ubp annual report 13

8/10/2019 UBP Annual Report 13

1/99ANNUAL REPORT 2013


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3/99UBP GROUP |ANNUAL REPORT 2013

CONTENTS

03 Notice of Annual Meeting to Shareholders

04 Management and Administration

05 Board of Directors and Board Committees

06 Directors and Senior Officers Profiles

11 Group Shareholding Structure

12 Financial Highlights and Ratios

14 Value Added Statement

15 Chairmans Report

18 Chief Executive Officers Report

21 Corporate Governance Report

32 Corporate Social Responsibility (CSR) Report

33 Statement of Directors Responsibilities

34 Other Statutory Disclosures

39 Company Secretarys Certificate

41 Independent Auditors Report to the Members

42 Statements of Financial Position

43 Statements of Comprehensive Income

44 Statements of Changes in Equity

45 Statements of Cash Flows

46 Notes to the Financial Statements

93 Proxy Form

Dear Shareholder,

The Board of Directors is pleased to present to you the AnnualReport of The United Basalt Products Ltd (UBP) for the

year ended June 30, 2013, the contents of which are listedhereafter.

This report was approved by the Board of Directors onSeptember 26, 2013.

Marc Freismuth Jean Michel GiraudChairman Chief Executive Officer



1. To consider the Annual Report 2013 of the Company.

2. To receive the report of Messrs Ernst & Young, the Auditors ofthe Company.

3. To consider and adopt the Companys and the Groups AuditedFinancial Statements for the year ended June 30, 2013.

4. To re-elect as Director of the Company, Mr E. Jean Mamet, aged70, who offers himself for re-election upon recommendationfrom the Corporate Governance Committee, to hold office

until the next Annual Meeting in accordance with Section138(6) of the Companies Act 2001.

5-13 To re-elect as Directors of the Company and by way of separateresolutions, the following persons who offer themselves for re-election upon recommendation from the Corporate GovernanceCommittee, to hold office until the next Annual Meeting:

5. Mr Marc Freismuth

6. Mr Francois Boull

7. Mr Jean Michel Giraud

8. Mr Jol Harel

9. Mr Laurent de la Hogue

10. Mr Arnaud Lagesse

11. Mr Stephane Lagesse

12. Mr Thierry Lagesse

13. Mr Jean Claude Maingard

14. To re-appoint Messrs Ernst & Young as Auditors of the Companyfor the year ending June 30, 2014 and to authorise the Board ofDirectors to fix their remuneration.

By order of the Board

Christophe QuevauvilliersCompany Secretary

September 26, 2013

A shareholder of the Company entitledto attend and vote at this meeting mayappoint a proxy (whether a shareholderor not) to attend and vote on his/herbehalf. The instrument appointing a proxyor any general power of attorney shall bedeposited at the registered office of theCompany, Trianon, Quatre Bornes, notless than twenty-four hours before the timefixed for the holding of the meeting or else

the instrument of proxy shall not be treatedas valid.

A proxy form is included for this purpose atthe end of the Annual Report.

For the purpose of this Annual Meeting,the Directors have resolved, in compliancewith Section 120(3) of the CompaniesAct 2001, that the shareholders who areentitled to receive notice of the meetingand attend such meeting shall be those

shareholders whose names are registeredin the share register of the Company as atNovember 18, 2013.

NOTICE OFANNUALMEETING TOSHAREHOLDERS

Notice is hereby given that the Annual Meeting of Shareholders of

The United Basalt Products Ltd will be held at the registered office

of the Company, Trianon, Quatre Bornes, on Tuesday December 17,

2013 at 15.00 hours to transact the following business in the manner

required for the passing of Ordinary Resolutions:


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MANAGEMENTAND ADMINISTRATION

Jean Michel Giraud Chief Executive Officer

Stephane Ulcoq Deputy CEO and Production Manager

Rmi de Gersigny Project and Business Development Manager

Christophe Quevauvilliers Group Finance Manager and Company Secretary

Denis Lincoln Group Engineering Manager

Caroline Tyack Group Communication and Marketing Manager

Clivy Coutet Chan Chuen Group Human Resources Manager

Fabien Harel Sales Manager

Dhuenesh Rambarassah Financial Controller

Dwight Hamilton Group IT Manager

Jocelyne LArrogant Group Procurement and Logistics Manager

Francis Koenig Quarry and Field Manager

Bernard Lagesse Manager Marbella Division

Raoul Maurel Manager PPB Division

Edley Michaud Personnel Manager

Jean Philippe Henry General Manager Espace Maison LteChristopher Blackburn General Manager Compagnie de Gros Cailloux Lte

Jean Claude Bellepeau General Manager Dry Mixed Products Ltd

LEGAL FORMThe United Basalt Products Ltd is a public company incorporated in Mauritius in July 1953and listed on the Official Market of the Stock Exchange of Mauritius since 1989.

MANAGEMENT TEAM

HEAD OFFICETrianon, Quatre Bornes MauritiusTel. : (230) 454 1964Fax : (230) 454 8043Email : [email protected] : www.ubpgroup.com

REGISTERED OFFICETrianon, Quatre Bornes Mauritius

COMPANY SECRETARYChristophe Quevauvilliers F.C.C.A.

AUDITORSErnst & Young

BANKERSAfrAsia Bank LtdBarclays Bank Mauritius LtdHSBC (Mauritius) LtdState Bank of Mauritius LtdThe Mauritius Commercial Bank Ltd

UBP GROUP |ANNUAL REPORT 20134



BOARDOF DIRECTORSAND BOARDCOMMITTEES

BOARD OF DIRECTORS

Marc Freismuth - ChairmanFranois Boull

Jean Michel Giraud Chief Executive OfficerJol HarelLaurent de la HogueArnaud LagesseStephane LagesseThierry Lagesse

Jean Claude Maingard

E. Jean Mamet

BOARD COMMITTEES

CORPORATE GOVERNANCE COMMITTEE

Jol Harel - ChairmanMarc FreismuthThierry Lagesse

AUDIT COMMITTEE

E. Jean Mamet - ChairmanFranois Boull

Jol Harel

COMPANY SECRETARY

Christophe Quevauvilliers F.C.C.A.


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6. Arnaud LagesseMr Arnaud Lagesse was appointed alternate Director to Mr J. Cyril Lagesse in March1994 and became full-fledged Director of the Company on August 25, 2011. Born in1968, Mr Lagesse holds a Matrise de Gestion from the University of Aix-MarseilleIII, France and is a graduate of the Institut Suprieur de Gestion, France. He alsocompleted an Executive Education Program at INSEAD Fontainebleau, France and

an Advanced Management Program (AMP180) at Harvard Business School, Boston,USA. Mr Lagesse joined GML in 1995 as Finance and Administrative Directorbefore becoming its Chief Executive Officer in August 2005. He also participatedin the National Corporate Governance Committee as a member of the Board. Heis a member of the Board of several of the countrys major companies and is theChairman of Alteo Limited, Ireland Blyth Limited, IOREC Ltd, Lux* Island Resorts Ltd,AfrAsia Bank Limited, United Investments Ltd inter alia. Mr Lagesse is an ex-Presidentof the Mauritius Chamber of Agriculture, the Mauritius Sugar Producers Associationand the Sugar Industry Pension Fund. He is also the Chairman of GML Fondation

Joseph Lagesse since July 2012.

7. Stephane Lagesse

Mr Stephane Lagesse was appointedDirector of the Company inNovember 2011. Born in 1959, MrLagesse holds a degree in Gestiondes Entreprises from the University

of Parix IX Dauphine. He joined thePalmar Group in 1983 where he iscurrently the Managing Director. MrLagesse participated in the settingup of two garment manufacturingcompanies in Mauritius.

8. Thierry Lagesse

Mr Thierry Lagesse was appointed Director of the Company in December 1989 and subse-quently Chairman of the Board in December 2002 until August 13, 2013 when he decided tostep down from the Chairmanship of the Company. Born in 1953, Mr Lagesse holds a Matrisedes Sciences de Gestion from the University of Paris Dauphine. He was the Non-ExecutiveChairman of GML until recently and is Director of several other companies listed on the StockExchange of Mauritius. He is also the Executive Chairman and founder of Palmar Group ofCompanies and the Executive Chairman of Parabole Runion SA. Mr Lagesse is a member ofthe Companys Corporate Governance, Nomination and Remuneration Committee.

10. E. Jean Mamet

Mr E.Jean Mamet was appointedDirector of the Company in November2004 and is currently the Chairmanof the Audit Committee. Born in1943, Mr Mamet is a CertifiedAccountant and has been in practicefor forty-three years involved inauditing and consulting services up to2003 when he retired as ManagingPartner of Ernst & Young Mauritius.He is currently the Vice Chairman ofThe Mauritius Commercial Bank Ltd.

9. Jean Claude Maingard

Mr Jean Claude Maingard was

appointed Director of the Companyin November 2007 in replacement ofMr Jean Paul Adam. Born in 1946,Mr Maingard holds a Diploma inQuantity Surveying from the Universityof Cape Town and is a member of theRoyal Institute of Chartered Surveyors(M.R.I.C.S.). In 1972 he joined Gen-eral Construction Co.Ltd, a well-knownfirm of building and civil engineeringcontractors operating in Mauritius. Hewas appointed Executive Director in

1986 and was Managing Director from1998 to 2006. Mr Maingard is sincethe Chairman of the company.



Stphane Ulcoq

Mr Stphane Ulcoq, born in 1977, holds a DiplmedIngnieur en Mcanique from the Institut National desSciences Appliques (INSA) of Rouen, France and an MBAInternational Paris from the Paris Dauphine & La SorbonneUniversities. He also holds a Certificate in Global Management

awarded by INSEAD after having completed 3 ExecutiveEducation Programs at INSEAD Fontainebleau, France andINSEAD Singapore in 2011 and 2012. Mr Ulcoq joined theCompany as Assistant Works Manager in year 2000 and waspromoted Workshop Manager in 2007. In January 2012,Mr Ulcoq was promoted to the post of Production Managerwhere he is since in charge of all production units, both inMauritius and overseas. In addition to his responsibilities asProduction Manager, Mr Ulcoq was appointed Deputy CEOby the Board of Directors in December 2012.

Rmi de Gersigny

Mr Rmi de Gersigny, born in 1953, joined the Companyas supervisor in 1978 and was promoted to the post ofPlant Manager in 1981. In the early nineties, he wasappointed Area Manager of the western and central regionswhere he was in charge of three crushing plants. In 2004,Mr de Gersigny was promoted to the post of Operations andProject Manager where he was in charge of all operationalmatters for our plants in Mauritius and overseas. In January2012, he was promoted to the post of Project and BusinessDevelopment Manager.

Christophe QuevauvilliersMr Christophe Quevauvilliers, born in 1968, is a Fellowmember of the Association of Chartered CertifiedAccountants. He joined the Company as Finance Managerand Company Secretary in May 2002 after having spentten years in public practice at De Chazal Du Me and four

years in the industrial sector. Mr Quevauvilliers sits on theBoard of several companies within the Group.

Denis Lincoln

Mr Denis Lincoln, born in 1963, holds a N.D. in Clay

Technology / Mechanical Engineering from the NatalTechnikon, (SA), a Diploma in Business Management (UK)and an MBA from Surrey University (UK). He joined theCompany as Works Manager (Machinery Dept.) in 1991,after having spent six years in the sugar and engineeringindustries. In 2004, Mr Lincoln was promoted to the postof Area Manager of the central and western regions wherehe was in charge of four production units. In January 2012,Mr Lincoln was promoted to the post of Group EngineeringManager where he is since responsible for all engineeringservices, supplies and projects, both in Mauritius andoverseas.

Caroline Tyack

Mrs Caroline Tyack, born in 1979, holds a DiplmedEtudes Approfondies (DEA) en Veilles et IntelligenceComptitive from the Universit Paul Valry, Montpellier,France. She joined the Company as CommunicationManager in January 2005 after having followed a crash

course in Administration et Gestion du Personnel at CNAM(Conservatoire National des Arts et Mtiers) at Montpellier,France. In November 2006, Mrs Tyack was promoted tothe post of Group Communication and Marketing Managerwhere she is since responsible for all communicationand marketing matters relevant to the Group. She is alsoresponsible for developing the CSR strategies of the Group.

Clivy Coutet Chan Chuen

Mrs Clivy Coutet Chan Chuen, born in 1970, holds anMsc in Human Resources Management from the Universityof Surrey. She is also an affiliate member of CIPD and anMQA trainer. She joined the Company as Group HumanResources Manager in February 2009 after having servedIframac Company Limited, a company forming part of theBritish American Investment Group, for twenty three years asDivisional Human Resources Manager and Assistant Vice-President Human Resources.

Fabien Harel

Mr Fabien Harel, born in 1981, holds a Maitrise en ScienceEconomique et Sociale from the University of Toulouse 1and an MBA International de Paris from the Paris Dauphine

& La Sorbonne Universities. He joined the Group in August2005 as Shop Manager of Espace Maison Lte. In 2009he moved to UBP as Property Development Manager until

July 2011 when he was appointed Area Manager of thenorthern region in charge of two crushing plants and onesales dpt. In 2012 he was promoted to the post of SalesManager where he is since responsible for the sales strategyand customer care of the core business activities whilst stillbeing in charge of all properties within the Group.

Dhuenesh Rambarassah

Mr Dhuenesh Rambarassah, born in 1976, is a Fellowmember of the Association of Chartered CertifiedAccountants and holder of an MBA with a specialisationin strategic planning from Edinburg Business School ofScotland. He joined the Company as Financial Accountantin February 2006 after having spent more than eight yearssuccessively in the Audit and Assurance department of Ernst& Young and De Chazal Du Me where he was involved inthe audit of several of the major companies in Mauritius.In July 2013, Mr Rambarassah was designated FinancialController of the majority of companies within the Group.

DIRECTORS AND SENIOR OFFICERS PROFILES (Contd)

SENIOR OFFICERS



Dwight Hamilton

Mr Dwight Hamilton, born in 1974, holds a ProfessionalGraduate Diploma in Information Technology (NationalCouncil for Vocational Qualification, NCVQ). He joinedthe Company as Systems Coordinator in year 2004 wherehe was responsible for the implementation of the ERP for

the Group. In 2011, he was promoted to the post of ITManager for the Group.

Jocelyne LArrogant

Ms Jocelyne LArrogant, born in 1969, holds a diploma inManagement (Financial Management) from the University ofMauritius. She joined the Company as Accounts Officer in1989 and was given the responsibility of the Import & Logisticdepartment of Espace Maison Lte and the Procurementdepartment of the UBP Group in 2002. Ms LArrogant waspromoted to the post of Group Logistic & Procurement Managerin 2011.

Francis Koenig

Mr Francis Koenig, born in 1957, joined the Company in1981 and was in charge of Stone Utilities Ltd. In 1981, hewas promoted to the post of Plant Manager for Terre Rouge,Roche Bois and Coromandel plants. After two years at thisposition, he was promoted to the post of Area Managerfor the northern region until 1991 where he moved to thesouthern region. In February 2012, he was promoted tothe post of Quarry and Field Manager where he is now incharge of our Land Reclamation Unit involved in quarrying

operations and the supply of raw-materials to the majority ofour production sites.

Bernard Lagesse

Mr Bernard Lagesse, born in 1951, joined the Company in1984 as Maintenance Officer in charge of all the buildingsof the Company. In 1985, he was promoted to the postof Manager of Marbella Ltd, a company engaged in theimport and sale of marble and ceramic tiles. In July 1995,Mr Lagesse was appointed Manager of UBP - MarbellaDivision where he is since responsible of all the production of

precast products, concrete pipes and of our marble factory.

Raoul Maurel

Mr Raoul Maurel, born in 1948, holds a Diploma in CivilEngineering from the Natal Technikon (S.A) and is a memberof the S.A Institute of Civil Engineers. He also holds a Diplomain Business Management and has been an affiliate member ofthe S.A Institute of Management. During his career he workedin civil engineering consulting firms both in South Africa andMauritius, where he joined Sigma Ove Arup in 1974. In 1982he joined Pre-mixed Concrete Ltd as Manager before leavingfor South Africa where he joined the LTA group, as manager

of Steeledale FBE, launching the Natal branch specializingin the manufacture of precast beam decking systems. Back inMauritius in 1989, he created his own company selling precastbeam decking systems in close collaboration with UBP whichhe consequently joined as Manager of the PPB Division since itsinception in 1990. Mr Maurel is presently director of the GreenBuilding Council of Mauritius (GBCM), a non-profit organization

aiming for the promotion of sustainable building technologies.

Edley Michaud

Mr Edley Michaud, born in 1951, holds a Certificate inPersonnel Management and Industrial Relations, a Diplomain Occupational Safety & Health from the National Collegeof Industrial Hygiene (Australia) and is a Fellow of the BritishSafety Council. He is also a registered Safety Officer under theOccupational Safety & Health Act. He joined the Companyas Production Supervisor in 1973 and became PersonnelManager in July 1987. Mr Michaud is closely involved in all

safety and health regulations within the Group.

Jean Philippe Henry

Mr Jean Philippe Henry, born in 1973, holds a NationalDiploma in Management from the Natal Technikon Institute,South-Africa and is a graduate of the Chartered Institute ofSecretaries (CIS). Between 1998 and 2002, Mr Henry wasemployed successively at Price Waterhouse Coopers Ltd,World Knits Ltd and Naade Resorts Ltd. He joined EspaceMaison Lte as Assistant Shop Manager in 2003 and waspromoted Purchasing Manager in 2005 and thereafterGeneral Manager in 2009.

Christopher BlackburnMr Christopher Blackburn, born in 1969, holds a Brevet deTechnicien Agricole with a specialisation in Jardin EspaceVert (France) and a Diploma in Marketing from Australia.He is actually completing a Bcom Management & Marketingfrom Curtin University, Australia. Mr Blackburn worked asGeneral Manager of the Landscaping & Nursery departmentat Mdine Ltd before joining the Group as General Managerof Compagnie de Gros Cailloux Lte in May 2012.

Jean Claude BellepeauMr Jean Claude Bellepeau, born in 1963, holds a DiplmedIngnieur Chimiste from EHICS, Strasbourg, France. Afterhaving spent 10 years in the textile and industrial chemicals inMauritius, he joined the Lafarge Group to launch the cementterminal in Mayotte. He then joined Pre-mixed Concrete Ltdas Operations Manager in 2003 and was promoted GeneralManager of Pre-mixed Concrete Ltd and Dry Mixed ProductsLtd in 2008. In 2011, further to the reorganisation of the twocompanies, Mr Bellepeau directed the integration of Dry MixedProducts Ltd into the UBP Group and is henceforth the GeneralManager of the company.


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GROUPSHAREHOLDING

STRUCTURE

100% Espace Maison Lte

100% Compagnie de Gros Cailloux Lte

100% Socit dinvestissement Rodriguais

75.9% Welcome Industries Ltd

100% UBP International Ltd100% UBP Madagascar

77% United Granite Product (Pvt) Ltd

100% DHK Metal Crusher (Pvt) Ltd

100% Sheffield Trading (Pvt) Ltd

76.5% Ste Marie Crushing Plant Ltd

100% Socit des Petits Cailloux

51% Dry Mixed Products Ltd

100% Marbella Ltd

100% Land Reclamation Ltd

100% Stone and Bricks Co. Ltd

100% The Stone Masters Co. Ltd

100% Pricom Ltd

Operational Dormant

* Via UBP International Ltd

THE UNITED BASALT PRODUCT LTD

SUBSIDIARIES

46% Terrarock Ltd

34% Prochimad Mines et Carrires SARL*

49% Pre-mixed Concrete Ltd

25% Sud Concassage Lte

25% Cement Transport Ltd

20% Compagnie Mauricienne DEntreprise Lte

30% Compagnie des Transport Runis

THE UNITED BASALT PRODUCTS LTD

ASSOCIATES

UBP GROUP |ANNUAL REPORT 2013 1



Note: Figures at Net Assets Value Per Share, Shareholders Equity and Earnings Per Share for years 2009 and2010 have been adjusted to reflect the bonus issue of shares dated September 2010.

FINANCIAL HIGHLIGHTSAND RATIOS

Rs

120

100

80

60

40

20

0

2009 2010 2011 2012 2013

64.8

6

70.7

6

72.3

2

107.

84

111.

12

NET ASSETS VALUEPER SHARE

Rs000

3,000.00

2,500.00

2,000.00

1,800.00

1,600.00

1,200.00

1,000.00

800.00

600.00

0

2009 2010 2011 2012 2013

SHAREHOLDERSEQUITY

1,7

1

9,

452

1,8

7

5,

930

1,9

1

7,

283

2,8

5

8,

746

2,9

4

5,

846

Rs

140

120

100

80

60

40

20

0

2009 2010 2011 2012 2013

53

123

135

108

98

SHARE PRICE

Rs

3.00

2.50

2.00

1.50

1.00

0.50

0

2009 2010 2011 2012 2013

2.6

0

2.7

5

2.7

5

2.7

5

3.0

0

DIVIDEND PER SHARE


15/99UBP GROUP |ANNUAL REPORT 2013 1

Statement of Financial Position

THE GROUP

2013 2012Rs 000 Rs 000

Total assets 4,543,137 4,551,084

Interest-bearing loans andborrowings

1,024,227 1,163,812

Borrowings excluding bankoverdrafts

779,201 931,079

Equity attributable to shareholdersof the parent

2,945,846 2,858,746

Rs Rs

Net assets value per share 111.12 107.84

Financial RatiosOperating margin - % 10.50 10.64

Interest cover - times 3.36 3.03

Dividend cover - times 2.02 2.05

Return on equity - % 5.46 5.23

Return on assets - % 3.54 3.29

Debt to equity - times 0.34 0.40

Statement of Comprehensive Income

THE GROUP

2013 2012

Rs 000 Rs 000

Revenue 2,443,424 2,580,449

EBITDA 472,827 468,533

Depreciation and amortisation (216,369) (193,901)

Operating profit 256,458 274,632

Net finance costs (70,694) (76,831)

Share of results of associates 36,092 6,084

Profit before tax 221,856 203,885

Income tax expense (43,685) (32,751)

Profit for the year 178,171 171,134

Non-controlling interests (17,412) (21,508)Profit for the year attributable toequity holders of the parent

160,759 149,626

Rs Rs

Earnings per share

Basic , profit for the year attributableto ordinary equity holders of theparent.

6.06 5.64

Dividend per share 3.00 2.75

Rs10

9

8

7

6

5

4

3

2

1

0

2009 2010 2011 2012 2013

EARNINGS PER SHARE

5.63

8.94 8.94

5.64

6.06

Rs000

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

0

2009 2010 2011 2012 2013

REVENUE



2013 2012Rs 000 Rs 000

Sale of goods and services 2,443,424 2,580,449

Paid to suppliers for materials and services (1,577,253) (1,818,522)

Value added 866,171 761,927

Other operating income 69,973 101,638

Total wealth created 936,144 863,565

Distributed as follows:

Employees

Salaries and other benefits 408,904 365,001

Providers of capital

Dividend 79,530 72,905

Interest paid on borrowings 75,527 84,107

Dividend to non-controlling interests 18,550 24,850

173,607 181,862

Government and parastatal

corporations

Income tax (current and deferred) 43,685 32,751

Environment protection fee 9,660 11,023

Licences and permits 2,690 2,306

56,035 46,080

Reinvested in the Group to

maintain and develop operations

Depreciation, amortisation and impairment 216,369 193,901

Retained profit 81,229 76,721

297,598 270,622

Total wealth distributed and

retained936,144 863,565

VALUE ADDEDSTATEMENT

44 % Employees

6 %

18 % Providers of capital

32 % Reinvested in the group

43 % Employees

5 %

21 % Providers of capital

31 % Reinvested in the group

JUNE 30, 2013

JUNE 30, 2012


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CHAIRMANSREPORT

Dear Shareholder,

As newly-appointed Chairman, I am pleased to present toyou the Annual Report of The United Basalt Products Ltd(UBP) and of the Group for the year ended June 30, 2013and to comment on the achieved performance.

1953 2013 : 60 YEARS OF GROWTHSTRATEGY

This year UBP celebrates its 60th anniversary. The Companywas incorporated in 1953 following the merger of threecompanies and has over the years developed itself to becomean unavoidable component of todays construction industryand one of the major actors of the Mauritian economicscene. As pioneer in its field of activity, the Company has

been since its creation involved in most major infrastructureand building projects of the country and has played animportant role in the derocking of thousands of hectares ofland to the benefit of agriculture. This development has overthe years enabled the Group to extend its activities in theregion with the setting up of crushing plants in Rodrigues,Madagascar and Sri Lanka.

Always innovating, the Group has introduced onto themarket various locally-made concrete-building productssuch as precast slabs, roof tiles, concrete pipes, paving-blocks, concrete kerbs and rustic pavements as well as pre-

mixed concrete and ready-to-use dry mortar in partnershipwith other companies. Since the late nineties, the Grouphas invested massively in appropriate machinery for theproduction of rocksand in anticipation to the Governmentspolicy to cease the extraction of coral sand from the sea,thereby preserving the environment. As from year 2002 andafter having commercialised for many years sanitary wares,marble and ceramic tiles, the Group decided to extend itsactivities through the setting up of Espace Maison storeswhich today offers a wide range of home-building products,tools and decorative components as well as green plantsand garden accessories via four stores located in Trianon,

Tamarin, Forbach and Flacq. In 2004, UBP acquired 100%of Compagnie de Gros Cailloux Lte, a company whoseprincipal activity consists of sugar cane cultivation withinsome 1,000 acres of land situated at Gros Cailloux, PetiteRivire. Since then, a nursery was created in order tosupply the garden sections of Espace Maison stores whilsta landscaping division was set up in 2008. Furthermore,in March 2010, UBP increased its stake from 30% to 51%in Dry Mixed Products Ltd, a company engaged in themanufacture of ready-to-use dry mortar whilst at the sametime increasing its shareholding in Pre-mixed Concrete Ltdfrom 30% to 49%.




These achievements have contributed to the growth of the Group over the years as shown by the figures in the table belowwhich relate to the last ten years:

June 30, 2003 June 30, 2013 Progression

Rs Million Rs Million %

Revenue 900.1 2,443.4 +171.4

Total assets 1,028.8 4,543.1 +341.6

Equity attributable to shareholders of the parent 683.3 2,945.8 +331.1

Rs Rs %

Net Assets Value per share Restated for the number of shares in issue 25.77 111.12 +331.1

Share price Restated for the bonus issue in 2003 and 2010 28.67 98.00 +241.8

Note : Our land and buildings were revalued in 2012.

Such a progress stems from the strategic decisions detailed above and also from more recent decisions such as increasingour proximity to customers via the creation of sales depots and the modernisation of our production units into upgradedand centralised plants.

2012-2013 FINANCIAL PERFORMANCE

During the financial year 2012-2013, the Groups revenue dropped by 5.3% to Rs 2.4 billion. Our core businessrevenue locally was affected by a drop in project sales whilst overseas our performance was below expectations dueto operational problems arising in Sri Lanka. Similarly, the revenue from our retailing operations was down by 3.9%compared to previous year due to the difficult market conditions prevailing in that segment of activities.

Despite this drop in Group revenue and significant operating losses incurred by our retailing and agricultural segments,the Groups profit for the year under review rose by 4.1% to Rs 178.2 million due to an improved performance of our

local core business operations. Our share of results from associate companies likewise increased by Rs 30.0 millionduring the year.

EPS and DPS rose by 7.4% and 9.1% to Rs 6.06 per share and Rs 3.00 per share respectively whilst our share pricedropped from Rs 108.00 at June 30, 2012 to Rs 98.00 at this year end.

The Groups financial position remains strong with an improved debt to equity ratio of 0.34 times whilst the Company isin the process of restructuring its existing debts through a Rs 1 billion Bond Programme with a first tranche of Rs 560.0million due to be completed by the beginning of November.

OUTLOOK

The financial year 2013-2014 will be challenging in many respects given the difficult and uncertain economic conditionsprevailing in the country. However, the Board of Directors is committed to pursue the Groups development plan andimprove on performance through synergies and cost control policies with a special focus on our retailing and agriculturalsegments locally and on our overseas operations in Sri Lanka.

CHAIRMANS REPORT (Contd)


19/99



CHIEF EXECUTIVEOFFICERS REPORT

Dear Shareholder,

I am pleased to report to you on the operational resultsand financial performance of The United Basalt ProductsLtd (UBP) and of the Group for the year ended June 30,2013 and to give you an insight of our present and futuredevelopment projects.

OPERATIONAL REVIEW

Revenue and results from operationsThe Groups revenue for the financial year ended June30, 2013 dropped by 5.3% to Rs 2.4 billion whilstthe Groups operating profit decreased from Rs 274.6

million in 2012 to Rs 256.5 million this year. The Groupscore business sales volumes dropped moderately andwere partly compensated by a slight increase in ouraverage selling price caused by favourable changesin our sales mix. At Company level, the revenue forthe year under review dropped by a slight 1.5% whilstthe operating profit increased by 8.1% from Rs 225.6million in 2012 to Rs 243.9 million this year, therebydenoting an increase from 15.6% to 17.1% of revenue.This increase was attributable mainly to a drop in thecost of production and synergies resulting from theupgrading and centralisation of our core businessproduction plants despite a significant increasein plant depreciation. Our subsidiary companiesWelcome Industries Ltd operating in Rodrigues and SteMarie Crushing Plant Ltd both experienced a drop inactivity level and operating performance due to theabsence of major projects whilst Dry Mixed ProductsLtd experienced a rise of 7.0% in revenue and anincrease of 10.6% in operating profit after accountingfor a major increase in employee benefit liability. Thebusiness prospects for dry mortar locally remain goodwhilst the export market potential is still below our

expectations and needs a significant boost.

In terms of our overseas core business operations, oursubsidiary company in Madagascar experienced asignificant rise of nearly 50.0% in revenue and endedup with an operating profit of Rs 13.1 million, a majorturnaround from 2012 where the operating resultsdenoted a loss of Rs 21.6 million due to adverse tradingconditions and a major stock valuation adjustment ofRs 10.8 million. In Sri Lanka however, our subsidiary

experienced a substantial loss in market share resultingfrom the effects of a three months stop order received in

July 2012 due to administrative reasons. Consequently,our subsidiarys revenue dropped by 72.1% whilstits operating results for the year denoted a loss of Rs9.0 million compared to an operating profit of Rs 4.6million in previous year.

In terms of our retailing operations, the revenue ofEspace Maison Lte for the year under review droppedby 3.9% to Rs 705.9 million whilst the operatingperformance dropped from an operating profit of Rs4.8 million in 2012 to an operating loss of Rs 13.4million this year. This downturn was due to the difficult

and highly competitive conditions prevailing in thismarket segment, a significant drop in project sales, anincrease in operating and marketing expenses, majorstock adjustments, doubtful debts and slow-movingstocks provisioning.

In terms of our agricultural operations, the revenue ofCompagnie de Gros Cailloux Lte was down by 25.0%compared to previous year due to a major drop inour sugar and landscaping revenues. The sugar croptonnage was significantly lower than in 2012 witha total of 1,172 tons of sugar (2012 : 1,704 tons 31.2% drop) whilst the price increased from Rs 16,020per ton in 2012 to Rs 17,364 per ton this year (+8.4%).Consequently, the operating loss increased from Rs10.6 million in 2012 to Rs 27.1 million for the yearunder review which was also attributable to an increasein estate operating and administrative expenses.

Our share of results from associate companies, netof tax, increased significantly from Rs 6.1 million inprevious year to Rs 36.1 million this year due to theimproved performance of Pre-mixed Concrete Ltd which

was positively affected by a reduction in employeebenefit liability and to an exceptional dividend incomereceived by our associate Compagnie MauriciennedEntreprises Lte, a company with a mixed portfolio ofproperties and shares.

Finance income and finance costsThe Groups finance income dropped from Rs 7.3 millionin 2012 to Rs 4.8 million this year whilst at Company levelthe same trend was noted due to lower dividend income



and management fees received from subsidiaries andassociates. In terms of finance costs, an appreciable

drop was noted both at Group and Company levelsdue to the reduction of our borrowings, the slight dropin interest rates and our improved cash flow situationresulting from the lower capital expenditure for the yearunder review compared to previous year.

EPS and DPSThe Groups profit for the year increased from Rs 171.1million in 2012 to Rs 178.2 million this year. Likewise,the Groups profit for the year attributable to equityholders of the parent increased from Rs 149.6 millionto Rs 160.8 million. Consequently, the Groups Earnings

Per Share (EPS) increased from Rs 5.64 in previous yearto Rs 6.06 for the year under review.

On May 14, 2013, an increased Dividend PerShare(DPS) of Rs 3.00 (2012 : Rs 2.75 per share) wasdeclared by the Company in respect of the financial yearended on June 30, 2013 and paid in full on June 25,2013.

STATEMENT OF FINANCIAL POSITION

The Groups financial position improved marginallyduring the year under review. The Groups total assetsremained almost the same at Rs 4.5 billion, totalliabilities dropped by Rs 99.2 million to Rs 1.5 billionwhilst the equity attributable to shareholders of theparent increased by Rs 87.1 million to Rs 2.9 billion.Total borrowings decreased by Rs 139.6 million to justover Rs 1.0 billion whilst there was no new long-termloan contracted during the year. The debt to equityratio improved from 0.40 times in 2012 to 0.34 timesthis year whilst the Net Assets Value (NAV) per shareincreased from Rs 107.84 at June 30, 2012 to Rs

111.12 this year.

During the year under review, the Board of Directorsof the Company decided to consider the setting up ofa five-year Bond Programme for a total amount of Rs1 billion to be issued in several tranches by way of aprivate placement to be listed on the Stock Exchangeof Mauritius (SEM). The rationale behind the BondProgramme is the re-structuring of the Companysexisting debts, including the repayment of the short term

unsecured loans and part of the facilities with variousbanking institutions, to reduce our finance costs and to

raise up funds to finance our future capital expenditureneeds. At the time of writing, our application for listingof the Bonds have just been approved by the ListingExecutive Committee of the SEM and the process for afirst tranche of Rs 560.0 million is due to be completedby the beginning of November.

The Groups total investment in property, plant andequipment for the year under review amounted to Rs150.4 million compared to Rs 368.3 million in 2012and Rs 339.6 million in 2011, and was financed withoutextra borrowings. Besides the normal recurring capital

expenditure aimed at the replacement of existing assets,a major part of the Groups capital expenditure for the

year was spent on new development projects as detailedthereafter.

The other major movements in the Groups Statement ofFinancial Position comprised of an increase of Rs 49.7million in inventories, a decrease of Rs 41.0 million intrade and other receivables, an increase of Rs 15.7million in trade and other payables and an increaseof Rs 20.9 million in employee benefit liability due tothe first-time accounting of a liability by our subsidiaryDry Mixed Products Ltd and to a change in actuarialassumptions in respect of the discount rate principally.

The cash and cash equivalent for the year under reviewdecreased by Rs 7.2 million (2012 : Rs 2.1 millionincrease). Besides our investment in property, plant andequipment, the other major group cash outflows madeduring the year comprised of the servicing of loans andleases, the financing of overseas subsidiaries and thepayment of dividends.

DEVELOPMENT PROJECTSIn terms of our core business operations, the majordevelopment project during the year was the completionof the expansion of our plant at St Julien. Consequently,this plant has an increased production capacity andbecomes one of our four major crushing plants situatedat strategic locations on the island. Besides this majorproject, the other developments comprised of theinstallation of a second crushing plant for our subsidiary



CHIEF EXECUTIVE OFFICERS REPORT (Contd)

in Sri Lanka which is still in progress, the acquisitionof equipments to increase our quarrying capacity inRodrigues and the automation of part of the productionprocess at Dry Mixed Products Ltd.

Our capital expenditure budget for the financial year

2013-2014 provides for the construction of a completeplant aimed at drying fine production dust to be used in themanufacture of a new blend of cement used as mortar forconstruction purposes, further improvements to the officesand the access road to our plant at St Julien, the installationof new electrical devices aimed at minimising energyconsumption on our plants generally, the acquisition of anew equipment to produce decorative bricks and stones,the acquisition of new additives towers for our dry mortarproduction unit and the purchase of additional equipmentsto increase our own quarrying divisions capacity.

In terms of our retailing Espace Maison operations, themajor development during the year under review consistedof the implementation of a new fully-integrated IT software(ERP) which is due to be up and running in October.Besides this project, the capital expenditure budget for thefinancial year 2013-2014 provides for the construction ofa mezzanine at our shop in Trianon and at our warehousein Roche Bois, improvements to our warehouse and yard atTerre Rouge and further IT equipments aimed at improvingthe service to our customers.

In terms of our subsidiary Compagnie de Gros Cailloux

Lte, there was no major development during the yearunder review. However, the capital expenditure budgetfor financial year 2013-2014 provides for the constructionof a new garden centre, the setting up of an irrigationsystem for a new vegetable-growing project and themechanisation of the sugar crop harvest, a project dueto span over six years and aimed at making our sugaractivity marginally profitable over time. In terms of ourproperty development plan, the demand for our first landparcelling project was negligible due to size and pricereasons. Consequently, our subsidiarys Board of Directorshas decided to advert the sale of the total identified plot inone lot with the necessary conversion rights.

The total capital expenditure budget for the financialyear 2013-2014 is higher than that of 2012-2013 butshould not give rise to extra borrowings thereby pursuingour debt reduction strategy which coupled with our BondProgramme should reduce our finance costs and ourexposure to risks which is a good initiative in times ofuncertain economic conditions.

FUTURE PROSPECTS

The recently published indicators denote an economicgrowth rate forecast of 3.2% for 2013 compared to 3.4%realised in 2012. However, the mood in terms of businessopportunities is not at its best which means that the coming

financial year will be another challenging one.

Our core business revenue trend since July 2013 showsa drop compared to the same period in 2012. Theachievement of our Groups performance forecast for thefinancial year 2013-2014 is highly dependent on theprevailing economic climate which in turn depends on theeconomic measures taken by the Government to promoteand assist various sectors of our economy. Such conditions,if prevailing, should favour investments in propertydevelopment projects and boost up the private dwellingsmarket which if combined with public infrastructure

projects should promote the construction industry goingforward. In terms of overseas operations, the net resultof our subsidiary in Madagascar is forecasted at a lowerlevel than in 2012-2013 due to a lack of visibility causedby the future presidential elections whilst in Sri Lankathe management is working towards an improvement inperformance for the financial year 2013-2014.

APPRECIATION

I wish to thank the members of the Board of Directors fortheir guidance and support during the past financial year.

I also wish to express my appreciation to the managementteam and the personnel at large for their restless effortsand dedication towards the progress of the Group duringthe year under review.

Jean Michel GiraudChief Executive Officer

September 26, 2013


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CORPORATEGOVERNANCEREPORT

Statement of Compliance(as per Section 75(3) of the Financial Reporting Act)

The Board of Directors of The United Basalt Products Ltdconfirms that to the best of their knowledge the Companyhas complied with all its obligations and requirements underthe Code of Corporate Governance for the year ended

June 30, 2013 except for Sections 2.2 and 2.8 of theCode. The reasons for non-compliance to these sections areincluded under the relevant headings in the following pagesof this report.

On behalf of the Board


September 26, 2013




CORPORATE GOVERNANCE REPORT (Contd)

The United Basalt Products Ltd was incorporated as apublic company in July 1953. The shares of the Companyare listed on the Official Market of the Stock Exchange ofMauritius since 1989.

The Board of Directors acknowledges that the Code of

Corporate Governance (the Code) sets out the bestpractices in terms of corporate governance and this reportdescribes how the main corporate governance principleshave been applied within the Company.

Companys Constitution

The shareholders adopted a new Constitution in 2004which complies with the provisions of The Companies Act2001 and those of the Listing Rules of the Stock Exchangeof Mauritius.

Its salient features are as follows: the Company has full capacity to carry on and/or

undertake any business activity; the Company has full rights, powers and privileges; the Company may acquire and hold its own shares; fully paid up shares are transferable without restriction; the quorum for a meeting of shareholders is 6 share-

holders present or represented and holding at least35% of the share capital of the Company;

the Board of Directors shall consist of not less than 7 ornot more than 15 Directors;

the quorum for a Board meeting is 4 Directors when theBoard consists of 7 members and 5 Directors when theBoard consists of more than 7 members;

the Chairman has a casting vote in case of equalityof votes at either a Board meeting or a shareholdersmeeting;

the Directors have the power to appoint any personto be a Director, either to fill a casual vacancy or asan addition to the existing Directors but so that thetotal number of Directors does not at any time exceedthe number fixed by the Constitution. Any Director soappointed shall hold office only until the next following

Annual Meeting of shareholders and shall then beeligible for re-election; a Director is not required to hold shares in the Company; the Company may indemnify and/or insure any Director

or employee of the Company or a related corporation.

Shareholding Structure

The shareholding structure of the Group at June 30,2013 is as detailed on page 11. The share capital ofthe Company amounts to Rs. 265,100,420 made up of26,510,042 ordinary shares of no par value.

The Company has as Holding Company GML Investisse-ment Lte, incorporated in Mauritius.

The list of common Directors with the shareholdercompanies holding more than 5% of the share capital ofthe Company at June 30, 2013 was as follows :

Directors UBP GMLInvestissementLte

ForwardInvestment andDevelopmentEnterprises Ltd

ThierryLagesse

ArnaudLagesse

*

*: Chairman

Substantial Shareholders

Shareholders holding more than 5% of the share capitalof the Company at June 30, 2013 were as follows:

Shareholders Number ofshares

% Holding

GML Investissement Lte 7,764,839 29.29

Forward Investment andDevelopment Enterprises Ltd

2,636,781 9.95



Shareholding Profile

The share ownership and categories of shareholders at June 30, 2013 were as follows:

Size of shareholding Number of shareholders Number of shares owned Percentage(%)

1 - 500 844 135,283 0.51

501 1,000 267 197,537 0.74

1,001 5,000 593 1,440,693 5.44

5,001 10,000 172 1,216,925 4.59

10,001 50,000 192 3,825,392 14.43

50,001 100,000 26 1,819,093 6.86

100,001 250,000 16 2,646,678 9.98

250,001 1,000,000 8 3,602,216 13.59

Over 1,000,000 3 11,626,225 43.86

Total 2,121 26,510,042 100.00

Category of shareholders Number of shareholders Number of shares owned Percentage(%)

Individuals 1,853 7,622,221 28.75

Insurance and assurance

companies

26 2,730,344 10.30

Pension and provident funds 52 2,925,071 11.03

Investment and trust companies 43 11,057,359 41.71

Other corporate bodies 147 2,175,047 8.21

Total 2,121 26,510,042 100.00

Shareholders Agreement

There is no shareholders agreement to the knowledge of

the Company.

Annual Meeting of Shareholders

The Companys Annual Meeting is the main forum wherethe shareholders exercise their rights to decide on theCompanys affairs. Shareholders are encouraged toattend the meeting to stay informed about the Groupsstrategy and objectives. A number of Directors and Board

Committee members are normally present to answer anyquestion relevant to the Companys affairs.

Besides the Annual Meeting, the shareholders areregularly informed of any relevant informationconcerning the Company and the Group such that theyare able to take decisions in full awareness of theirimplications. These communications are made either byannouncements in the press, the publication of quarterlyinterim Abridged Group Financial Statements anddisclosures in the Annual Report.




Shareholders Calendar of Events

Further to the financial year end in June, the calendar ofkey events is as follows :

September : Publication of audited abridged yearend results to June 30

November : Annual Meeting of shareholders: Publication of unaudited abridged first

quarter results to September 30

February : Publication of unaudited abridged half-year results to December 31

May : Publication of unaudited abridged thirdquarter results to March 31

: Declaration of dividend

June : Payment of dividend

The Annual Meeting of shareholders will be held exceptionally in

December this year.

Share Price Information

Please refer to Financial Highlights and Ratios on page12 for indicators and share price movements at June 30,2013.

At the time of writing the share of the Company is quotedat Rs 94.00 on the Official Market of the Stock Exchangeof Mauritius compared to Rs 103.00 on September 27,

2012, date of the preceding Annual Report. The PriceEarnings Ratio (PER) is at 16.67, the Dividend Yield at3.19 % and the Price to Net Assets Value (NAV) at 0.87.

Dividend Policy

The Company has no formal set dividend policy. Thepayment of dividend is subject to the Companysperformance and future growth opportunities, its cashflow position, its capital expenditure and debt servicingrequirements as well as its future investment needs. Inso doing, the Board of Directors attempts to distribute

a yearly dividend which, under normal circumstances,should remain sustainable in the medium to long term.

On May 14, 2013, the Company declared a dividend of Rs3.00 per share in respect of the financial year 2012-2013.This dividend was paid on June 25, 2013 to all ordinaryshareholders registered at close of business on May 31, 2013.

Please refer to Financial Highlights and Ratios on page12 for a summary of the dividend paid per ordinary shareover the past five years.

Board of Directors

The Board of Directors as a whole is ultimately responsibleand accountable for the affairs and overall performanceof the Group. Its primary role is to protect and enhanceshareholders interests by ensuring proper systems andcontrols are in place to safeguard the Groups assets and

its good reputation. Considering the recommendationsmade by Management, the Board identifies key riskareas and makes strategic choices, approves theCompanys investments, capital expenditure and operatingbudgets, monitors the implementation of strategieswhilst maintaining an effective corporate governanceframework. In so doing the Board may delegate certainduties to Board Committees and to Management.

The Directors perform their duties and exercise theirpowers to the extent permitted by law. They have the rightto seek independent professional advice at the expense

of the Company to enable them to discharge theirresponsibilities effectively.The roles of the Chairman and of the Chief ExecutiveOfficer are clearly separated. The Chairman has noexecutive or management responsibilities and his mainrole is to lead and monitor the work of the Board ofDirectors and to ensure that it operates effectively. He iselected by the members of the Board and also acts asChairman at shareholders meetings. The Chief ExecutiveOfficer is responsible for the day-to-day management ofthe Group, preparing and recommending developmentplans to the Board in line with the Groups long-termstrategy and vision and making and implementingoperational decisions.

All Directors, whether executive, non-executive orindependent non-executive are bound by fiduciaryduties. They have both a legal and moral duty to actindependently, in good faith, with due care and skill,and without fetter or instruction. Non-executive andindependent Directors perform their duties intermittentlyand have less regular access to the Companys booksand records than do executive Directors but they play a

particularly vital role in providing independent judgementin all circumstances. They are individuals of calibre andcredibility, and have the necessary skill and experience tobring judgement, independent of management, on issuesof strategy, performance, resources, transformation,equal opportunities, standards of conduct and evaluationof performance. Executive Directors on the otherhand, manage the conflict between their managementresponsibilities and their fiduciary duties in the bestinterests of the Company.


27/99




Governance provides that each Director should beelected or re-elected every year at the Annual Meetingof shareholders. Although being of the opinion thatthe holding of office by Directors relies on theirexperience and knowledge of the Groups activitiesto ensure that they exercise the appropriate degree ofleadership, skill and judgement required to achieve a

sustainable performance over the years, the CorporateGovernance Committee has decided to comply withthe Code and to include the re-election of all Directorsat the agenda of the Annual Meeting of shareholdersof the Company. In addition, the Board is continuouslyconsidering bringing new skills amongst its members.

Directors and Senior Officers Interests andDealings in Shares

The Directors and Senior Officers interests in the ordinaryshares of the Company are set out in the table on page 37

of Other Statutory Disclosures.

The Directors of the Company use their best endeavoursto abide to the principles set out in the Model Codeon Securities Transactions by Directors as stipulated inAppendix 6 of the Listing Rules of the Stock Exchangeof Mauritius. All newly appointed Directors are requiredto notify the Company Secretary in writing about theirdirect and indirect holdings in the shares of the Companyalthough, as per the Companys Constitution, a Director isnot required to hold shares in the Company. Subsequently,any Director willing to deal in the shares of the Companyshould notify the Chairman of the Board and obtain awritten acknowledgement before proceeding further.

The Directors and Senior Officers of the Company areprohibited from dealing in the shares of the Companyfor a period of one month preceding the publication ofthe Companys quarterly and yearly financial statementsand prior to the announcement of a dividend payment orother distribution and more generally, at any time whenin possession of unpublished price-sensitive informationrelevant to the Company.

During the year under review, Mr Bernard Lagesse, SeniorOfficer, sold 4,000 shares of the Company. Except forthis, none of the Directors and Senior Officers dealt in theshares of the Company, either directly or indirectly.

Furthermore, pursuant to the provisions of The SecuritiesAct 2005, the Company registered itself as a reportingissuer with the Financial Services Commission (FSC) in2008 and identified its insiders according to the definitionswithin the Act. All the insiders and their associates wererequired to disclose their interest in the shares of the

Company and in those of the associates of the Company.This information was then forwarded to the FSC andthereafter any movement thereon is being recorded andnotified to the Commission.

As such this year, the Commission was notified whenGML Investissement Lte and Forward Investment &

Development Enterprises Ltd acquired respectively1,135,000 and 130,800 shares of the Company on June25, 2013. In addition, all the abridged group quarterlyfinancial statements and the audited financial statementsfor the year are sent to the Commission in accordancewith Section 88 of the Act.

Board Meetings

The Chairman and the Chief Executive Officer, assistedby the Company Secretary, are responsible for fixing theagenda for each Board meeting.

The quorum for Board meetings is 4 Directors whenthe Board consists of 7 members and 5 Directors whenthe Board consists of more than 7 members. In case ofequality of votes, the Chairman has a casting vote.

Directors have the responsibility to attend Board meetings.The attendance record for the year under review is asshown on page 29.

The Board met six times this year to examine, consider,discuss or approve, amongst other items, the auditedgroup financial statements, the abridged group financialstatements and the Annual Report for year ended June 30,2012, the remuneration of external auditors, the abridgedgroup financial statements for the quarters to September30, 2012, December 31, 2012 and March 31, 2013,the progress and alternatives available for the propertydevelopment of Compagnie de Gros Cailloux Lte, theappeals and court cases relevant to our new plant atGeoffroy Road, the proposal of a Chairmans SupportAgreement, the Board calendar for 2013, the nominationof a Deputy CEO and an update of the succession plan, the

restructuring of existing debts through an issue of bonds,the appraisal of an investment project, the results forecaststo June 30, 2013, the declaration of a dividend and theoperating and capital expenditure budgets for the financial

year 20132014. Decisions were also taken by way ofresolutions in writing, signed by all the Directors.

Board Committees

In order to fulfil its obligations and duties, the Board hasdelegated certain duties and responsibilities to BoardCommittees to ensure full review of specific matters.



This delegation does not however reduce the overallresponsibilities of the Board.

In line with the Code, the Corporate GovernanceCommittee and the Audit Committee were set up in 2005with clearly defined terms of reference. These BoardCommittees report to the Board on their activities and

recommend specific matters to the Board for its approval.

Corporate Governance Committee

The composition of the Corporate Governance Committeeis as follows:

Chairman : Jol HarelMembers : Marc Freismuth Thierry Lagesse

The Codes aspiration is that the Corporate

Governance Committee be chaired by an IndependentNon-Executive Director. The Board had nominated MrThierry Lagesse, the then Non-Independent Chairmanof the Board, to chair this Committee in view of hispast experience and given that he has no executiveresponsibilities and since there was a majorityof Independent Non-Executive Directors on theCommittee. However, since Mr Marc Freismuth hasceased to be an independent Director, the Board hasdecided to appoint Mr Jol Harel as Chairman of theCommittee in replacement of Mr Thierry Lagesse whoremains a member of the Committee.

The Corporate Governance Committee is also responsiblefor Nomination and Remuneration aspects of the Codeand its functions are as follows : In its role as Remuneration Committee, its terms of

reference include inter alia the development of theGroups general policy on executive and seniormanagement remuneration including the definitionof performance measurement criteria and specificremuneration packages for executive Directors andsenior management and the making of recommendations

to the Board on all aspects of remuneration. In its role as Nomination Committee, it reviews thestructure, size and composition of the Board, it assessesand evaluates the role of each potential and currentDirector and makes recommendations to the Board forthe election and re-election of Directors and for mattersrelevant to the succession planning.

It has a further responsibility of determining thepolicy on Corporate Governance in accordancewith the principles of the Code, to advise and makerecommendations to the Board of Directors on all aspectsof Corporate Governance and to report to shareholders

on compliance with the provisions of the Code.The Committee met three times during the financial

year 2012-2013 to appoint a new Chairman forthe Committee, to examine and take decisions oncorporate governance issues, to review the Boardscomposition, to determine the remuneration policy ofDirectors, Committee members and key management

personnel and to discuss and approve the proposedsuccession plan.

The attendance record for the year under review is asshown on page 29. Mr Jean Michel Giraud, the ChiefExecutive Officer, is in attendance at all meetings of theCommittee.

The remuneration of the Chairman and of each memberof the Corporate Governance Committee for the yearended June 30, 2013 amounted to Rs 30,000 (2012 :Rs 10,000).

Audit Committee

The composition of the Audit Committee is as follows:

Chairman : E. Jean MametMembers : Franois Boull Jol Harel

As recommended by the Code, the Chairman of thisCommittee is an independent non-executive Director aswell as the two members.

The Audit Committee Charter was approved by the Board ofDirectors on May 20, 2005. The main duty of the Committeeis to ensure the integrity of accounting and financial reportingand to review internal control systems and procedures in orderto assist the Board of Directors in carrying out its responsibilities.The Committee also monitors the role and scope of work ofinternal and external auditors, including the identificationof any risk areas, and ensures compliance with legal andregulatory provisions. The Committee has the authority toconduct investigations into any matter within its scope of

responsibilities and to engage any firm of professionals it seesfit to provide independent expert advice.

The Committee met five times during the financial year2012-2013, mainly to review and recommend to theBoard for approval the audited financial statements andthe Annual Report for year ended June 30, 2012 as wellas the unaudited abridged group quarterly financialstatements, to fix the remuneration of external auditors,to review the reports of internal and external auditorsand to follow-up remedial actions by managementbased on their recommendations, to approve the writing



Audit Committee (Contd)

up of a procedures manual for both the core business andretailing operations, to review issues relevant to the relianceof the auditors on the existing IT system, to document theprocedures within the IT function and to consider and makerecommendations on the proposed Chairmans Support

Agreement. In so doing, the Committee reviewed controlsystems and procedures in place at all the subsidiarycompanies within the Group.

The attendance record for the year under review is asshown on page 29. The Finance Manager is in attendanceat all meetings of the Committee whilst the Chief ExecutiveOfficer, the internal and external auditors and somemembers of the management attended the meetings byinvitation depending on the agenda.

The remuneration of the Chairman and of each member

of the Audit Committee for the year ended June 30, 2013amounted to Rs 150,000 (2012 : Rs 120,000) andRs 100,000 (2012 : Rs 80,000) respectively.

Internal Audit Function

The internal audit function is responsible for providingindependent, objective assurance to the Board regardingthe implementation, operation and effectiveness ofinternal control systems and risk management. Theobjective is to ascertain the extent of compliance toprocedures, policies, regulations and legislation, tofacilitate proper risk management practices and torecommend improvements in control, performance andproductivity within the Group.

The internal audit function is carried out by a memberof our staff who has access to all Companys records,systems and personnel and maintains an open andconstructive communication line with the managementand the Audit Committee. The internal audit plan wasapproved by the Audit Committee and gives the extentof coverage attributable to each business process cycle

within the organisation depending on the degree ofrisk. The methodology used is based on the selectionof specific business cycles, the identification of inherentrisks, the verification of key controls in place in view ofeliminating or reducing the risks to an acceptable level,the verification of the said controls to ensure they areoperating satisfactorily, the performance of walkthroughtests on procedures and processes and the formulation ofnecessary recommendations.

During the year under review, the internal auditor carriedout regular visits to all operational sites to ensure the controls

and procedures are adhered to and to improve processeswhere necessary in order to minimise risks. His findings wereclassified in terms of risk level and his recommendationswere discussed and commented by management. This yearagain, no material financial problems were identified whichwould affect materially the figures reported in the financialstatements. The recommendations are being implemented

gradually by management under the close follow-up of theAudit Committee.

The firm BDO & Co. which was also in charge of ourinternal audit function until last year has been assignedthe task of writing up a procedures manual for allaspects of the business within the Group. The job is stillin progress and will in due course be used as referenceand updated whenever necessary. At time of writing, themanagement is considering the recruitment of additionalstaff and the acquisition of specialised software toenable the internal audit function to enlarge its scope of

work and to be more effective.

Internal Control and Risk Management

The Board of Directors is ultimately responsible forthe adequacy and effectiveness of the internal controlsystem which is designed to manage the risk of failure toachieve business objectives and which can only providereasonable and not absolute assurance against materialfinancial misstatement or loss.

The management is responsible for the implementationof internal control and risk management systems underthe supervision of the Audit Committee to ensure theireffectiveness. Such systems must ensure that properaccounting records are maintained and that the strategiesand policies adopted by the Board are being implemented.The Board relies on the internal audit function to reporton any weaknesses and to make recommendations viathe Audit Committee, the objective being to ensure theeffective and efficient use of available resources andascertaining the accuracy of information used in thepreparation of financial statements.

The key risks relevant to the Group are as follows : Industry risks : risks that makes the industry less

attractive as a result of changes in (i) the key factorsfor competition success within the industry, includingsignificant opportunities and threats, (ii) the capabilitiesof existing and potential competitors and (iii) the Groupsstrengths and weaknesses relative to present and futurecompetitors.

Operational risks : risks defined as risks of lossresulting from inadequate or failed internal processesand procedures, human error or system failure or from




external events e.g. Legal risks.

Operational risks are further broken down into thefollowing five constituents: Human resources risks : losses arising from acts

inconsistent with employment and health and safetylaws.

Fraud risks : intentional or fraudulent acts intendedto defraud or misappropriate property or circumventregulations, law and policies and involving one internalparty and/or a third party.

Physical risks : losses due to fire, cyclone, explosion,riots or else.

Business continuity risks : losses from failed transactionprocessing and process management, inadequate back-ups and loss of data.

Reputational risks : losses due to unintentional ornegligent failure to meet a professional obligationto specific clients or from the nature or design of a

product.

Technology risks : risks that hardwares and softwaresare not operating as intended thereby compromisingthe integrity and reliability of data and information andexposing significant assets to potential loss or misuseor exposing the Groups ability to maintain a highstandard in its main business processes.

Country risks : risks arising when the political climatein a specific country affects the business environmentand impacts on the companys objectives andstrategies in such a way that the company may getout of business.

Financial risks : exposure to credit, interest rate, liquidity,foreign currency and capital management risks.

The Audit Committee via the internal audit functionensures that some of the above risks are managedand kept at an acceptable level. Our sales, marketingand operations staff follow closely the actions of ourexisting and potential competitors, our internal auditordoes regular testing aimed at detecting any potentialweaknesses in our internal control systems and any

likely risk of fraud, our HR department manageshuman resources risks via proper and adequate jobreviews and performance evaluation, our assets areinsured against fire and allied perils and other all risksinsurance cover as relevant to the type of asset, ouroffices and operational sites are all equipped withfire extinguishers and security systems, our health andsafety department ensures that all necessary measuresare taken to minimise risks, our IT department ensuresthe latest technologies are used for our ERP and thatour database is secured via a disaster recovery plan,

our manufactured products are tested in our laboratoryto ensure they are of the required standard and ouroverseas subsidiaries managers follow the politicalevents closely to avoid any risk of business failure.

For financial risks management, please refer to note 4 ofthe Notes to the Financial Statements on pages 66 to 69.

Meetings Attendance

Management Agreement

There is no management agreement between any thirdparty and the Company or its subsidiaries. However,the Company itself has management agreements withsubsidiaries and associates within the Group.

Remuneration Philosophy Statement

The Corporate Governance Committee in its role asRemuneration Committee is responsible for making recom-mendations to the Board with regard to the definition anddevelopment of the Groups general remuneration policy,including determining performance measurement criteriaand specific remuneration packages for executive Directorsand senior management and the level of remuneration ofnon-executive Directors, taking into consideration the mar-ket trend and the Groups performance.

Board

CorporateGovernanceCommittee

AuditCommittee

MarcFreismuth

4 out of 6 3 out of 3

FranoisBoull


Jean MichelGiraud

6 out of 6

Jol Harel 6 out of 6 3 out of 3 5 out of 5

Laurent de laHogue

6 out of 6

ArnaudLagesse

4 out of 6

StephaneLagesse

3 out of 6

ThierryLagesse


Jean Claude

Maingard 5 out of 6

E. JeanMamet




Remuneration Philosophy Statement (Contd)

The current remuneration scheme is being reviewed withthe help of consultants to favour more alignment betweenremuneration and performance in terms of businessobjectives and to recognise both corporate and individualperformance. A grading system has been introduced for

all staff whilst the competencies are being assessed inview of identifying any training need and hence elaboratea full rewarding system. This will enable the Company tomotivate, retain and attract best employees capable ofachieving the Groups objectives.

Please refer to Other Statutory Disclosures on page 36 fora table of total emoluments and benefits received by theDirectors from the Company and subsidiary companies.Although acknowledging that the Code requires that theremuneration received by Directors should be disclosed onan individual basis, the Corporate Governance Committee,

in its role as Remuneration Committee, has recommended thatthe remuneration be disclosed by category of Directors onlyin view of the confidentiality and sensitivity of this information.

The remuneration of the Chief Executive Officer comprisesa basic salary and other benefits in kind and an annualperformance bonus. The proportion of variable pay tofixed pay is significant and aims at aligning the interestsof the Chief Executive Officer to those of the Group.

Company Secretary

All Directors have access to the advice and services ofthe Company Secretary who is responsible for ensuringthat Board procedures are followed and for providingguidance and proper induction to Directors concerningtheir duties, responsibilities and powers.

The Company Secretary administers, attends and preparesminutes of all Board and Shareholders meetings. Heassists the Chairman in ensuring that the CompanysConstitution and relevant rules and regulations arecomplied with and in implementing good governance

practices within the Group.

Employee Share Option Plan

The Company has no employee share option plan.

Integrated Sustainability Reporting

The Board believes that it is in the long-term economicinterest of the Company to conduct itself as a responsiblecorporate citizen and to act in a manner which is non-exploitative, non-discriminatory and respectful of human

rights.

In terms of ethics, the Company has at the time of writinga draft version of its Code of Ethics which is yet to beimplemented but inspires itself from the principles set out inthe Model Code of the Joint Economic Council as adaptedto meet its specific needs. Nevertheless, the Companystrongly expects all its employees to act with honestyand integrity amongst colleagues and with customers,

suppliers and other stakeholders, thereby ensuring thegood reputation of the Company.In terms of the environment, the Company is continuouslymaking significant investments in appropriateequipments aimed at reducing dust emission fromits production plants. Our plant at Geoffroy Roadis the first eco-friendly plant of its kind in Mauritius.Furthermore, a few years ago the Company launched aconcrete recycling project aimed at reducing the levelof demolition waste dumping.

In terms of health and safety, the Companys Healthand Safety Officer performs regular risk assessments toensure that the production units are equipped to run ina safely manner thereby minimising the risk of causingdamage to the environment and to the neighbourhoods.As regards the health and safety of employees, regulartraining sessions are provided to ensure health andsafety practices are applied and to help increase theawareness of employees on security and health issues byinsisting on the use of protective clothing and accessories.Furthermore, all security issues are taken into considerationin the determination of Key Performance Indicators usedto assess the performance of all Managers.

In terms of social responsibility, our policies and practicesare as detailed in our Corporate Social Responsibility(CSR) report on page 32.

Donations

Please refer to Other Statutory Disclosures on page 38 fordetails of donations made during the year.

Related Party Transactions

Please refer to note 29 of the Notes to the FinancialStatements on page 87.

Christophe QuevauvilliersCompany Secretary

September 26, 2013




CORPORATESOCIAL RESPONSIBILITY(CSR) REPORT

This report sets out the UBP Groups Corporate Social Responsibility (CSR) programme forthe year ended June 30, 2013. This year again, the Group has been active mainly in thefollowing areas of intervention: the welfare of vulnerable children, education, socio-economicdevelopment and sports. All the projects have been realised in compliance with the CSRguidelines thereby ensuring a better coordination and continuity of the activities in which wewere already engaged.

Review of activities

For the financial year under review, the Grouphas been involved in twenty projects moreparticularly in the vicinity of our productionand sales sites although several of them wereimplemented at national level.

The NGOs who benefitted from our programmeunder theWelfare of Vulnerable Childrenare: Mouvement Forces Vives Quartier EDCin Rose-Belle, Ecole Rve & Espoir, La PointeTamarin, Garderie Etoile, A.P.E.I.M., Fondation

pour lInterculturel et la Paix and SolidaritMamans.

The Group has also been involved in thepromotion of Education in supporting thefollowing schools and project : New BambousGeoffroy Government School, CottageGovernment School and Institut Cardinal JeanMargot for the project Les Amis de Zippy.

Also very active in the field of Sports, theGroup provided sponsorship to the following

organizations : Trust Fund for Excellence inSports, The Faucon Flacq Sporting Club,Triathlon Club de Roches Brunes and UnionRugby Mauritiusas we strongly believe thatsports can contribute to the development ofchildren and facilitate their integration intosociety.

Finally, the Group has been involved in projectsin the Socio-Economic developmentfieldwhereby assistance has been provided to La

Chrysalide and Bel Ombre Foundation ForEmpowerment in view of alleviating poverty

and improving the living conditions of themost destitute persons.

Besides our core priority projects above,the Group has also participated activelyin various other initiatives forming partof the Fondation Joseph Lagesse areas ofintervention, namely in terms of support tochildcare services and technical trainingfor Caritas Centre dEveil in Grand Gaube,Collge Technique St Gabriel, EcoledAlphabtisation de Fatima in Triolet andMahebourg Espoir Education Centre.

In summary, the Group has contributed Rs 4.4million to CSR activities for the financial year2012 2013, shared as follows amongstour main areas of intervention :Welfare of

Vulnerable Children (34%), Education(6%), Sports (27%), Socio-Economicdevelopment (8%) and projects incommon with Fondation JosephLagesse (25%).

This year again, our programme has beenenriching in many aspects. It has been agreat pleasure to assist the new NGOs andwe are proud of the progress perceived fromour beneficiaries. For the financial year 2013- 2014, our drive will be inspired by thesame motive whilst the Group will continueto endeavor sustainable projects in creatingvalue and promoting the well-being of thecommunity.

forthe


35/99UBP GROUP |ANNUAL REPORT 2013 3UBP GROUP |ANNUAL REPORT 2013

STATEMENT OF DIRECTORSRESPONSIBILITIES

in respect of the preparation of financial statements and internalcontrol.

The Directors are responsible for the preparation of financialstatements which give a true and fair view of the financial position,financial performance and cash flows of the Company. In so doingthey are required to : select suitable accounting policies and apply them consistently; make judgements and estimates that are reasonable and

prudent; comply with the provisions of the Companies Act 2001 and the

International Financial Reporting Standards (IFRS), and explainany material departure thereto;

prepare the financial statements on a going concern basis

unless it is inappropriate to presume that the Company willcontinue in business in the foreseeable future.

The Directors acknowledge that they have exercised theirresponsibilities as described above and confirm that they havecomplied with the above requirements in preparing the financialstatements for the year ended June 30, 2013.

The Directors are also responsible for the proper maintenance ofaccounting records which disclose at any time and with reasonableaccuracy, the financial position and performance of the Company.They are also responsible for safeguarding the assets of the

Company and for taking reasonable steps to prevent and detectfraud and other irregularities.

The Directors confirm that they have established an internal auditfunction and report that proper accounting records have beenmaintained during the year ended June 30, 2013 and that nothinghas come to their attention which could indicate any materialbreakdown in the functioning of internal control systems and havea material impact on the trading and financial position of theCompany.

On behalf of the Board


September 26, 2013


36/99



Subsidiary Companies

Espace Maison LteMessrs: Thierry Lagesse - Chairman Franois Boull

Marc FreismuthJean Michel Giraud

Jol HarelLaurent de la HogueStephane Lagesse

Jean Claude MaingardE. Jean Mamet

Compagnie de Gros Cailloux Lte

Messrs: Thierry Lagesse - Chairman Franois Boull Jean Michel Giraud Christophe Quevauvilliers

Welcome Industries LtdMessrs: Thierry Lagesse - Chairman

Jean Michel Giraud Christophe Quevauvilliers

UBP International LtdMessrs: Thierry Lagesse - Chairman

Jean Michel Giraud Louis Raoul Harel

UBP MadagascarMr: Steve Ren Manager

United Granite Products (Pvt.) LtdMessrs: Jean Michel Giraud - Chairman Joseph Albert

A. Mahir Didi Rmi de Gersigny Hussain Saad Hasim Christophe Quevauvilliers

Sainte Marie Crushing Plant LtdMessrs: Thierry Lagesse - Chairman

Jean Michel Giraud Richard Koenig Stephane Ulcoq

Dry Mixed Products LtdMessrs: Jean Michel Giraud - Chairman Brice Riche Appointed on March 15, 2013

in replacement of Mr Edelio Bermejo* whoresigned on the same date.

Thierry Lagesse - alternate: Rmi de Gersigny

Alexandre Roland Maurel- alternate: Lloyd George Richard-CoombesChristophe QuevauvilliersColin Taylor

- alternate: Eric Adam

* Prior to his resignation and replacement by Mr BriceRiche on March 15, 2013, Mr Edelio Bermejo wasappointed as Director on July 17, 2012 in replacement ofMr Vincent Lenette who resigned on the same date.



OTHER STATUTORY DISCLOSURES (Contd)

Marbella LtdMessrs: Jean Michel Giraud - Chairman

Franois Boull

Jol Harel

Land Reclamation LtdMessrs: Jean Michel Giraud - Chairman Franois Boull Jol Harel

Mr Jean Giraud passed away on May 14, 2013and was not replaced.

Stone & Bricks Co. LtdMessrs: Jean Michel Giraud - Chairman

Jol Harel


The Stone Masters Co. LtdMessrs: Jean Michel Giraud - Chairman Jol Harel


Pricom LtdMessrs: Thierry Lagesse - Chairman Jean Michel Giraud Jol Harel

2013 2012

Executive Non-Executive Executive Non-ExecutiveRs000 Rs000 Rs000 Rs000

The Company 8,681 1,800 10,314 1,570

Subsidiary Companies :

Espace Maison Lte - 536 - 536

Compagnie de Gros Cailloux Lte - 120 - 150

Welcome Industries Ltd - - - -

UBP International Ltd - - - -

UBP Madagascar - - - -

United Granite Products (Pvt.) Ltd - - - -

Sainte Marie Crushing Plant Ltd - 120 - 112

Dry Mixed Products Ltd - - - -

Marbella Ltd - - - -

Land Reclamation Ltd - - - -

Stone & Bricks Co. Ltd - - - -

The Stone Masters Co. Ltd - - - -

Pricom Ltd - - - -

DIRECTORS REMUNERATION AND BENEFITS

Total remuneration and benefits received by the Directors from the Company and its subsidiary companies were asfollows:



DIRECTORS AND SENIOR OFFICERS INTERESTS IN SHARES

The Directors and Senior Officers interests in the ordinary shares of the Company at June 30, 2013 were as follows:

Except for the above, none of the other Senior Officers had an interest in the shares of the Company, either directly orindirectly.

None of the Directors and Senior Officers of the Company had an interest in the shares of the subsidiary companies.

DIRECTORS SERVICE CONTRACTS

Except for Mr Jean Michel Giraud who has a contract of employment with the Company, there is no service contractbetween the Company and any of the Directors.

DIRECTORS AND OFFICERS INSURANCE AND INDEMNIFICATION

The Directors and the Secretary of the Company benefit from an indemnity insurance cover for liabilities incurred whileperforming their duties, to the extent permitted by law.

Ordinary shares

Category

Number % Number %

Directors

Marc Freismuth - Chairman NICB - - - -

Franois Boull INED - - 26,270 0.099

Jean Michel Giraud ED 4,184 0.016 2,526 0.010

Jol Harel INED - - - -

Laurent de la Hogue NED - - - -

Arnaud Lagesse NED - - 9,452 0.036

Stephane Lagesse NED 216 0.001 45,023 0.170

Thierry Lagesse NED 1,116 0.004 45,023 0.170Jean Claude Maingard NED - - - -

E. Jean Mamet INED - - 2,000 0.007

Senior Ofcers

Christophe Quevauvilliers * 600 0.002 12 0.000

Denis Lincoln * 1,200 0.004 - -

Clivy Coutet Chan Chuen * 1,500 0.005 - -

Dhuenesh Rambarassah * 480 0.002 - -

Jocelyne LArrogant * 10 0.000 - -

Bernard Lagesse * 8,000 0.030 - -

Raoul Maurel * 300 0.001 10 0.000

Edley Michaud * 605 0.002 - -

ED Executive Director INED Independent Non-Executive Director

NED Non-Executive Director NICB Non-Independent Chairman of the Board

* The job titles of the Senior Officers are as described in their profile

ubp annual report 13

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