with Azur Financial Services Limited and GML Trésorerie Ltée, for the provision of cash management services, treasury advisory services and foreign exchange & money market brokerage services to the ALTEO Group;

- a management agreement for the provision of administrative, financial, legal and technical services to four of its subsidiaries namely Alteo Energy Limited, Consolidated Energy Limited, Alteo Milling Ltd and Deep River-Beau Champ Milling Limited; and

- a management agreement for the provision of managerial and administrative services to Alteo Refinery Ltd which owns the refinery.

No major agreements, other than those in the ordinary course of business, were contracted by the Company during the year under review.

RELATED PARTY TRANSACTIONS

For details on related party transactions, please refer to the Notes to the Financial Statements.

Furthermore, in compliance with the Listing Rules of the SEM, shareholders of the Company are informed of related party transactions through the issue of cautionary announcements and circulars.

108

111

105

101

98

95

92

88

85

1-Jul-2

014

1-Aug-20

14

1-Sep-20

14

1-Oct-

2014

1-Nov-2

014

1-Dec-2

014

1-Jan-20

15

1-Feb-20

15

1-Mar-2

015

1-Apr-2

015

1-Jul-2

015

1-May-2

015

1-Aug-20

15

1-Jun-20

15

1-Sep-20

15 ALTEO

Semdex

Performance of ALTEO share versus the Market


YEAR ENDED JUNE 30, 2015STATUTORY DISCLOSURES

REMUNERATION AND BENEFITS

Remuneration and benefits received from the Company and its subsidiaries were as follows:

THE COMPANY SUBSIDIARIES 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000

Directors of the CompanyExecutive Directors 28,965 35,570 - - Non-Executive Directors 2,450 2,450 - 12 Independent Non-Executive Directors 1,025 1,025 - -

Directors of the Subsidiary companiesExecutive Directors 19,611 22,100 1,017 1,504 Non-Executive Directors - - 361 361

The emoluments of the Directors have not been disclosed on an individual basis due to the commercial sensitivity of such information.

DONATIONS

THE GROUP THE COMPANY 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000

Donations made during the year:- Political 3,000 - 3,000 - - Charitable 5,987 4,942 1,334 522

AUDITORS’ FEES


Audit fees paid to:BDO & Co 5,139 4,767 1,200 1,100

The Board expresses its appreciation and thanks to all those involved for their contribution during the year.

Approved by the Board of Directors on September 24, 2015 and signed on its behalf by:


STATUTORY DISCLOSURES

page

88


AUDITORS’ REPORT AND ACCOUNTS

The auditors’ report is set out on page 98 and the statements of profit or loss and other comprehensive income are set out on pages 100 and 101.

DIRECTORS’ SERVICE CONTRACTS

- Messrs. Patrick de L. d’Arifat and Fabien de Marassé Enouf have a service contract with the Company with no expiry terms.

- Messrs. Christian Marot, Sébastien Lavoipierre, Neel Madhun, Dominique Rousset & Andy Tonta, Directors of subsidiary companies, have a service contract with the Company with no expiry terms.

- Mr. Patrice Legris, Director of a subsidiary company, has a service contract with Alteo Properties Ltd with no expiry terms.

- Mr. Salim Soobadar, Director of Compagnie Usinière de Mon Loisir Ltée, has a service contract with Alteo Milling Ltd with no expiry terms.

- Mr. Jean-Luc Harel, alternate Director of a subsidiary company, has a service contract with the Company with an expiry term.

The Directors are pleased to present the Annual Report of Alteo Limited (the “Company’’) for the year ended June 30, 2015.

NATURE OF BUSINESS

The main activities of the Company consist of sugar cane growing and milling and other agricultural activities.

The main activities of the Group consist principally of:- Sugar cane growing and milling and other

agricultural activities;- Sugar refining activities;- Operating a bagasse and coal based power

generation plant for the supply of electricity to the National Grid of the Central Electricity Board;

- Regional development; and- Property development, hospitality and leisure.

DIRECTORS

The persons who held office as Directors of the Company as at June 30, 2015 are:

P. Arnaud Dalais (Chairman)Jean-Claude BégaJan BoulléJean-Pierre DalaisAmédée DargaJérôme De ChasteauneufJean de FondaumièrePatrick de L. d’Arifat Fabien de Marassé Enouf (Appointed on June 24, 2015)Arnaud LagesseThierry Lagesse

The Directors of the subsidiaries are disclosed on pages 92 to 95.

YEAR ENDED JUNE 30, 2015(Pursuant to Section 221 of the Companies Act 2001 and Section 88 of the Securities Act 2005) (Pursuant to Section 221 of the Companies Act 2001 and Section 88 of the Securities Act 2005)


page

90


STATUTORY DISCLOSURES YEAR ENDED JUNE 30, 2015

STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE PREPARATION OF FINANCIAL STATEMENTS

Directors acknowledge their responsibilities for:

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

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

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

The external auditors are responsible for reporting on whether the financial statements are fairly presented.

The Directors report that:

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

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

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

(iv) the Code of Corporate Governance has been adhered to in all material aspects and reasons provided for non-compliance.

Approved by the Board of Directors on September 24, 2015 and signed on its behalf by:


(Pursuant to Section 221 of the Companies Act 2001 and Section 88 of the Securities Act 2005)



DIRECTORSHIPS OF SUBSIDIARY COMPANIES AS AT JUNE 30, 2015

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AH SUE William √

AH SUE Carine Barbara √*

BÉGA Jean Claude √ √ √ √

BOULLÉ Jan √ √

CALLY Devendra √

CHUMROO Tejnarain √

DALAIS Jean-Pierre √ √ √ √

DALAIS P. Arnaud √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √

DE CHASTEAUNEUF Jérôme √ √ √ √* √ √ √

DE L. D'ARIFAT Patrick √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √

DE MARASSE ENOUF Fabien √

DUVAL Alexis √ √ √

GOVINDEN Thierry Desire Laval √

HAREL Jean-Luc √*

LABRO Philippe √ √ √ √

LAGESSE Arnaud √ √ √ √ √* √

LAGESSE Stephane √* √* √

LAGESSE Thierry √ √ √ √ √ √ √ √ √ √ √ √ √ √

LAVOIPIERRE Sébastien √ √ √ √ √ √

LECLEZIO Hubert √ √* √* √ √

LEGRIS Patrice √

MADHUN Neel Kamal √

MAFURU Lawrence √

MAROT Christian √ √

* Alternate Director** Société Ducomet and Société Gonin are both managed by West East Limited.

page

92


STATUTORY DISCLOSURES YEAR ENDED JUNE 30, 2015(Pursuant to Section 221 of the Companies Act 2001 and Section 88 of the Securities Act 2005) (Pursuant to Section 221 of the Companies Act 2001 and Section 88 of the Securities Act 2005)


DIRECTORSHIPS OF SUBSIDIARY COMPANIES AS AT JUNE 30, 2015 (con’d)

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MAUNICK Youlaganaden √

MUNGROO Bissoon √

RAMPERSAD Khemlall √

REY Clément √* √* √ √

RIBET Jean √ √ √ √ √ √

ROUSSET Dominique √

SEEAM Kamless √

SEMWAZA Henry √

SOOBADAR Salim √

SOOKAYE Omduthsing √ √

SUKARI Investment Company Limited √

THIEBLIN Xavier √ √

TONTA Andy √

* Alternate Director** Société Ducomet and Société Gonin are both managed by West East Limited.


page

94


STATUTORY DISCLOSURES YEAR ENDED JUNE 30, 2015(Pursuant to Section 221 of the Companies Act 2001 and Section 88 of the Securities Act 2005) (Pursuant to Section 221 of the Companies Act 2001 and Section 88 of the Securities Act 2005)

The following changes occurred during the year under review:

Alteo Energy Ltd

Mr. Premsagar Bholah was removed as Director on February 18, 2015

Mr. Geerendra Gocool was removed as Alternate Director to Mr. Premsagar Bholah on February 18, 2015

Mr. Omduthsing Sookaye was appointed as Director on February 20, 2015

Alteo Milling Ltd

Mr. Hastadeo Aucharaz was removed as Director on July 1, 2014

Mr. Bissoon Mungroo was appointed as Director on July 1, 2014

Alteo Refinery Ltd

Mr. Muhammad Iqbal Mallam Hasham resigned as Director on January 23, 2015

Mr. Iswurlal Golam resigned as Alternate Director to Mr. Muhammad Iqbal Mallam Hasham on January 23, 2015

Mr. Deevendra Cally was appointed as Director on June 4, 2015

Mr. Mahensingh Bheekee resigned as Director on June 6, 2015

Mr. Deevendra Cally resigned as Alternate Director to Mr. Mahensingh Bheekee on June 6, 2015

Compagnie Usinière de Mon Loisir Ltée

Mr. Swayaj Soojhawon was removed as Director on July 1, 2014

Mr. Tejnarain Chumroo was appointed as Director on July 1, 2014


Consolidated Energy Co. Ltd

Mr. Premsagar Bholah was removed as Director on February 18, 2015

Mr. Omduthsing Sookaye was appointed as Director on February 20, 2015

Deep River-Beau Champ Milling Company Limited

Mr. Shyamduthsingh Ramdhary was removed as Director on July 1, 2014

Mr. Kamless Seeam was appointed as Director on July 1, 2014

Sucrière des Mascareignes Ltd

Mr. Jean-Pierre Dalais resigned as Director on July 16, 2014

Mr. Jérome De Chasteauneuf was appointed as Director on July 16, 2014

Mr. Jean-Claude Harel resigned as Director on August 28, 2014

Mr. Arnaud Lagesse resigned as Alternate Director to Mr. Jean-Claude Harel on August 28, 2014

Mr. Arnaud Lagesse was appointed as Director on August 28, 2014

Mr. Hubert Leclézio was appointed as Alternate Director to Mr. Arnaud Lagesse on August 28, 2014

Sukari Investment Company Limited

Mr. Jean-Pierre Dalais resigned as Director on July 16, 2014

Mr. Jérome De Chasteauneuf was appointed as Director on July 16, 2014



Mr. Arnaud Lagesse was appointed as Director on August 28, 2014

Mr. Hubert Leclézio was appointed as Alternate Director to Mr. Arnaud Lagesse on August 28, 2014

TPC Ltd



Mr. Hubert Leclézio was appointed as Director on August 28, 2014

Mr. Arnaud Lagesse was appointed as Alternate Director to Mr. Hubert Leclézio on August 28, 2014

Mr. Mihalale Mwakibinga resigned as Director on February 23, 2015

Mr. Lawrence Mafuru was appointed as Director on February 23, 2015

page

96


STATUTORY DISCLOSURES YEAR ENDED JUNE 30, 2015(Pursuant to Section 221 of the Companies Act 2001 and Section 88 of the Securities Act 2005)

DIRECTORSHIPS OF SUBSIDIARY COMPANIES AS AT JUNE 30, 2015 (con’d)

The following changes occurred during the year under review:

In our capacity as Company Secretary, we hereby confirm that, to the best of our knowledge and belief, the Company has lodged with the Registrar of Companies, as at June 30, 2015, all such returns as are required for a company in terms of the Companies Act 2001, and that all such returns are true, correct and up to date.

Nathalie Gallet, ACISFor Navitas Corporate Services Ltd Company Secretary

September 24, 2015

COMPANY SECRETARY’SCERTIFICATE

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS

STATEMENTS OF FINANCIAL POSITION

page

98


page

99


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

Report on the Financial Statements

We have audited the group financial statements of Alteo Limited and its subsidiaries (the “Group”) and the Company’s separate financial statements on pages 99 to 175 which comprise the statements of financial position at June 30, 2015, the income statements, statements of comprehensive income, statements of changes in equity and statements of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Directors’ Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for

the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements on pages 99 to 175 give a true and fair view of the financial position of the Group and of the Company at June 30, 2015 and their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with the Companies Act 2001.

Report on Other Legal and Regulatory Requirements

Companies Act 2001

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

We have obtained all information and explanations we have required.

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

Financial Reporting Act 2004

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

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

BDO & Co Shabnam Peerbocus, FCA Chartered Accountants Licensed by FRC

Port Louis,Mauritius.

September 24, 2015

THE GROUP THE COMPANY Notes Restated Restated Restated Restated 2015 2014 2013 2015 2014 2013 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

ASSETS EMPLOYEDNon-current assetsProperty, plant and equipment 5 17,668,912 17,702,994 16,420,306 12,944,945 12,941,005 11,609,836Land-projects 6 5,853 5,853 5,853 - - -Investment properties 7 1,721,718 1,722,668 1,722,677 1,845,607 1,845,607 1,845,607Intangible assets 8 23,725 23,725 - 33,400 33,400 33,400Investment in subsidiary companies 10 - - - 7,582,678 7,684,971 7,949,945Investment in joint ventures 11 2,021 1,233 985,420 47,507 30,575 1,043,206Investment in associated companies 12 58,209 60,854 46,392 53,128 41,336 37,677Investment in available-for-salefinancial assets 13 97,756 117,106 139,605 80,781 87,283 117,632Bearer biological assets 14 593,610 596,871 552,678 385,477 379,237 317,968Non-current receivables 15 58,631 7,578 1,619 620,048 511,509 504,205Deferred expenditure 16 954,708 1,006,362 872,496 239,619 180,230 188,156Retirement benefit asset 27 5,227 127 3,819 - - -Deferred tax assets 17 208,508 136,032 82,175 193,681 125,940 60,289

21,398,878 21,381,403 20,833,040 24,026,871 23,861,093 23,707,921

Current assetsDeferred expenditure 16 198,932 163,420 210,116 35,604 23,193 33,083Inventories 18 561,913 501,953 579,987 55,117 53,539 43,061Work in progress 19 128,339 282,118 181,761 - - -Consumable biological assets 20 2,414,550 2,409,932 2,437,104 850,890 890,691 1,014,248Trade and other receivables 21 962,337 904,867 603,323 587,690 547,297 355,559Current tax assets 22 9,297 48,084 38,962 - 2,704 -Short term deposits 38(b) 67,651 - 2,545 250,927 344 31,416Cash and cash equivalents 38(b) 338,102 229,009 412,993 86,954 35,849 209,346

4,681,121 4,539,383 4,466,791 1,867,182 1,553,617 1,686,713

Non-current assets classified as held for sale 9 408,945 1,014,154 171,249 31,200 960,200 37,700

Total assets 26,488,944 26,934,940 25,471,080 25,925,253 26,374,910 25,432,334

EQUITY AND LIABILITIESCapital and reservesShare capital 23 8,991,595 8,991,595 8,991,595 8,991,595 8,991,595 8,991,595Revaluation and other reserves 24 5,420,367 5,548,349 4,335,361 11,238,757 11,835,356 10,761,711Retained earnings 2,582,425 2,202,562 2,467,703 2,044,743 1,834,815 2,028,638

Owners’ interests 16,994,387 16,742,506 15,794,659 22,275,095 22,661,766 21,781,944Non-Controlling interests 2,475,006 2,373,020 2,327,504 - - -

19,469,393 19,115,526 18,122,163 22,275,095 22,661,766 21,781,944

Non-current liabilitiesBorrowings 26 1,642,301 2,338,233 2,628,198 763,701 1,240,819 1,383,495Deferred income 29 61,642 59,373 59,780 - - -Deferred tax liabilities 17 900,898 896,452 849,147 - - -Retirement benefit obligations 27 936,029 832,302 780,436 705,319 609,161 513,492

3,540,870 4,126,360 4,317,561 1,469,020 1,849,980 1,896,987

Current liabilitiesTrade and other payables 28 1,725,624 1,837,989 1,287,164 1,009,576 991,538 993,701Deferred income 29 5,853 7,804 7,000 - - -Current tax liabilities 22 62,299 15,724 33,805 1,063 - 5,269Borrowings 26 1,541,584 1,688,216 1,560,066 1,027,178 728,305 611,112Proposed dividend 30 143,321 143,321 143,321 143,321 143,321 143,321

3,478,681 3,693,054 3,031,356 2,181,138 1,863,164 1,753,403

Total equity and liabilities 26,488,944 26,934,940 25,471,080 25,925,253 26,374,910 25,432,334

The financial statements have been approved for issue by the Board of Directors on September 24, 2015.


The notes on pages 105 to 175 form an integral part of these financial statements.Auditors’ report on page 98.

YEAR ENDED JUNE 30, 2015

STATEMENTS OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME

page

100


STATEMENTS OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME

page

101


THE GROUP THE COMPANY Notes 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000

Revenue 31, 2(af) 6,735,828 5,931,826 983,392 1,180,300

Earnings before interests, taxation,depreciation and amortisation 32 2,091,377 1,976,355 350,621 438,378 Depreciation and amortisation (655,270) (639,023) (194,770) (176,803)

Earnings before interests and taxation 1,436,107 1,337,332 155,851 261,575 Finance costs 36 (210,140) (262,916) (129,373) (164,544)Share of results of joint ventures 11 (5,923) 52,708 - -Share of results of associates 12 26,582 2,763 - -

1,246,626 1,129,887 26,478 97,031

Profit/(loss) on sale of investments and assets 40 358,447 (175,541) 386,282 (25,247)

Profit before taxation 1,605,073 954,346 412,760 71,784 Income tax (charge)/credit 22 (447,504) (385,546) 57,443 46,054

Profit for the year 1,157,569 568,800 470,203 117,838

Attributable to:- Owners of the parent 689,980 63,059 470,203 117,838

- Non-Controlling interests 467,589 505,741 - -

1,157,569 568,800 470,203 117,838

Earnings per share 37 Rs 2.17 0.20 1.48 0.37



Profit for the year 1,157,569 568,800 470,203 117,838 Other comprehensive incomeItems that will not be reclassified to profit or loss:Remeasurements of post employment benefit obligations (62,082) 7,489 (58,351) 9,992 Reclassification adjustment 5 - 1,259,382 - 1,259,382 Items that may be reclassified subsequently to profit or loss:Change in fair value of investments (11,153) 21,688 (164,044) (229,884)Reclassification adjustment upon disposal of investment (8,466) - (379,579) 58,261 Currency translation differences (105,314) (85,619) - - Movement in reserves of associates and joint ventures 11,901 (6,840) - -

Other comprehensive income for the year (175,114) 1,196,100 (601,974) 1,097,751

Total comprehensive income for the year 982,455 1,764,900 (131,771) 1,215,589

Attributable to:- Owners of the parent 565,173 1,309,828 (131,771) 1,215,589 - Non-Controlling interests 417,282 455,072 - -

982,455 1,764,900 (131,771) 1,215,589


YEAR ENDED JUNE 30, 2015 YEAR ENDED JUNE 30, 2015

STATEMENTS OF CHANGES IN EQUITY YEAR ENDED JUNE 30, 2015

page

102


STATEMENTS OF CHANGES IN EQUITY YEAR ENDED JUNE 30, 2015

page

103


THE GROUP Attributable to owners of the parent

Revaluation Non- Share and other Retained Controlling Total Notes Capital reserves Earnings Total interests equity Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Balance at July 1, 2014- as previously stated 8,991,595 5,548,349 2,268,016 16,807,960 2,377,624 19,185,584- MRA claim - - (8,587) (8,587) (4,604) (13,191)

8,991,595 5,548,349 2,259,429 16,799,373 2,373,020 19,172,393- Net SIPF1 liabilities * - - (56,867) (56,867) - (56,867)

- as restated 8,991,595 5,548,349 2,202,562 16,742,506 2,373,020 19,115,526Total comprehensive income for the year:- Profit or loss - - 689,980 689,980 467,589 1,157,569- Other comprehensive income - (124,807) - (124,807) (50,307) (175,114)Movement in reserves - (3,168) (30,220) (33,388) 33,823 435New loan - - - - 6,207 6,207Issue of share capital - - - - 23,500 23,500Consolidation adjustments - (7) (25,103) (25,110) 23,483 (1,627)Dividends 30 - - (254,794) (254,794) (402,309) (657,103)

Balance at June 30, 2015 8,991,595 5,420,367 2,582,425 16,994,387 2,475,006 19,469,393

Balance at July 1, 2013- as previously stated 8,991,595 4,335,361 2,476,290 15,803,246 2,332,108 18,135,354- MRA claim - - (8,587) (8,587) (4,604) (13,191)

8,991,595 4,335,361 2,467,703 15,794,659 2,327,504 18,122,163- Net SIPF1 liabilities * - - (56,867) (56,867) - (56,867)

- as restated 8,991,595 4,335,361 2,410,836 15,737,792 2,327,504 18,065,296Total comprehensive income for the year:-Profit or loss - - 63,059 63,059 505,741 568,800-Other comprehensive income - 1,246,769 - 1,246,769 (50,669) 1,196,100Movement in reserves - (13,806) (15,696) (29,502) 6,035 (23,467)Reclassification adjustment - (24,106) - (24,106) - (24,106)Consolidation adjustments - 3,288 - 3,288 1,306 4,594Dividends 30 - - (254,794) (254,794) (347,861) (602,655)Share buy back - - - - (69,036) (69,036)Transfer - 843 (843) - - -

Balance at June 30, 2014 8,991,595 5,548,349 2,202,562 16,742,506 2,373,020 19,115,526

* Represents additional SIPF1 liabilites for the members that were not valued in prior years


THE COMPANY Revaluation Share and other Retained Notes Capital reserves Earnings Total Rs’000 Rs’000 Rs’000 Rs’000

Balance at July 1, 2014- as previously stated 8,991,595 12,306,054 1,891,682 23,189,331- effect of fair value change in prior years - (470,698) - (470,698)

8,991,595 11,835,356 1,891,682 22,718,633- Net SIPF1 liabilities * - - (56,867) (56,867)

- as restated 8,991,595 11,835,356 1,834,815 22,661,766Amalgamation adjustments 42 - 8,543 (8,649) (106)Total comprehensive income for the year:- Profit or loss - - 470,203 470,203- Other comprehensive income - (601,974) - (601,974)Dividends 30 - - (254,794) (254,794)Reclassification adjustment - (3,168) 3,168 -

Balance at June 30, 2015 8,991,595 11,238,757 2,044,743 22,275,095

Balance at July 1, 2013- as previouly stated 8,991,595 11,232,409 2,028,638 22,252,642- effect of fair value change in prior years - (470,698) - (470,698)

8,991,595 10,761,711 2,028,638 21,781,944- Net SIPF1 liabilities * - - (56,867) (56,867)

- as restated 8,991,595 10,761,711 1,971,771 21,725,077Total comprehensive income for the year:- Profit or loss - - 117,838 117,838- Other comprehensive income - 1,097,751 - 1,097,751Dividends 30 - - (254,794) (254,794)Reclassification adjustment - (24,106) - (24,106)

Balance at June 30, 2014 8,991,595 11,835,356 1,834,815 22,661,766

* Represents additional SIPF1 liabilites for the members that were not valued in prior years


STATEMENTS OF CASH FLOWS YEAR ENDED JUNE 30, 2015

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NOTES TO THE FINANCIAL

STATEMENTS YEAR ENDED JUNE 30, 2015

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Operating activitiesCash generated from/(absorbed by) operations 38(a) 2,251,520 1,898,096 (34,782) (18,130)Interest received 348 1,173 6,795 7,306 Interest paid (261,168) (275,243) (129,373) (166,024)Tax (paid)/refund (392,011) (385,997) 3,767 (7,973)

Net cash from/(used in) operating activities 1,598,689 1,238,029 (153,593) (184,821)

Investing activitiesPurchase of property, plant and equipment (506,077) (738,863) (73,057) (178,966)Investment in subsidiary - (4,180) (76,500) (41,518)Investment in joint ventures - - - (23,237)Investment in associates - (17,667) - (17,000)Investment in securities (463) (5,235) (463) (5,235)Disposal of subsidiary - 6,850 - - Disposal of investment in joint ventures - 175,970 - 175,970 Disposal of investment in associate 6,000 - 6,000 -Disposal of investment in available-for-salefinancial assets 11,747 66,659 1,605 38,936 Proceeds on disposal of non-current assets held for sale 926,500 3,877 926,400 - Proceeds on disposal of golf lifetime memberships - - 4,600 6,000 Proceeds on disposal of land - 57,498 9,405 57,498 Proceeds from sale of property, plant and equipment 11,047 31,412 2,397 2,657 Proceeds on disposal of investment property 1,540 - - - Investment in cane replantation (169,000) (212,125) (87,672) (130,409)Additions to deferred expenditure (188,243) (152,053) (127,426) (21,053)Grant received from the Sugar Reform Trust 7,503 207,712 - - Loans granted (51,053) (5,959) (116,184) (7,304)Additions to deferred income - 6,000 - - Dividends received from subsidiaries - - 423,876 398,601 Dividends received from available-for-salefinancial assets 4,673 1,812 2,393 1,371 Dividends received from associated companies 24,502 5,218 24,502 4,219

Net cash from/(used in) investing activities 78,676 (573,074) 919,876 260,530

Financing activitiesProceeds from borrowings 66,124 251,798 - - Repayment of borrowings (529,429) (805,901) (142,473) (398,583)Shareholders’ loan 6,207 - - - Issues of shares 23,500 - - - Share redemption - (69,036) - - Finance lease principal payments (20,808) (18,824) (11,819) (8,867)Dividends paid to minority shareholders (402,309) (347,861) - - Dividends paid to company’s shareholders (254,794) (254,794) (254,794) (254,794)

Net cash used in financing activities (1,111,509) (1,244,618) (409,086) (662,244)

Increase/(decrease) in cash and cash equivalents 565,856 (579,663) 357,197 (586,535)

Movement in cash and cash equivalentsAt July 1, (741,590) (143,952) (531,755) 54,780 Increase/(decrease) 565,856 (579,663) 357,197 (586,535)Effect of business combination - (17,975) 2,088 -

At June 30, 38(b) (175,734) (741,590) (172,470) (531,755)


1. GENERAL INFORMATION

Alteo Limited is a limited liability company incorporated and domiciled in Mauritius. The address of its registered office is Vivea Business Park, Saint Pierre. These financial statements will be submitted for consideration and approval at the forthcoming Annual Meeting of Shareholders of the Company.

2. SIGNIFICANT ACCOUNTING POLICIES

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

(a) Basis of preparation

The financial statements of Alteo Limited and its subsidiaries (the”Group”) comply with the Companies Act 2001 and are prepared in accordance with International Financial Reporting Standards (IFRS).

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

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

(i) Land is carried at revalued amount,

(ii) Available-for-sale securities are stated at their fair value,

(iii) Consumable biological assets are stated at fair value,

(iv) Relevant financial assets and financial liabilities are carried at amortised cost.

(v) Investment property is stated at their fair value.

Amendments to published Standards and Interpretations effective in the reporting period

Amendments to IAS 32, ‘Offsetting Financial Assets and Financial Liabilities’, clarify the requirements relating to the offset of financial assets and financial liabilities. The amendment is not expected to have any impact on the Group’s financial statements.

Amendments to IFRS 10, IFRS 12 and IAS 27, ‘Investment Entities’, define an investment entity and require a reporting entity that meets the definition of an investment entity not to consolidate its subsidiaries but instead to measure its subsidiaries at fair value through profit or loss in its consolidated and separate financial statements.

Consequential amendments have been made to IFRS 12 and IAS 27 to introduce new disclosure requirements for investment entities. As the Company is not an investment entity, the standard has no impact on the Group’s financial statements.

IFRIC 21, ‘Levies’, sets out the accounting for an obligation to pay a levy that is not income tax. The interpretation addresses what obligating event that gives rise to pay a levy and when should a liability be recognised. The Company is not subject to levies so the interpretation has no impact on the Group’s financial statements.

Amendments to IAS 36, ‘Recoverable Amount Disclosures for Non- financial Assets’, remove the requirement to disclose the recoverable amount of a cash-generating unit (CGU) to which goodwill or other intangible assets with indefinite useful lives had been allocated. The amendment has no impact on the Group’s financial statements.

Amendments to IAS 39, ‘Novation of Deriva-tives and Continuation of Hedge Accounting’, provide relief from the requirement to discontinue hedge accounting when a derivative designated as a hedging instrument is novated under certain circumstances. The amendments also clarify that any change to the fair value of the derivative designated as a hedging instrument arising from the novation should be included in the assessment and

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2015

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YEAR ENDED JUNE 30, 2015NOTES TO THE

FINANCIAL STATEMENTS

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2. SIGNIFICANT ACCOUNTING POLICIES (continued)

(a) Basis of preparation (continued)

Amendments to published Standards and Interpretations effective in the reporting period (continued)

measurement of hedge effectiveness. The amendment has no impact on the Group’s financial statements.

Defined Benefit Plans: Employee Contributions (Amendments to IAS 19) applies to contributions from employees or third parties to defined benefit plans and clarifies the treatment of such contributions. The amendment distinguishes between contributions that are linked to service only in the period in which they arise and those linked to service in more than one period. The objective of the amendment is to simplify the accounting for contributions that are independent of the number of years of employee service, for example employee contributions that are calculated according to a fixed percentage of salary.

Entities with plans that require contributions that vary with service will be required to recognise the benefit of those contributions over employee’s working lives. The amendment has no impact on the Group’s financial statements.

Annual Improvements 2010-2012 Cycle

IFRS 2, ‘Share based payments’ amendment is amended to clarify the definition of a ‘vesting condition’ and separately defines ‘performance condition’ and ‘service condition’. The amendment has no impact on the Group’s financial statements.

IFRS 3, ‘Business combinations’ is amended to clarify that an obligation to pay contingent consideration which meets the definition of a financial instrument is classified as a financial liability or equity, on the basis of the definitions in IAS 32, ‘Financial instruments: Presentation’. It also clarifies that all non-equity contingent consideration is measured at fair value at each reporting date, with changes in value recognised in profit and loss.

The amendment has no impact on the Group’s financial statements.

IFRS 8, ‘Operating segments’ is amended to require disclosure of the judgements made by management in aggregating operating segments. It is also amended to require a reconciliation of segment assets to the entity’s assets when segment assets are reported. The amendment has no impact on the Group’s financial statements.

IFRS 13 (Amendment), ‘Fair Value Measurement’ clarifies in the Basis for Conclusions that short-term receivables and payables with no stated interest rates can be measured at invoice amounts when the effect of discounting is immaterial. The amendment has no impact on the Group’s financial statements.

IAS 16,‘Property, plant and equipment’ and IAS 38,’Intangible are amended to clarify how the gross carrying amount and the accumulated depreciation are treated where an entity uses the revaluation model. The amendment has no impact on the Group’s financial statements.

IAS 24,‘Related party disclosures’ is amended to include, as a related party, an entity that provides key management personnel services to the reporting entity or to the parent of the reporting entity (the ‘management entity’). Disclosure of the amounts charged to the reporting entity is required. The amendment has no impact on the Group’s financial statements.

Annual Improvements 2011-2013 Cycle

IFRS 1, ‘First-time Adoption of International Financial Reporting Standards’ is amended to clarify in the Basis for Conclusions that an entity may choose to apply either a current standard or a new standard that is not yet mandatory, but permits early application, provided either standard is applied consistently throughout the periods presented in the entity’s first IFRS financial statements. The amendment has no impact on the Group’s financial statements, since the Group is an existing IFRS preparer.


(a) Basis of preparation (continued)

Annual Improvements 2011-2013 Cycle (continued)

IFRS 3,‘Business combinations’ is amended to clarify that IFRS 3 does not apply to the accounting for the formation of any joint venture under IFRS 11. The amendment has no impact on the Group’s financial statements.

IFRS 13,‘Fair value measurement’ is amended to clarify that the portfolio exception in IFRS 13 applies to all contracts (including non-financial contracts) within the scope of IAS 39 or IFRS 9. The amendment has no impact on the Group’s financial statements.

IAS 40,‘Investment property’ is amended to clarify that IAS 40 and IFRS 3 are not mutually exclusive. IAS 40 assists users to distinguish between investment property and owner-occupied property. Preparers also need to consider the guidance in IFRS 3 to determine whether the acquisition of an investment property is a business combination. The amendment has no impact on the Group’s financial statements.

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

Certain standards, amendments to published standards and interpretations have been issued that are mandatory for accounting periods beginning on or after January 1, 2015 or later periods, but which the Group has not early adopted.

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

IFRS 9 Financial Instruments Defined Benefit Plans: Employee Contri-

butions (Amendments to IAS 19) IFRS 14 Regulatory Deferral Accounts Accounting for Acquisitions of Interests in

Joint Operations (Amendments to IFRS 11)

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

IFRS 15 Revenue from Contract with Customers

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

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

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

Annual Improvements to IFRSs 2012-2014 Cycle

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

Disclosure Initiative (Amendments to IAS 1)

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

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

(b) Property, plant and equipment

All property, plant and equipment are initially recorded at cost. Land, buildings and plant and machinery are subsequently revalued. Freehold land has been revalued by Société D’hotman De Speville in June 2013 based on open market value. The directors have valued the freehold land at 70% of the revalued amount. Factory building and plant and machinery have been revalued by directors in 1995, based on the recommendations of the Mauritius Sugar Authority. This has been treated as deemed cost.


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(b) Property, plant and equipment (continued)

All other property, plant and equipment are subsequently stated at historical cost less depreciation, except for golf course which is not depreciated.

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

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

The annual rates used are:

Buildings 2 - 5 % Agricultural equipment 5 - 20 % Motor Vehicles 10 - 25 % Plant & Machinery 5 - 20 % Power generation plant 4 - 10 % Furniture and Equipment 4 - 20 % Computer equipment 25 % Land derocking project and land

improvement 4 % Others 2 - 20 %

Freehold land is not depreciated.

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

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

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

surplus relating to that asset are transferred to retained earnings.

(c) Land projects

Land-projects represent the portion of land relating to the northern part of the IRS project of Anahita Estates Ltd which is yet to be developed as far as general infrastructure is concerned. It will be sold in the medium to long term once the southern portion are fully developed and sold. Land projects are initially recorded at cost. Gains on disposal are credited to profit or loss.

(d) Investment properties

Investment properties, held to earn rentals or for capital appreciation or both, and not occupied by the Group, are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are carried at fair value, representing open-market value determined annually by external valuers. Changes in fair values are included in profit or loss.

(e) Intangible assets

Intangible assets consist of land development rights and goodwill.

(i) Land development rights

Land development rights are shown at cost and tested annually for impairment.

(ii) Goodwill

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

Goodwill is tested annually for impairment.

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

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


(f) Non-current assets held for sale

The Company

Non-current assets classified as held for sale are measured at the lower of carrying value amount and fair value less costs to sell if their carrying amounts are recovered principally through a sale transaction rather than through a continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition.

The Group

Non-current assets classified as held for sale are measured at the lower of carrying value amount and fair value less costs to sell if their carrying amounts are recovered principally through a sale transaction rather than through a continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition.

When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a non-controlling interest in its former subsidiary after the sale.

Events or circumstances may extend the period to complete the sale beyond one year if the delay is caused by events or circumstances beyond the entity’s control and there is sufficient evidence that the entity remains committed to its plan to sell the asset.

(g) Investment in subsidiaries

The Company

Investment in subsidiaries is carried at fair value. The carrying amount is reduced to recognise any impairment in the value of individual investments.

The Group

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

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets.

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

Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated.






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(g) Investment in subsidiaries (continued)

The Group (continued)

Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Transactions with non-controlling interests

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

Disposal of subsidiaries

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

(h) Investments in associates

The Company

Investments in associated companies are carried at fair value. The carrying amount is reduced to recognise any impairment in the value of individual investments.

An associate is an entity over which the Group has significant influence but not control, or joint control.

Investments in associated companies are accounted for using the equity method, except when classified as held-for-sale.

Investment in associates are initially recorded at cost as adjusted by post acquisition changes in the Group’s share of the net assets of the associate less any impairment in the value of individual investments.

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

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

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

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

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amount previously recognised in other comprehensive income are reclassified to profit or loss where appropriate. Dilution gains and losses arising in investment in associates are recognised in profit or loss.


(i) Investments in joint ventures

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

Joint ventures are accounted for using the equity method.

(j) Financial assets

(i) Categories of financial assets

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

The classification depends on the purpose for which the investments were acquired. Management determines the classification of its financial assets at initial recognition.

(a) Loans and receivables

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

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

(b) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories.

They are included in non-current assets unless management intends to dispose of the investment within twelve months after the end of the reporting period.

(ii) Recognition and measurement

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

Available-for-sale financial assets are subsequently carried at their fair values. Loans and receivables are carried at amortised cost using the effective interest method.

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

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

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

(iii) Impairment of financial assets

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

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired.






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(j) Financial assets (continued)

(iii) Impairment of financial assets (continued)

(a) Financial assets classified as available- for-sale (continued)

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

If the fair value of a previously impaired debt security classified as available-for-sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised, the impairment loss is reversed and the reversal recognised in profit or loss.

Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale are not reversed through profit or loss.

(b) Financial assets carried at amortised cost

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

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

(k) Trade receivables

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

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

(l) Borrowings

Borrowings are recognised initially at fair value being their issue proceeds net of transaction costs incurred.

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

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


(m) Trade and other payables

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

(n) Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of 3 months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.

(o) Share capital

Ordinary shares

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

(p) Non current receivable

Non current receivable, without fixed repay-ment terms, is carried at cost.

(q) Deposit on investments

Deposit on investments is shown at cost.

(r) Bearer biological assets

Cane replantation costs are deferred at cost and amortised over 4 to 7 years.

(s) Consumable biological assets

Standing cane, flowers crop, palmhearts and pineapples have been measured at fair value. The fair value of the living plants held for sale is the present value of expected net cash flows from the standing canes discounted at the relevant market-determined pre-tax rate.

(t) Deferred Expenditure

Land development

Land development costs incurred are in respect of land to be sold. This expenditure is released to profit or loss in proportion to the subsequent land disposal.

Current milling and crop expenses

Expenditure incurred in respect of direct factory repairs, maintenance works and operating expenses, the benefit of which will be derived in the subsequent crop season, has been accounted as deferred milling expenses.

Sugar Industry Voluntary Retirement Scheme (VRS)

VRS (net of refunds under the Multi Annual Adaptation Scheme and pension obligations previously provided for) are carried forward and are amortised over a period of 6 years. The amortisation is reviewed and reassessed yearly to ascertain the adequacy of the yearly charge taking into account the right exercised.

Milling centralisation costs

Closure of Constance La Gaiete Sugar Fac-tory

The compensation payments for centralisation in accordance with the provisions of the Blue Print relating to the closure of Constance La Gaiété Sugar Factory are recoverable from the sale proceeds of freehold land. Land development costs are capitalised and released against proceeds from the subsequent land disposal.

Closure of Mon Loisir Sugar Factory

Closure costs (net of refunds under the Multi Annual Adaptation Scheme and pension obligations previously provided for) are carried forward and are recoverable from the sale proceeds of freehold land.






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(t) Deferred Expenditure (continued)

Closure of Mon Désert Alma Sugar Factory

Closure costs (net of refunds under the Multi Annual Adaptation Scheme and pension obligations previously provided for) are carried forward and are amortised over a period of 6 years. The amortisation is reviewed and reassessed yearly to ascertain the adequacy of the yearly charge taking into account the right exercised.

Closure of Deep River Beau Champ Sugar Factory

Closure costs (net of refunds under the Multi Annual Adaptation Scheme and pension obligations previously provided for) are carried forward and are recoverable from the sale proceeds of freehold land.

(u) Inventories

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

(v) Leases

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

Finance leases-Where the Company is the lessee.

Finance leases are capitalised at the lease’s inception at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss.

Operating leases

Assets leased out under operating leases are included in property, plant and equipment in the financial position.

They are depreciated over their expected useful lives on a basis consistent with similar fixed assets. Rental income is recognised on a straight line basis over the lease term.

(w) Deferred income tax

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

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

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


(x) Foreign currencies

(i) Functional and presentation currency

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

(ii) Transactions and balances

Foreign currency transactions are accounted for at the exchange rates prevailing at the date of the transactions.

Gains and losses resulting from settlement of such transactions and from the translation of monetary assets and liabilities are recognised in profit or loss. Such balances are translated at year-end exchange rates.

(iii) Group companies

The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(a) assets and liabilities are translated at the closing rate at the date of the statement of financial position;

(b) income and expenses are translated at average exchange rates;

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

(y) Retirement benefit obligations

(i) Defined benefit plans

A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or

more factors such as age, years of service and compensation.

The liability recognised in the statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period, less the fair value of plan assets.

The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method.

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

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

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

(ii) Defined contribution plans

A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity.

The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.






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(y) Retirement benefit obligations (continued)

(ii) Defined contribution plans (continued)

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

(iii) Gratuity on retirement

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

(iv) Termination benefits

Termination benefits are payable when employment is terminated before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan without the possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.

(z) Provisions

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

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the

obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

(aa) Dividend distribution

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

(ab) Related parties

Related parties are individuals and companies where the individual or the company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions.

(ac) Segment reporting

Segment information presented relate to the operating segments that engage in business activities for which revenues are earned and expenses incurred. The group’s customer is diversified, with no individually significant customer except for Sudzucker, through the Mauritius Sugar Syndicate and Central Electricity Board.

(ad) Real Estate contracts

Contract costs are recognised when incurred.

Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the cost of sales. They are presented as deferred expenditure.

When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that are likely to be recoverable.

Real estate contract costs are recognised when incurred.

When the outcome of a real estate contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that are likely to be recoverable.


(ad) Real Estate contracts (continued)

When the outcome of a real estate contract can be estimated reliably and it is probable that the contract will be profitable, contract revenue is recognised over the period of the contract. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

The Group uses the ‘percentage of completion method’ to determine the appropriate amount to recognise in a given period. The stage of completion is measured by reference to the contract costs incurred up to the end of reporting period as a percentage of total estimated costs for each contract (or by reference to surveys of work performed or completion of a physical proportion the contract work). Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. They are presented as inventories, prepayments or other assets, depending on their nature.

(ae) Impairment of non-financial assets

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

(af) Turnover

Turnover represents the gross proceeds of sugar, molasses, bagasse, sale of ‘IRS’ residences, golf revenue, deer farming and other agricultural products and income

receivable for the supply of electricity to the National Grid of the Central Electricity Board.

Turnover is net of value added tax less discounts, allowances and returns after eliminating sales within the group companies. Sale of goods are recognised when goods are delivered and title has passed. Sale of services are recognised in the accounting year in which the services are rendered.

Sugar and molasses proceeds are recognised on total production of the crop year. Bagasse proceeds are accounted on a cash basis. Sugar and molasses prices are based on prices recommended by the Mauritius Chamber of Agriculture for the crop year.

Other revenues earned by the Group are recognised on the following basis:

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

SIFB compensation - on a cash basis. Interest income - on a time-proportion basis

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

3. FINANCIAL RISK MANAGEMENT

3.1 Financial Risk Factors

The Group’s activities expose it to a variety of financial risks; market risk (including currency risk, price risk and cash flow and fair value interest rate risk), credit risk and liquidity risk.

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






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3. FINANCIAL RISK MANAGEMENT (continued)

3.1 Financial Risk Factors (continued)

(a) Market risk

(i) Currency risk

The Company exports its entire production through the Mauritius Sugar Syndicate and is exposed to currency risk due to fluctuations in the price of sugar and the incidence of the exchange rate, as sugar is initially paid in foreign currency to the Mauritius Sugar Syndicate. This will affect the sugar proceeds. Other group companies operate internationally and are exposed to foreign exchange risk arising from primarily the Euro, the US Dollar and the Tanzanian Shilling.

At June 30, 2015, if the Rupee had weakened/strenghthened by 5% against the US Dollar and the Euro with all other variable held constant, post tax profit and equity would have been Rs.2,939,368 (2014: Rs.498,445) higher/lower for the Company and Rs.7,364,000 (2014: Rs.19,673,000) lower/higher for the Group following changes in foreign exchange gains/losses on translation of US Dollar and Euro denominated trade receivables, trade payables and borrowings.

(ii) Price risk

The Group is exposed to equity securities price risk because of investments in financial assets held by the Group and classified as available-for-sale.

The Group is also exposed to price risk with the incidence of the price of sugar on the European Union market.

To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio.

Sensitivity analysis

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

Impact on equity


Categories of investments:

Available- for-sale 4,888 5,855 4,039 4,364

(iii) Cash flow and fair value interest rate risk

As the Group has no significant interest-bearing assets, its income and operating cash flows are substantially independent of changes in market interest rates. The Group’s interest rate risk arises from borrowings. Borrowings issued at variable rates expose the Group to cash flow interest-rate risk. At June 30, 2015, if interest rates on borrowings had been 50 basis points higher/lower with all other variables held constant, post-tax profit for the year would have been Rs.9,400,000 (2014: Rs.10,409,000) lower/higher for the Company and Rs.18,107,000 (2014: Rs.21,037,000) lower/higher for the Group, mainly as a result of higher/lower interest expense on floating rate borrowings.

(b) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s trade receivables.

For the sugar and energy sectors, the Group has a concentration of credit risk since its main debtors are the Mauritius Sugar Syndicate and the Central Electricity Board. The Group does not expect any losses from non-performance of the latter since they are reputable institutions.

Other group companies have no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history and to limit the amount of credit exposure to any one financial institution.


3.1 Financial Risk Factors (continued)

(c) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivery of cash or another financial asset.

Prudent liquidity risk management implies maintaining sufficient cash marketable funding through an adequate amount of committed credit facilities. The Group aims at maintaining flexibility in funding by keeping committed credit lines available.

Management monitors rolling forecasts of the Group’s liquidity reserve on the basis of expected cash flow and does not foresee any major liquidity risk over the next two years.

(c) Liquidity risk

The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date:

THE GROUP Less than Between 1 Between 2 Over 1 year and 2 years and 5 years 5 years Rs’000 Rs’000 Rs’000 Rs’000

At June 30, 2015 Loan at call 250,203 - - - Trade and other payables 1,725,624 - - - Bank borrowings 864,924 429,118 750,704 7,608 Debentures 400,000 - 400,000 - Finance leases 26,457 25,959 28,912 -

At June 30, 2014 Loan at call 112,647 - - - Trade and other payables 1,837,989 - - - Bank borrowings 1,555,814 555,221 884,289 45,729 Debentures - 400,000 400,000 - Finance leases 19,755 18,549 34,445 -

THE COMPANY Less than Between 1 Between 2 Over 1 year and 2 years and 5 years 5 years Rs’000 Rs’000 Rs’000 Rs’000

At June 30, 2015 Loan at call 430,426 - - - Trade and other payables 1,009,576 - - - Bank borrowings 180,994 98,611 240,293 - Debentures 400,000 - 400,000 - Finance lease liabilities 15,758 14,655 10,142 -

At June 30, 2014 Loan at call 185,459 - - - Trade and other payables 991,538 - - - Bank borrowings 531,337 94,287 284,052 41,071 Debentures - 400,000 400,000 - Finance lease liabilities 11,509 9,621 11,788 -






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3.2 Capital risk management

The Group’s objective when managing capital is to safeguard its ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders.

The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the

capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

Consistently with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt over total of adjusted capital and net debt. Net debt is calculated as total debt (as shown in the statement of financial position) less cash and cash equivalents. Adjusted capital comprises all components of equity (i.e. share capital, retained earnings and reserves).

The gearing ratios at June 30, 2015 and at June 30, 2014 were as follows:


Total debt 3,183,885 4,026,449 1,790,879 1,969,124 Less: cash and cash equivalents (405,753) (229,009) (337,881) (36,193)

Net debt 2,778,132 3,797,440 1,452,998 1,932,931

Equity 19,469,393 19,115,526 22,275,095 23,189,331

Gearing ratio 0.12 0.17 0.06 0.08

3.3 Fair value estimation

The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting period. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1. Instruments included in level 1 comprise primarily quoted equity investments classified as trading securities or available-for-sale.

The fair value of financial instruments that are not traded in an active market is

determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

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

Specific valuation techniques used to value financial instruments include:

Quoted market prices or dealer quotes for similar instruments.

Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments.


3.3 Fair value estimation (continued)

The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cashflows at the current market interest rate that is available to the Group for similar financial instruments.

3.4 Biological assets

The Group is exposed to fluctuations in the price of sugar and the incidence of exchange rate. The risk affects both the crop proceeds and the fair value of biological assets.The risk is not hedged.

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

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

Critical accounting estimates and assumptions

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

4.1 Impairment of available-for-sale financial assets

The Group follows the guidance of IAS 39 on determining when an investment is other-than-temporarily impaired.

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

4.2 Estimated impairment of goodwill

The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in note 2(e). These calculations require the use of estimates.

4.3 Biological assets

(a) Bearer biological assets

Bearer biological assets have been estimated based on the cost of land preparation and planting of bearer canes and flower seeds.

(b) Consumable biological assets - Standing Canes

The fair value of consumable biological assets has been arrived at by discounting the present value of expected net cash flows from standing canes at the relevant market determined pre-tax rate.

The expected cash flows from standing canes have been computed by estimating the expected crop and the sugar extraction rate and the forecasts of sugar prices which will prevail in the coming year for standing canes. For palm hearts and pineapples, the expected cash flows have been computed by estimating the sales proceeds from the number of saleable palm trees and pineapples currently in cultivation. The harvesting costs and other direct expenses are based on the yearly budgets of the Group.






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4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)

4.4 Depreciation policies

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

The directors therefore make estimates based on historical experience and use best judgement to assess the useful lives of assets and to forecast the expected residual values of the assets at the end of their expected useful lives.

4.5 Investment in growing and milling entities

The Government of Mauritius has commissioned a study by LMC International with the objective of assessing the impact on future sugar proceeds, in view of systemic sugar surpluses and high stocks in the European Union Market and the abolition of quotas as from 2017, and making appropriate recommendations for the re-engineering of the industry to efficiently operate in the new commercial set up. The new configuration calls for major changes to adapt to a higher level of competition.

A draft copy of the report from LMC Interna-tional with findings and recommendations has been submitted to the Government in January 2015 and is currently under study by various Ministries of the Government of Mauritius for subsequent implementation.

In the light of the above, assets and investments in respect of cane growing and milling entities in Mauritius have been maintained at their existing carrying values.

4.6 Pension benefits

The present value of the pension obligations depend on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions

used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of pension obligations.

The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, the Group considers the interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability.

4.7 Revaluation of property, plant and equipment and investment properties

The Group carries its investment properties at fair value, with changes in fair value being recognised in the statement of profit or loss and other comprehensive income. In addition, it measures land and buildings at revalued amounts with changes in fair value being recognised in the statement of profit or loss and other comprehensive income. The Group engaged independent valuation specialists to determine fair value as at June 30, 2014. For the investment property, the valuer used a valuation technique based on a discounted cash flow model as there is a lack of comparable market data because of the nature of the property.

4.8 Fair value of securities not quoted in an active market

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

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)

4.9 Limitation of sensitivity analysis

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

Sensitivity analysis does not take into consideration that the Group’s assets and liabilities are managed. Other limitations include the use of hypothetical market movements to demonstrate potential risk that only represent the Group’s view of possible near-term market changes that cannnot be predicted with any certainty.

4.10 Asset lives and residual values

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

4.11 Impairment of assets

Goodwill is considered for impairment at least annually. Property, plant and equipment, and intangible assets, are considered for impairment if there is a reason to believe that impairment may be necessary. Factors taken into consideration in reaching such a decision include the economic viability of the asset itself and where it is a component of a larger economic unit, the viability of that unit itself.

4.12 Deferred tax on investment properties

For the purposes of measuring deferred tax liabilities or deferred tax assets arising from investment properties, the directors reviewed the Group’s investment property portfolio and concluded that none of the Group’s investment properties are held under a business model whose objective is to consume substantially all of the economic benefits embodied in the investment properties over time, rather than through sale. Therefore, in determining the Group’s deferred taxation on investment properties, the directors have determined that the presumption that the carrying amounts of investment properties measured using the fair value model are recovered entirely through sale is not rebutted. As a result, the Group has not recognised any deferred taxes on changes in fair value of investment properties as the Group is not subject to any capital gain taxes on disposal of its investment properties.






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5. PROPERTY, PLANT AND EQUIPMENT Land Improve- Expansion THE GROUP Leasehold Power Furniture ment and Project and Freehold Land & Agricultural Motor vehicles Plant and Machinery Generation and Computer Derocking Golf Work in Land Buildings Equipment Owned Leased Owned Leased Plant Equipment Equipment Project course Progress Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

(a) COST AND vALUATION At July 1, 2014 Cost/Deemed cost 987,559 1,711,820 746,416 667,006 129,375 3,093,704 28,169 1,635,197 602,225 56,843 358,294 378,576 200,498 10,595,682 Valuation 11,370,852 4,250 - - - - - - - - - - - 11,375,102

12,358,411 1,716,070 746,416 667,006 129,375 3,093,704 28,169 1,635,197 602,225 56,843 358,294 378,576 200,498 21,970,784 Additions 5,636 51,444 26,166 19,314 17,391 110,932 - 18,024 11,732 1,350 17,903 - 255,572 535,464 Disposals (5,329) - (674) (16,549) (1,389) (421) - - (35) - - - - (24,397) Transfers - 73,500 19,419 30,258 - 114,643 - 10,209 20,007 2,524 - - (270,560) - Assets written off - - - - - (3,108) - - - - - - - (3,108) Transfers (to)/from NCA Held-for-Sale (23,231) 3,784 - 383 - 7,668 - - - - - - - (11,396) Exchange differences - (51,788) - (25,219) - (91,387) - - (93,694) (22,115) - - (3,959) (288,162)

At June 30, 2015 Cost/Deemed cost 964,635 1,788,760 791,327 675,193 145,377 3,232,031 28,169 1,663,430 540,235 38,602 376,197 378,576 181,551 10,804,083 Valuation 11,370,852 4,250 - - - - - - - - - - - 11,375,102

12,335,487 1,793,010 791,327 675,193 145,377 3,232,031 28,169 1,663,430 540,235 38,602 376,197 378,576 181,551 22,179,185

DEPRECIATION At July 1, 2014 - 319,323 586,137 522,812 34,595 1,306,949 9,598 990,166 302,379 46,475 148,454 902 - 4,267,790 Charge for the year - 45,887 32,160 58,026 11,109 188,223 9,253 52,619 43,624 3,979 14,639 113 - 459,632 Disposal adjustments - - (674) (13,688) (1,111) (337) - - (35) - - - - (15,845) Assets written off - - - - - (2,254) - - - - - - - (2,254) Transfers from NCA

Held-for-Sale - - - 603 - - - - - - - - - 603 Exchange differences - (20,850) - (22,750) - (47,645) - - (86,595) (21,813) - - - (199,653)

At June 30, 2015 - 344,360 617,623 545,003 44,593 1,444,936 18,851 1,042,785 259,373 28,641 163,093 1,015 - 4,510,273

NET BOOK vALUES - At June 30, 2015 Rs. 12,335,487 1,448,650 173,704 130,190 100,784 1,787,095 9,318 620,645 280,862 9,961 213,104 377,561 181,551 17,668,912






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5. PROPERTY, PLANT AND EQUIPMENT (continued) Land Improve- Expansion THE GROUP Leasehold Power Furniture ment and Project and Freehold Land & Agricultural Motor vehicles Plant and Machinery Generation and Computer Derocking Golf Work in Land Buildings Equipment Owned Leased Owned Leased Plant Equipment Equipment Project course Progress Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

(a) COST AND vALUATION At July 1, 2013 Cost/Deemed cost 991,008 1,694,443 727,177 664,642 139,842 3,352,482 28,169 1,611,573 580,663 51,773 338,522 378,576 161,008 10,719,878 Valuation 10,111,470 4,250 - - - - - - - - -- - - 10,115,720

11,102,478 1,698,693 727,177 664,642 139,842 3,352,482 28,169 1,611,573 580,663 51,773 338,522 378,576 161,008 20,835,598 Additions 38,000 63,355 40,800 31,144 - 158,261 - 20,799 17,792 2,791 19,772 - 346,198 738,912 Disposals (28,495) - (21,561) (33,117) - (41,995) - - - - - - - (125,168) Transfers - 75,803 - 32,978 - 206,462 - 2,825 28,359 1,437 - - (303,786) 44,078 Adjustments - - - - - - - - - (49) - - - (49) Consolidation adjustment - - - - - - - - - - - - 2,000 2,000 Deconsolidation of subsidiary (12,954) (33,551) - - (10,467) (3,198) - - (8,706) (3,030) - - - (71,906) Effects of business combination - - - - - - - - 1,730 5,397 - - - 7,127 Transfers to NCA Held-for-Sale - (77,262) - - - (541,640) - - - - - - - (618,902) Reclassification adjustment 1,259,382 - - - - - - - - - - - - 1,259,382 Exchange differences - (10,968) - (28,641) - (36,668) - - (17,613) (1,476) - - (4,922) (100,288)

At June 30, 2014 Cost/Deemed cost 987,559 1,711,820 746,416 667,006 129,375 3,093,704 28,169 1,635,197 602,225 56,843 358,294 378,576 200,498 10,595,682 Valuation 11,370,852 4,250 - - - - - - - - - - - 11,375,102

12,358,411 1,716,070 746,416 667,006 129,375 3,093,704 28,169 1,635,197 602,225 56,843 358,294 378,576 200,498 21,970,784 DEPRECIATION At July 1, 2013 - 350,831 579,357 509,922 42,731 1,534,635 172 938,524 284,973 38,718 134,640 789 - 4,415,292 Charge for the year - 43,269 28,341 69,943 278 205,456 9,426 51,642 30,886 7,111 13,814 113 - 460,279 Effects of business combination - - - - - - - - 1,665 4,998 - - - 6,663 Disposal adjustments - - (21,561) (32,341) - (20,579) - - - - - - - (74,481) Transfers to NCA Held-for-Sale - (42,979) - - - (397,585) - - - - - - - (440,564) Deconsolidation of subsidiary - (27,845) - - (8,414) (1,951) - - (7,833) (2,932) - - - (48,975) Exchange differences - (3,953) - (24,712) - (13,027) - - (7,312) (1,420) - - - (50,424)

At June 30, 2014 - 319,323 586,137 522,812 34,595 1,306,949 9,598 990,166 302,379 46,475 148,454 902 - 4,267,790

NET BOOK vALUES At June 30, 2014 Rs. 12,358,411 1,396,747 160,279 144,194 94,780 1,786,755 18,571 645,031 299,846 10,368 209,840 377,674 200,498 17,702,994

(i) Freehold land has been revalued by Socété D’Hotman De Speville in June 2013 based on open market value. The

directors have valued the freehold land at 70% of the revalued amount.

The revaluation surplus was credited to revaluation surplus.

(ii) Factory building and plant and machinery have been revalued by directors in 1995, based on the recommendations of the Mauritius Sugar Authority. The revaluation was done for the purpose of transferring assets to milling companies. This has been treated as deemed cost.

(iii) Borrowings are secured by floating charges on the asset of the group, including property, plant and equipment (note 26).

(iv) The depreciation charge for the year has been charged to operating expenses.

(v) If the freehold land was stated on the historical cost basis, the amounts would be as follows:

2015 2014 Rs’000 Rs’000

Cost 964,635 987,559

(vi) THE GROUP Freehold land Level 2 2015 2014 FAIR VALUE Rs’000 Rs’000

At June 30, 12,335,487 12,358,411






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5. PROPERTY, PLANT AND EQUIPMENT (continued)

THE COMPANY Land Furniture Improve- Freehold Agricultural Motor vehicles and ment and Work in Land Buildings Equipment Owned Leased Fittings Derocking Progress Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

(c) COST AND vALUATION

At June 30, 2014 Cost/Deemed cost 959,265 261,033 503,347 378,592 55,306 71,997 391,493 26,309 2,647,342 Valuation 11,246,540 - - - - - - - 11,246,540

12,205,805 261,033 503,347 378,592 55,306 71,997 391,493 26,309 13,893,882 Additions 5,636 6,152 26,166 8,570 17,391 8,375 17,903 2,320 92,513 Transfers - 5,425 19,419 1,465 - - - (26,309) - Disposals (3,168) - (674) (8,159) - (35) - - (12,036)


12,208,273 272,610 548,258 380,468 72,697 80,337 409,396 2,320 13,974,359

DEPRECIATION

At July 1, 2014 - 70,267 379,151 275,395 24,457 55,775 147,832 - 952,877 Charge for the year - 6,941 32,160 15,548 10,554 4,584 14,572 - 84,359 Disposal adjustments - - (674) (7,113) - (35) - - (7,822)

At June 30, 2015 - 77,208 410,637 283,830 35,011 60,324 162,404 - 1,029,414

NET BOOK vALUES

At June 30, 2015 Rs. 12,208,273 195,402 137,621 96,638 37,686 20,013 246,992 2,320 12,944,945

5. PROPERTY, PLANT AND EQUIPMENT (continued)

THE COMPANY Land Furniture Improve- Freehold Agricultural Motor vehicles and ment and Work in Land Buildings Equipment Owned Leased Fittings Derocking Progress Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

(c) COST AND vALUATION At June 30, 2013 Cost/Deemed cost 949,760 243,728 484,108 381,203 55,306 64,030 371,721 - 2,549,856 Valuation 9,987,158 - - - - - - - 9,987,158

10,936,918 243,728 484,108 381,203 55,306 64,030 371,721 - 12,537,014 Additions 38,000 17,305 40,800 28,813 - 7,967 19,772 26,309 178,966 Disposals (28,495) - (21,561) (31,424) - - - - (81,480) Reclassification

adjustment 1,259,382 - - - - - - - 1,259,382


12,205,805 261,033 503,347 378,592 55,306 71,997 391,493 26,309 13,893,882

DEPRECIATION At July 1, 2013 - 63,821 372,371 291,205 13,396 52,298 134,087 - 927,178 Charge for the year - 6,446 28,341 15,614 11,061 3,477 13,745 - 78,684 Disposal adjustments - - (21,561) (31,424) - - - - (52,985)

At June 30, 2014 - 70,267 379,151 275,395 24,457 55,775 147,832 - 952,877

NET BOOK vALUES At June 30, 2014 Rs. 12,205,805 190,766 124,196 103,197 30,849 16,222 243,661 26,309 12,941,005

(i) Freehold land has been revalued by Société D’Hotman De Speville in June 2013 based on open market value. The directors have valued the freehold land at 70% of the revalued amount. The revaluation surplus was credited to revaluation surplus.

(ii) Factory building and plant and machinery have been revalued by directors in 1995, based on the recommendations of the Mauritius Sugar Authority. The revaluation was done for the purpose of transferring assets to milling companies. This has been treated as deemed cost.

(iii) Borrowings are secured by floating charges on the asset of the group, including property, plant and equipment (note 26).

(iv) The depreciation charge for the year has been charged to operating expenses.

(v) If the freehold land was stated on the historical cost basis, the amounts would be as follows:

2015 2014 Rs’000 Rs’000

Cost 961,733 959,265

(vi) THE COMPANY Freehold land Level 2 2015 2014 FAIR VALUE Rs’000 Rs’000

At June 30, 12,208,273 12,205,805






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6. LAND-PROJECTS 2015 2014

THE GROUP Rs’000 Rs’000

At July 1, and June 30, 5,853 5,853

Land-projects represent the portion of land relating to the northern part of the IRS project of Anahita Estates Ltd which is yet to be developed as far as general infrastructure is concerned. It will be sold in the medium to long term once the southern portion is fully developed and sold.

Borrowings are secured by floating charges on the assets of the group, including land-projects (note 26).

7. INvESTMENT PROPERTIES

Land and Buildings 2015 2014(a) THE GROUP Rs’000 Rs’000

FAIR VALUE At July 1, 1,722,668 1,722,677 Impairment - (9) Disposal (950) 0

At June 30, 1,721,718 1,722,668

(i) No rental income was received from investment property during the year (2014: Rs.Nil). No direct operating expenses were incurred on the investment property during the year (2014: Rs.Nil).

(ii) Investment properties have been revalued by Société D’Hotman De Speville in June 2013 based on open market value. At June 30, 2015, the directors have estimated the fair value of freehold land at 70% of the revalued amount.

(iii) Borrowings are secured by floating charges on the asset of the group, including investment properties (note 26).

Land and Buildings 2015 2014(b) THE COMPANY Rs’000 Rs’000

FAIR VALUE Level 2 At July 1 & June 30, 1,845,607 1,845,607

(i) No rental income was received from investment property during the year (2014: Rs.Nil). No direct operating expenses were incurred on the investment property during the year (2014: Rs.Nil).

(ii) Investment properties have been revalued by Société D’Hotman De Speville in June 2013 based on open market value. At June 30, 2015, the directors have estimated the fair value of freehold land at 70% of the revalued amount.

(iii) Borrowings are secured by floating charges on the asset of the group, including investment properties (note 26).

8. INTANGIBLE ASSETS 2015 2014


Goodwill on acquisition of subsidiaries At July 1, 23,725 - Effect of business combination - 23,725

At June 30, 23,725 23,725

2015 & 2014 Rs’000

THE COMPANY Acquisition of land development rights 33,400

In 2005, the company purchased land development rights on 15 hectares from its subsidiary company, Deep River Beau Champ Milling Company Limited. There is no time limit to utilise those land development rights.

9. NON-CURRENT ASSETS HELD FOR SALE 2015 2014


Level 3 Sugar mills 302,717 310,582 Inventories 76,252 80,793 Land & buildings reclassified (note 5) 23,231 - Reclassified from investment in joint venture (note 11) - 615,473 Others 6,745 7,306

408,945 1,014,154

The group intends to dispose of the sugar mills and inventories in the near foreseeable future.

2015 2014THE COMPANY Rs’000 Rs’000

Level 3 Lifetime golf memberships 31,200 33,800 Reclassified from investment in joint venture (note 11) - 926,400

At June 30 31,200 960,200

The Company has purchased lifetime golf memberships and intends to sell these to Anahita villa owners.






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10. INvESTMENT IN SUBSIDIARY COMPANIES

Restated 2015 2014

THE COMPANY Rs’000 Rs’000

FAIR VALUE Level 2 At July 1, - as previouly stated 8,155,669 8,420,643 - effect of fair value change in prior years (470,698) (470,698)

- as restated 7,684,971 7,949,945 Amalgamation adjustment (8,250) - Additions 76,500 41,518 Transferred from joint ventures (note 11) - 24,305 Transfer from non-current receivables 7,645 - Fair value movement (178,188) (330,797)

At June 30, 7,582,678 7,684,971

2015 2014(a) The following companies are subsidiaries of Alteo Limited: Effective percentage Effective percentage holding holding % held by Type of held held held held non-controlling Company shares held Stated capital Activity Directly Indirectly Directly Indirectly interests

. Anahita Estates Limited Ordinary Rs’000 826,123 Real Estates Development 100.00 - 100.00 - -

. Anahita Golf Ltd Ordinary Rs’000 528,584 Golf - 74.90 - 61.00 25.10

. Anahita World Class Sanctuary Ltd * Ordinary Rs’000 10 Trademark Owner 100.00 - - 100.00 -

. Commercial and Industrial Ordinary Rs’000 48,400 Investment - - 100.00 0 - Entreprises Limited (note 10(d)). Consolidated Energy Co Ltd Ordinary Rs’000 200,000 Energy 13.13 31.25 13.13 31.25 55.62 . Deep River Beau Champ Milling Company Limited Ordinary Rs’000 208,552 Investment - 52.15 - 52.15 47.85 . Eastern Energy CompanyLimited Ordinary Rs’000 101,250 Investment 61.72 - 61.72 - 38.28 . Ferney Aquaculture Limited Ordinary and Preference Rs’000 31,283 Sugar 99.99 - 100.00 - 0.01 . Refinest Limited Ordinary Rs’000 46,000 Investment 64.23 - 64.23 - 35.77 . Sucrière des Mascareignes Ltd Ordinary USD’000 7,000 Investment 60.00 - 60.00 - 40.00 . Sukari Investment Company Ltd Ordinary USD’000 9,936 Investment - 60.00 - 60.00 40.00 . TPC Ltd Ordinary TShs’000 3,326,897 Sugar - 45.00 - 45.00 55.00 . Usinest Limited Ordinary Rs’000 46 Investment 65.19 - 65.19 - 34.81 . Alteo Refinery Ltd Ordinary EUR’000 11,917 Sugar Refinery 32.50 20.87 32.50 20.87 46.63 . Alteo Energy Ltd Ordinary Rs’000 120,000 Energy 65.10 - 65.10 - 34.90 . Alteo Milling Co Ltd Ordinary Rs’000 177,497 Sugar Milling 76.50 - 76.50 - 23.50 . Island Fresh Limited Ordinary Rs’000 1,850 Poultry Framing 100.00 - 100.00 - -. West East Limited Ordinary Rs’000 90,000 Investment 99.99 - 99.99 - 0.01 . Société Beauregard Ordinary Rs’000 7,459 Rental of equipment 100.00 - 100.00 - - . Société Ducomet Ordinary Rs’000 46,000 Real Estate - 99.99 - 99.99 0.01 . Société Gonin Ordinary Rs’000 46,000 Real Estate - 99.99 - 99.89 0.01 . Compagnie Usinière de Mon Loisir Ltée Ordinary Rs’000 217,328 Investment - 70.80 - 70.80 29.20 . Trianon Estates Limited Ordinary Rs’000 4,128 Investment - 99.89 - 99.99 0.11 . Sena Development Limited Ordinary Rs’000 - Investment Holding 57.15 - 57.15 - 42.85 . Compagnie de la Vigie Limitée Ordinary Rs’000 7 Estate Management 85.72 - 85.72 - 14.28 . Schoenfeld Co Ltd Ordinary Rs’000 25 Real Estate 100.00 - 100.00 - - . Alteo Planters Services Company Ltd Ordinary Rs’000 25 Cane Harvesting - 76.50 - 76.50 23.50 . Alteo Properties Ltd Ordinary Rs’000 1,000 Real Estate Development 100.00 - 100.00 - -

* Anahita World Class Sanctuary Ltd is in the process of being removed from the Register.






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10. INvESTMENT IN SUBSIDIARY COMPANIES (continued)

(b) The financial statements of all above subsidiaries, included in the consolidated financial statements, are co-terminous with those of the holding company. Except for TPC Ltd, which is incorporated in the Republic of Tanzania, all the subsidiary companies are incorporated in the Republic of Mauritius.

(c) Although the Group holds less than 51% in Consolidated Energy Co Ltd and TPC Ltd, the Group has the power to govern the financial and operating policies of the entities so as to obtain benefits from their activities.

(d) Commercial and Industrial Enterprises Limited was amalgamated with Alteo Limited on June 01, 2015.

(e) Subsidiaries with material non-controlling interests

Details for subsidiaries that have non-controlling interests that are material to the entity:

Profit allocated to Accumulated Non-controlling Non-controlling interests during interests Name the year at June 30,

Rs’000 Rs’000

2015 TPC Ltd 405,685 1,210,154

2014 TPC Ltd 393,581 1,225,298

(f) Summarised financial information on subsidiaries with material non-controlling interests

(i) Summarised statement of financial position and statement of profit or loss and other comprehensive income: Profit/loss from Other Total Dividend paid to Current Non-current Current Non-current continuing comprehensive comprehensive non-controlling Name assets assets liabilities liabilities Revenue operations income for the year income for the year interests Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

2015 TPC Ltd 1,980,377 1,796,988 508,044 886,872 2,419,468 737,609 (846) 736,763 (370,509)

2014 TPC Ltd 1,922,921 1,783,106 446,679 875,170 2,180,116 715,602 (5,137) 710,464 (301,321)

(ii) Summarised cash flow information: Net (decrease)/ increase in Operating Investing Financing cash and cash Name activities activities activities equivalents Rs’000 Rs’000 Rs’000 Rs’000

2015 TPC Ltd 935,182 (298,227) (673,652) (36,697) 2014 TPC Ltd 925,169 (349,635) (547,857) 27,677

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






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11. INvESTMENT IN JOINT vENTURES

2015 2014 Rs’000 Rs’000

(a) THE GROUP At July 1, 1,233 985,420 Disposal - (407,572) Share of result for the year (5,923) 52,708 Share of movement in other reserves 6,711 (13,850) Reclassified to non-current assets held for sale (note 9) - (615,473)

At June 30, 2,021 1,233

(b) THE COMPANY FAIR vALUE Level 2 At July 1, 30,575 1,043,206 Additions - 23,237 Disposal - (243,846) Transfer to subsidiary (note 10) - (24,305) Reclassification adjustment upon disposal - 58,261 Fair value movement 16,932 100,422 Reclassified to non-current assets held for sale (note 9) - (926,400)

At June 30, 47,507 30,575

(c) The Company has effective interest in the following joint ventures. The financial statements used for all joint ventures are in respect of the year ended June 30, 2015.

2015 2014 Activity Name Direct Indirect Direct Indirect % % % %

Anahita Hotel Limited (note 11(c)(i)) - - 50.00 - Hotel Operation Domaine de l’étoile Ltd 50.00 - 50.00 - Hospitality empowerment

programme Anahita Residences & Villas Limited 50.00 - 50.00 - Rental

management

(i) Anahita Hotel Limited has been reclassified to Non-current assets held for sale at June 30, 2014, and disposed of during the year ended June 30, 2015.

(iii) The following amounts represent the assets, liabilities, revenue and results of the joint ventures: Anahita Domaine de Residences l’Etoile and villas Ltd Limited 2015 Rs’000 Rs’000

Assets 1,903 369,134 Liabilities 8,952 244,043 Revenues 3,156 246,887 Profit/(Loss) 799 (6,836)

Share of profit/(loss) 400 (3,418)

11. INvESTMENT IN JOINT vENTURES (continued) Anahita Domaine de Residences l’Etoile and villas Ltd Limited 2014 Rs’000 Rs’000

Assets 3,518 379,476 Liabilities 11,486 355,046 Revenues 3,271 244,943 Profit/(Loss) 159 (15,649)

Share of profit/(loss) 80 (7,825)

Summarised statement of profit or loss and other 2015 2014 comprehensive income of Anahita Residences and villas Limited Rs’000 Rs’000

Revenue 246,887 247,761

Profit or loss from continuing operations (6,836) (15,649)

Post-tax profit/(loss) from discontinued operations - -

Profit/(loss) for the year (6,836) (15,649)

Other comprehensive income for the year 7,497 6,275

Total comprehensive income for the year 661 (9,374)

Dividends received from the joint venture during the year - -

The above profit/(loss) for the year include the following: 2015 2014 Rs’000 Rs’000

Depreciation and amortisation 15,027 14,284

Interest income 5 47

Interest expense 12,789 15,132

Income tax expense/(income) - -

Reconciliation of summarised financial information

Reconciliation of the above summarised financial information to the carrying amount of the interest in the joint venture recognised in the financial statements:

2015 2014 Rs’000 Rs’000

Opening net assets of the joint venture at July 1, 10,432 19,806 Profit/(loss) for the year (6,836) (15,649) Other comprehensive income for the year 7,497 6,275

Closing net assets 11,093 10,432

Interest in joint venture (50%) 5,547 5,216 Goodwill - -

Carrying amount of the Group’s interest in the joint venture 5,547 5,216






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11. INvESTMENT IN JOINT vENTURES (continued)

Classification of Anahita Residences and villas Limited as a joint venture

Anahita Residences and Villas Limited is a limited liability company whose legal form confers separation between the parties to the joint arrangement and the Company itself. Furthermore, there is no contractual arrangement or any other facts and circumstances that indicate that the parties to the joint arrangement have rights to the assets and obligations for the liabilities of the joint arrangement. Accordingly, Anahita Residences and Villas Limited is classified as a joint venture.

Aggregate financial information of joint ventures that are not individually material: 2015 2014 Rs’000 Rs’000

Share of profit from continuing operations 399 79

Share of other comprehensive income - -

Share of total comprehensive income 399 79

Carrying amount of interests in these joint ventures (3,524) (3,984)

12. INvESTMENT IN ASSOCIATED COMPANIES 2015 2014 Rs’000 Rs’000

(a) THE GROUP

(i) Group’s share of net assets 58,209 60,854

(ii) At July 1, 60,854 46,392 Addition - 17,667 Disposal (5,341) - Share of profit after taxation 26,582 2,763

Dividends (24,502) (5,218) Movement in reserves 616 (750)

At June 30, 58,209 60,854

2015 2014 Rs’000 Rs’000

(b) THE COMPANY FAIR VALUE Level 2 At July 1, 41,336 37,677 Amalgamation adjustment (note 42) 14,771 -

Addition - 17,000 Disposals (9,000) - Fair value movement 6,021 (13,341)

At June 30, 53,128 41,336

12. INvESTMENT IN ASSOCIATED COMPANIES (continued)

(c) The following amounts represent the assets, liabilities, revenue and results of the associated companies: Proportion of effective Country of ownership Share of Name Year end incorporation Indirect Assets Liabilities Revenues Profit profit % Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

2015 Trois Ilots Limited June 30, Mauritius 33.33 55,333 9,629 24,958 4,327 1,442 Alcohol & Molasses

Export Limited June 30, Mauritius 42.03 186,951 101,769 356,833 71,291 29,964 Volailles et

Traditions Ltée June 30, Mauritius 33.33 201,203 187,179 125,085 (14,472) (4,824)

443,487 298,577 506,876 61,146 26,582

2014 Trois Ilots Limited June 30, Mauritius 33.33 52,297 8,651 20,665 4,568 1,523 Alcohol & Molasses

Export Limited June 30, Mauritius 42.03 99,882 29,231 285,791 53,285 14,984 Volailles et

Traditions Ltée June 30, Mauritius 33.33 181,718 155,403 38,224 (41,237) (13,744)

333,897 193,285 344,680 16,616 2,763

(i) All of the above associated companies are incorporated in the Republic of Mauritius.

(d) Reconciliation of summarised financial information

Reconciliation of the above summarised financial information to the carrying amount recognised in the financial statements:

Other Profit/ compre- Closing Owner- Interest Opening (loss) for hensive net ship in Carrying Name net assets the year Dividend income assets interest associates Goodwill value Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 % Rs’000 Rs’000 Rs’000

2015 Trois Illots Limited 43,647 4,327 (4,000) 1,730 45,704 33.33 15,233 - 15,233

Alcohol & Molasses Export Limited 70,650 71,291 (55,124) (1,633) 85,184 42.03 35,803 7,173 42,976

Total 114,297 75,618 (59,124) 97 130,888 51,036 7,173 58,209 2014 Trois Illots Limited 42,142 4,569 (3,000) (64) 43,647 33.33 14,548 - 14,548 Alcohol & Molasses

Export Limited 35,838 53,294 (15,000) (3,482) 70,650 42.03 37,533 - 37,533 Volailles et

Traditions Ltee 66,813 (41,241) - 751 26,323 33.33 8,773 - 8,773

144,793 16,622 (18,000) (2,795) 140,620 60,854 - 60,854






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12. INvESTMENT IN ASSOCIATED COMPANIES (continued)

(e) Aggregate information of associates that are not individually material 2015 2014 Rs’000 Rs’000

Carrying amount of interests 58,208 60,854

Share of profit from continuing operations 31,406 2,763

Share of other comprehensive income (111) (750)

Share of total comprehensive income 31,295 2,013

(f) Change in ownership interest in an associate

In the prior year, the Company held a 33.33% interest in Volailles et Traditions Ltee and accounted for the investment as an associate. In June 2015, the Company disposed of all its interest in Volailles et Traditions Ltee to a third party for proceeds of Rs.6m.

This transaction has resulted in the recognition of a loss in profit or loss, calculated as follows.

Rs’000

Proceeds of disposal 6,000 Less: cost of investment (25,600)

Loss recognised (19,600)

13. INvESTMENT IN AvAILABLE-FOR-SALE FINANCIAL ASSETS

THE GROUP THE COMPANY

2015 2014 2015 2014

Level 1 Level 3 Level 1 Level 3

DEM DEM LISTED MARKET UNQUOTED TOTAL TOTAL LISTED MARKET UNQUOTED TOTAL TOTAL Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

AVAILABLE-FOR-SALE At July 1, 2,356 80,047 34,703 117,106 139,605 2,332 63,354 21,597 87,283 117,632 Amalgamation

adjustment (note 42) - - - - - - 3,593 - 3,593 - Additions - 463 - 463 5,235 - 463 - 463 5,235 Disposals (1,749) (6,911) - (8,660) (51,224) (1,749) - - (1,749) (49,416) (Decrease)/Increase

in fair value (587) (10,566) - (11,153) 21,688 (583) (8,226) - (8,809) 13,832 Consolidation adjustment - - - - 1,802 - - - - -

At June 30, 20 63,033 34,703 97,756 117,106 - 59,184 21,597 80,781 87,283 All the investments are denominated in the Mauritian Rupee. None of the financial assets are either past due

or impaired.

14. BEARER BIOLOGICAL ASSETS THE GROUP THE COMPANY 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000

COST At July 1, 1,119,604 1,116,523 819,826 707,794 Additions during the year 169,000 212,125 87,672 130,409 Less: Fully amortised assets (18,278) (18,377) (18,278) (18,377) Exchange difference (9,973) (81,346) - - Deconsolidation adjustment - (109,321) - -

At June 30, 1,260,353 1,119,604 889,220 819,826

AMORTISATION At July 1, 522,733 563,845 440,589 389,826 Amortisation charge for the year 166,571 79,851 81,432 69,140 Less: Fully amortised assets (18,278) (18,377) (18,278) (18,377) Exchange difference (4,283) (2,859) - - Deconsolidation adjustment - (99,727) - -

At June 30, 666,743 522,733 503,743 440,589

NET BOOK vALUES 593,610 596,871 385,477 379,237

Bearer biological assets represent cane replantation expenditure for canes that have an expected life cycle of 4 years and 7 years for TPC Ltd and Alteo Limited respectively, as they would normally generate 4 - 7 years of crop harvest. There exists a market for cane tops, when sold in limited quantities. Such biological assets on a large scale do not have a market value and alternative estimates of fair value would be unreliable, hence these biological assets are measured at cost (direct costs incurred including cost of purchase if any) less any accumulated depreciation and any accumulated impairment losses. In line with IAS 41 - Agriculture, the replantation costs are deferred and amortised over 4 - 7 years.

15. NON-CURRENT RECEIvABLES THE GROUP THE COMPANY 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000

Loans to subsidiary companies and joint ventures (note 15(a)) - - 620,048 511,509

Other non-current receivables 58,631 7,578 - -

58,631 7,578 620,048 511,509

a) Loans to subsidiary companies and joint ventures are interest free and have no fixed repayment terms.






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16. DEFERRED EXPENDITURE

THE GROUP

Compensation payments

Closure of Closure of Closure of Compagnie Closure of Constance La Mon Désert Usinière De Deep River Gaiété Sugar Alma Sugar Mon Loisir Beau Champ Factory Factory Factory Factory vRS 2 Land Non-current (note 16(a)) (note 16(b)) (note 16(a)) (note 16(a)) (note 16(b)) Development 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 85,547 4,740 82,284 182,113 74,132 577,546 1,006,362 872,496 Expenditure incurred

during the year - - - - 2 188,241 188,243 152,053 Additional provision

made during the year - - - 11,481 - - 11,481 380,000 Transfer to statements

of profit or loss and other comprehensive income - - - - - (214,896) (214,896) (161,496)

Amortisation charge for the year - - - - (28,979) - (28,979) (28,979)

Grant received during the year - - - (7,503) - - (7,503) (207,712)

At June 30 85,547 4,740 82,284 186,091 45,155 550,891 954,708 1,006,362

(a) The compensation payments for centralisation, in accordance with the provisions of the Blue Print relating to the closure of Constance La Gaiété Sugar Factory, Deep River Beau Champ factory, Mon Désert Alma factory and Mon Loisir Factory are recoverable from the proceeds of the sale of freehold land.

(b) The Voluntary Retirement Scheme costs comprise of compensation payments, provision for land infrastructure and other costs less refunds received from the Mauritius Sugar Reform Trust. The net expenses are amortised over a period of 6 years.

THE GROUP 2015 2014 Rs’000 Rs’000

Current Expenses incurred during the year 198,932 163,420 Expenditure incurred during the year, the benefit of which will be derived in the subsequent crop season, has

been accounted as deferred expenses.

16. DEFERRED EXPENDITURE (continued)

THE COMPANY

voluntary Land Retirement Development Total Total Scheme Costs Costs 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000

Non-current At July 1, 74,132 106,098 180,230 188,156 Expenditure incurred during the year - 127,426 127,426 21,053 Amount written off - (10,058) (10,058) - Transfer from trade and other receivables - (29,000) (29,000) - Amortisation (28,979) - (28,979) (28,979)

At June 30, 45,153 194,466 239,619 180,230

The Voluntary Retirement Scheme costs comprise of compensation payments, provision for land infrastructure and other costs less refunds received from the Mauritius Sugar Reform trust. The net expenses are amortised over a period of 6 years.

THE COMPANY 2015 2014 Rs’000 Rs’000

Current Expenses incurred during the year 35,604 23,193

Expenditure incurred during the year, the benefit of which will be derived in the subsequent crop season, has been accounted as deferred expenses.

17. DEFERRED INCOME TAXES

Deferred income taxes are calculated on all temporary differences under the liability methods at 15%/30% for the Group (2014:15%/30%), and 15% for the Company (2014: 15%). Deferred income tax assets and liabilities are offset when the income taxes relate to the same fiscal authority.

(a) THE GROUP

The following amounts are shown net in the statement of financial position: 2015 2014 Rs’000 Rs’000

Deferred tax assets (208,508) (136,032) Deferred tax liabilities 900,898 896,452

692,390 760,420






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17. DEFERRED INCOME TAXES (continued)

(a) THE GROUP (continued) 2015 2014 Rs’000 Rs’000

Movement in deferred income tax At July 1, 760,420 766,972 Acquisition through business combination - 83 Deconsolidation of subsidiary - 792 Profit or loss (credit)/charge (note 22(b)) (33,250) 30,128 Credited to statement of comprehensive income (11,162) 26 Credited to equity - (10,035) Exchange difference (23,618) (27,546)

At June 30, 692,390 760,420

Deferred tax assets and liabilities and deferred tax charge in the income statement are attributable to the following items:

Tax losses Retirement Deferred Accumulated Biological carried Benefit Milling Interest Tax Depreciation assets forward Obligation Expenses Deferred Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Deferred income tax liabilities

At July 1, 2013 501,644 491,962 (84,876) (132,184) 1,097 (10,671) 766,972 Exchange difference (9,960) (19,210) (96) 1,433 - 287 (27,546) Acquisition through

business combination 83 - - - - - 83 Deconsolidation

of subsidiary (21) - - 813 - - 792 Charged/(credited)

to income statement 2,552 47,427 (22,152) (3,458) (53) 5,812 30,128 Credited to equity - - - (10,035) - - (10,035) Credited to

statements of OCI - - - 26 - - 26

At June 30, 2014 494,298 520,179 (107,124) (143,405) 1,044 (4,572) 760,420 Exchange difference (10,907) (14,268) 172 994 - 391 (23,618) Charged/(credited) to

income statement 1,710 22,879 (36,221) (1,430) 685 (20,873) (33,250) Credited to statements of OCI - - - (11,162) - - (11,162)

At June 30, 2015 485,101 528,790 (143,173) (155,003) 1,729 (25,054) 692,390

At the end of the reporting period, the Group had unused tax losses of Rs.1,850,234,000 (2014: Rs.1,680,686,000) available for offset against future profits. A deferred tax asset has been recognised in respect of Rs.954,493,333 (2014: Rs.714,166,667) of such losses. No deferred tax asset has been recognised in respect of the remaining Rs.895,740,667 (2014: Rs.966,520,000) due to unpredictability of future profit streams.

17. DEFERRED INCOME TAXES (continued) 2015 2014 Rs’000 Rs’000

(b) THE COMPANY At July 1, (125,940) (60,289) Profit or loss credit (note 22(b)) (57,443) (46,054) Credited to statement of comprehensive income (10,298) 1,763 Credited to equity - (21,360)

At June 30, (193,681) (125,940)

Deferred tax assets and liabilities, deferred tax charge in the income statements and deferred tax charge in equity are attributable to the following items:

Tax losses Retirement Accelerated carried Benefit Tax Depreciation forward Obligation Total Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2013 24,390 (17,281) (67,398) (60,289) Credited to profit or loss (11,172) (30,504) (4,378) (46,054) Credited to equity on SIPF 1 - - (21,360) (21,360) Charged to equity - - 1,763 1,763

At June 30, 2014 13,218 (47,785) (91,373) (125,940) Credited to profit or loss (11,141) (42,175) (4,127) (57,443) Credited to statement of

comprehensive income - - (10,298) (10,298)

At June 30, 2015 2,077 (89,960) (105,798) (193,681)

At the end of the reporting period, the Company had unused tax losses of Rs.599,732,435 (2014: Rs.375,262,792) available for offset against future profits. A deferred tax asset has been recognised in respect of Rs.599,732,435 (2014: Rs.327,711,761) of such losses. The tax losses expire on a rolling basis over 5 years.

18. INvENTORIES THE GROUP THE COMPANY 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000

Raw materials and spare parts 475,016 428,325 55,117 53,539 Raw sugar 3,488 25,172 - - Coal 79,477 45,758 - - Goods for resale 3,932 2,698 - -

Total 561,913 501,953 55,117 53,539

(i) The cost of inventories recognised as expense and included in operating expenses amounted to Rs.2,302,675,000 (2014: Rs.1,436,405,000) for the Group and Rs.224,976,000 (2014: Rs.244,338,000) for the Company.

(ii) Borrowings are secured by floating charges on the assets of the Group and the Company, including inventories (note 26).






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19. WORK IN PROGRESS THE GROUP 2015 2014 Rs’000 Rs’000

IRS residences 128,339 282,118

Borrowings are secured by floating charges on the assets of the Group, including work in progress (note 26).

20. CONSUMABLE BIOLOGICAL ASSETS THE GROUP THE COMPANY 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000

Level 2 At July 1, 2,409,932 2,437,104 890,691 1,014,248 Gain/(Loss) in fair value 46,418 33,784 (39,801) (123,557) Exchange difference (41,800) (56,253) - - Deconsolidation adjustment - (4,703) - -

At June 30, 2,414,550 2,409,932 850,890 890,691

Consumable biological assets represent the fair value of standing canes. The fair value has been arrived at by discounting the present value of expected net cash flows at the relevant market determined pre-tax rate. The expected cash flows have been computed by estimating the expected crop, the sugar extraction rate and the forecasts of sugar prices which will prevail in the coming year. The harvesting costs and other direct costs are based on yearly budgets.

At June 30, 2015, standing canes comprised of approximately 16,767 hectares of cane plantations (2014: 17,756 hectares) for the Group and 9,117 hectares (2014: 10,026 hectares) for the Company.

During the year, the Group harvested approximately 1,743,124 tonnes of canes (2014: 1,768,276 tonnes), which has a fair value less costs to sell of MUR’M 2,409.9 at the date of harvest.

21. TRADE AND OTHER RECEIvABLES THE GROUP THE COMPANY Restated 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000

Trade receivables 605,917 426,469 221,044 99,338 Prepayments and other receivables 311,162 450,385 73,426 138,073 Receivable from related companies - subsidiary companies - - 277,499 300,645 - related parties 45,258 28,013 15,721 9,241

962,337 904,867 587,690 547,297

The carrying amounts of trade and other receivables approximate their fair values. At June 30, 2015, no trade receivables were past due or impaired (2014: Rs.Nil). The carrying amounts of the Group’s and Company’s trade and other receivables are denominated in the following currencies.


Mauritian Rupee 676,402 808,162 587,690 547,297 Tanzanian Shilling 70,539 18,633 - - US Dollar 93,619 9,300 - - Euro 121,186 68,104 - - Pound Sterling 591 668 - -

962,337 904,867 587,690 547,297

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






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22. INCOME TAX THE GROUP THE COMPANY Restated 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000

(a) Statement of financial position At July 1, - as previously stated (41,095) (13,892) (2,704) 5,269 - MRA claim 8,735 8,735 - -

- as restated (32,360) (5,157) (2,704) 5,269 Movement during the year: Consolidation adjustment - 1,668 - - Effect of business combination - 882 - - Deconsolidation of subsidiary - (829) - - Current tax on the adjusted profit

for the year (15%/30% for the Group and 15% for the Company) 354,291 295,486 - -

Withholding tax 67,618 60,355 - -

421,909 357,562 - -

Less: Tax refund 10,693 3,222 3,767 - Tax paid (360,978) (352,542) - (5,269) Transfer - 416 - - TDS (13,146) (10,617) - - Payment made under APS (19,287) (26,060) - (2,704) Additional tax claimed by MRA (8,735) - - - Under/(Over) provision transferred 58,845 (423) - - Exchange difference (3,939) 1,239 - -

(336,547) (384,765) 3,767 (7,973)

At June 30, 53,002 (32,360) 1,063 (2,704)

Disclosed as follows: Current tax assets (9,297) (48,084) - (2,704) Current tax liabilities 62,299 15,724 1,063 -

53,002 (32,360) 1,063 (2,704)

(b) Income statement

Current tax on the adjusted profit for the year (15%/30% for the Group and 15% for the Company) 354,291 295,486 - -

Withholding tax 67,618 60,355 - - Deferred tax (note 17) (33,250) 30,128 (57,443) (46,054) Under/(Over) provision transferred 58,845 (423) - -

Tax charge/(credit) for the year 447,504 385,546 (57,443) (46,054)

22. INCOME TAX (continued)

(c) The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the basic rate of the group as follows:


Profit before share of results of associates and joint ventures and taxation: 1,584,414 898,875 - 71,784

Tax at 15%/30% for the group and 15% for the company 411,909 488,361 61,914 10,273 Withholding tax 67,618 60,355 - - Income not subject to tax (46,441) (173,193) (146,316) (99,177) Expenses not deductible for tax purposes 58,443 63,886 26,959 35,717 Net tax losses utilised (18,423) (3,196) - - Tax losses for which no deferred tax was recognised 3,621 22,314 - 7,133 (Over)/Under provision in previous year 58,845 (423) - - Foreign tax credit (81,252) (69,333) - - Others (6,816) (3,225) - -

Tax charge/(credit) for the year 447,504 385,546 (57,443) (46,054)

23. SHARE CAPITAL

THE GROUP AND THE COMPANY 2015 & 2014 Number Ordinary Shares of no par value of shares Rs’000

At July 1 & June 30, 318,492,120 8,991,595






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24. REvALUATION AND OTHER RESERvES (continued)


Revaluation and other reserves may be analysed as follows:

Profit on disposal of property, plant and equipment reserve

At July 1, and at June 30, - - 213,079 213,079

Reserve on consolidation At July 1, and at June 30, 4,684 4,684 - -

Associates and joint ventures reserves At July 1, (96,458) (89,618) - - Movement during the year 3,435 (6,840) -

At June 30, (93,023) (96,458) - -

Revaluation surplus At July 1, 6,538,138 5,278,756 6,286,355 5,026,973 Movement during the year (3,168) 1,259,382 (3,168) 1,259,382

At June 30, 6,534,970 6,538,138 6,283,187 6,286,355

Fair value reserve At July 1, 36,756 17,954 4,871,290 5,042,912 Movement during the year (11,153) 18,802 (543,623) (171,622)

At June 30, 25,603 36,756 4,327,667 4,871,290

Translation reserve At July 1, (206,836) (177,084) - - Movement during the year (54,931) (29,752) - -

At June 30, (261,767) (206,836) - -

Amalgamation reserve At July 1, (493,562) (455,650) 658,150 682,257 Movement during the year - (37,912) 8,543 (24,107)

At June 30, (493,562) (493,562) 666,693 658,150

Actuarial (gains)/losses reserve At July 1, (234,373) (243,681) (193,518) (203,510) Movement during the year (62,165) 9,308 (58,351) 9,992

At June 30, (296,538) (234,373) (251,869) (193,518)

At June 30, 5,420,367 5,548,349 11,238,757 11,835,356

24. REvALUATION AND OTHER RESERvES (continued)

Profit on disposal of property, plant and equipment reserve

The profit on disposal of property, plant and equipment reserve arose prior to the year 2000 upon disposal of property, plant and equipment.

Reserve on consolidation

Reserve on consolidation represents reserve that arises on consolidation of subsidiaries.

Associates and joint ventures reserves

The associates and joint ventures reserves relate to the Group’s share of associates and joint ventures reserves.

Revaluation surplus

The revaluation surplus relates to the revaluation of property, plant and equipment.

Fair value reserve

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

Translation reserve

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

Amalgamation reserve

Amalgamation reserve represents the excess of assets over liabilities and reserves of subsidiaries following amalgamation of entities under common control.

25. LOANS

Loans are from other related shareholders in subsidiaries of the Group. The loans are interest free and have no fixed repayment terms.






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26. BORROWINGS


Current Bank overdrafts (note 26(a)) 331,284 857,952 79,925 382,489 Loans at call (note 26(a)) 250,203 112,647 430,426 185,459 Bank loans (note 26(b)) 533,640 697,862 101,069 148,848 Finance leases (note 26(c)) 26,457 19,755 15,758 11,509 Debentures (note 26(d)) 400,000 - 400,000 -

1,541,584 1,688,216 1,027,178 728,305

Non-current Bank loans (note 26(b)) 1,187,430 1,485,239 338,904 419,410 Finance leases (note 26(c)) 54,871 52,994 24,797 21,409 Debentures (note 26(d)) 400,000 800,000 400,000 800,000

1,642,301 2,338,233 763,701 1,240,819

Total Borrowings 3,183,885 4,026,449 1,790,879 1,969,124

(a) The bank loans and bank overdrafts are secured by floating charges on the group’s assets. Loans at call are unsecured and are from related parties.

(b) Bank loans THE GROUP THE COMPANY 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000

The maturity of non-current bank loans are as follows:

- After one year and before two years 429,118 555,221 98,611 94,287 - After two years and before five years 750,704 884,289 240,293 284,052 - After five years 7,608 45,729 - 41,071

1,187,430 1,485,239 338,904 419,410

26. BORROWINGS (continued)

(c) Finance leases THE GROUP THE COMPANY 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000

Minimum lease payments Not later than one year 31,384 25,210 18,178 14,382 Later than 1 year and not later than 2 years 29,364 21,763 16,253 10,928 Later than 2 years and not later than 5 years 31,053 36,381 11,127 11,640 Future finance charges on finance leases (10,473) (10,605) (5,003) (4,032)

Present value of finance lease liabilities 81,328 72,749 40,555 32,918

The present value of finance lease liabilities may be analysed as follows:


Not later than one year 26,457 19,755 15,758 11,509 Later than 1 year and not later than 2 years 25,959 18,549 14,655 9,621 Later than 2 years and not later than 5 years 28,912 34,445 10,142 11,788

81,328 72,749 40,555 32,918

The finance leases bear interest rates between 7.25% to 9.76% (2014: 7.70% to 9.76%) per annum.

Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.

(d) Debentures THE GROUP AND THE COMPANY 2015 2014 Rs’000 Rs’000

Secured debentures: At 5.40% fixed interest rates redeemable on June 26, 2016. 400,000 400,000 At 5.75% fixed interest rates redeemable on June 26, 2018. 400,000 400,000 Less: repayable within one year shown as current borrowings (400,000) -

400,000 800,000






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26. BORROWINGS (continued)

(e) The effective interest rates at the reporting date were as follows:

2015 2014

RS EURO USD TSH RS EURO USD TSH THE GROUP % % % % % % % %

Bank overdrafts 6.90% - 7.90% 1.35% -9.2% 4.50% 13.00% 7.00% - 8.15% 1.26% - 4.5% 4.50% 13.00% Bank borrowings 4.25% -10.00% 1.35% -9.2% 3.67% N/A 7% -9.75% 1.26% - 4.5% 3.67% 13.00% Loans at call 5.73% - 6.025% N/A N/A N/A 5.845 - 6.025% N/A N/A N/A Finance lease liabilities 7.25% - 9.76% N/A N/A N/A 7.70% - 9.76% N/A N/A N/A

2015 2014

Rs.

THE COMPANY % %

Bank overdrafts 7.15% - 7.25% 7.25% - 7.65% Bank borrowings 7.00% -9.15% 7.40% -9.15% Loans at call 5.73% - 6.025% 5.25% - 6.025% Finance lease liabilities 7.25% - 9.76% 7.70% - 9.76%

(f) The carrying amounts of the Group’s borrowings are denominated in the following currencies:


Mauritian Rupee (Rs) 2,871,975 3,644,450 1,790,879 1,969,124 Euro 95,519 285,897 - - US Dollar (USD) 102,858 - - - Tanzanian Shilling (TSH) 113,533 96,102 - -

3,183,885 4,026,449 1,790,879 1,969,124

27. RETIREMENT BENEFIT OBLIGATIONS THE GROUP THE COMPANY 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000

Amounts recognised in the Statement of financial position:

Pension benefits (note 27(a)(i)) 930,802 832,175 705,319 609,161

Disclosed as follows: THE GROUP THE COMPANY 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000

Non-current assets (5,227) (127) - - Non-current liabilities 936,029 832,302 705,319 609,161

930,802 832,175 705,319 609,161

Amounts charged to profit or loss: - Pension benefits (note 27(a)(v)) 93,976 61,001 64,424 57,270

Amounts (credited)/charged to other comprehensive income:

- Pension benefits (note 27(a)(vi)) 73,245 (7,515) 68,649 (11,755)

(a) Defined pension benefits

(i) The Group operates a defined benefit pension. The plan is a final salary plan, which provides benefits to members in the form of a guaranteed level of pension payable for life. The level of benefits provided depends on members’ length of service and their salary in the final years leading up to retirement.

The assets of the plan are independently administered by Anglo Mauritius Assurance Society Limited, GML pension fund and the Sugar Insurance Pension Fund.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligations were carried out at June 30, 2015 by Anglo Mauritius Assurance Society Limited. The present value of the defined benefit obligations, and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.


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

Present value of funded obligations 1,440,473 1,358,774 1,159,223 1,082,793 Fair value of plan assets (917,680) (880,799) (690,950) (671,474)

522,793 477,975 468,273 411,319 Present value of unfunded obligations 408,009 354,200 237,046 197,842

Liability in the statement of financial position 930,802 832,175 705,319 609,161






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27. RETIREMENT BENEFIT OBLIGATIONS (continued)

(a) Defined pension benefits (continued)

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


At July 1, 832,175 776,619 609,161 524,816 Amalgamation adjustment - 2,026 - - Deconsolidation of subsidiary - (10,384) - - Charged/(credited) to profit or loss 93,977 61,001 64,424 57,270 (Credited)/Charged to other comprehensive income 73,245 (7,515) 68,649 (11,755) SIPF1 liabilites - 66,902 - 66,902 Benefits paid (16,566) (10,503) - - Contributions paid (48,544) (41,588) (36,915) (28,072) Exchange difference (3,485) (4,383) - -

Balance at June 30, 930,802 832,175 705,319 609,161


(iii) The movement in the present value of obligations for the year is as follows:

At July 1, 1,712,974 1,072,623 1,280,635 718,554 Amalgamation adjustment - 4,559 - - Deconsolidation of subsidiary - (21,050) - - Current service cost 36,083 34,901 21,567 19,809 Past service cost 982 - - - Employee contribution 4,588 5,436 3,413 4,018 Interest expense 130,329 87,166 90,092 54,673 Benefits paid (103,279) (41,745) (74,996) (26,864) Exchange difference (3,301) (3,992) - - SIPF1 Liabilities (5,735) 607,854 - 514,575 Effect of curtailments/ settlements (5,519) (36,043) - - Actuarial (gains)/losses 81,360 3,265 75,558 (4,130)

At June 30, 1,848,482 1,712,974 1,396,269 1,280,635

Disclosed as follows: Funded obligations 1,440,473 1,358,774 1,159,223 1,082,793 Unfunded obligations 408,009 354,200 237,046 197,842

1,848,482 1,712,974 1,396,269 1,280,635




(iv) The movement in the fair value of plan asset for the year is as follows:

At July 1, 880,799 398,674 671,474 269,240 Amalgamation adjustment - 1,507 - - Deconsolidation of subsidiary - (10,793) - - Contribution by employee 37,964 4,252 36,915 4,018 Scheme expenses (598) (466) (399) (365) Cost of insuring risk benefits (1,925) (3,073) (1,393) (2,355) Expected return on plan assets 64,744 29,343 - 19,931 SIPF1 Assets - 438,456 - 372,172 Actuarial gains on plan assets 8,115 11,945 6,909 7,625 Contribution by employer 15,168 41,934 3,413 28,072 Exchange Difference 126 34 - - Benefits paid (86,713) (31,439) (74,996) (26,864) Interest income - - 49,027 - Others - 425 - -

At June 30, 917,680 880,799 690,950 671,474


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

Current service cost 36,082 35,030 21,567 19,809 Past service cost 982 - - - Interest expense 24,578 58,155 - 34,741 Scheme expenses 598 561 399 365 Cost of insuring risk benefits 1,925 3,297 1,393 2,355 Effects of curtailments/ settlements 29,811 (36,042) 41,065 -

Total, included in employee benefit expense 93,976 61,001 64,424 57,270

Actual return on plan assets 72,860 49,807 55,937 31,204






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(a) Defined pension benefits (continued) THE GROUP THE COMPANY 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000

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

Liability experience losses/(gains) 144,698 3,621 136,215 (345) Actuarial losses arising from changes in financial assumptions 3,563 4,569 6,245 -

148,261 8,190 142,460 (345) Actuarial gains - (200) - - Gains/(losses) on pension scheme assets (8,114) (4,095) (6,909) - Changes in financial assumptions - - - - Return on plan assets excluding

interest income - (11,410) - (11,410)

140,147 (7,515) 135,551 (11,755)

THE GROUP THE COMPANY 2015 2014 2015 2014 % % % %

(vii) Major asset categories as percentage of plan assets:

Local equities 30% 39% 30% 39% Overseas equities 25% 28% 24% 27% Fixed interest 24% 19% 28% 19% Properties 21% 14% 18% 15%

(viii) The assets of the plan are invested in funds. The expected return on plan assets was determined by considering the expected returns available on the assets underlying the current investment policy. Expected yields on fixed interest investments are based on gross redemption yields as at the balance sheet date. Expected returns on equity and property investments reflect long-term real rates of return experienced in the respective markets.

(ix) Expected contributions to post-employment benefit plans for the year ending June 30, 2016 are Rs.26,200,000 for the company and Rs.35,605,000 for the group.

(x) The principal actuarial assumptions used for accounting purposes were: THE GROUP AND THE COMPANY 2015 2014 % %

Discount rate 6.75 7.50 Expected return on plan assets 6.5 7.50 Future salary increases 5.25/4.25 6.00/5.00 Future pension increases 2.5/0.00 3.50/2.00



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

THE GROUP THE COMPANY 2015 2014 2015 2014 June 30, 2015 Rs’000 Rs’000 Rs’000 Rs’000

Increase Decrease Increase Decrease Discount rate (1% movement) 168,589 (168,589) 131,567 (131,567) Future long term salary assumption 70,116 (70,116) 53,619 (53,619)

(xii) During the year, Rs.2,814,000 (2014: Rs.3,312,000) has been recognised as an expense for defined contribution plans in the profit or loss.

(xiii) The weighted average duration of the defined benefit obligation is 10 years for the company and 13 years for the group at the end of the reporting period.

28. TRADE AND OTHER PAYABLES


Trade payables 539,294 641,313 75,993 68,862 Payable to related companies - subsidiary companies - - 694,567 696,861 - related company 108,072 101,610 - - Other payables and accrued expenses 508,886 701,331 26,813 41,868 Accruals for centralisation and VRS costs 455,318 351,635 98,149 141,847 Land under development cost 114,054 42,100 114,054 42,100

1,725,624 1,837,989 1,009,576 991,538

The carrying amounts of trade and other payables approximate their fair values.






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29. DEFERRED INCOME THE GROUP 2015 2014 Rs’000 Rs’000

At July 1, 67,177 66,780 Additions during the year 4,600 6,000 Release to statement of comprehensive income (4,282) (5,603)

At June 30, 67,495 67,177

Deferred income may be analysed as follows: Current 5,853 7,804 Non current 61,642 59,373

67,495 67,177

30. DIvIDENDS THE GROUP AND THE COMPANY 2015 2014 Rs’000 Rs’000

Interim of Re.0.35 per share paid (2014: Re.0.35) - ordinary dividend 111,473 111,473

Final dividend of Re.0.45 per share (2014: Re.0.45) per share paid - ordinary dividend 143,321 143,321

Total dividend declared 254,794 254,794

Dividend payable At July 01, 143,321 143,321 Dividend declared during the year, 254,794 254,794 Dividend paid during the year, (254,794) (254,794)

At June 30, 143,321 143,321

31. TURNOvER THE GROUP THE COMPANY 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000

Sugar 3,595,627 3,773,232 897,628 1,107,631 Special sugars premium 93,805 82,743 - - Molasses 159,575 125,564 64,690 49,722 Distillers contribution 17,003 18,590 16,980 18,579 Bagasse 4,101 4,297 4,094 4,368

3,870,111 4,004,426 983,392 1,180,300 Electricity generation 1,060,655 1,016,457 - - Proceeds from sale of real estates 1,144,917 222,824 - - Golf revenue 95,291 99,819 - - Flower production and export - 11,790 - - Refining service fees 283,535 307,754 - - Services to planters 29,948 79,390 - - Poultry 167,815 132,047 - - Others 83,556 57,319 - -

6,735,828 5,931,826 983,392 1,180,300

32. EARNINGS BEFORE INTERESTS, TAXATION, DEPRECIATION AND AMORTISATION


Earnings before interests, taxation, depreciation and amortisation is determined as follows:

Revenue (note 31) 6,735,828 5,931,826 983,392 1,180,300 Gain/(losses) arising from changes in fair value of biological assets (note 20) 46,418 33,784 (39,801) (123,557) Other operating income (note 33) 262,585 234,799 179,913 195,731 Operating expenses (note 34) (4,958,475) (4,227,039) (1,230,448) (1,225,593) Investment and other income (note 35) 5,021 2,985 457,565 411,497

2,091,377 1,976,355 350,621 438,378

Earnings before interests, taxation, depreciation and amortisation is arrived after: crediting Profit on sale of available for sale financial assets (3,087) - - - Profit on sale of property, plant and equipment (2,495) (9,221) (1,353) (2,657) Profit on sale of non current asset held for sale (100) (2,100) (2,000) (2,100) and charging Cost of inventories recognised as expense 2,302,675 1,436,405 224,976 244,338 Staff costs (note 34(a)) 1,608,473 1,517,976 676,604 607,076






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33. OTHER OPERATING INCOME


Management fees - - 62,598 78,912 Rent and transport 43,748 42,172 69,558 55,636 Profit on sale of property, plant and equipment 2,495 9,221 1,353 2,657 Agricultural diversification 35,384 32,160 35,384 32,150 Profit on sale of land 101,972 30,249 - - Profit on sale of NCA held for sale 100 3,147 2,000 2,100 Cane supply agreement 19,661 21,205 - - Others 59,225 96,645 9,020 24,276

262,585 234,799 179,913 195,731

34. EXPENSES BY NATURE


Staff costs (note 34(a)) 1,608,473 1,517,976 676,604 607,076 Cost of inventories recognised as expense 2,302,675 1,436,405 224,976 244,338 Management fees 38,844 37,111 33,153 37,111 SIFB premium 618 60,925 618 39,088 Cultivation and irrigation 321,590 496,612 295,097 297,980 Construction costs 244,419 127,778 - - Factory expenses 161,376 284,763 - - Poultry 125,384 111,499 - - Others 155,096 153,970 - -

4,958,475 4,227,039 1,230,448 1,225,593


(a) Staff costs Wages and salaries 1,377,100 1,298,095 601,373 534,766 Pension costs 231,373 219,881 75,231 72,310

1,608,473 1,517,976 676,604 607,076

35. INvESTMENT AND OTHER INCOME


Interest income 348 1,173 6,795 7,306 Dividend income 4,673 1,812 450,770 404,191

5,021 2,985 457,565 411,497

36. FINANCE COSTS


Foreign exchange transaction gains (51,028) (12,327) (18,036) (1,480)

Interest expense: - Bank and other loans 218,726 244,966 140,653 151,677 - Bank overdrafts 23,278 23,146 3,817 3,218 - Finance leases 7,140 6,043 2,939 2,983 - Others 12,024 1,088 - 8,146

261,168 275,243 147,409 166,024

210,140 262,916 129,373 164,544

37. EARNINGS PER SHARE

THE GROUP THE COMPANY 2015 2014 2015 2014

Basic earnings per share Rs. 2.17 0.20 1.48 0.37

Based on: Profit after tax and minority

interest (Rs’000) 689,980 63,059 470,203 117,838 Number of ordinary shares in issue 318,492,120 318,492,120 318,492,120 318,492,120






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38. NOTES TO STATEMENT OF CASH FLOWS


(a) Cash generated from operations Profit before tax 1,605,073 954,346 412,760 71,784

Adjustments for: Release of deferred income 318 (5,603) - - Deferred expenditure written off - - 10,059 - Gain on fair value remeasurement - (2,908) - - Depreciation of property, plant and equipment 459,632 460,279 84,359 78,684 Property, plant and equipment written off 854 - - - Impairment of investment property - 9 - - Amortisation of bearer biological assets 166,571 79,851 81,432 69,140 Amortisation of deferred expenditure 28,979 28,979 28,979 28,979 Gain on disposal of subsidiary - (9,566) - - Profit on sale of land and building - (29,002) (6,237) (29,002) Profit on sale of investment property (590) - - - Loss/(Profit) on sale of available for sale financial assets (3,087) (15,435) 144 (13,627) Profit on sale of property, plant and equipment (2,495) (9,221) (1,353) (2,657) Profit on sale of non current asset held

for sale (314,397) - (398,179) (2,100) Loss on sale of investment in joint ventures - 229,365 - 67,876 (Profit)/loss on disposal of investment in associate (659) - 19,600 - Investment income (5,021) (2,985) (457,565) (411,497) Interest expense 261,168 275,243 129,373 166,024 Exchange difference (2,088) 68,424 - - Retirement benefit obligations 28,867 8,910 27,509 29,198 Share of results of associates (26,582) (2,763) - - Share of results of joint ventures 5,923 (52,708) - - Consolidation adjustment 3,585 (828) - - Deconsolidation adjustment - 26,807 - - Effects of business combination - (29,131) - - Changes in working capital: - fair value of consumable biological assets (46,418) (33,784) 39,801 123,557 - trade and other receivables (57,470) (301,128) (9,276) (191,738) - inventories (59,960) (17,715) (1,578) (10,478) - trade and other payables (112,365) 550,825 17,801 (2,163) - deferred expenditure-non current 203,415 (218,504) - - - deferred expenditure-current (35,512) 46,696 (12,411) 9,890 - work in progress 153,779 (100,357) - -

Cash generated from/(absorbed by) operations 2,251,520 1,898,096 (34,782) (18,130)

38. NOTES TO STATEMENT OF CASH FLOWS (continued)


(b) Cash and cash equivalents Short term deposits 67,651 - 250,927 344 Cash in hand and at bank 338,102 229,009 86,954 35,849 Bank overdrafts (331,284) (857,952) (79,925) (382,489) Loans at call (250,203) (112,647) (430,426) (185,459)

At June 30, (175,734) (741,590) (172,470) (531,755)

(c) Non cash transactions

The principal non cash transactions are the acquisition of property, plant and equipment using finance leases (Note 5).

39(a). OPERATING LEASE COMMITMENTS

The group leases vehicles under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights.

Operating Lease Commitments - Where the Company is the Lessee

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:


Not later than one year 4,977 1,308 - 315 Later than one year and not later

than five years 6,839 3,269 - 31

11,816 4,577 - 346

Operating Lease Commitments - Where the Company is the Lessor

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:


Not later than one year 2,366 3,359 - 5,366 Later than one year and not later

than five years 9,464 12,444 - 21,465 Later than 5 years 175,086 177,452 - 397,770

186,916 193,255 - 424,601






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39(b). CAPITAL COMMITMENTS


Capital expenditure approved by the Board: -contracted 686,183 422,507 - - - not contracted 469,119 508,056 130,019 177,295

1,155,302 930,563 130,019 177,295

40. PROFIT/(LOSS) ON DISPOSAL OF INvESTMENT AND ASSETS


Loss on disposal of Novelife - (229,803) - (67,876) Profit on disposal of Non-current asset

held for sale 304,471 - 396,179 - Reclassification adjustment upon disposal of Non-current asset held for sale 9,826 - - - Profit/(Loss) on disposal of inv in AFS 3,864 12,872 (144) 13,626 Profit/(Loss) on disposal of associate 659 - (19,600) - Gain on disposal of land 39,627 29,003 9,847 29,003 Others - 12,387 - -

358,447 (175,541) 386,282 (25,247)

During the year, Alteo Ltd disposed of its 50% stake in Anahita Hotel Limited previously classified as non-current asset held for sale for a total consideration of Rs.962.4m net of taxes, resulting in a profit of Rs.396.2m for the Company and Rs.304.4m for the Group.

41. CONTINGENT LIABILITIES


Bank Guarantees 417,688 646,777 - 322,764

Contingencies 259,924 275,576 55,600 55,600

THE COMPANY

(a) The Company has received income tax assessments totalling Rs 55.6m in respect of the years of assessment 2006/2007, 2007/2008 and 2009/2010. It has filed an objection to the assessment in accordance with the provisions of the Income Tax Act.

The Company is of the opinion that the tax liability will not crystallise in the foreseeable future since it has strong support based on legal and tax advice.

41. CONTINGENT LIABILITIES (continued)

THE GROUP

In addition to the above claim, the Group has also the following additional contingent liabilities:

(a) Tax assessments have been issued by the Tanzania Revenue Authority (TRA) in connection with the corporation tax filed and paid by TPC Limited for the financial years 2004 to 2013. In these assessments, some expenses incurred in the production of income have been disallowed for tax purposes by the TRA, resulting into a significant potential liability of T Sh. 10.512 billion (Rs.189m) for the company. TPC Limited has submitted a notice of objection to the TRA assessment as per the requirements of the laws of the country. TPC Limited is in the process of reaching an agreement to conclude on the assessment with TRA for the period 2004-2010. It is anticipated that there will be no additional tax liability for these years other than what has been recognised in the statement of comprehensive Income for 2015 as per note 22.

In addition, TPC Limited is confident that the forthcoming settlement in relation to the period 2011-2013 will not result in a material liability but is unable to determine at this time how much,if any liability would arise as part of such settlement agreement with the TRA.

(b) In May 2013, Compagnie Usiniere de Mon Loisir Ltee, a subsidiary company, received a claim for compensation from the Central Electricity Board for breach of contract further to the closure of Mon Loisir sugar factory. The claim amounts to Rs.270m and is disputed by the company.

(c) The Mauritius Revenue Authority (MRA) has a claim against Anahita Estates Ltd regarding taxation unpaid on deemed interest on the long term loan receivable from its subsidiary, Anahita Golf Ltd, for the years 2007 to 2010 to which Anahita Estates Ltd is not agreeable. The claim, including interest and penalty charges, amounts to Rs.20,403,833 and is disputed by the company.

(d) At June 30, 2015, the Group had contingent liabilities in respect of bank and other guarantees and other matters arising in the ordinary course of business from which it is anticipated that no material liabilities would crystalise. In the ordinary course of business, the Group has letters of credit amounting to Rs.165m (2014: Rs.90.4m) to third parties in respect of Alteo Energy Ltd and Consolidated Energy Ltd.

42. BUSINESS COMBINATIONS

Commercial & Industrial Enterprise Ltd On June 1, 2015 Alteo Limited has amalgamated with Commercial & Industrial Enterprise Limited in

accordance with and pursuant to the provisions of the Companies Act 2001. The continuing company is Alteo Limited;

The assets and liabilities of Commercial & Industrial Enterprise Ltd have been accounted in the books of Alteo Ltd at fair value in accordance with IFRS 3 Business Combinations.

Rs’000 Investment in associated companies 14,771 Investment in available-for-sale financial assets 3,593 Trade and other receivables 2,118 Cash in hand and at bank 2,088 Trade and other payables (238) Borrowings (14,188) Fair value of net assets amalgamated 8,144 Less: Cost of investment (8,250) (106)






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43. RELATED PARTY TRANSACTIONS

(a) THE GROUP Sale/(Purchase) Investment Management fees Loans of goods income/ receivable/ at call Amount Amount and services (expense) (payable) (from)/to owed to due from 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Joint Ventures in which the Company is a venturer 35,163 52,638 12 (152) - - - 6,120 3,051 32,241 68,036 24,947

Companies with common Directors (55,249) (85,519) 2,191 671 (32,793) (40,411) (67,650) - 8,923 747 2,855 3,066

Major Shareholders - - - - - - - - 68,622 68,622 - -

Total (20,086) (32,881) 2,203 519 (32,793) (40,411) (67,650) 6,120 80,596 101,610 70,891 28,013

The above transactions have been made at arms’ length, on normal commercial terms and in the normal course of business.

Outstanding balances at the year-end are secured, interest free and settlement occurs in cash. There has been no guarantees provided or received for any related party receivables or payables. For the year ended 2015, the group has not recorded any impairment of receivables relating to amounts owed by related parties (2014: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

(b) THE COMPANY Sale/(Purchase) Investment Management fees Loans of goods income/ receivable/ at call Amount Amount and services (expense) (payable) (from)/to owed to due from 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Subsidiaries 139,919 127,002 (39,893) (41,233) 56,598 78,726 3,046 (44,199) 697,786 696,861 840,961 837,733 Associates - - - - - - - - - - 2,494 406 Related company - - - - (32,793) (40,411) 67,650 (75) - - - - Joint ventures - - (12) (152) - - - (6,120) - - 68,036 16,562 Companies with

common Directors (30,346) (21,411) 2,192 41 - - - (2) - - 2,855 2,827 Major

Shareholders - - (74) (377) - - - - 68,622 68,622 - -

Total 109,573 105,591 (37,787) (41,721) 23,805 38,315 70,696 (50,396) 766,408 765,483 914,346 857,528

The above transactions have been made at arms’ length, on normal commercial terms and in the normal course of business.

Outstanding balances at the year-end are secured, interest free and settlement occurs in cash. There has been no guarantees provided or received for any related party receivables or payables. For the year ended 2015, the company has not recorded any impairment of receivables relating to amounts owed by related parties (2014:Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

43. RELATED PARTY TRANSACTIONS (continued)

(c) Key management personnel compensation


Salaries and short-term employee benefits 47,606 53,316 28,965 35,750 Post-employment benefits 688 635 - -

44. THREE YEAR FINANCIAL SUMMARY

2015 2014 2013 THE GROUP Rs’000 Rs’000 Rs’000

(a) Results Turnover 6,735,828 5,931,826 6,066,307

Share of results of joint ventures (5,923) 52,708 102,133 Share of results of associates 26,582 2,763 2,182 Profit before taxation 1,605,073 954,346 1,830,592 Income tax expense (447,504) (385,546) (414,900)

Profit for the year 1,157,569 568,800 1,415,692 Other comprehensive income for the year, net of tax (175,114) 1,196,100 1,209,356

Total comprehensive income for the year 982,455 1,764,900 2,625,048

Profit attributable to: - Owners of the parent 689,980 63,059 837,229 - Non-Controlling interests 467,589 505,741 578,463

1,157,569 568,800 1,415,692

Total comprehensive income attributable to: - Owners of the parent 565,173 1,309,828 2,054,643 - Non-Controlling interests 417,282 455,072 570,405

982,455 1,764,900 2,625,048

Earnings per share (Rs.) 2.17 0.20 2.63






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44. THREE YEAR FINANCIAL SUMMARY (continued)

(a) Statement of financial position Restated Restated 2015 2014 2013 THE GROUP Rs’000 Rs’000 Rs’000

ASSETS Non-current assets 21,398,878 21,381,403 20,833,040 Current assets 4,681,121 4,539,383 4,466,791 Non-current assets classified as held for sale 408,945 1,014,154 171,249

Total assets 26,488,944 26,934,940 25,471,080

EQUITY AND LIABILITIES Capital and reserves 16,994,387 16,742,506 15,794,659 Non-Controlling interests 2,475,006 2,373,020 2,327,504

Total equity 19,469,393 19,115,526 18,122,163

LIABILITIES Non-current liabilities 3,540,870 4,126,360 4,317,561 Current liabilities 3,478,681 3,693,054 3,031,356

Total liabilities 7,019,551 7,819,414 7,348,917

Total equity and liabilities 26,488,944 26,934,940 25,471,080

45. EFFECT OF PRIOR YEAR CHANGES

(a) Additional tax claimed by Mauritius Revenue Authority (MRA)

Following a reassessment of income tax computations for the years of assessments 2007/2008 and 2008/2009, one of the Company’s subsidiary, namely Alteo Energy Ltd, has been assessed to additional income tax of Rs.13,190,952 including interest. An amount of Rs.4,456,424 was paid under protest on objection and the balance was due for payment by April 12, 2012 and August 8, 2012. The remaining balance was settled to the MRA in April 2015.

45. EFFECT OF PRIOR YEAR CHANGES (continued)

In this respect, the opening statement of financial position of the earliest comparative period presented (July 1, 2013) has been restated for the Group.

Impact on financial statements Net current Trade and Non- tax other Owner’s controlling asset receivables interest interest Rs’000 Rs’000 Rs’000 Rs’000

Balance as reported at July 1, 2013 - as previously stated 13,892 607,779 15,803,246 2,332,108 - Additional tax claimed by MRA (8,735) (4,456) (8,587) (4,604)

- as restated 5,157 603,323 15,794,659 2,327,504

Balance as reported at June 30, 2014 - as previously stated 41,095 909,323 16,807,960 2,377,624 - Effects of Additional tax claimed by MRA on 2013 figures (8,735) (4,456) (8,587) (4,604)

- as restated 32,360 904,867 16,799,373 2,373,020

(b) Effect of fair value change in prior years

The prior year change in the fair value of investments in subsidiary companies results from a review of the valuation inputs used upon first time adoption of the fair value accounting policy by the company. Comparative figures have been amended accordingly.

The effect of the restatement of the investment in a subsidiary on the Company’s statement of financial position is as shown below:

Impact on financial statements Investment in subsidiary Owners’ companies interest Rs’000 Rs’000

Balance as reported at July 1, 2013 - as previously stated 8,420,643 22,252,642 - effect of fair value change in prior years (470,698) (470,698)

- as restated 7,949,945 21,781,944

Balance as reported at June 30, 2014 - as previously stated 8,155,669 23,189,331 - effect of fair value change in prior years (470,698) (470,698)

- as restated 7,684,971 22,718,633






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46. SEGMENT INFORMATION

The accounting policies of the operating segments are same as those described in the summary of significant accounting policies. Consolidation adjustments transactions represent elimination of intra-group which are entered into under the normal commercial terms and conditions that would be available to unrelated parties.

Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, cash and cash equivalents and receivables and exclude in joint ventures investments, investments in associates, and investment in other financial assets.

The Group is organised into the following main business segments:-

Agri & Sugars Energy Property & Hospitality Others Adjustments Total

Mauritius Tanzania Mauritius Mauritius Mauritius

2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Segment revenue 1,778,038 2,164,769 2,547,289 2,307,403 1,125,829 1,121,850 1,330,436 222,824 201,657 430,361 (119,600) (188,094) 6,863,649 6,059,113 Inter-segment revenue - - (127,821) (127,287) - - - - - - - - (127,821) (127,287)

Revenue from external customers 1,778,038 2,164,769 2,419,468 2,180,116 1,125,829 1,121,850 1,330,436 222,824 201,657 430,361 (119,600) (188,094) 6,735,828 5,931,826

Segment (loss)/profit (82,848) 37,489 1,172,010 1,082,560 103,278 188,369 114,370 (44,594) 93,021 93,761 80,582 25,938 1,480,413 1,383,523 Finance costs - net (183,022) (202,035) 9,942 2,510 (13,271) (16,806) (47,197) (70,559) (20,898) (22,217) - - (254,446) (309,107) Share of results of

associates net of tax - - - - - - - - 26,582 2,763 - - 26,582 2,763 Share of results of joint ventures - - - - - - - - (5,923) 52,708 - - (5,923) 52,708 Profit/(loss) on disposal of assets and investment - - - - - - - - 358,447 (175,541) - - 358,447 (175,541)

Profit/(Loss) before tax (265,870) (164,546) 1,181,952 1,085,070 90,007 171,563 67,173 (115,153) 451,229 (48,526) 80,582 25,938 1,605,073 954,346 Income tax expense 48,727 27,983 (471,375) (376,214) (14,125) (25,992) 54 66 (10,785) (11,389) - - (447,504) (385,546)

Profit/(Loss) for the year (217,143) (136,563) 710,577 708,856 75,882 145,571 67,227 (115,087) 440,444 (59,915) 80,582 25,938 1,157,569 568,800






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46. SEGMENT INFORMATION (continued)

Agri & Sugars Energy Property & Hospitality Others Total

Mauritius Tanzania Mauritius Mauritius Mauritius

2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Segment assets 28,929,324 29,735,243 3,777,365 3,706,027 1,009,736 1,447,906 1,677,698 2,071,609 7,159,979 7,330,964 42,554,102 44,291,749 Adjustments - - - - - - - - - - (16,125,388) (18,044,404) Associates - - - - - - - - 58,209 60,854 58,209 60,854 Joint ventures - - - - - - - - 2,021 616,706 2,021 616,706

26,488,944 26,924,905

Segment liabilities 3,920,843 4,490,730 1,394,916 1,229,536 471,056 501,768 643,565 1,164,378 589,171 366,100 7,019,551 7,752,512 Capital expenditure 268,466 420,916 219,806 271,413 33,904 31,633 - 4,501 13,288 10,449 535,464 738,912

Depreciation 195,617 203,961 151,114 121,791 87,623 88,822 - 1,171 25,278 44,534 459,632 460,279

Geographical information

The Group’s three business segments are managed locally and operate in the following main geographical areas:

Sales Total assets Capital expenditure 2015 2014 2015 2014 2015 2014

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Mauritius 4,316,360 3,751,710 22,711,579 23,218,878 315,658 467,499 Tanzania 2,419,468 2,180,116 3,777,365 3,706,027 219,806 271,413

6,735,828 5,931,826 26,488,944 26,924,905 535,464 738,912

Sales revenue is based on the country in which the customer is located. Total assets and capital expenditure are shown by the geographical area in which assets are located.





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NOTES


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178

Alteo Limited - ANNUAL REPORT 2015 Alteo Limited - ANNUAL REPORT 2015

page

179PROXYFORM

I/We,

of

being a member/members of Alteo Limited (“the Company”), do hereby appoint:

of

or failing him/her,

of

or failing him/her the Chairman of the Meeting, as my/our proxy to represent me/us and vote for me/us and on my/our behalf at the Annual Meeting of the Shareholders of the Company to be held at Hennessy Park Hotel, Ebony Conference Room, 65 Ebène Cybercity, 72201 Ebène on Friday, December 18, 2015 at 14.00 hours and at any adjournment thereof.

I/We direct my/our proxy to vote in the following manner (please vote with a tick):

ORDINARY RESOLUTIONS FOR AGAINST ABSTAIN1. To consider the Annual Report 2015 of the Company.2. To receive the report of BDO & Co, the auditors of the Company.

3. To consider and adopt the Group’s and Company’s audited financial statements for the year ended June 30, 2015.

4.

To elect, on the recommendation of the Corporate Governance, Nomination, Remuneration & Ethics Committee, as Director of the Company to hold office until the next Annual Meeting, Mr. Fabien de Marassé Enouf who has been nominated by the Board of Directors on June 24, 2015 and who offers himself for election.

5-14. To re-elect, on the recommendation of the Corporate Governance, Nomination, Remuneration & Ethics Committee, as Directors of the Company to hold office until the next Annual Meeting, the following persons who offer themselves for re-election (as separate resolutions):5. Mr. P. Arnaud Dalais6. Mr. Jean-Claude Béga7. Mr. Jan Boullé8. Mr. Jean-Pierre Dalais9. Mr. Amédée Darga10. Mr. Jérôme De Chasteauneuf11. Mr. Jean de Fondaumière12. Mr. Patrick de L. d’Arifat13. Mr. Arnaud Lagesse14. Mr. Thierry Lagesse

15. To re-appoint BDO & Co as auditors for the ensuing year and to authorise the Board of Directors to fix their remuneration.


Signed this day of 2015.

Signature(s)

Notes:1 Any member of the Company entitled to attend and vote at this meeting may appoint a proxy of his/her own choice to attend and vote on his/her behalf.

A proxy need not be a member of the Company.2 If the instrument appointing the proxy is returned without an indication as to how the proxy shall vote on any particular resolution, the proxy will exercise

his/her discretion as to whether, and if so, how he/she votes.3 The instrument appointing a proxy or any general power of attorney, duly signed, shall be deposited at the Share Registry and Transfer Office of the

Company, MCB Registry & Securities Ltd, 2nd Floor, MCB Centre, 9-11, Sir William Newton Street, 11328 Port-Louis by Thursday, December 17, 2015 at 14.00 hours and in default, the instrument of proxy shall not be treated as valid.


POSTALVOTEI/We, ………………………………………………………………………………………………………............................……….

of being a member/members

of Alteo Limited (“the Company”), do hereby cast my/our vote, by virtue of Clause 18.10 of the Constitution of the Company for the Annual Meeting of the Shareholders of the Company to be held at Hennessy Park Hotel, Ebony Conference Room, 65 Ebène Cybercity, 72201 Ebène on Friday, December 18, 2015 at 14.00 hours and at any adjournment thereof.

I/We direct my/our proxy to vote in the following manner (please vote with a tick):

ORDINARY RESOLUTIONS FOR AgAINST AbSTAIN1. To consider the Annual Report 2015 of the Company.2. To receive the report of BDO & Co, the auditors of the Company.

3. To consider and adopt the Group’s and Company’s audited financial statements for the year ended June 30, 2015.

4.

To elect, on the recommendation of the Corporate Governance, Nomination, Remuneration & Ethics Committee, as Director of the Company to hold office until the next Annual Meeting, Mr. Fabien de Marassé Enouf who has been nominated by the Board of Directors on June 24, 2015 and who offers himself for election.

5-14. To re-elect, on the recommendation of the Corporate Governance, Nomination, Remuneration & Ethics Committee, as Directors of the Company to hold office until the next Annual Meeting, the following persons who offer themselves for re-election (as separate resolutions):5. Mr. P. Arnaud Dalais6. Mr. Jean-Claude Béga7. Mr. Jan Boullé8. Mr. Jean-Pierre Dalais9. Mr. Amédée Darga10. Mr. Jérôme De Chasteauneuf11. Mr. Jean de Fondaumière12. Mr. Patrick de L. d’Arifat13. Mr. Arnaud Lagesse14. Mr. Thierry Lagesse

15. To re-appoint BDO & Co as auditors for the ensuing year and to authorise the Board of Directors to fix their remuneration.


Signed this day of 2015.

Signature(s)

Notes:The duly signed postal vote should reach the Share Registry and Transfer Office of the Company, MCB Registry & Securities Ltd, 2nd Floor, MCB Centre, 9-11, Sir William Newton Street, 11328 Port-Louis forty-eight (48) hours before the start of the meeting and in default, the postal vote shall not be treated as valid.

Alteo LimitedRegistered Office: Vivéa Business Park | 81406 Saint Pierre | MauritiusTel: (230) 402 90 50 | Fax: (230) 432 07 29

www.alteogroup.com

INVESTINGAND

ENGAGINGANNUAL REPORT 2015

investing and engaging

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