Ambition and Goal - Vivo Energy · Vivo Energy Mauritius Limited Annual Report 2012 Ambition and...

Vivo Energy Mauritius Limited Annual Report 2012

Ambition and Goal

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OUR AMBITION AND GOALOUR AMBITION

Becoming Africa’s most respected energy business.• GoalZero:puttingsafetyfirst.• Tofocus.Tosimplify.Toperform.• Employees:empower,recogniseandreward.• Clearvisionandswiftdecision-making.• Caringfortheenvironment,communitiesandpeople.• Investinginthefuture-forthebusinessandthecommunitiesandcountriesinwhich weoperate.

OUR GOAL

The goal ofVivo Energy Mauritius Limited is to create a performance driven, dynamicenterprisewiththecapabilitytodeliverlongtermbenefitstocustomers,employeesandthelocalcommunitiesinwhichitoperates.

OUR VALUES

Wearejudgedbyhowweact:ourreputationisupheldbyhowweputintopracticeourcorevaluesof“honesty,integrityandrespectforpeople”.ThesevaluesunderpinourStatementofGeneralBusinessPrinciples.Weemployamostdiversegroupofpeopleandvaluethebenefitsthisbrings.Werespectthehumanrightsofouremployeesandstrivetoprovidethemwithsafeworkingconditions,promotethedevelopmentoftheirtalentsandgivethemchannelstoreportconcerns.

Wealsofirmlybelieveinthefundamentalimportanceoftrust,openness,teamworkandprofessionalism,andprideinwhatwedo.

DearShareholders,IamhonouredtoassumethepositionofChairmanoftheBoardofVivoEnergyMauritiusLimited.

AsthetransitionfromShelltoVivoEnergyMauritiusLimitedtookplaceon1stDecember2011,2012wasthefirstfullyearinoperationforVivoEnergy.Ithasbeenachallengingyearwithoperatingprofitsdowncomparedto2011despitegrowingmarketshareinmostpartsofourbusiness.However,wecontinuedtomaintainourmarketleadershippositionandhaveambitiousplanstodeliverourtargetsthisyear.

AsVivo EnergyMauritius Limited we take our responsibility to our shareholdersand our other stakeholders very seriously. Our long-term ambition is to builda competitive business that can deliver long-term sustainable growth in order tomaximiseshareholdervalue.Forthewidercommunitywewishtoremainexcellentcorporatecitizens,makingapositivecontributionineverythingthatwedo.Sohowhavewedoneinourfirst fullyearofoperations?Wehavecontinuedtooperateinaccordancewith industry leadingsafetystandards. Inaddition,weoperatedtothehighestlevelsofethicalbusinesspracticeswhichwillprovidetheprinciplesforethicalconductforourdirectors,employeesandcontractorsinthefuture.

OneofthekeyprioritiesforthenextfewyearsistogrowVivoEnergyMauritiusLimited.To achieve this,we have put an ambitious growth plan in place and anorganisationthatisabletodeliverthis.Theywillcontinuetogettheresourceandsupportthattheyneedtodelivertheoutcomesthatweallwishfor.Thecompany’s2013planincludesanumberofambitioustargetsbutIamconfidentthatthesecanbeachievedwiththeenergyandcommitmentoftheteamthatwearefortunatetohaveinMauritius.IwouldliketothanktheManagingDirector,Mr.PawanJuwaheer,hisleadershipteamandeverysingleemployeeofVivoEnergyMauritiusLimitedforalltheircontributionsandhardworkin2012,ayearofmuchchangeforeveryone.

My appreciation also goes toMrHonoréDainhi, the outgoing Chairman, and all themembersoftheVivoEnergyMauritiusLimitedBoardfortheirhelpfuladviceandsupport.

WelookforwardtogrowingourbusinesshereinMauritius,deliveringsuccessforVivoEnergyMauritiusLimited,forthebenefitofallourshareholders.

Finally, I would like to take this opportunity to thank you, our shareholders, for thesupportandconfidencethatyouhaveshowninVivoEnergyMauritiusLimited.

Yourssincerely,Christian Chammas

CEOVivoEnergyandChairmanMay 2013

2012hasbeenachallengingyearinmanyways.Operatingprofitsweredowncomparedto2011despitegrowingmarketshareinmostsegments.

Theinlandbusinessesremainedfairlyresilient.Deliveringourfuelefficientproductsatnoextracosttothecustomerhascontributedtomaintainour leadership inRetailwhile new customer acquisitions have helped to achieve a good growth in thecommercialsector.Haditnotbeenforthehugepricevolatilityoftheinternationalmarketwhich impactednegativelyonourmarinebusiness,wewouldhavehadavery good year overall.

Weperformedwellonourgrowthagendaandinvestedtobuildourfuture.Webroughtinadouble-hulledbarge,TristarGlory,whichcameintooperationatthebeginningof2012,withmorecapacitytoservethemarket.Wegrewourretailnetworkbybuildinganewservice station inArsenal andwhich isoperationalsincethebeginningof2013.Althoughwealreadyhavethelargeststoragecapacity,wearestillinvestinginadditionalstoragebyreplacingatankatCausewaybyanewfueloilstoragetankofgreatercapacity.

WithregardtoHealth,Safety,SecurityandEnvironment(HSSE),wecontinuedtofocusonimprovedHSSEawarenessbothinternallyandexternally.In2012,outofnearly571,000exposurehoursandnearly2.0millionkilometersdriven,VivoEnergyMauritiusLimitedhadzerofatalincidentsandourrecordinlosttimeinjuriesremainedverylow.FocusonHSSEmeanssustainableperformanceforourshareholders,ourpeople,customers,suppliersandcontractors.

Our corporate-citizenship efforts continued making a meaningful impact in2012.Thecompanycontinuedsupportingenvironmental,educationandsafetyprogramsbothontheroadandinhouseholdswithourLPGSafetyAwarenessCampaign.

2012wasourfirstfullyearasVivoEnergyMauritiusLimited.Weprideourselvesinaperfectseamlesstransition;achallengemadepossiblethankstoouremployees’hardworkandpositiveattitude.

OutlookWewillcontinuelookingforopportunitiestoinvesttomeetoursustainablegrowthambition.Witheffectfrom1March2013,wereceivedamarginincreaseinmogasandgasoilwhichwillpositivelyimpacton2013results.Asfarasstorageisconcerned,wehaveexpressedourkeeninterestinanindustryventuretobuild15,000tonnesmogasstorageatMerRougedepot.Weareincreasingourstoragecapacitywithanewtankof5,000tonnesplannedtobeinservicein2013.

Vivo Energy Mauritius Limited Annual Report 2012 Vivo Energy Mauritius Limited Annual Report 2012

Chairman’s Message Managing’s Director’s Report

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Managing Director’s ReportChairman’s Message


Managing’s Director’s Report

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AVIATION

Theaviationbusinessregisteredlowervolumesin2012comparedto2011,buthigherthanplanned.Thisisexplainedbythelifetimecycleofsomemajorcontractsarrivingtotheirterm.Thosecontractshavebeenrenewedatend2012.

Industrywise,2012wasstilladifficultyearduetohighvolatilityofprices.Asaresult,theindustryshrunkby8%.Stiffercompetitionstilldragsmarginstoadownwardtrend,amplifiedbypricesfluctuations.

SinceVivoEnergyMauritiusLimitedtradesunderVitolAviationbrandname,thecompanyhasbeenabletogrowthecustomerportfolio.2013outlookshowsbettersignsthan2012andthecompanywillendeavourtofurthergrowthebusiness.

MARINE

Marine performed well in 2012 in terms of volume increase. However, the pressure oninternationalandlocalpriceshasimpactedthebusinessastoughercompetitionleadtolowermargins,lowerdemandandlackofsupplyatsomespecificpointsintimedidnotallowfullyoptimisation of revenues.

Overall, the business performance is satisfactory given the volumes achieved and theinternational context. Thegrowthstrategyremainedattheheartofthecompany’sagendawhichstillleveragedonthegoodfoundationsofthebusiness.

Withastrongexperienceandknowhowofmorethan70yearsintheMarinebusiness,VivoEnergyMauritiusLimitedoperatesadedicatedbunkeringdepotintheheartofPortLouis.

Thecompanypursuedtherenewalanddevelopmentofourinfrastructurebyinvestinginnewpipelinestoenablethesupplyatquays,rebuildingablackoiltankwithenhancedcapacityandinvestinginequipmentsfordeliveriesatquayandbybarge.

The new barge,TristarGlory, entered in service in February 2012.With its highercapacity,thecompanyisabletofulfilltheneedsofvesselsatanchorageoratquay,and,morespecificallyperformcomplexandtechnicaldeliveries. CustomersareservedatquaysA,D,E,TrouFanfaronfishingquaysandVivoEnergyMauritius Limited’s two private quays at Froid desMascareignes.Deliveries atMauritiusContainerTerminalandMauritiusFreeportDevelopmentaredonebyTristarGlory.

StateTrading Corporation is the sole importer of fuel in Mauritius. Anindependentworldwiderecognisedlaboratoryrecertifieseverybatchof


Review Of Operations

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REVIEW OF OPERATIONSWhilst there are many more projects in the pipeline forVivo Energy MauritiusLimited in2013, the futureremainschallenging. I look forwardtoanexcitingandprofitableyear2013.

Finally, Iwould like toexpressmygrateful appreciation toMr.HonoreDainhi asOutgoingChairmanoftheBoardofDirectorsofVivoEnergyMauritiusLimited,forhisinvaluableadviceandguidanceduringtheyear.Ithasbeenapleasureworkingwithhim.

In the same breath, a hearty welcome to Mr. Christian Chammas, ChiefExecutiveOfficerofVivoEnergy,andwhoisournewChairman.Mr.Chammasbringsalongawealthofexperiencehavingworkedintheenergysectorformorethan31years.

IwouldalsoliketoputonrecordthecontributionofboththeBoardandManagementofVivoEnergyfortheirsupporttotheleadershipteaminMauritius.

Iwouldliketoexpressmythankstoourcustomersfortheirloyalty.Itakethisopportunitytothankyou,ourshareholders,foryourtrustinVivo Energy Mauritius Limited.

Pawan K Juwaheer

Managing Director

23 May 2013

Vivo Energy Mauritius Limited Annual Report 2012 9

Review of Operations

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MarineFuelOilandMarineGasOilthatthecompanyreceivesinitstanks.Thisensuresdeliveryofqualityproductstocustomers.

The company also markets Shell Lubricants, the leadership of which isrecognisedinternationally.Itsteamofexpertsisdedicatedtosupportandgiveadvice to customers.

Vivo Energy Mauritius Limited follows the highest standards to ensuresafe operations to customers. 2013 international outlook gives signs ofimprovementandtheteamiscommittedandreadytograbopportunitiestopursuethegrowthofthebusinessfurther.

LIqUEFIED PETROLEUM GAS (LPG)

LPG is still, by far, a competitive source of energy for domesticapplicationsas compared toelectricity. It is alsoanenvironmentallyfriendlyproductaswellasaconvenientandcleansourceoffuelforanumberofindustrialapplicationsincludinguseinthetextile,hotelandfoodsectors.Overallvolumeimprovedslightlylastyearmainlypropelledby thegrowth in thedomestic sectoreven if theLPGsectorisfacingfiercecompetitionfromsolarinbothdomesticandthehotelsectorforwaterheatingpurposes.

Shellgashasawidedistributionnetworkwhichconsistsofsome900 resellers throughout the island. In addition, the companyprovidesahomedelivery service in selectedregions throughanetworkofresellers. Italsooffersavarietyofcylindersizes forvariousapplications:12kgand5kgfordomesticpurposes,50kgforbothdomesticandindustrialapplicationsand12/15kgforforkliftapplications.

Installationservicesfordomestichotwaterorindustrialapplicationsare provided through a number of professional contractorswho are trained and certified byShellgas.This ensures thatall installations carriedoutby the company’s contractors are inconformitywith internationalstandards. Inordertosensitisethepublicfortheneedtocomplywithsafetyrequirements,anumberof safety workshops and seminars were organised for both theresellers and end consumers.

Shell Autogas was introduced in 2001 as it offers a cheaperalternative tomotorists andbrings in a numberof benefits to theenvironment because of cleaner emissions. Despite the fluctuatingprices,autogasstillremainscompetitiveascomparedtomotorgasoline

butitstillhighcomparedtofueloil.Thereisalargegapinpricebetweenthesubsidised domestic cylinders and autogas.This has resulted in a number ofmotoristsstartingtodecantsubsidisedLPGfromcylindersintotheircarsusingunsafeequipment.Asaresultofthis illegalpractice in2011,autogasvolumehasdeclinedinShellsevicestations.Thispracticeisverydangerousandaftertheissuehadbeenaddressedwiththeauthorities,anewlegislationhascomeintoforcesince1stFebruary2012abouttheuseof12kgcylindersexclusivelyfordomesticpurposes.

The company’s effort to invest in this sector is alignedwith the conceptof‘Maurice,IleDurable’.TheShell Autogasnetworktodaycompriseseightretailoutletsnamely:Lataniers(PortLouis),Roadway(PortLouis),Goodlands,Emeralda(Westcoast),SaintJean(BelleRose),Floreal,Pineview(LaVigie)andBelAir.

ENERGY STORAGE COMPANY LIMITEDEnergyStorageCompanyLimited(ESCOL) isa50:50 jointventurebetweenVivoEnergyMauritiusLimitedandTotalMauritiusLimited.Thecompanyhasamoundedstoragecapacityof3,000metrictonssplitin6x500metrictonstanksbuiltwithbestpracticetechnologyandwhichofferssafestorageofLPG.ThemainpurposeofESCOListoallowlargertankerstosupply LPG to the country thus reducingunit freight cost.The contractwith STC for thehandling, receipt and storage of LPG came to an end in December 2009 and has beenrenewedforafurtherfiveyears.Inordertoadapttochangesintheportarea,anewpipelinewascommissionedinFebruary2010toconnectthenewoiljettywithESCOL.

RETAIL

AsaShelllicensee,VivoEnergyMauritiusLimitedoperatesawell-distributednetworkof43service-stationsundertheShellbrand.

Shellispioneerindifferentiatedfuelsdevelopmentwithanupgradedoffertocustomers.Shell Unleaded Extra and Shell FuelSave Dieselwithfueleconomyformulationarethelatestavailableproductsonournetwork.Theseproductshavebeendesignedfordrivingextrakilometresandensuringbetterefficiencyandprotectionofengines.Theyaresoldatthesamepriceasordinaryfuels.

Vivo Energy Mauritius Limited also offers Shell Autogas, Shell Lubricants and Shell Gas. Shell Cardisaneasy-to-use,convenientandsecuredpaymentcardwhichensuresanefficientmonitoringoffuelexpenses.Select and Shell Shops offerconvenienceretailingforquickpurchases.

Retailexperiencedgrowthaboveindustryinbothgasolineandgasoilalthoughthe industry registered a slight decline in the gasoil segment.A number ofmarketingactivitieswereorganised,namelythelaunchofShell FuelSave

Diesel which provides fuel economy from the first fill and the tacticalpromotion“ShellFillUpSaveandWin”.


Review of Operations Review Of Operations

10 11Vivo Energy Mauritius Limited Annual Report 2012

During the numerous road shows around the island, the benefits ofShell fuel

economy products and disseminating safe and fuel economy driving tips werecommunicated to motorists.

With regards to operational excellence,we continued the“MysteryMotoristProgram”which aims at sustainably enhancing the customer service on site.Andlikeeveryyear,weprovidedtrainingtoourretailers,qualitymarshallsandforecourt staff.

Asfarasnetworkisconcerned,weinvestedMUR83Min infrastructureandstartedtheconstructionanewservicestationintheNorthatArsenalwhichwasinoperationin2013.Wealsocarriedoutupgradeworksandcanopyinstallationonothersitesin2012.

Shell Cardregisteredagoodgrowthin2012.WepartneredwithVISAandaregraduallyrollingouttheiracceptanceacrossthenetworkfor greater payment convenience.

Overall,the2012retailvolumegrowthwasaboveindustrygrowthandabove2011.However,thefinancialperformancewasimpactedbylowermarginsandbaddebtsfromafewcustomers.Despitetheongoinguncertaintyinanumberofleadingeconomicsectors, 2013 looks promising for further growth.We have arobustmarketingplan inplaceandareplanning theopeningofanotherservice-station.

COMMERCIAL

Safety PerformanceHealth,Safety,SecurityandEnvironment(HSSE)continuestobethenumberonepriorityfortheF&Bbusinessandourlicencetooperate.Wemaintainedoursafetytrackrecordandcompletedanumberofcustomerinstallationswithoutanyincidentsfrombothourpersonnelandourcontractors.Ourcustomerstremendouslyvalueourcontributiontotheirbusinessintermsofincreasingtheirteams’HSSEawareness.

Business PerformanceDespite the ongoing recession and reduced volumes at ourmanufacturing customers, the team managed to secure growththrough securingnewcontracts.Anumberof important contractsthatweredueforrenewalweresigned,ascustomersplacedrenewedtrustinourhighlevelsofcustomerservice.

Enhanced Partnership with our Valued CustomersThe launch of Shell FuelSave Diesel was positively welcome by ourcustomersandseveraltestimonialsofwitnessedsavingswereachieved.

LUBRICANTS

In2012,ourmajorpartnershaveoncemorerenewedtheirtrustinthecompanyastheirpreferredlubricantssupplierwhilesomeotherkeyindustryplayershaveshiftedtoShell lubricantstobenefitfromourtechnicaledgeandworld-classservice.

Oureffortstooptimiseourportfolioandgrowourmarketshareinthelubricantsmarkethavebroughttangibleresultsthroughourleadingbrands,Shell Helix and Shell Rimula.

Shell’sleadinglobalmarketsharewasreconfirmedinanewreportfromKlineandCompany(CompetitiveintelligencefortheGlobalLubricantsIndustry,2008-2018)andShell’sstrongcompetitivepositioninghasbeenunderlinedrecentlyintheinternationalpress.

WearefocusingevenmoreonHealth,Safety,SecurityandEnvironment(HSSE)onthefieldtoensurethatourcustomersandthepublicatlargeunderstandtheimportanceofsafetyintheirday-to-dayactivitieswhendealinglubricants.

CUSTOMER SERVICE CENTRE

TheCustomerServiceCentre(CSC)waslaunchedin1997andhassincebecomekeytotheday-to-daybusinessactivitiesofthecompany,

TheCSCisaone-stopshopforthecompany’svaluedcustomers.Throughacallcentre,basicservicesareprovided,namelyordertakingfrombothretailandcommercialcustomersforfuelsandlubricants,complaintshandling,invoicingandrespondingtoqueriesoncustomeraccounts.

Overtheyears,theCSCupgradedandextendeditsservicestoincludedebtorfollowup,maintenancecallsmanagement,lubricantsandLPGmilk-rundeliveryschedulingandplanningandtelesales/telemarketingsupporttootherbusinesses.

TheCSC receives about 80,000 calls a year.These are handled by trained agentswhohavebeenempowered toactasbusinessand service focalpoints forHSSE,Commercial,Lubricants,LPG,AviationandMarine.

CSCMauritiushasbeenscoringmorethan99%inthecustomersatisfactionindexsurveyssince2008andismaintainingthishighscore.Furthermore,VivoEnergyMauritiusLimitedistheonlycompanyinthegrouptodeliverconsistentlyonallitstargetssince2007andendedtheyearonceagainaheadofalltheAfricancountries.




Withanever-growingdemandforservicesbothinternallyandexternally,theprimeobjective of the company is to bring continuous improvement to its service todistinguishitselfonthemarketandsatisfyitscustomersthroughserviceexcellence.

VivoEnergyMauritiusLimitedistheonlypetroleumcompanyoperatingsuchcomprehensivecustomerserviceinthecountry.Tothateffect,itiscontinuouslyrevisiting its processes and striving tomaintain high performance throughfocusandemphasisonpeopledevelopmentandstaffmotivation.

PRODUCT SUPPLIES AND DISTRIBUTION

SuppliesVivo Energy Mauritius Limited co-ordinates the replenishmentprogramme on behalf of the oil industry with the StateTradingCorporation(STC)forbothmainproductsandLPG.Some68,000metrictonsofLPGand865,000metrictonsofmainproductswereimportedin2012.LPGisreceivedinconsignmentsof2,000-3,000metric tons fromLPG tankers;white and black oils are receivedin60,000metric ton tankers,combiningoil industryandCentralElectricityBoardrequirements,afterthecommissioningofthenewoiljettyinNovember2008andthecomingintooperationofRedEagle,theMauritianownedoiltanker.

Vivo Energy Mauritius Limited purchases from STC in 2012amountedto301,000metrictonsformainproductsand34,000metric tons for LPG, representing35%and50%of total traderespectively.

TheShellgroup“SAFE”systemforvettingtankersissystematicallyutilised to ensure suitability of all vessels before loading. Substandards vessels are therefore avoided, thus ensuring a betterprotectionforMauritianshores.

DistributionVivo Energy Mauritius Limited owns and operates two depots,namelyRocheBoisandCauseway.RocheBoisismainlyusedforthestorageofwhiteoilsandincludesanLPGdepotwithasemiautomaticcylinderfillingplant, aswell aspacked lubricants stores.Causewaydepot is essentially for the storage and distribution of fuel oil tobothmarineand industrialcustomers.Thesetwodepotsconstituteastoragecapacityof23,000metrictonsforwhiteoils,16,000metrictons forblackoilsand1,200metric tons forLPG, representing32%,

54%and20%respectivelyoftotaloil industrystoragecapacityinMauritius.Besidesthesetwodepots,VivoEnergyMauritiusLimitedoperatesthreeotherdepotsonbehalfoftheoilindustry,oneatFortWilliamforthestorageoffueloilonbehalfoftheCentralElectricityBoard,thesecondoneinRodriguesIsland,andthirdly,ajointventureLPGstorage,ESCOL,of3,000metrictonscapacity,inwhichVivoEnergyMauritiusLimitedowns50%equity.

Distributiontoretailoutlets,industrialcustomersandtheairportiseffectedbyafleetof11bulkdeliveryvehiclesforwhiteoilsandblackoils.Afleetof15vehiclesdistributesLPGcylinders across the island to retailers,whilebulkLPG isdelivered through threespecialisedvehicles.Deliveriestomarinecustomersareeffectedeitherthroughbunkeringbargeorthroughpipelinesatquays.

HUMAN RESOURCES

Recruitment and selectionAfit-for-purposeorganisationiskeytogrowingthebusinesssuccessfully.During2012,VivoEnergyMauritiusLimitedon-boardedtennewrecruitsandtherewerenineappointmentsandpromotionsofwhichthreepositionswerewithintheManagementTeamThelatterpositionswereallfilledinbyinternalrecruitsconfirmingastrongsuccessionplanthecompanyhasinplace.

Recognition2012sawthelaunchofthefirstannualVivoAwards,acompetitionorganizedbythegroupaimedtobuildtheVivoEnergycultureofrewardandrecognition.TheVivoAwardshavefourcategories:PeopleAward,HSSEAward,CustomerAwardandBestPerformingOrganisationalUnitAward.VivoEnergyMauritiusLimitedwonthePeopleAwardforitsLearnandEarnprogramme.

Performance ManagementThenewPerformance,RewardandRecognitionPolicywaslaunchedin2012and,oneofitskeycomponentsistostrengthenthelinkbetweenperformanceandreward.Inthatrespect, the newpolicy focuses on clear andmeaningful reward differentiationwithsignificantrewardsfortopperformers.

Learning and DevelopmentLeadershipandfunctionalcompetencesofpeopleplayamajorroleinthecompany’ssuccess.During2012, trainingwas carriedoutonvarious aspectsnamelyHSSE,Compliance,Operations,Salesandtherewasalsothe launchoftheFrontLineLeadershipprogrammewhichwillcontinuein2013.In2012,theaveragenumberoftrainingdaysperemployeewas3.3.




HEALTH, SAFETY, SECURITY AND ENVIRONMENT

An HSSE community has been built up, comprising staff holding HSSE criticalpositions, to motivate our employees, contractors, retailers and customers atlarge.The HSSE community has the support of theManagementTeamwhocontinuouslydemonstrates their leadershipandcommitment, thusenhancingHSSEcultureandmaintaininghighstandardsofHSSE.

HSSE performance 2010-2012 2010 2011 2012

Fatality zero zero zeroTotalRecordableCases zero zero 1TotalRecordableOccupationalIllnessFrequency zero zero zeroExposureHours 600,000 571,000 571,000LostTimeInjury zero zero 1 Spills NIL NIL NILKilometresdriven 2,100,000 1,997,000 1,921,000

Safety DaySafety Day is a significant milestone inVivo Energy MauritiusLimited journey to build a stronger safety culture in its pursuit ofGoalZero.2012wasthesixthyearthecompanycelebratedSafety Day, the purpose of which is to bring employees andcontractors together toengageand focusonsafety. The2012themewas‘TimeforSafety’.

Life-saving rulesAfteridentifyingtwelvehigh-riskoperationsatwork,thecompanyputinplacetwelvecorrespondinglife-savingrules.Theaimistopreventharmtopeopleandemployeeshavetocomplywiththeserules.Eachreportednon-complianceisinvestigatedandfailuretocomply results in discipline and up to termination of employment ordischargeincaseofcontractors.

Global Environmental StandardsVivoEnergyMauritiusLimitedhasinplaceasystemforreportingandinvestigating environmental incidents. Hence, like every year a risk-basedassessmentofoursiteshasbeencompletedin2012andactionsclosed.

Competence assessmentPeople are one of the key barriersVivo EnergyMauritius Limited has in placetomitigate risks.The company aims at providing assurance that an employee iscompetent for the jobor taskheor she isperforming.Competency is confirmedthrough testing and recorded outcomes and the tests used are valid, reliable, andrecognised by external parties including regulators.

HSSE Culture LadderTaking on board initiatives started during previous years andwith the commitment ofemployeesandcontractors,VivoEnergyMauritiusLimitedhasreachedtheproactivelevelontheHSSEcultureladder.

Notes to the Financial Statements

16 Vivo Energy Mauritius Limited Annual Report 2012 Vivo Energy Mauritius Limited Annual Report 2012

Hisotory Of Vivo Energy

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HISTORY OF VIVO ENERGYIN MAURITIUSVivoEnergy,aShelllicenseein14Africanmarkets,wasestablishedon1stDecember2011todistributeandmarketShell-brandedfuelsandlubricants.

Vitol andHelios eachown40%ofVivoEnergy,with Shell holding the remaining20%.ShellandVivoLubricantsis50%ownedbyShelland50%ownedbyVitolandHelios.Shellremains theoverarching customer-facingbrand and thenameonVivoEnergy’s fuels andlubricants.

VivoEnergyoperatesinRetail;CommercialFuels(MarineandAviationinpartnershipwithVitolAviation);LiquefiedPetroleumGas;LubricantsandBitumeninMauritius.

Thecompanynowemploys120peopleandoperates43retailstationsundertheShellbrand.TheShellCompanyofEastAfricaLimitedstarteditsmarketingoperationsinMauritiusin1905through itsmanagingagents,BlythBrothersandCompanyLimited. Assuch,ShellwasthefirstinternationaloilcompanytosetupbusinessontheislandanditsclosepartnershipwithBlythhasbeenthecornerstoneofasuccessfuldevelopment.Mostofthesitesofcurrentservicestations,depotandcustomerportfoliowereacquiredduringthistime.

Aspartofaregionalcorporatereorganisationinthelate1950s,theShellCompanyofEastAfricawasreplacedbytheShellCompanyoftheIslandsLimited,abranchofacompanyincorporatedintheUnitedKingdom.Aftertheirreversibleturmoilontheinternationaloilsceneintheearly1970sandrecognisingtheneedforoilcompaniestohavetheirownidentityanddirectdialoguewithGovernment,ShellandIrelandBlythLimited,whowasthentheoldestShellagentsintheworld,negotiatedthetermsoftheagencyagreement.In1976,therefore,Shelltookoveritsownbusinessmanagement inMauritius, directlypromoting its activities, engaging itsown staff andopeningitsownoffices.

AsaresultofadecisionmadebytheShellandBPgroupstodeconsolidatetheirjointbusinessinterestsinAfricain1982,BPOceanIslandsLimited’sactivitiesinMauritiusweretakenoverbyShelltobecomeShellOceanIslandsLimited.BothTheShellCompanyoftheIslandsLimitedandShellOceanIslandsLimitedweregiventhestatusofaPublicLimitedCompany(plc)asaresultofachangeinBritishCompanyLaw.OnJanuary1st1991,thebusinessesofthelocalbranchofbothTheShellCompanyoftheIslandsplcandShellOceanIslandsplcweretransferred to a locally incorporated company, ShellMauritius Limited, in exchange forsharesinthelatter.ThischangeincorporatestructureunderlinesShell’sconfidenceinthefutureofMauritius.Inaddition,thenewlyincorporatedcompanywasfloatedontheMauritianStockExchangeandtheMauritianpubliccurrentlyowns22.85%ofitsshares.

Duringits108-yearpresenceinMauritius,thecompanyhasbuiltupacomprehensivebusiness network in the energy scene, backed up by strong infrastructuralinvestments,goodtechnicalknow-howandprofessionalism.VivoEnergyMauritiusLimitedaccountsfornearlyhalfoftheimportedenergydemandoftheislandandispresentinallsectorsofthisbusinessactivity.


FinancialStatements


Director’s Report Director’s Report


DIRECTORS’ REPORTThedirectorspresenttheirannualreportandtheauditedfinancialstatementsofVivoEnergyMauritiusLimited(the“Company”)fortheyearended31December2012.

PRINCIPAL ACTIVITIES

The Company’s principal activity is the marketing and distribution ofpetroleumproducts.Itsjointventure,EnergyStorageCompanyLimited,isinvolvedintheprovisionofLPGterminalusagefacilities.

RESULTS AND DIVIDENDS

TheCompany’sprofitfortheyearisRs180,868,000 (2011-Rs324,860,000).

ThefinancialstatementsoftheCompanyfortheyearended31De-cember2012aresetoutonpages44to88.Theauditor’sreportonthesefinancialstatementsisonpages47and48.

TheCompanydeclaredandpaidthe followingdividendsduringtheyear :

Dividend per share 2012 2011 Rs RsDeclaredon: 26March2012 6.10 6.1009November2012 2.00 5.00 8.10 11.10

Fortheyearended31December2012,theCompanymadeaprofitofRs 6.17 (2011–Rs11.08)pershareanddeclaredatotal dividend of Rs 2.00(2011-Rs5.00)pershareofwhichRs

2.00(2011-Nil)waspaidduringtheyear.

STATEMENT OF DIRECTORS’RESPONSIBILITIES IN RESPECT OF THEFINANCIAL STATEMENTS

Company law requires the directors to prepare financial statements for each financialyearwhichpresentfairlythefinancialposition,financialperformanceandcashflowsoftheCompany.Inpreparingthosefinancialstatements,thedirectorsarerequiredto:

• selectsuitableaccountingpoliciesandthenapplythemconsistently;• makejudgementsandestimatesthatarereasonableandprudent;• statewhetherInternationalFinancialReportingStandardshavebeenfollowed,subjecttoanymaterialdeparturesdisclosedandexplainedinthefinancialstatements;and

• preparethefinancialstatementsonthegoingconcernbasisunlessitisinappropriatetopresumethattheCompanywillcontinueinbusiness.

Thedirectorsconfirmthattheyhavecompliedwiththeaboverequirementsinpreparingthefinancialstatements.

ThedirectorsareresponsibleforkeepingproperaccountingrecordswhichdisclosewithreasonableaccuracyatanytimethefinancialpositionoftheCompanyandtoenablethemtoensure that thefinancial statements complywith theMauritianCompaniesAct2001.TheyarealsoresponsibleforsafeguardingtheassetsoftheCompanyandhencefortakingreasonablestepsforthepreventionanddetectionoffraudandotherirregularities.

DIRECTORS

ThedirectorsoftheCompanysince01January2012andatthedateofthisreportare:MrHonoreDainhi(appointedon29February2012andresignedon27February2013)MrPawanKJuwaheerMrPatrickCrightonMrRogerKFLeungShinCheungMr Antoine DelaporteMrChristianChammas(appointedon21March2013)

CONTRACTS OF SIGNIFICANCE

Witheffectfrom01December2011,thecompanyenteredintothefollowingcontractswithrelatedparties:

(a) licenceagreementforthebrandingofretailautomotivefuelsitesandother assetswithShellBrandsInternationalAG;and(b) contractfortheprovisionofserviceswithVivoEnergySouthAfrica(Pty)Ltd.

DIRECTORS’ REPORT (CONTINUED)

Director’s Report Director’s Report

MAJOR SHAREHOLDERAt 31 December 2012, Vivo EnergyMauritius Holdings BV holds directly77.15%oftheordinarysharecapitaloftheCompany.No other person holds5% or more of the ordinary sharecapitaloftheCompany.

SEGMENTAL ANALYSISA business segment analysis of sales and resultsisgiveninNote5tothefinancialstatements.

SERVICE CONTRACTSMessrs Patrick Crighton and PawanK. Juwaheer have service contractswithoutanexpirydate.Service contracts of other directorsareterminablewitha3months’noticeperiodbyeitherparty.

DIRECTORS’ INTERESTSThedirectors haveno interests in theordinarysharecapitaloftheCompany,eitherdirectlyorindirectly.

THREE YEAR SUMMARYAthreeyearfinancialsummaryissetoutinNote30tothefinancialstatements.

DONATIONSDuring the year, the Company madedonationsofRsNil(2011-Rs69,370).

SECRETARY’S REPORT TO THE MEMBERS OFVIVO ENERGY MAURITIUS LIMITEDUNDER SECTION 166(D) OF THE COMPANIES ACT 2001

WecertifythatwehavefiledwiththeRegistrarofCompaniesallsuchreturnsasarerequiredoftheCompanyundertheCompaniesAct2001.

Executive Services Limited

AsperChristianAngseesingACISCORPORATESECRETARY 28March2012

AUDITORThefeeschargedbytheauditor,PricewaterhouseCoopers,forauditandotherserviceswere: 2012 2011 Rs’000 Rs’000Statutoryaudit 1,876 1,746Auditrelatedservices-Quarterlyreviews 510 480ReportingtoGroupAuditors 200 -

The audit related services consist of (i) quarterly review of published financialstatements and (ii) reporting to the group auditors. PricewaterhouseCoopers hasindicateditswillingnesstocontinueinofficeandwillbeautomaticallyreappointedattheAnnualMeeting.

ApprovedbytheBoardofdirectorson28March2013andsignedonitsbehalfby: } }DIRECTORS } }

DIRECTORS’ REPORT (CONTINUED)

Vivo Energy Mauritius Limited Annual Report 2012Vivo Energy Mauritius Limited Annual Report 2012

Corporate Governance Report

25Vivo Energy Mauritius Limited Annual Report 2012


2424

CORPORATE GOVERNANCE REPORTMauritius Code of Corporate Governance compliance

The disclosures contained in this report are intended to provide the readerwitha description of Vivo Energy Mauritius Limited corporate governance policies and practices. Thedirectors firmlybelieve in and supporthigh standardsof corporategovernance,whicharecriticaltoourbusinessintegrity.

TheBoardconfirmscompliancetotheMauritiusCodeofCorporateGovernance.

BOARD OF DIRECTORSThe Board of directors ofVivo Energy Mauritius Limited remains stringent whenit comes to upholding the highest standards of integrity and transparency in theirgovernanceofthecompany.Theimportanceandthevalueofabalancedinterplaybetweendirectors,managementandshareholderswithinthecompanyhaslongbeenamajorprinciplegoverningtheconductofVivoEnergyMauritiusLimited.

ABoardofdirectorsconsistingoffivedirectorsmanagesVivoEnergyMauritiusLimited.Directorsareappointedattheannualmeetingofshareholders.Incompliancewithits constitution, at eachAnnualMeeting of theCompany, theDirectorswho havebeen longest inofficesincetheir lastelectionretirebyrotationandareeligible forreappointment.Thechairpersonretires fromofficeevery4yearsand iseligible forreappointment.Theyholdofficeuntil they retireor submit their resignation, unlessremovedearlierfromofficebytheannualmeetingofshareholders.

Theboarddelegatestheday-to-dayrunningofthecompanytotheManagingDirector.The board delegates operational issues to the management team and is directlyaccountabletotheshareholdersfortheperformanceofthecompany.

DuringtheyearendedDecember31,2012,fourboardmeetingswereheld.

TheofficesofChairmanandManagingDirectorwereseparatedonNovember17,2003 in order to align board governance with the Mauritius Code of CorporateGovernance. ANon-executiveDirector occupies theOffice ofChairman and anExecutive Director occupies the office of Managing Director. The Chairman andManagingDirectorensurethatthemembersoftheboardreceiveaccurate,timelyandclear information.

In February 2012,Vivo Energy Mauritius Holdings BV bought 631,627sharesfromminorityshareholdersandasaresult,holds22,623,316shares(77.15%)at31December2012.

Nootherpersonholds5%ormoreoftheordinarysharecapitaloftheCompany.

Holding Structure

HVInvestmentsBV(Netherlands)

80%

Vivo Energy Mauritius Holding BV(Netherlands)77.15%

Vivo Energy Holding BV (Netherlands)

100%

Vivo EnergyMauritius Limited

ShellOverseasInvestmentsBV(Netherlands)

20%

Localshareholders22.85%

CORPORATE GOVERNANCE REPORT (CONTINUED)


PROFILE OF DIRECTORS

HonoreDainhi joinedShell inCoteD’Ivoire1996asRetailSalesandOperationsManager.In1998,hewaspromotedtoRetailManager.Afterthat,hehasoccupiedthepostsofAuditManagerforGlobalLPGbasedinLondon,RetailBusinessAdvisorfortheSouthZone/AfricaRetailCoreTeamandRegionalRetailManagerforWestandCentralAfrica.In2004,hemovedtoTheHaguewhereheworkedasSeniorIDAdviserforSub-SaharanAfrica.In2006,hewasappointedRegionalVice-PresidentforWestAfricaandsinceDecember2011,hewasappointedChiefOperatingOfficerofVivoEnergy.MrDainhiholdsanEngineeringdegreeinelectronicsfromEcoleNationale Supérieure d’Electronique et de Radioélectricité’ (ENSERB),France.In1990,hecompletedapost-graduatedegreeininternationalbusinessmanagement(specialisation inmarketing/salesmanagement) from‘EcoledesHautesEtudesCommerciales’(EDHEC),France.

ChristianChammas,joinedVivoEnergy,aShelllicenseein14Africancountries,asChiefExecutiveOfficer (CEO)on1st January2012.Mr.Chammashasextensiveexperienceintheenergysector.PriortojoiningVivoEnergy,hewasatTotalfor31yearswhereheheldseveralpositionsinCentralAmerica,theCaribbeanandIndia.HoweveritisinAfricawheremostofhiscareerhasdeveloped.Asanengineer,heworkedonhisfirstprojectinNigeria.HelaterservedasCEOforTotalGroupofCompaniesinCameroonandKenya.Inhislastrole,hewastheExecutiveVicePresidentfortheMiddleEastandNorthAfricadivisionofTotal’srefineryandmarketingdivision.MrChristianisbasedinLondon,butspendsthemajorityofhistimewithemployees,customersandotherkeystakeholdersintheVivoEnergybusinessesacrossAfrica.


Corporate Governance Report Corporate Governance Report

26 27

Honore Dainhi, aged 46

(appointed29February2012andresigned27February2013)

ChairmanandNon-ExecutiveDirector

Mr Pawan K Juwaheer, aged 49

ManagingDirectorandVice-PresidentIndianOceanIslands

Christian Chammas, aged 58

(appointedon21March2013)Patrick Crighton, aged 53

ExecutiveDirectorandFinanceManager

CORPORATE GOVERNANCE REPORT (CONTINUED) CORPORATE GOVERNANCE REPORT (CONTINUED)

Pawan Juwaheer studiedmechanical engineering at the University of ManchesterInstitute of Science andTechnology, UK. Joining the company in 1986, he hasoccupied different positions across the business.Heworked as Lubricants SalesTechnicalAssistant,ConsumerSalesRepresentative,RetailPlannerandSupervisorandRetailSalesManagerinMauritius.HethenworkedoverseasasRetailVisualIdentityfocalpointandRetailEngineeringManagerforShellinTunisiaandlaterasEastAfricaRetailNetworkManagerandRegionalRetailManager forShellEastAfricabased inNairobi.Mr Juwaheerwas appointedManagingDirectorofVivoEnergyMauritiusLimitedinJuly2006andhassincebeenamemberoftheboard.HehastakenthepositionofVice-PresidentIndianOceanIslandsinJanuary2012.HeisalsoaDirectoronEnergyStorageCompanyLimited,StateInformaticsLimited,MauritiusCargoCommunityServicesLimitedboardsandtheLocalAdvisoryBoardofBarclaysBank(Mauritius).HeistheChairmanoftheSociétéMalgachedesPétrolesVivoEnergy,LogistiquePétroliereSAandVivoEnergyIndianOceanHolding.MrJuwaheerwasaformerChairpersonof theMauritius Chamber of Commerce and Industry and is currently amember.

FellowoftheAssociationofCharteredCertifiedAccountants,MrCrightonjoined Vivo Energy Mauritius Limited in January 1987 as ManagementAccountant. Thereafter, from 1989 to 1993, he occupied the position ofLegal andTaxAccountantbefore takingover thepositionofTreasuryandCorporateAccountantupto1995.HewasthenappointedCreditManagerand in 1997 became a member of the JD Edwards team before beingtheCorporateAccountant. In 2001,MrCrightonwas appointed FinanceManager.MrCrightonistheholderofaMastersinBusinessAdministrationfromNapierUniversity.InJanuary2005,hewasappointedaDirectorofVivoEnergy Mauritius Limited.


Roger Leung, aged 66

IndependentandNon-ExecutiveDirector

Antoine Delaporte, aged 52

IndependentandNon-ExecutiveDirector

MemberoftheAssociateoftheCharteredInstituteofbankersinUKandafellowmemberof theMauritius InstituteofDirectors,Mr Leunghasbeen appointed aDirectorofVivoEnergyMauritiusLimitedinJune2006.HeretiredfromBarclaysBankinSeptember2005asRegionalCorporateDirector.HehasbeentrusteeoftheBarclaysEmployeesPensionFundandaDirectoroftheBarclaysLeasingCompany(Mauritius)Limited.MrLeungisnowadirectorofMDIT,IPROFundLtd and Bank One Limited. He presently works as Consultant in businessrestructuring and performance optimisation.

AntoineDelaportewasappointedaDirectorofVivoEnergyMauritiusLimitedinJune2006.HeisthefounderandManagingDirectorofI&PManagementLimited,aprivatecompanymanagingprivateequityfundsinAfrica.Beforethat,MrDelaportewasanentrepreneurinMadagascarandhehadbeenamanageratBain&Co,aleadingstrategicConsultingfirm.GraduatedoftheESCP-Parisbusinessschool,heholdsanMBAfromINSEAD,France.HeisamemberoftheboardsofCielTextile,CAMLandCEALinMauritiusandservesonseveralboardsinMadagascar,ReunionIslandandEurope.

DIRECTORS’ EMOLUMENTS 2012 20110–Rs200,000 1 2BetweenRs200,000toRs1m 2 1BetweenRs1mtoRs3m 0 0Above Rs 3 m 2 2

During the year ended 31December 2012, executive directors received anaggregateamountofRs11,295,169(2011-Rs15,065,891)asremunerationandbenefitsfromtheCompany.Thenon-executivedirectorsreceivedanaggregateamountofRs540,000(2011-Rs759,751)asremunerationandbenefitsfromtheCompanyduring the sameperiod.During2012, the corporate governancecommittee met to consider whether the company would disclose directors’remunerationon an individual basis going forward. Eventually itwasdecided tocontinuedisclosingsalariesbybandstoprotectpersonalprivacyofindividuals,whichisalsoinlinewithcurrentmarketpractice.

PROFILE OF MANAGEMENT TEAM

TheVivoEnergyMauritiusLimitedmanagementteamisresponsibleforsupervisingthegeneralcourseofbusinessofthecompanyandadvisetheBoardofdirectors.

The teamcomprises theManagingDirector,MrPawanK Juwaheer, theFinanceManager,MrPatrickCrighton,andthefollowingmanagers:

NancyYoungjoinedVivoEnergyMauritiusLimitedin1990asAssistanttothePersonnelandServicesManager.AsfromApril1999,sheoccupiedthepositionofHumanResourcesandServicesManagerand in January2005,MrsYoungwasappointedClusterHumanResourceManager.MrsYoungisacertifiedgraduateinterviewerandassessorandaregisteredtrainerinHumanResourcesManagement.SheholdsaMastersdegreeinPsychologywithspecialisationinIndustrialPsychologyfromtheUniversityofBordeaux,France.

MrRajanahDhaliah isholderofadegree inMechanicalEngineeringandaMastersDegreeinBusinessAdministrationfromtheUniversityofMauritius.HejoinedVivoEnergyMauritiusLimitedin1990asLubricantsSalesEngineer.Afterthat,heactedasheadoftheBusinessProcessImprovementProject,LPGcoordinatorforShellGasMauritiusbusiness,RetailManager,Competenceand Learning Manager forAfrica and MECAS (Middle East CentralAsiaSouth)fortheGlobalLubesOrganisationuntil2009.From2009to2012,MrDhaliahworkedasB2CMarketingManagerforCommercialbusinessesinAfrica.HewasappointedBusinesstoBusinessManagerforVivoEnergyMauritiusLimitedinJuly2012.

Holder of a postgraduate degree inCommerce,Management and Financefrom Ecole Supérieure deCommerce de Pau, France, EricHufouye joinedVivo EnergyMauritius Limited as RetailManager inOctober 2008. Beforethat,hewasProjectandDevelopmentManager,ExportManagerandProjectTeamLeader.MrHufouyewasappointedMarineandAviationManageron1December 2012.



28 29

Nancy Young

ClusterHumanResourceManager

Rajanah Dhaliah

Business-to-BusinessManager

Eric Hufouye

Marine and Aviation Manager



Krishnen Vencadachellum

Retail Manager

Afsar Soobadar

Distribution Manager

Holder of a degree in Mechanical Engineering from the University ofAllahabad(India) and a Masters degree in BusinessAdministration from the University ofMauritius,KrishnenVencadachellum joinedVivoEnergyMauritiusLimited in2004asRetailEngineerandPropertyManager.In2009,hetookthepostofOperationsExcellenceCoordinatorthenNetworkPlannerforEastandSouthEastAfricathenbecameExecutiveAssistanttoVPIndianOceanIslands.HewasappointedRetailManager in December 2012.

Afsar Soobadar joinedVivoEnergyMauritius Limited in2004asTransportand LogisticsManager. He thenworked asTerminalOperationsManagerfrom2008until 2012afterwhichhewas appointedDistributionManageron 1 January 2013. Mr Soobadar studiedmanufacturing engineering andmanagement at the University of Manchester, UK. Before joining thecompany, heworked for Bonair Knitwearwhere he held the positions ofIndustrial Engineer,MaintenanceManager and ProductionManager. He isalsoManagingDirectorforESCOL(EnergyStorageCompanyLimited),anassociatecompanyofVivoEnergyMauritiusLimitedsince1January2013.

BOARD MEETINGS

Theboardmeetsonaregularbasisandhasaformalscheduleofmattersreservedforit.ThisincludesmatterssuchasapprovaloftheAnnualReport,approvalofinterim dividends and recommendation of final dividends, approval ofmaterialcontracts and nomination of candidates for boardmembership. The full listofmatters reserved to the board for decision is available from theCompanySecretary.

Attendance of board meetings in 2012

In2012,theattendanceofthedirectorswasasfollows:

WitheffectfromNovember2012,eachtimetheChairmanisnotinapositiontochairBoardmeetings,theChairmanshipisheldbyanindependentdirector.

BOARD COMMITTEES

TheBoardhastwostandingcommitteesmadeupofExecutiveandNon-executiveDirectorstoassistinthedischargeofitsduties.Thecommittees,whicharesetoutbelow,meetregularlyunderthetermsofreferencesetbytheboard.

AsfromMarch27,2007theNominationandRemunerationcommitteehasbeenmergedwiththeCorporateGovernancecommittee.

Mar26 May10 Aug14 Nov09 2012 2012 2012 2012Chairman MrHonoreDainhi X X - X (byphone) (byphone) (byphone)Managing Director MrPawanKumarJuwaheer X X X X (Chairperson) (Chairperson) (Chairperson) (Chairperson)Directors MrPatrickCrighton X X X XMrAntoineDelaporte X X X X (Chairperson)MrRogerLeung X X X X



30 31





TERMS OF REFERENCETERMS OF REFERENCE OF AUDIT AND RISK COMMITTEE (ARC) TERMS OF REFERENCE OF AUDIT AND RISK COMMITTEE (ARC)

Constitution

TheARC, establishedby theBoardof the company, shallconsist of at least two but not exceeding three Non-executive Directors (NED). The Chairperson of thecommitteeshallbeanindependentNED(asdefinedbytheCodeofCorporateGovernanceofMauritius).

Each member shall be financially literate. At least onemembermusthaveaccountingorrelatedfinancialexpertise.

Members shall be appointed for two (2) years term ofnoticesolongastheyremainadirectorofthecompany.

Audit committeemembers shallnot serve simultaneouslyontheauditcommitteeofcompaniesinthesamefieldasthepresentcompanyandofmore than twootherpubliccompanieswithouttheapprovalofthefullboard.

Objectives

Theauditcommitteeshallassisttheboardinmonitoringandoverseeing itsfinancial responsibilities. Itsmainobjectivesshallbeto:

• Overseetheintegrityofthefinancialreportingprocessand ensure the transparency and performance ofpublishedfinancialinformation.

• Review the effectiveness and performance of thecompany’sinternalfinancialcontrolandriskmanagementsystem.

• Evaluatetheworkoftheinternalauditfunctionandofthe external auditors.Review the company’s processcompliance with legal and regulatory requirementsaffectingfinancialreportingand,ifapplicable,itscodeofbusiness conduct.

The ARC committee will maintain effective workingrelationships with the board of directors, management,and the external and internal auditors. The duties andresponsibilitiesofamemberoftheauditcommitteeareinaddition to those set out for amember of the board ofdirectors.

Meetings

Only committee members will attend meetings. Aquorumof anymeeting shall be two (2)members. Theauditcommitteemayinvitesuchotherpersons(e.g.otherdirectors, the General Manager, head of finance, headof internal audit and external audit senior partner) to itsmeetings,asitdeemsnecessary.

Theexternalandinternalauditorsshallbeinvitedtomakepresentations to the audit committee as appropriate. Atleastonceayear,thecommitteeshallmeetwiththeheadofinternalauditandseniorpartneroftheexternalauditorswithoutthepresenceofexecutivemanagementtodiscussanymattersthateitherthecommitteeorthesetwopartiesbelieveshouldbediscussedprivately.

Thecommitteeshallmeetasoftenasitdeterminesnecessaryorappropriatebutnotlessfrequentlythanquarterly.

The committee chairman shall convene a meeting uponrequest of any committee member who considers itnecessary.

Thesecretaryoftheauditcommitteeshallbethecompanysecretary,orsuchotherpersonasnominatedbytheboard.

Thesecretaryofthecommitteeshallcirculatetheminutes,agenda, and background materials of meetings to themembers of the committee and to the chairman of theboardatleastaweekbeforethemeeting.

Thebackgroundmaterialmustincludeallsuchmanagementaccounts, financial statements, internal and external auditreportsandinternalcontrolevaluationsthatareavailable.

The chairman of the committee or another member ofthecommitteeshallattendtheboardmeetingatwhichthefinancialstatementsareapproved.

Thecommitteeshouldmeetwithin-houselegaladviseronaregularbasis(ifoneisappointed).Meetingswithoutsidelegaladvisershouldbeheldifitisdeemednecessary.

Board authority (et al)

Theboardauthorisestheauditcommittee,withinthescopeofitsresponsibilitiesto:• Investigateanyactivityitdeemsappropriate,• Appoint independent advisers and professionals

(accountants,lawyersandsoon)asitdeemsnecessarytocarryoutitsduties,

• Instruct any officer or employee of the company toattend any meetings and provide pertinent information asnecessaryandappropriate,

• Haveunrestrictedaccesstomembersofmanagement,employeesandrelevantinformation,

• Establish procedures for dealing with concern ofemployees regarding accounting, internal controls andauditingmatters,

• Makerecommendationstotheboardinrelationtotheappointment,terminationandremunerationofexternalauditorsandevaluatetheworkofthelatter,

• Review theperformanceof theexternal auditors andexercisefinalapprovalontheappointmentordischargeoftheauditors;and

• Pre-approveallauditservicesfeesandtermsaswellasreviewpolicies fortheprovisiononnon-auditservicesbytheexternalauditors.

The internal audit manager reports functionally to thechairmanof the audit committee (and administratively totheGeneralManager).

Main responsibilities

The basic responsibility of the members of the auditcommitteeistoexercisetheirbusinessjudgmenttoactinwhattheyreasonablybelievetobeinthebestinterestsofthecompanyanditsshareholders.Indischargingthatobligationmembers should be entitled to rely on the honesty andintegrityofthecompanyseniorexecutivesanditsoutsideadvisorsandauditors,tothefullestextentpermittedbylaw.

Key responsibility in respect of financial reporting

Thecommitteeshall:• Reviewtheinterimfinancialstatements,annualfinancial

statements and preliminary announcements prior to theirrelease,

• Meet with management, internal auditors and theexternalauditorstoreviewthefinancialstatements,thecriticalaccountingpoliciesandpractices,andtheresultsoftheiraudit,

• Ensure that significant adjustments, unadjusteddifferences, disagreements with management andmanagement letter are discussed with the externalauditors; and

• Reviewtheothersectionsoftheannualreportbeforeits release and consider whether the information isunderstandable,consistentwithmembers’knowledgeofthecompanyandunbiased.





TERMS OF REFERENCE OF AUDIT AND RISK COMMITTEE (ARC) TERMS OF REFERENCE OF AUDIT AND RISK COMMITTEE (ARC)

TERMS OF REFERENCE OF THE CORPORATE GOVERNANCE COMMITTEE

Key responsibility in respect of internal control

Thecommitteeshall:• Discuss the internal controls, adhered to by the

company’s management, financial, accounting andinternalauditpersonnel,

• Discuss with management the company’s major riskexposures and the steps management has taken tomonitorandcontrolsuchexposures,

• Evaluatetheoveralleffectivenessoftheinternalcontrolandriskmanagementframeworksandconsiderwhetherrecommendations made by the internal and externalauditorshavebeenimplementedbymanagement,

• Ensure that significant findings and recommendationsnoted by the internal auditors and management’sproposed response are discussed and appropriately acted on; and

• Evaluatetheinternalcontrolmatrixofthecompanyonaquarterlybasisandobtainmanagementcommentsonfluctuationsinthescore.

Key responsibility in respect of internal audit

Thecommitteeshall:• Ensure that the company has an appropriate internal

auditfunction,• Review theeffectivenessof the internal audit function

andensure that ithasappropriate standingwithin thecompany; and

• Evaluatetheinternalauditdepartmentanditsimpactontheaccountingpractices internal controlsandfinancialreportingofthecompany.

Key responsibility in respect of external audit

Thecommitteeshall:• Review on an annual basis the performance of theexternal auditors based on the scope and results oftheir work andmake recommendations to the board ofthe appointment, reappointment or termination of theappointmentoftheexternalauditors,• Consider the independence and objectivity of theexternal auditor.• Discuss and review the external auditors’ proposedaudit scope, planning and approach in the light of thecompany’s circumstances and changes in regulatory andotherrequirements;and• Ensure that significant findings, accounting adjustmentsand recommendations noted by the external auditorsand management’s proposed response are discussed and appropriately acted on.

Responsibility in respect of compliance with laws and regulations

Thecommitteeshall:• Reviewtheeffectivenessof thesystem formonitoringcompliance with laws and regulations and the resultsof management’s investigation and follow-up (includingdisciplinaryaction)ofanyfraudulentactsornon-compliance,• Oversee the company’s compliance with legal andregulatory provisions, its articles of association, code ofconduct,by-lawsandanyrulesestablishedbytheboard;and• Conduct andauthorise investigations into anymatterswithintheauditcommittee’sscopeofresponsibilities.

Evaluating performance and reporting responsibilities

Thecommitteeshall:• Assess the achievement of the duties specified in the

charter annually and make regular report of theirfindingstotheboard,

• Reviewandreassesstheadequacyofitschartereverytwo(2)yearsanddiscussanyrequiredchangeswiththeboard; and

• Recommendapprovaloftheannualreportandaccountstotheboard.

The main attribution of the Corporate GovernancecommitteeistoprovideguidancetotheBoardonaspectsofCorporateGovernanceandtorecommendtheadoptionofpoliciesandbestpracticesasappropriatetothecompany.TheCorporateGovernancecommitteeisalsoresponsiblefor remuneration and nomination matters within thecompany.

The Corporate Governance committee that hasresponsibility for board and senior executive nominations should:

• Ascertainwhetherpotential newdirectors arefit andproper and are not disqualified from being directors.Priortotheirappointment,theirbackgroundsshouldbeinvestigatedthoroughly;

• Ensurethatthepotentialnewdirectorisfullycognisantofwhatisexpectedfromadirector,ingeneral,andfromhimorherinparticular ;

• Ensure that the right balance of skills, expertise andindependence is maintained;

• Ensure that there is a clearly defined and transparentprocedure for shareholders to recommend potentialcandidates;

• Ensurethatpotentialcandidatesarefreefrommaterialconflictsofinterestandarenotlikelytosimplyactintheinterestsofamajorshareholder,substantialcreditororsignificantsupplierofthecompany.Thisisofparticularimportance when a candidate has been nominatedby virtueof a shareholders’ agreement, orother suchagreement.Inanycase,candidatessonominatedcannotbe considered independent (see Section 2, chapter 4,clause7).

• Ensure that those directors who, in the opinion ofthe board, have either acted in accordance with theinstructionsofathirdpartyorhavenotdischargedtheirdutiesasdirectorstothesatisfactionoftheboard,notbenominatedforre-election.





36

Corporate Governance committee Directors in joint venture

Vivo Energy HR performance, rewardsand benefits philosophy

MrAntoineDelaporte(Chairman)MrPawanKJuwaheerMr Roger Leung

Mar26 Nov04 2012 2012 Chairman MrAntoineDelaporte X X Directors MrPawanKumarJuwaheer X XMrRogerLeung X X

Audit and Risk Management CommitteeMrRogerLeung(Chairman)Mr Antoine Delaporte

Mar22 May04 Aug07 Nov01 2012 2012 2012 2012Chairman MrRogerLeung X X X XDirector MrAntoineDelaporte X X X X (byphone)

May03 Nov15 2012 2012Chairman MrBashirallyACurrimjee X XDirectors MrChristianFassinou(appointed29Mar2012) X XMrPawanKumarJuwaheer X XMrMauriceLionnet(resignedon31Dec2012) X XMrFrançoisGauthierdeCharnacé(resignedon15Sep2012) XMsAnneSolangeRenouard(appointedon15Sep2012) XMrJeanJacquesPapee X X

Energy Storage Company LimitedVivoEnergyMauritiusLimitedholds50%ofthesharesofEnergyStorageCompanyLimited.TheBoarddirectorsofESCOLandtheirattendancetotheESCOLboardmeetingin2012areasfollows:

People inVivo Energy are critical to the achievement ofour business objectives.Vivo Energy compensation policies,practices,andsystemsareintendedtorecogniseandsupport:

• Individualandbusinessperformance;bothshortandlongterm;

• Vivo Energy core values, business principles andpeopleprinciples;

• Businessandpeoplestrategies;• Ourstrongcommitmenttosustainabledevelopment;• Market competitiveness and the importance of internal

relationships;and• Differentbusinessandcountryeconomic,social,legal,and

regulatory environments.Performance and rewardpolicies shouldhelppeopleexcel,

foster affiliationwithVivo Energy, and encourage behaviourthat leads to the achievement of business and personalobjectives.

Benefits that are provided or enabled by Vivo Energycompanies are another important component of theemployee value proposition and support our attraction and retention strategies. Benefits that are common fosteraffiliationandcommunityspiritandofferafoundationforthetotalcompensationpackage.

Our pay and benefits philosophy, objectives and standardsapply to Vivo Energy companies that employ people onVivo Energy terms and conditions and should be broadlycommunicated and understood by all.






Objectives VivoEnergycompanieswilloperateperformance,rewardandbenefitsystemsthat:

• Alignemployeeandshareholderinterests;• Supporttheattractionandretentionofthebesttalentat

alllevelswhofitourbusinessneeds;• Assistmobilityandavoidcreatingbarrierstomovement

withinabusiness,countryorVivoEnergy;• Recognise both common interests and individual

preferences; and• Aretransparentandwellexplained

Inadditiontothesesharedobjectives,thedifferentelementsofthetotalcompensationpackagefocusondifferent,althoughcomplementary,goals.

Performance and rewards• Differentiateonthebasisofperformanceandvaluetothe

business; and • Encourage growth and development as individuals and

team players.

Benefits• Provide a standardised platform that allows other

elements of the reward strategy to differentiateon thebasis of performance;

• Arecosteffectiveandtaxadvantaged,whereVivoEnergypurchasing power provides leverage over individualpurchasingpowertoprovideforcostreductionandrisksharing;

• Supportlong-termsocialobjectivesforthecommunitieswithinwhichwework;

• Recognise the legislative environments and competitivemarketswithintheseenvironments;and

• Support sharingof responsibilitybetween the state, theemployerandtheemployee.

StandardsAll rewardandbenefitprogrammesmustcomply fullywithappropriatelawsandregulationsandourBusinessPrinciples:• Ourcompetitivereference:Tocomparetorepresentative

employersinthemarketsinwhichwecompetefortalent.

• Our competitive objective:To have salary and benefitsthat result in a fair and competitive market positionamongthecompetitivereferencegroup.Thepayelementwithinthetotalmixismoreimportantthanbenefitsinourcompetitivepositioning-aimedatdeliveringacompetitivepositiononTotalCashandTotalCompensation(includingbenefits).

POLICIES AND PRACTICE ON ETHICOur approach to business integrityOurcommitmenttobusinessintegrityisclearandunequivocal;Vivo Energy Mauritius Limited insists on honesty, integrityand fairness in all aspects of our business and expects thesame inour relationshipswith all thosewithwhomwedobusiness.Wedonotbribe,nordoweacceptbribes.Wedonot sanction illegal paymentsof any kind and investigate allsuspiciouscircumstances.Seriousaction is takenagainstanyemployeefoundtohavebreachedourfirm‘nobribes’policy.Corruption can occur in all parts of the world and at alllevels.Ourpolicyisthatthedirectorindirectoffer,payment,soliciting or acceptance of bribes in any form is unacceptable. Facilitationpaymentsarealsobribesandshouldnotbemade.

Declaration of conflict of interestEmployees must avoid conflicts of interest between theirprivate activities and their part in the conductof companybusiness.Theymustalsodeclareinwritingtothecompanypotential conflicts of interest. All business transactions onbehalfofaVivoEnergycompanymustbereflectedaccuratelyandfairlyintheaccountsofthecompanyinaccordancewithestablishedproceduresandaresubjecttoauditanddisclosure.Wereportannuallyonanybreachesofour‘nobribes’policy.

OurassuranceletterprocesshelpsustomonitorwhetherwearelivingbyourPrinciples,inaccordancewithbothexternallawsandregulationsandwithourinternalstandards.Eachyear,theManagingDirector reportsback to theChiefExecutiveOfficer of Vivo Energy, in writing, whether Vivo EnergyMauritiusLimitedhasacted in linewith theserequirementsandtoreportmaterialexceptions.Actionistakentoaddressareasofnon-compliance.

Code of ConductThe Code of Conduct helps us to live by our businessprinciples.AsShellLicensee,wefullyabidebytheStatementofGeneralBusinessPrincipleswhichprovidesthefoundationforhowVivoEnergycompaniesdobusinessaroundtheworld.Manyoftheseprinciplescontainlegalandethicalcompliancerequirements.Thecodeisasinglesourceofinformationaboutwhatthosecompliancerequirementsmean,withguidanceonwhentousethem,howtousethemandhowtobesure.

Responsibility to employeesWeprovideemployeeswithgoodandsafeworkingconditions,and competitive terms and conditions of employment.

Responsibility to customersWe remain at the forefront of innovation, in consistentlyoffering top quality products to our customers at verycompetitive prices.

COMPANY’S POLICIES AND PRACTICES WITH REGARDS TO SOCIAL ISSUESVivo Energy companies aim to be good neighbours bycontinuously improving the ways in which we contributedirectly or indirectly to the general well-being of thecommunitieswithinwhichwework.We manage the social impacts of our business activitiescarefully andworkwith others to enhance the benefits tolocalcommunities,andtomitigateanynegativeimpactsfromour activities.

Inaddition,VivoEnergycompaniestakeaconstructiveinterestinsocietalmatters,directlyorindirectlyrelatedtoourbusiness.

CORPORATE SOCIAL RESPONSIBILITYInVivoEnergy,itisourfirmbeliefthatsustainablegrowthcanonlybeachievedinpartnershipwiththecommunityinwhichweoperate.HencethecompanyhasallocatedRs7,463,500toCSRinitiatives.

POLITICAL DONATIONSVivoEnergyMauritiusLimitedhasnomandatetoparticipateinpartypolitics,although,asamajorgeneratorofeconomicwealth,theenergyindustryclearlyhasconsiderablesocialand

political impact. However, when dealing with government,VivoEnergyMauritiusLimitedhastherightandresponsibilitytomakeitspositionknownonanymatter,whichaffectsthecompany, its employees, its customers, or its shareholders.VivoEnergyMauritiusLimitedhasalsotherighttomakeitsposition knownonmatters affecting the community,wherethecompanyhasacontributiontomake.Wedonotmakedonationstopoliticalpartiesandtreatthisissueinthesamewayasbriberyandcorruption. Wereportannuallyontheimplementationofthispolicyofnopoliticalpayments.

Duringtheyear,thecompanymadenopoliticaldonations.

RISK MANAGEMENT AND INTERNAL CONTROLTheapproachtointernalcontrolisbasedontheunderlyingprinciple of line management’s accountability for risk andcontrolmanagement.Theriskandinternalcontrolpolicy explicitly states that the company has a risk-basedapproach to internal control and that management isresponsible for implementing, operating and monitoringthesystemof internalcontrol,which isdesignedtoprovidereasonablebutnotabsoluteassuranceofachievingbusinessobjectives.

The approach to internal control includes a number ofgeneralandspecificriskmanagementprocessesandpolicies.WithintheessentialframeworkprovidedbytheStatementofGeneralBusinessPrinciples,theprimarycontrolmechanismsare self-appraisal processes in combination with strictaccountabilityforresults.Thesemechanismsareunderpinnedby established policies, standards and guidance materialthat relate toparticular typesof risk; structured investmentdecisionprocesses,timelyandeffectivereportingsystemsandperformance appraisal.

Examplesofspecificriskmanagementmechanismsinclude:• regular review of significant risks by the management

team;• acommonhealth,safety,securityandenvironment(HSSE)

policy, a common requirement for HSSE managementsystems, and external certificationof the environmentalcomponentofsuchsystemsformajorinstallations;





• afinancialcontrolhandbookthatestablishesstandardsfortheapplicationofinternalfinancialcontrols;

• arrangements for the management of property, liabilityandtreasuryrisks;and

• abusinesscontrolincidentreportingprocessthatenablesmonitoringandappropriatefollow-upactionsforincidentsarisingasaresultofcontrolbreakdowns.Lessonslearnedfrom these incidents are used to improve the overallcontrolframework.

Aformalisedself-appraisalandassuranceletterprocessisinplace.Annually,themanagementofeverybusinessunitprovidesassurance as to the adequacyof governance arrangements,risk and internal control management, HSSE management,financialcontrolsandreporting,treasurymanagement,brandmanagement and information management. The ManagingDirectoralsoprovidesassuranceregardingcompliancewiththe Statement of General Business Principles and otherimportant topics; as part of this process business integrityconcerns or instances of bribery or illegal payments are to be reported. Assurance letter results including any material qualificationsarereviewedbyVivoEnergyAuditCommitteeandsupportrepresentationsmadetotheexternalauditors.

Inadditiontothesestructuredself-appraisals, theassuranceframeworkreliesuponobjectiveappraisalsbyinternalaudit.Theresultsofinternalaudit’srisk-basedreviewsofoperationsprovide an independent view regarding theeffectivenessofrisk and control management systems. These establishedreview;reportingandassuranceprocessesenableVivoEnergytoregularlyconsider theoveralleffectivenessof thesystemof internal control and to perform a full annual review ofthe system’s effectiveness. Taken together, these processesand practices provide confirmation toVivo Energy holdingcompaniesthatrelevantpoliciesareadoptedandproceduresimplementedwithrespecttoriskandcontrolmanagement

RISK RELATED TO CREDITCredit risk is one of the company’s key risks. Vivo Energyhas devised a set of rules that apply across the continenton that subject. Items onwhich this policy place a lot ofemphasis include carrying out customer risk assessmentbefore any delivery is made to a customer and also at regular

intervals, settingofacredit limitbycustomerandusing theEnterpriseResourcePlanningsystemtoavoidtradingoutsideto approved conditions.

RISK RELATED TO FOREIGN ExCHANGEMore than one third of the company’s business is carriedout in foreigncurrency. Thecompany’s riskmitigationpolicywith respect to foreign currency is tominimiseexposurebymatching currencieswhenever feasible and entering forwardcontractswheneverpossibleandeconomicallyviable.

RISK RELATED TO SUPPLIESRegularity of supplies is of vital importance to enable Vivo EnergyMauritiusLimitedtomeettheneedsofitscustomers;consequentlyVivo Energy has secured the position of OilIndustrycoordinatorwithTheStateTradingCorporationforthemonitoringofallproductimports.Whereasproductdemandfor inlandtrade is fairlypredictable,withtransferpricesfixedmonthly and regulated by the PetroleumPricingMechanism,internationalsalesarenotpricecontrolled,veryseasonalandunpredictable. In this respect, efficient management of theproduct replenishment cycle, product availability and freightarethereforeofessencetoensurecontinuityofservice.Therisktothebusiness isproductshortageorstockoutcausingcurtailmentofsales,lossofrevenueandbusiness.

RISK RELATED TO HEALTH, SAFETY, SECURITY, ENVIRONMENT (HSSE)Vivo Energy Mauritius Limited operates under a common set of businessprinciples,supportedbypoliciesandbusinesscontrols.These include aHealth, Safety, Security, Environment (HSSE)and Social Performance (SP)Commitment and Policy,whichrequirethatourcompanyshallhaveasystematicapproachtoHSSE&SPmanagement.WehaveputinplacetheVivoEnergymandatory procedure for an HSSE Management System(HSSEMS),whichisastructuredsetofcontrolsformanagingthe business and to ensure and demonstrate that businessobjectives are met. This management system takes intoaccountHSSEMSimplementationrequirements,incorporatedin thebusiness levelHSSEMSaswell as the various classesofbusinessHSSEMSsrelevanttoouroperations.Classesofbusinessaredistribution,marine,aviation,business-to-business,LPG, lubricantsandretail. Theelementsof thismanagement

system are organised according to Vivo Energy guidance of how to integrateHSSE into the business andmanageHSSEmatters as any other critical activity. In line with our HSSE&SPpolicytoachievecontinuousperformanceimprovement,the individualclassesofbusinessactionplanshavebeenwellobserved and completed.

RISK RELATED TO INFORMATION SECURITYVivo Energy Mauritius Limited has in place an InformationSecurityprogrammethatensuresitadherestotheInformationsecuritybasedonISO27001.Disasterrecoveryplansareinplace and tested to ensure that there is minimum businessdisruptionintheeventofadisaster.Allnewstaffandcontractorsarecontinuallycoachedtocompletethemandatorye-learninginformation security training module, the objective of thetrainingbeingtoenhanceawareness,educationandbehaviouragainstinformationsecuritythreats.

RISK RELATED TO REPUTATIONVivoEnergyMauritiusLimitedandtheVivoEnergycompaniesvaluetheperceptionofstakeholdersasnocompanyorbusinessoperates inavacuum.Our licencetooperateandourveryexistencerelyontheunderstanding,goodwillandemotionofstakeholders.Assuch,VivoEnergyMauritiusLimitedaddressesthe interests, concerns and perceptions of key stakeholdersthroughavarietyofmethods.Includedarestatementsofourcommitments, policies and standards and human resourcerolesofCommunicationsandManagingDirector.TheroleoftheManagingDirector, inparticular, isspecificallydesignedtoprotectthereputationofVivoEnergycompaniesoperatinginacountrywiththesupportfromCommunicationsbothlocallyandatVivoEnergylevel.Statementsofcommitments,policiesand standards adopted by Vivo Energy Mauritius Limited includetheStatementofGeneralBusinessPrinciples,CodeofConduct,CommitmenttoSustainableDevelopment,HSSE&SPCommitmentandPolicy,DiversityandInclusiveness Standard, Environmental Minimum Standards,Environmental,SocialandHealthImpactAssessment,MinimumHealthStandards,

Security Standards,HIV/AIDS Policy,HumanRights Standard,RoadTransportSafetyPolicy,CodeofEthicsandadoptionof

theMauritianCodeofCorporateGovernance.

RISK RELATED TO FLUCTUATING OIL PRICESOil and oil products prices can vary as a result of variousfactors,includingnaturaldisasters,politicalinstabilityorconflicts,economic conditions or action taken bymajor oil-exportingcountries.Fluctuationsinthesepricescouldtestourbusinessassumptions, and could have an adverse impact on VivoEnergy Mauritius Limited investment decisions, operationalperformanceandfinancialposition.

RISK RELATED TO OPERATIONAL HAzARDS, NATURAL DISASTERS AND PANDEMICSTheactivitiesofVivoEnergyMauritiusLimitedplaceitattheriskofoperationalhazards,naturaldisastersandpandemics,whichcouldresultinlossoflife,adverseimpactontheenvironmentandcausedisruptiontobusinessactivities.Realisationoftheseriskscouldhaveanadverseeffectontheresultsofoperationsandfinancialpositionofthecompany.

RISK RELATED TO CHANGE IN LEGISLATION AND FISCAL AND REGULATORY POLICIESTheoperationsofVivoEnergyMauritius Limited are subjecttoriskofchangeinlegislation,taxationandregulation,changesthatcouldhaveanadverseeffectontheresultsofoperationsandfinancialpositionofthecompany.

RISK RELATED TO EFFECTIVE GOVERNANCESuccessfuldeliveryoftheVivoEnergyMauritiusLimitedstrategyrequireseffectivegovernance.Thereisariskofincorrectdesignandoperationofinternalcontrol,whichmayresultindamagetothecompany’sreputation,financialresultsandemployees.

RISK RELATED TO PARTNERS AND VENTURESThereisariskthatVivoEnergyMauritiusLimitedcouldlosetheabilitytoinfluenceandcontroltheoperations,behavioursandperformanceofbusinessactivitiesofotherpartieswith




42

Shareholder Information


whomthecompanyisengaged.Thiscouldresultindamagetostaff,assetsandfinancialresults.

RISK RELATED TO ECONOMIC AND FINANCIAL MARKET CONDITIONSVivo Energy Mauritius Limited is subject to differing economic andfinancialmarketconditions.Therearerisksfrompoliticaland economic instability. Realisation of one of these riskscouldhaveanadverseimpactontheresultsofoperationsandfinancialpositionofVivoEnergyMauritiusLimited.

INTERNAL CONTROLSTheGrouphasaninternalauditplaninplace.Theplanissetupsuchthatinternalcontrolsarereviewedatregularintervalsforwhichthetimingoftheinterventionsisdecidedatgrouplevelinalloperatingunits,includingVivoEnergyMauritiusLimited.

MANAGEMENT AGREEMENTSThe company does not have any shareholders’ agreementthataffectsthegovernanceofthecompanybytheBoard.Asmentionedinpage3ofthedirectorsreport,thecompanyhasalicenceagreementwithShellBrandsInternationalAGandacontractfortheprovisionofserviceswithVivoEnergySouthAfrica(formerlyAfricaDownstreamOilProducts(Proprietary)Limited).Apartfromthesetwocontracts,thecompanydoesnothaveanymanagementagreementwiththirdpartieswherethethirdpartyisadirectororacompanyownedbyadirector.

SHAREHOLDER COMMUNICATIONS

The Board recognises the importance of two-waycommunicationswithitsshareholdersand,inadditiontogivingabalancedreportofresultsandprogressateachannualmeeting,VivoEnergyMauritiusLimitedrespondstoquestionsandissuesraised by institutions and private shareholders. InformationaboutVivoEnergyMauritiusLimitedisavailableonthewebsitewww.vivoenergy.com.Inaddition,shareholders’questionscanbeaskedviathetelephoneline(+2302061234)orfax line(+2302401043).

ANNUAL MEETING OF SHAREHOLDERSTheAnnualMeetingofShareholdersofVivoEnergyMauritiusLimitedisheldonceayeartodiscussthereportoftheBoardofdirectors,toapprovetheauditedfinancialstatements,toelectany newdirectors, to appoint the auditors and to authorisethedirectorstofixtheirremuneration,toratifythedividendsdeclaredbytheBoardofdirectors.

TheAnnual Meeting of Shareholders shall be called by theBoardofdirectors.TheitemstobedealtwithatthemeetingaredeterminedbytheBoardofdirectorsandarespecifiedin

theagenda included in thenoticeof convocation. ASpecialMeetingofShareholdersmaybecalledbytheBoardonwrittenrequestofshareholdersholdingsharescarrying togethernotlessthat5%ofthevotingrightsentitledtovoteonanissue.

The resolutionsof theAnnualMeetingofShareholders shall,except in those cases where the law or the Constitutionprescribealargermajority,bepassedbyabsolutemajorityofthevotescast.Atannualmeetings,shareholdersmaycastonevoteforeachordinaryshareheldbythem.

SHAREHOLDER INFORMATION

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Vivo Energy Mauritius Limited share price v/s SEMDEX (Mur), January - December 2012

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Vivo Energy Mauritius Limited share price v/s SEMTRI (Mur), January - December 2012

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SEM7 Vivo Energy Mauritius

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Vivo Energy Mauritius Limited share price v/s SEM7 (Mur), January - December 2012

CORPORATE GOVERNANCE REPORT (CONTINUED)




SHARE OWNERSHIP SHARES HELD BY EACH DIRECTOR AT DECEMBER 31, 2012

SHAREHOLDERS’ DIARY

LARGEST SHAREHOLDERS AS AT DECEMBER 31, 2012

ApartfromVivoEnergyMauritiusHoldingsB.V,noothershareholderownsmorethan5%ofthesharecapitalofthecompany.

Number of shareholders Number of shares Number of shares owned % of total issued shares

2,258 1-500 446,244 2% 530 501-1,000 480,388 2% 517 1,001-5,000 1,292,389 4% 100 5,001-10,000 733,992 3% 92 10,001-50,000 1,867,521 6% 5 50,001-100,000 372,808 1% 6 100,001-250,000 954,658 3% 2 250,001-500,000 550,936 2% - 500,001-1,000,000 - 0% 1 Over1,000,000 22,623,316 77% 3,511 29,322,252

Financial Year End December31,2012Reports and profits statement IncomeStatementfortheyearended31December2012 Published March31,2013CondensedInterimIncomeStatementforthequarterended31March2013 Published May15,2013CondensedInterimIncomeStatementforthesixmonthsended30June2013 Published August15,2013CondensedInterimIncomeStatementfortheninemonthsended30September2013 Published November15,2013IncomeStatementfortheyearended31December2013 Published March31,2014(atlatest)Dividend InterimDividend Tobeannounced November15,2013InterimDividend Payable January31,2014(atlatest)FinalDividend Tobeannounced May31,2014(atlatest)FinalDividend Payable July31,2014(atlatest)

Shareholder’s Name Number of shares held

VIVOENERGYMAURITIUSHOLDINGSB.V. 22,623,316THEMCBLTD(A/CBARCLAYSMAURITIUSSTAFFPENSIONFUND)REF:CB/2704 276,999MRLIMBERGLAMPOTANG 273,937MRLIMKWATCHOWLAMPOTANG 224,552NATIONALPENSIONSFUND 200,849SECTIONSROLLINGLIMITED 137,100MRNJPMAURICERAFFRAY 135,000THEMCBLTD(A/CTHESUGARINDUSTRYPENSIONFUNDBOARDII)REF:IM/113 133,323THEMCBLTD(A/CGMLPENSIONFUND)REF:AC/2295 123,834STATEINSURANCECOMPANYOFMAURITIUSLTD(LIFEFUND) 90,233

Thedirectors follow theprinciplesof themodel codeon securities transactionsbydirectors asdetailed inAppendix6of theMauritiusStockExchangerules.

Thedirectorshavenotheldortradedinanysharesofthecompanyduringtheyear.

CONSTITUTION Thecompany’sconstitutionisinconformitywiththeprovisionsoftheCompaniesAct2001andthoseoftheListingRulesoftheStockExchangeofMauritius. Itssalientfeaturesare:• There are restrictions on pre-emptive rights attached to

theshares.• Thecompanymayacquireandownitsshares.• Thecompanymaynotissuefractionsshares.• Shareholdersmaycasttheirvotesbypost.• TheBoardconsistsofnotlessthantwo(2)ormorethan

elevendirectors(11).• Thereisrotationofdirectorseveryyearexceptfortheone

whoiselectedaschairpersonwhoretireseveryfouryears.

DIVIDEND POLICY

TheCompanywillpaydividendstwiceperyearinJuneandinDecember.ThetimingofBoardmeetingsshouldbeplannedsoas tomeet thisobjective.Dividendpayments should takeintoaccountthedividendcalendaroftradingrulesoftheStockExchange. Ideally, dividends should be declared at the BoardmeetingswhichareheldinMayandNovembereachyear.The Dividend Policy ofVivo Energy Mauritius Limited is todeclareup toamaximumof100%ofNet IncomeafterTax(NIAT)subjecttosufficientfundsandsolvencycertificate.Thesolvency certificate should be signed and approved by theBoardofdirectorsinaccordancewiththeCompaniesAct.

SHAREHOLDER INFORMATION (CONTINUED) SHAREHOLDER INFORMATION (CONTINUED)




INSIDER DEALING Vivo Energy believes it important in order to protect thereputation for honesty and integrity enjoyed by bothVivoEnergyanditsemployeesthat,wherepartofthesharecapitalof aVivo Energy company is traded on a Stock Exchange,there shouldbenopossibilityof suspicion thatanemployeeor contractor of the company or a person connected withthat employee or contractorwhile dealing in the company’squotedshareshasusedconfidentialknowledgeforeitherhisownbenefitorthatofanotherperson.Betweenthedatesaperiodisclosedandtheresultsarepublished,anoticeissenttoallstaffaskingthemnottodealwithsharesduringsuchperiods.

RELATED PARTY TRANSACTIONSRelated party transactions are disclosed in Note 28 of thefinancialstatements.

NON-AUDIT SERVICESDuringtheyear,theexternalauditorshaverenderednonon-audit related services.

GOING CONCERNThedirectorshaveareasonableexpectationthatthecompanyhasadequateresourcestocontinueinanoperationalexistencefortheforeseeablefutureaccordingtothebusinessplanofthecompany,andforthisreasonhasadoptedthegoingconcernbasisinpreparingtheannualfinancialstatements.

REGISTERED OFFICEVivo Energy Mauritius LimitedCemeteryRoadRocheBoisPOBox85,PortLouisWebsite:www.vivoenergy.com

BY ORDER OF THE BOARD

ExecutiveServicesLimitedPerChristianAngseesingSecretary

SHAREHOLDER INFORMATION (CONTINUED)

Report on the Financial StatementsWe have audited the financial statements of Vivo Energy Mauritius Limited (the “Company”) on pages 49 to 88 which

comprise the statement of financial position at 31 December 2012 and the statements of comprehensive income, changes

in equity and 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 Company’s 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 Mauritian

Companies Act 2001, and for such internal control as the directors determine is necessary to enable the preparation of

financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur 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 about whether the financial statements are free from

material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial

statements. The procedures selected depend on the auditor’s 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 auditor

considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to

design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies

used and the reasonableness of accounting estimates made by 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.

OpinionIn our opinion, the financial statements on pages 49 to 88 give a true and fair view of the financial position of the Company

at 31 December 2012 and of its financial performance and its cash flows for the year then ended in accordance with

International Financial Reporting Standards and comply with the Mauritian Companies Act 2001.

Independent Auditor’s Report To the Shareholders of Vivo Energy Mauritius Limited(formerly Shell Mauritius Limited)

PricewaterhouseCoopers18, Cybercity, Ebène, Republic of Mauritius

Tel: (230) 404 5000Facsimile: (230) 404 5088/89

www.pwc.com/mu



48 Vivo Energy Mauritius Limited Annual Report 2012 49

STATEMENT OF COMPREHENSIVE INCOME

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2012

2012 2011 Rs’000 Rs’000

SALES 12,595,242 12,313,299COSTOFSALES (11,922,927) (11,507,655)GROSSPROFIT 672,315 805,644OTHERINCOME(Note6) 87,207 71,684OTHERLOSSESONEXCHANGE-NET (6,262) (3,693)DISTRIBUTIONCOSTS (87,112) (83,958)ADMINISTRATIVEEXPENSES (426,416) (376,704)OPERATINGPROFIT(Note7) 239,732 412,973 FINANCEINCOME(Note8) 8,186 1,086FINANCECOSTS(Note8) (12,412) (25,304)FINANCECOSTS-NET (4,226) (24,218)SHAREOFPROFITOFJOINTVENTURE(Note16) 10,323 10,327PROFITBEFOREINCOMETAX 245,829 399,082INCOMETAXEXPENSE(Note9) (64,961) (74,222)PROFITANDTOTALCOMPREHENSIVEINCOMEFORTHEYEAR 180,868 324,860BASICANDDILUTEDEARNINGSPERSHARE(Note10) Rs 6.17 11.08

Thenotesonpages53to88areanintegralpartofthesefinancialstatements.

Report on Other Legal and Regulatory RequirementsMauritian Companies Act 2001

The Mauritian Companies Act 2001 requires that in carrying out our audit we consider and report to you on the following

matters. We confirm that:

(a) we have no relationship with or interests in the Company other than in our capacity as auditor;

(b) we have obtained all the information and explanations we have required; and

(c) in our opinion, proper accounting records have been kept by the Company as far as appears from our examination of

those records.

Financial Reporting Act 2004

The directors are responsible for preparing the Corporate Governance Report on pages 24 to 46 and making the

disclosures required by Section 8.4 of the Code of Corporate Governance of Mauritius (“Code”). The Financial Reporting

Act 2004 requires us to report on these disclosures, where the directors disclose the extent of compliance with the Code.

In our opinion, the disclosures in the Corporate Governance Report are consistent with the requirements of the Code.

Other MatterThis report, including the opinion, has been prepared for and only for the Company’s shareholders, as a body, in accordance

with Section 205 of the Mauritian Companies Act 2001 and for no other purpose. We do not, in giving this opinion, accept

or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands

it may come save where expressly agreed by our prior consent in writing.

PricewaterhouseCoopers Lindsay Levehang licensed by FRC

28 March 2013

Vivo Energy Mauritius Limited Annual Report 2012 Vivo Energy Mauritius Limited Annual Report 201250 51


STATEMENT OF FINANCIAL POSITION

STATEMENT OF FINANCIAL POSITION - 31 DECEMBER 2012

Restated Restated 2012 2011 2010 Rs’000 Rs’000 Rs’000ASSETS Non-current assets Property,plantandequipment(Note12) 779,452 668,806 619,117Intangibleassets(Note13) - - 487Prepaidoperatingleases(Note14) 740 808 878Otherlongtermassets(Note15) 41 2,088 4,119InterestinJointventure(Note16) 18,534 25,711 39,384Retirementbenefitasset(Note21) 45,678 44,764 - 844,445 742,177 663,985

Current assets Inventories(Note17) 787,532 766,655 808,015Tradeandotherreceivables(Note18) 1,044,222 1,148,625 1,023,387Cashandcashequivalents(Note24) 14,741 30,065 225,565Incometaxasset(Note9) 4,393 - - 1,850,888 1,945,345 2,056,967Total assets 2,695,333 2,687,522 2,720,952

EqUITY Capital and reserves Sharecapital(Note19) 293,223 293,223 293,223Retainedearnings 123,628 179,131 179,748Totalequity 416,851 472,354 472,971

LIABILITIES Non-current liabilities Deferredincometaxliabilities(Note20) 75,776 55,018 48,028Retirementbenefitobligations(Note21) - - 19,708 75,776 55,018 67,736 Current liabilities Bankoverdrafts(Note24) 391,278 196,818 610Tradeandotherpayables(Note22) 1,538,596 1,694,245 1,933,816DepositsonLPGcylinders(Note23) 272,832 247,785 218,435Currentincometaxliabilities(Note9) - 21,302 27,384 2,202,706 2,160,150 2,180,245Totalliabilities 2,278,482 2,215,168 2,247,981Totalequityandliabilities 2,695,333 2,687,522 2,720,952

Approved by the Board of directors on 28 March 2013and signed on its behalf by: } } } DIRECTORS } }


STATEMENT OF CHANGES IN EqUITY

STATEMENT OF CHANGES IN EqUITY FOR THE YEAR ENDED 31 DECEMBER 2012

Share Retained Total capital earnings equity Rs’000 Rs’000 Rs’000 At01January2011 293,223 179,748 472,971

Comprehensive Income Profitfortheyear - 324,860 324,860Total comprehensive income - 324,860 324,860Transactionswithowners Dividendsdeclared(Note25) - (325,477) (325,477)Totaltransactionswithowners - (325,477) (325,477)At 31 December 2011 293,223 179,131 472,354 At 01 January 2012 293,223 179,131 472,354

Comprehensive income Profitfortheyear - 180,868 180,868Totalcomprehensiveincome - 180,868 180,868

Transactions with owners Dividendsdeclared(Note25) - (237,510) (237,510)Dividendsunclaimed2002-2006(Note25) - 1,139 1,139Total transactions with owners - (236,371) (236,371)At 31 December 2012 293,223 123,628 416,851





STATEMENT OF CASH FLOWS

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2012

2012 2011 Rs’000 Rs’000 (Restated)Cash flows from operating activities Profitbeforeincometax 245,829 399,082Adjustmentsfor : Depreciationonproperty,plantandequipment(Note12) 80,031 75,164Lossonimpairmentofproperty,plantandequipment - 4,000Provisionforimpairmentofreceivables(Note18) 2,202 3,758Amortisationofintangibleassets(Note13) - 487Amortisationofprepaidoperatingleases(Note14) 68 70Interestexpense(Note8) 12,412 9,250(Profit)/lossondisposalofproperty,plantandequipment (41,902) 518Interestincome(Note8) (437) (1,086)Unrealised(gain)/lossonexchange (7,021) 18,192ShareofprofitofJointventure(Note16) (10,323) (10,327)Decreaseinretirementbenefitobligations(Note21) (914) (64,472)

Cash generated before working capital changes 279,945 434,636(Increase)/decreaseininventories (20,877) 41,360Decrease/(increase)inreceivablesandprepayments 106,602 (124,270)Decreaseintradeandotherpayables (12,120) (243,766)IncreaseindepositsonLPGcylinders(Note23) 25,047 29,350

Cash generated from operations 378,597 137,310Interestpaid(Note8) (12,412) (9,250)Incometaxpaid(Note9) (69,898) (73,652)

Net cash generated from operating activities 296,287 54,408

Cash flows from investing activities Proceedsfromdisposalofproperty,plantandequipment 74,081 1,015Interestreceived(Note8) 437 1,086Loantodealers - (280)DividendsreceivedfromJointventure(Note16) 17,500 24,000Paymentsforpurchaseofproperty,plantandequipment (222,856) (130,406)

Net cash used in investing activities ( 130,838) ( 104,585)Cash flows from financing activities Dividendspaidtocompany’sshareholders (384,121) (325,477)Dividends unclaimed 2002-2006 1,139 -

Net cash used in financing activities ( 382,982) ( 325,477)Netdecreaseincash,cashequivalentsandbankoverdrafts (217,533) (375,654)Cash,cashequivalentsandbankoverdraftsatbeginningofyear (166,753) 224,955Effectofexchangeratechangesoncashandbankoverdrafts(Note8) 7,749 (16,054)

Cash, cash equivalents and bank overdrafts at end of year (Note 24) ( 376,537) ( 166,753)

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2012

1 GENERAL INFORMATION

Vivo EnergyMauritius Limited (the“Company”), formerlyShellMauritiusLimited, isa limited liabilitycompany listedontheStockExchangeofMauritiusandisincorporatedanddomiciled in Mauritius.

The Company’s principal activity is the marketing anddistributionofpetroleumproducts.Itsjointventure,EnergyStorageCompany Limited, is involved in the provision ofLPGterminalusagefacilities.

Thesefinancialstatementswereauthorisedforissuebytheboardofdirectorson28March2013.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Theprincipalaccountingpoliciesappliedinthepreparationofthesefinancialstatements,aresetoutbelow.Thesepolicieshavebeenconsistentlyappliedtoalltheyearspresented,unlessotherwisestated.

Basis of preparation

Thefinancial statementsofVivoEnergyMauritius LimitedhavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(“IFRS”)andIFRICinterpretations.Thefinancialstatementshavebeenpreparedunderthehistoricalcostconvention.Thefinancialstatementsarepresented inMauritianRupees(‘Rs’),roundedtothenearestthousand.

ThepreparationoffinancialstatementsinconformitywithIFRSrequirestheuseofcertaincriticalaccountingestimates.ItalsorequiresmanagementtoexerciseitsjudgementintheprocessofapplyingtheCompany’saccountingpolicies.Theareasinvolvingahigherdegreeofjudgementorcomplexity,orareaswhereassumptionsandestimatesaresignificanttothefinancialstatementsarediscussedoninNote3.

Changes in accounting policies and disclosures(a)NewandamendedstandardsadoptedbytheCompany

TherearenoIFRSsorIFRICinterpretationsthatareeffectiveforthefirsttimeforthefinancialyearbeginningonorafter1January2012thatwouldbeexpectedtohaveamaterialimpactontheCompany.

(b)Newstandardsandinterpretationsnotyetadopted

Anumberofnewstandardsandamendmentstostandardsand interpretations are effective for annual periods beginning after1January2012,andhavenotbeenappliedinpreparingthese financial statements.None of these is expected tohaveasignificanteffecton thefinancial statementsof theCompany,exceptthefollowingsetoutbelow:

•Amendment to IAS1,‘Financial statementpresentation’regardingothercomprehensiveincome.Themainchangeresulting from these amendments is a requirement forentitiestogroupitemspresentedin‘othercomprehensiveincome’ (OCI) on the basis of whether they arepotentially reclassifiable to profit or loss subsequently(reclassification adjustments).The amendments do notaddresswhichitemsarepresentedinOCI.Thedirectorshaveconsideredthattheamendmentisnotexpectedtohaveamajor impacton thefinancial statementsof theCompany.

•IFRS 13, ‘Fair value measurement’, aims to improveconsistency and reduce complexity by providing a precise definitionof fair value and a single sourceof fair valuemeasurementanddisclosurerequirementsforuseacrossIFRSs.Therequirements,whicharelargelyalignedbetweenIFRSsandUSGAAP,donotextendtheuseoffairvalueaccounting but provide guidance on how it should beappliedwhereitsuseisalreadyrequiredorpermittedbyotherstandardswithinIFRSsorUSGAAP.Thedirectorshaveconsideredthattheamendmentisnotexpectedtohaveamajor impacton thefinancial statementsof theCompany.

•IAS19,‘Employeebenefits’,wasamended in June2011.The impact on the Company will be as follows: to


Notes to the Financial Statements Notes to the Financial Statements

54 55


Summary of Significant Accounting Policies (Continued)Changes in accounting policies and disclosures (continued)

Summary of Significant Accounting Policies (Continued)


immediately recognise all past service costs; and to replace interest cost and expected return on plan assets withanetinterestamountthatiscalculatedbyapplyingthe discount rate to the net defined benefit liability(asset).TheCompany isyet toassess the full impactoftheamendments.

•IFRS9,‘Financialinstruments’,addressestheclassification,measurement and recognition of financial assets andfinancial liabilities. IFRS9was issued inNovember2009andOctober2010. It replaces thepartsof IAS39 thatrelatetotheclassificationandmeasurementoffinancialinstruments.IFRS9requiresfinancialassetstobeclassifiedinto two measurement categories: those measuredas at fair value and thosemeasured at amortised cost.The determination is made at initial recognition. Theclassificationdependsontheentity’sbusinessmodelformanaging its financial instruments and the contractualcashflowcharacteristicsof the instrument.Forfinancialliabilities, the standard retains most of the IAS 39requirements.The main change is that, in cases wherethe fair value option is taken for financial liabilities,the part of a fair value change due to an entity’s owncredit risk is recorded in other comprehensive incomeratherthantheincomestatement,unlessthiscreatesanaccountingmismatch.TheCompanyisyettoassessIFRS9’sfullimpactandintendstoadoptIFRS9nolaterthanthe accounting period beginning on or after 1 January2015.TheCompanywillalsoconsidertheimpactoftheremainingphasesofIFRS9whencompletedbytheBoard.

•IFRS12,‘Disclosuresofinterestsinotherentities’,includesthedisclosure requirements forall formsof interests inother entities, including joint arrangements, associates,special purpose vehicles and other off balance sheetvehicles.TheCompanyisyettoassessIFRS12’sfullimpactandintendstoadoptIFRS12nolaterthantheaccountingperiodbeginningonorafter1January2013.

TherearenootherIFRSsorIFRICinterpretationsthatarenotyeteffectivethatwouldbeexpectedtohaveamaterialimpactontheCompany.

Segment reporting

Operating segments are reported in amanner consistentwiththeinternalreportingprovidedtothechiefoperatingdecision-maker. The chief operating decision-maker, whois responsible for allocating resources and assessing performanceoftheoperatingsegments,hasbeenidentifiedastheManagingDirector.

Foreign currency translation

•Functionalandpresentationcurrency Itemsincludedinthefinancialstatementsaremeasured usingthecurrencyoftheprimaryeconomicenvironment inwhichtheentityoperates(the“functionalcurrency”). Thefinancialstatementsarepresentedinthousandsof MauritianRupee(Rs’000),whichistheCompany’s functional and presentation currency.•Transactionsandbalances Foreign currency transactions are translated into thefunctionalcurrencyusingtheexchangeratesprevailingatthedatesofthetransactionsorvaluationwhereitemsarere-measured.Foreignexchangegainsandlossesresultingfrom the settlementof such transactions and from thetranslationatyear-endexchangeratesofmonetaryassetsand liabilities denominated in foreign currencies are recognisedinthestatementofcomprehensiveincome.

Foreignexchangegainsandlossesthatrelatetoborrowingsandcashandcashequivalentsarepresentedinthestatementof comprehensive income within ‘Finance income/(costs)– Net’. All other foreign exchange gains and losses arepresented in statement of comprehensive income within‘Otherlossesonexchange–Net’.

Property, plant and equipment and depreciation

Property, plant and equipment is stated at historical costlessdepreciation.Historicalcostincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheitems.

Subsequent costs are included in the asset’s carryingamountor recognisedasa separateasset, asappropriate,only when it is probable that future economic benefitsassociated with the item will flow to the Company andthecostoftheitemcanbemeasuredreliably.Thecarryingamount of the replaced part is derecognised. All otherrepairsandmaintenancearecharged to thestatementofcomprehensiveincomeduringthefinancialperiodinwhichtheyareincurred.

Nodepreciationisprovidedonfreeholdlandandonassetsn thecourseofconstruction. Buildingson leasehold landaredepreciatedovertheperiodoftheleaseiflessthan20years.Depreciationonotherassetsiscalculatedusingthestraight-linemethodtoallocatetheircostlesstheirresidualvalues over their estimated useful lives. The annual ratesusedare:

FreeholdBuildings 5.0%Plantandequipment 5.0%-10.0%Motorvehicles 15.0%-25.0%Computerequipment 33.3%Furnitureandfittings 15.0%

Theassets’residualvaluesandusefullivesarereviewed,andadjustedifappropriate,attheendofeachreportingperiod.

An asset’s carrying amount is written down immediatelytoitsrecoverableamountiftheasset’scarryingamountisgreaterthanitsestimatedrecoverableamount.

Gainsandlossesondisposalsaredeterminedbycomparingtheproceedswiththecarryingamountandareincludedinoperatingprofitinthestatementofcomprehensiveincome.

Intangible assets

Acquired computer software licences are capitalised onthebasisofthecostsincurredtoacquireandbringtousethespecificsoftware.Thesecostsareamortisedovertheirestimatedusefullives(notexceedingthreeyears).

Costs associated with maintaining computer softwareprogrammes are recognised as an expense as incurred. Development costs that are directly attributable to thedesign and testing of identifiable and unique softwareproducts controlled by the Company, are recognised asintangibleassets,whenthefollowingcriteriahavebeenmet:

• Itistechnicallyfeasibletocompletethesoftwareproduct sothatitwillbeavailableforuse;•Managementintendstocompletethesoftwareproduct and use or sell it;•Thereisanabilitytouseorsellthesoftwareproduct;• Itcanbedemonstratedhowthesoftwareproductwill generateprobablefutureeconomicbenefits;•Adequatetechnical,financialandotherresourcesto completethedevelopmentandtouseorsellthesoftware product are available; and•Theexpenditureattributabletothesoftwareproduct during its development can be reliably measured.

Directly attributable costs that are capitalised as part ofthe software product include the software developmentemployee costs and an appropriate portion of relevant overheads.

Other development expenditures that do not meetthese criteria are recognised as an expense as incurred.Development costs previously recognised as an expense arenotrecognisedasanassetinasubsequentperiod.

Computer software development costs recognised asassetsareamortisedover theirestimateduseful lives,notexceedingthreeyears.



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Impairment of non-financial assets

Assetsthathaveanindefiniteusefullife,forexample,goodwillor intangible assets not ready to use - are not subjectto amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed forimpairmentwhenevereventsorchanges incircumstancesindicatethatthecarryingamountmaynotberecoverable.Animpairmentlossisrecognisedfortheamountbywhichtheasset’scarryingamountexceedsitsrecoverableamount.Therecoverableamountisthehigherofanasset’sfairvalueless costs to sell and value in use. For the purposes ofassessingimpairment,assetsaregroupedatthelowestlevelsforwhichthereareseparatelyidentifiablecashflows(cash-generatingunits).Non-financialassetsotherthangoodwillthat suffered an impairment are reviewed for possiblereversaloftheimpairmentateachreportingdate.

Financial assets

ClassificationTheCompanyclassifies itsfinancialassets in thecategory‘Loans and receivables’.The classification depends on thepurpose for which the financial assets were acquired.Management determines the classification of its financialassets at initial recognition.

Loans and receivablesLoansandreceivablesarenon-derivativefinancialassetswithfixed or determinable payments that are not quoted in anactivemarket.Theyare included incurrentassets,except formaturities greater than 12months after the reporting date.Theseareclassifiedasnon-currentassets.TheCompany’sloansand receivables comprise ‘trade and other receivables’, and‘cashandcashequivalents’inthestatementoffinancialposition.

Recognition and measurementRegularpurchasesandsalesoffinancialassetsarerecognisedonthetradedate,whichisthedateonwhichtheCompanycommits topurchaseorsell theasset.Financialassetsare

derecognisedwhen the rights to receive cashflows fromthe investments have expired or have been transferredand the Company has transferred substantially all risksand rewards of ownership. Loans and receivables aresubsequentlycarriedatamortisedcostusing theeffectiveinterestmethod.

OffsettingfinancialinstrumentsFinancialassetsandliabilitiesareoffsetandthenetamountreportedinthestatementoffinancialpositionwhenthereisalegallyenforceablerighttooffsettherecognisedamountsandthereisanintentiontosettleonanetbasisorrealisetheassetandsettletheliabilitysimultaneously.

Impairmentoffinancialassets

Assets carried at amortised cost

TheCompanyassessesattheendofeachreportingperiodwhether there is objective evidence that a financial assetor group of financial assets is impaired.A financial assetor a groupof financial assets is impaired and impairmentlosses are incurred only if there is objective evidence ofimpairmentasaresultofoneormoreeventsthatoccurredaftertheinitialrecognitionoftheasset(a‘lossevent’)andthatlossevent(orevents)hasanimpactontheestimatedfuturecashflowsofthefinancialassetorgroupoffinancialassetsthatcanbereliablyestimated.

Evidence of impairment may include indications that thedebtors or a group of debtors is experiencing significantfinancial difficulty, default or delinquency in interest orprincipal payments, the probability that they will enterbankruptcy or other financial reorganisation, and whereobservabledataindicatethatthereisameasurabledecreaseintheestimatedfuturecashflows,suchaschangesinarrearsoreconomicconditionsthatcorrelatewithdefaults.

Forloansandreceivablescategory,theamountofthelossismeasuredasthedifferencebetweentheasset’scarrying

amount and the present value of estimated future cashflows (excluding future credit losses that have not beenincurred)discountedatthefinancialasset’soriginaleffectiveinterestrate.Thecarryingamountof theasset is reducedandtheamountofthelossisrecognisedinthestatementofcomprehensiveincome.If, in a subsequentperiod, the amountof the impairmentlossdecreasesandthedecreasecanberelatedobjectivelytoaneventoccurringaftertheimpairmentwasrecognised(suchasanimprovementinthedebtor’screditrating),thereversal of the previously recognised impairment loss isrecognisedinthestatementofcomprehensiveincome.

Inventories

Inventoriesarestatedatthelowerofcostandnetrealisablevalue.Costisdeterminedusingthefirst-in,first-out(FIFO)method.Costcomprisesdirectcostsonly. Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusiness,lessthecostsofcompletionandapplicablevariableselling expenses.

Spares,accessoriesandsuppliesincludedunderinventoriesconsist of items which are regularly used for repairs,maintenanceandnewinstallations.Theyarestatedatthelowerofcostandnetrealisablevalue.

Trade receivables

Trade receivables are amounts due from customers forgoodssoldintheordinarycourseofbusiness.Ifcollectionisexpectedinoneyearorless(orinthenormaloperatingcycleofthebusinessiflonger),theyareclassifiedascurrentassets.Ifnot,theyarepresentedasnon-currentassets.

Trade receivables are recognised initially at fair value andsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod,lessprovisionforimpairment.AprovisionforimpairmentoftradeandotherreceivablesisestablishedwhenthereisobjectiveevidencethattheCompanywillnot

beabletocollectallamountsdueaccordingtotheoriginalterms of the receivables. Significant financial difficulties ofthedebtor,probabilitythatthedebtorwillenterbankruptcyor financial reorganisation, and default or delinquency inpayments (more than 90 days overdue) are consideredindicators that the receivable is impaired.The amount oftheprovisionisthedifferencebetweentheasset’scarryingamountanditsrecoverableamount,beingthepresentvalueof estimated future cash flows, discounted at the originaleffective interest rate. The carrying amount of the assetis reduced through the useof an allowance account, andthe amountof the loss is recognised in the statementofcomprehensiveincome.Whenareceivableisuncollectible,it is written off against the allowance account for tradeor other receivables. Subsequent recoveries of amountspreviously written off are credited against ‘administrativeexpenses’inthestatementofcomprehensiveincome.Baddebtsarewrittenoffintheyearinwhichtheyareidentified. Cash and cash equivalents

In the statementof cashflows, cash and cashequivalentsincludescashinhand,depositsheldatcallwithbanks,othershort-termhighlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorlessandbankoverdrafts.Bankoverdraftsareshownseparatelyonthestatementoffinancialposition.

Share capital

Ordinarysharesareclassifiedas“ShareCapital”inequity.

Where any group company purchases the Company’sequity share capital (treasury shares), the considerationpaid, including any directly attributable incremental costsis deducted from equity attributable to the Company’sequity holders until the shares are cancelled or reissued.Where such ordinary shares are subsequently reissued,anyconsiderationreceived,netofanydirectlyattributableincrementaltransactioncostsisincludedinequity.

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2012 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2012

Summary of Significant Accounting Policies (Continued) Summary of Significant Accounting Policies (Continued)Financial assets (continued)



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Trade payables

Tradepayablesareobligationstopayforgoodsorservicesthathavebeenacquiredintheordinarycourseofbusinessfrom suppliers.Accounts payable are classified as currentliabilitiesifpaymentisduewithinoneyearorless(orinthenormaloperatingcycleofthebusinessiflonger).Ifnot,theyarepresentedasnon-currentliabilities.

Trade payables are recognised initially at fair value andsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestratemethod.

Accounting for leases

Leasesinwhichasignificantportionoftherisksandrewardsof ownership are retained by the lessor are classified asoperating leases. Paymentsmade under operating leasesarechargedtothestatementofcomprehensiveincomeonastraight-linebasisovertheperiodofthelease

TheCompanyleaseslandunderoperatingleases.Upfrontlease payments are carried forward as prepaid operatingleasesundernon-currentassetsandareamortisedsoastorecordaconstantannualchargetotheprofitorlossoverthe leaseperiod. Otherpaymentsmadeunderoperatingleases are charged to theprofitor losson a straight linebasisovertheperiodofthelease.

When an operating lease is terminated before the leaseperiodhasexpired,anypayment required tobemadetothelessorbywayofpenaltyisrecognisedasanexpenseintheperiodinwhichterminationtakesplace.

Interest in Joint Venture

Ajointventureisacontractualagreementwherebytwoormorepartiesundertakeaneconomicactivitythatissubjectto joint control.

Jointcontrol is thecontractuallyagreedsharingofcontroloveraneconomicactivity,andexistsonlywhenthestrategicfinancial and operating decisions relating to the activityrequire the unanimous consent of the parties sharingcontrol(theventurers).

Theinterestinthejointventureisaccountedforusingtheequitymethodof accounting and is initially recognised atcostandadjustedthereafterforthepostacquisitionchangeintheventurer’sshareofnetassetsofthejointlycontrolledentity. The profit or loss of the venturer includes theventurer’sshareoftheprofitorlossofthejointlycontrolledentity.

Current and deferred income tax

Thetaxexpensefortheperiodcomprisescurrent,deferredincometaxandCorporateSocialResponsibilitycontribution.Taxisrecognisedinthestatementofcomprehensiveincome,except to the extent that it relates to items recogniseddirectly inequity. In thiscase, thetax isalsorecognised inequity.

The current income tax charge is calculated on thebasis of the tax laws enacted or substantively enacted atthe reporting date. Management periodically evaluatespositionstaken intaxreturnswithrespecttosituations inwhichapplicabletaxregulationissubjecttointerpretation.Itestablishesprovisionswhereappropriateonthebasisofamountsexpectedtobepaidtothetaxauthorities.

Deferred income tax is recognised, using the liabilitymethod,ontemporarydifferencesarisingbetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsinthefinancialstatements.However,thedeferredincometaxis not accounted for if it arises from initial recognition of an assetor liability in a transactionother than abusinesscombination that at the time of the transaction affectsneither accounting nor taxable profit or loss. Deferred

income tax is determined using tax rates (and laws) thathave been enacted or substantively enacted by the dateofthestatementoffinancialpositionandareexpectedtoapplywhentherelateddeferredincometaxassetisrealisedorthedeferredincometaxliabilityissettled.

Deferred income tax assets are recognised only to theextentthat it isprobablethatfuturetaxableprofitwillbeavailable against which the temporary differences can beutilised.

Deferred income tax is provided on temporary differences arisingfromdepreciationonplantandequipment.

Deferred income taxassetsand liabilitiesareoffsetwhenthere is a legally enforceable right to offset current taxassetsagainstcurrenttaxliabilitiesandwhenthedeferredincome taxes assets and liabilities relate to income taxes leviedby the same taxationauthorityoneither the sametaxableentityordifferenttaxableentitieswherethereisanintentiontosettlethebalancesonanetbasis.

Employee benefits

•Pensionandretirementplans

Thecompanyhasadefinedbenefitpensionplan.Adefinedbenefit plan is a pension plan that defines an amount ofpensionbenefitthatanemployeewillreceiveonretirement,usually dependent on one or more factors such as age,yearsofserviceandcompensation.Theplanisfundedbythe payments from the Company taking account of therecommendationsofindependentqualifiedactuaries.

•Pensionandretirementplans(continued)

The liability recognised in the statement of financialposition inrespectofdefinedbenefitpensionplans isthepresentvalueofthedefinedbenefitobligationattheendof the reporting period less the fair value of plan assets,

together with adjustments for unrecognised past-servicecosts.Thedefinedbenefitobligation is calculated annuallyby independent actuaries using the projected unit creditmethod.Thepresentvalueofthedefinedbenefitobligationis determined by discounting the estimated future cashoutflowsusinginterestratesofhigh-qualitycorporatebondsthataredenominatedinthecurrencyinwhichthebenefitswillbepaid,andthathavetermstomaturityapproximatingtothetermsoftherelatedpensionobligation.Incountrieswherethereisnodeepmarketinsuchbonds,themarketrateson governmentbonds are used. Premiumcosts areassessedusingtheprojectedunitcreditmethod:thecostofprovidingpensionsischargedtotheprofitorlosssoastospreadtheregularcostovertheservicelivesofemployeesinaccordancewith theadviceof theactuarieswhocarryoutafullvaluationoftheplaneverythreeyears(thelatestvaluationwasdoneat30November2011.

The defined benefit obligation is calculated annually byindependent actuaries using the projected unit creditmethod.Thepresentvalueofthedefinedbenefitobligationis determined by discounting the estimated future cashoutflowsusingadiscountratebyreferencetocurrentinterestratesandtheyieldonTreasuryBillsandrecentcorporatedebentures. Actuarial gains and losses are recognised over theaverageremainingservicelivesofemployees.

Actuarial gains and losses arising from experience adjustmentsandchangesinactuarialassumptionsinexcessof thegreaterof10%of thevalueofplanassetsor10%of the definedbenefit obligation are chargedor creditedtotheprofitorlossovertheemployees’expectedaverageremainingworkinglives.

Gains or losses on curtailments or settlements arerecognisedwhenthecurtailmentsorsettlementsoccur.

Past-servicecostsarerecognisedimmediatelyintheprofitorloss,unlessthechangestothepensionplanareconditionalontheemployeesremaininginserviceforaspecifiedperiod


Summary of Significant Accounting Policies (Continued) Summary of Significant Accounting Policies (Continued)Current and deferred income tax (continued)



60 61

oftime(thevestingperiod).Inthiscase,thepastservicecostsareamortisedonastraight-linebasisoverthevestingperiod.

•Otherbenefits

Employee entitlement to annual leave and other benefitsarerecognisedwhentheyaccruetotheemployees.

•Terminationbenefits

Termination benefits are payable when employment isterminatedbytheCompanybeforethenormalretirementdate, or whenever an employee accepts voluntaryredundancyinexchangeforthesebenefits.TheCompanyrecognises termination benefits when it is demonstrablycommitted to either : terminating the employment ofcurrent employees according to a detailed formal plan withoutpossibilityofwithdrawal;orproviding terminationbenefitsasaresultofanoffermadetoencouragevoluntaryredundancy.Benefitsfallingduemorethan12monthsafterthereportingdatearediscountedtotheirpresentvalue. Deposits on LPG cylinders

Deposits on LPG cylinders are accounted for as part ofcurrentliabilitiesandarerecognisedathistoricalcostinthefinancialstatements.

Provisions

Provisionsforenvironmentalrestoration,restructuringcostsandlegalclaimsarerecognisedwhen:theCompanyhasapresent legal or constructive obligation as a result of past events; it isprobable thatanoutflowof resourceswillberequiredtosettletheobligation,andtheamounthasbeenreliablyestimated.Provisionsarenotrecognisedforfutureoperating losses.

Where there are a number of similar obligations, thelikelihood that an outflow will be required in settlement

is determinedby considering the classofobligations as awhole.Aprovisionisrecognisedevenifthelikelihoodofanoutflowwithrespecttoanyoneitemincludedinthesameclass of obligations may be small.

Provisions are measured at the present value of theexpenditures expected to be required to settle theobligationusingapre-taxratethatreflectscurrentmarketassessments of the time value of money and the risksspecifictotheobligation.Theincreaseintheprovisiondueto passage of time is recognised as interest expense.

Revenue recognition

Revenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivable,andrepresentsamountsreceivablefor goods supplies, stated net of discounts, returns andvalueaddedtaxes.TheCompanyrecognisesrevenuewhentheamountof revenuecanbereliablymeasured;when itisprobablethat futureeconomicbenefitswillflowtotheentity;andwhenspecificcriteriahavebeenmetforeachoftheCompany’sactivities,asdescribedbelow.

Saleofgoods

Sales are recognised upon delivery of products andcustomeracceptance,ifany,netoftradediscountsandvalueadded tax.

Dividend income

Dividend income is recognisedwhen the right to receivepaymentisestablished.

Interestincome

Interest income is recognised on a time-proportion basisusingtheeffectiveinterestmethod.

Dividend distributions

Dividenddistributions to theCompany’s shareholdersarerecognisedintheCompany’sfinancialstatementsintheyearinwhichthedividendsaredeclared.

3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated and are based on historical experience and other factors,includingexperienceof futureevents thatarebelievedtobereasonableunderthecircumstances.

Criticalaccountingestimatesandassumptions

The Company makes estimates and assumptionsconcerning the future.The resulting accounting estimateswill, by definition, seldom equal the related actual results.Estimates and judgements are continually evaluated and are basedonhistoricalexperienceandotherfactors,includingexpectations of future events that are believed to bereasonableunderthecircumstances.

Theestimatesandassumptions thathaveasignificantriskof causing amaterial adjustment to the carrying amountsof assets and liabilities within the next financial year areoutlinedbelow.

•Pensionbenefits

Thepresentvalueofthepensionobligationsdependsonanumberoffactorsthataredeterminedonanactuarialbasisusinganumberofassumptions. Theassumptionsused indeterminingthenetcost(income)forpensionsincludethediscountrate.Anychangesintheseassumptionswillimpactthecarryingamountofpensionobligations.

The Company’s actuary determines the appropriatediscountrateat theendofeachyear. This is the interest

ratethatshouldbeusedtodeterminethepresentvalueofestimatedfuturecashoutflowsexpectedtoberequiredtosettlethepensionobligations.Indeterminingtheappropriatediscountrate,theCompanyconsiderstheinterestratesofhigh-qualitycorporatebondsthataredenominated inthecurrency inwhich thebenefitswillbepaid,andthathavetermstomaturityapproximating thetermsof therelatedpension liability.

Otherkeyassumptionsforpensionobligationsarebasedinpartoncurrentmarketconditions.AdditionalinformationisdisclosedinNote21.

4 FINANCIAL RISK MANAGEMENT

Financial risk factors

TheCompany’sactivitiesexposeittoavarietyoffinancialrisks: market risk (including currency risk, price risk andcashflowinterestraterisk),creditriskandliquidityrisk.TheCompany’s overall risk management programme focuseson the unpredictability of financial markets and seeksto minimise potential adverse effects on the Company’sfinancialperformance.

Riskmanagement remainswithin the responsibility of theBoardofdirectorstowhomtheAuditandRiskcommitteereports. Theboardprovideswrittenprinciples foroverallriskmanagement,aswellaswrittenpoliciescoveringspecificareas,suchascurrencyrisk,interestraterisk,creditrisk,andinvestmentofexcessliquidity.

(a)Market risk

(i)Currencyriskandcurrencyprofile

Currency risk is the risk that the fairvalueor futurecashflows of a financial instrument will fluctuate because ofchangesinforeignexchangerates.


Summary of Significant Accounting Policies (Continued)Employees benefits (continued)

Summary of Significant Accounting Policies (Continued)



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TheCompany transactswith international customers andsuppliers and is exposed to currency risk arising fromvarious currency exposures, primarilywith respect to theUnited States dollar (‘USD’). Currency risk arises fromfuture commercial transactions and recognised assets and liabilities. It is theCompany’spolicynot toenter intoanycurrencyhedgingtransactions.

ThecurrencyprofileoftheCompany’sUSD-denominatedfinancialassetsandliabilitiesissummarisedasfollows:

Financial Financial Financial Financial assets liabilities assets liabilities 2012 2012 2011 2011 Rs’000 Rs’000 Rs’000 Rs’000UnitedStatesDollar 344,406 437,976 452,370 516,306

At 31 December 2012, if the currency had weakened/strengthened by 10% against the USD with all othervariablesheldconstant,post-taxprofit for theyearwouldhave decreased/increased byRs 9,357,000 (2011 - Rs6,394,000),mainly as a result of currency gains/losses ontranslationofUSdollar-denominatedtradereceivablesandtrade payables.

Management considers a 10% shift in foreign currencyexchangerateisappropriatetodeterminethesensitivityofUSDdenominatedfinancialassetsandliabilitiesvisavistheMauritian rupee.

(ii)Pricerisk

Priceriskistheriskthatthefairvalueorfuturecashflowsofafinancial instrumentwillfluctuatebecauseofchangesinmarket pricesof equity (other than those arising frominterestrateriskorcurrencyrisk).

TheCompanyisnotexposedtoequitypriceriskasitdoesnothaveanyinvestmentinequitysecurities. (iii)Cashflowandfairvalueinterestraterisk

Cashflowinterestrateriskarisesfromthepossibilitythatchangesininterestrateswillaffectfuturecashflowsorthefairvaluesoftheassets.TheCompany’spolicyistoinvestinfinancial institutionswhereitcanearnthehighestratesofinterest.

TheCompany’sinterestrateriskarisesfromcashandcashequivalents and short-term bank overdrafts which bearinterestatvariablerates.TheCompanydoesnothavelong-termborrowings.

Basedon the simulationsperformed, the impactonpost-taxprofitofa50basispointshiftininterestratewouldbeamaximum increase/decreaseofRs 59,875 (2011 -Rs40,378),respectively.

Managementconsidersthata50basispointshiftininterestrate is reasonable as the repo rate has fluctuated by amaximum of 50 basis point in 2012.

(b)Creditrisk

Creditriskreferstotheriskthatacounter-partywilldefaultonitscontractualobligationsresultinginfinanciallosstothe Company.

Credit risk arising from trade receivables is managed atthecompanylevel.Creditriskarisesfromcreditexposuresto wholesale and retail customers, including outstandingreceivablesandcommittedtransactions.Thecreditcontroldepartment assesses the credit quality of the customer,taking into account its financial position, past experienceand other factors. Individual risk limits are set based on

internalratings inaccordancewith limitssetbytheboard.Theutilisationofcreditlimitsisregularlymonitored.

Incaseswherecreditlimitswereexceededduringtheyear,thiswasdoneinaccordancewiththeCompany’sproceduresand management does not expect any major losses from non-performancebythesecounterparties.

Credit risk arising on cash and cash equivalents is consideredto be minimal as these are placed with reputable financialinstitutions.

Themaximumriskexposureisequivalenttothecarrying/fairvalueofthebalancesasdisclosedinNote18.

(c)Liquidityrisk

Prudentliquidityriskmanagementimpliesmaintainingsufficientcash, theavailabilityof funding throughanadequateamountof committed credit facilities and the ability to close outmarketpositions.Duetothedynamicnatureoftheunderlyingbusinesses,companytreasurymaintainsflexibilityinfundingbymaintaining availability under committed credit lines.

All of the Company’s financial liabilities, which includestrade andother payables, deposit on LPG cylinders andbank overdrafts are payable within 12 months and theamountsrecognisedinthestatementoffinancialpositionof Rs 2,202,706,000 (2011: Rs 2,138,848,000) areapproximatelyequaltothecontractualundiscountedcashflows.Allbalancesduewithin12monthsequaltheircarryingamounts,astheimpactofdiscountingisnotsignificant.

TheCompanyadoptsprudentliquidityriskmanagementbymaintainingsufficientcashandcashequivalentstomeetitsnormal operating commitments.

Capital risk management

The Company’s objectives when managing capital are tosafeguard the Company’s ability to continue as a goingconcern inorder toprovidereturns forshareholdersandbenefitsforotherstakeholdersandtomaintainanoptimalcapitalstructuretoreducethecostofcapital.

ThecapitaloftheCompanyconsistsofequityandretainedearnings.TheCompanydoesnothaveanydebt,otherthanshort-termbankoverdrafts.Inordertomaintainoradjustthecapitalstructure,theCompanymayadjusttheamountofdividendspaidtoshareholders.

Fair value estimation

Thecarryingvalueoftradeandotherreceivables,cashandcashequivalents,bankoverdrafts,tradeandotherpayablesanddepositsonLPGcylindersareassumedtoapproximatetheirfairvaluesduetotheirshorttermmaturities.

5 SEGMENT INFORMATION

TheCompanyhasdetermineditsoperatingsegmentsbasedonthereportsreviewedbytheManagingDirectorthatareused tomake strategicdecisions.Abusiness segment is adistinguishable componentof an entity that is engaged inproviding an individual product or service or a group of related products or services and that is subject to risksandreturnsthataredifferentfromthoseofotherbusinesssegments.The company operates principally in Mauritiusandhasidentifiedthefollowingbusinesssegments:

•Aviationandmarine•Regulatedretailandcommercial•Non–regulatedretailandcommercial


Financial risk management (Continued)Market risk (continued)

Financial risk management (Continued)Credit risk (continued)



64 65


The operations of the joint venture comprise of LPGterminal usage facilities.

Therearenosalesbetweenthebusinesssegments.Revenuefromnosinglecustomeramountedto10%ormoreoftheCompany’s total revenue.Unallocatedcostsrepresentnetexpensesthatdonotdirectlyrelatetoabusinesssegment.Segment assets consist primarily of property, plant andequipment, prepaid operating leases, loans receivable,inventories, trade andother receivables andprepayments,investment in joint venture, and exclude cash and cashequivalents.Segmentliabilitiescompriseoperatingliabilitiesand exclude items such as taxation. Capital expenditurecomprisesadditionstoproperty,plantandequipment.

5 SEGMENT INFORMATION (Continued)

Year ended 31 December 2012 Regulated Non-Regulated Aviation and Retail and Retail and marine commercial commercial Total Rs’000 Rs’000 Rs’000 Rs’000

Revenue from external customers 4,615,661 6,746,815 1,232,766 12,595,242Segmentresults 43,730 110,638 184,872 339,240Unallocatedcosts (99,508)Operatingprofit 239,732Financeincome 8,186Financecost (12,412)Shareofprofitsofjointventure - - 10,323 10,323

Profitbeforeincometax 245,829Incometaxexpense (64,961)Profitfortheyear 180,868

Segmentassets 807,577 970,135 354,953 2,132,665Jointventure - - 18,534 18,534Unallocatedassets 544,134Totalassets 2,695,333

Segmentliabilities 692,885 902,221 209,512 1,804,618Unallocatedliabilities 473,864Totalliabilities 2,278,482

Othersegmentitems Capitalexpenditure 48,978 126,242 19,189 194,409Depreciation (11,391) (44,899) (12,040) (68,330)Amortisation - (68) - (68) Unallocateditems Capitalexpenditure 28,447Amortisation -Depreciation (11,701)

TheamountsprovidedtotheManagingDirectorwithrespecttothetotalassetsandtotalliabilitiesaremeasuredinamannerconsistentwiththatofthefinancialstatements.

Theassetsandliabilitiesareallocatedbasedontheoperationsofthesegments.


Segment Information (Continued)



66 67


Segment assets and liabilities are reconciled to the Company’s assets and liabilities as follows: Assets Liabilities Rs’ 000 Rs’ 000

Segmentassets/liabilities 2,151,199 1,804,618Unallocated: Property,plantandequipment 168,564 -Valueaddedtaxrecoverable 10,000 -Otherreceivablesandprepayments 300,758 -Cashandcashequivalents 14,741 -Retirementbenefitassets 45,678 -Deferredincometaxliabilities - 75,776Bankoverdrafts - 391,277Otherpayables - 6,811Currentincometaxassets 4,393 -Total 2,695,333 2,278,482


Year ended 31 December 2011 (Restated) Regulated Non-Regulated Aviation and Retail and Retail and marine commercial commercial Total Rs’000 Rs’000 Rs’000 Rs’000 Revenue from external customers 4,920,427 6,255,894 1,136,978 12,313,299Segmentresults 134,704 179,756 208,417 522,877Unallocatedcosts (109,904)Operatingprofit 412,973Financeincome 1,086Financecost (25,304)Shareofprofitsofjointventure - - 10,327 10,327Profitbeforeincometax 399,082Incometaxexpense (74,222)Profitfortheyear 324,860Segmentassets 770,465 878,973 400,790 2,050,228Jointventure - - 25,711 25,711Unallocatedassets 611,583Totalassets 2,687,522Segmentliabilities 744,520 823,353 190,211 1,758,084Unallocatedliabilities 457,084Totalliabilities 2,215,168Othersegmentitems Capitalexpenditure 5,829 95,704 21,097 122,630Depreciation (12,244) (36,737) (10,971) (59,952)Impairment (4,000) - - (4,000)Amortisation - (487) - (487) Unallocateditems Capitalexpenditure 7,776Amortisation -Depreciation (15,212)




68 69


Segment assets and liabilities are reconciled to the Company’s assets and liabilities as follows: Assets Liabilities Rs’ 000 Rs’ 000Segmentassets/liabilities 2,075,939 1,758,084Unallocated: Property,plantandequipment 152,589 -Valueaddedtaxrecoverable 23,136 -Otherreceivablesandprepayments 361,029 -Cashandcashequivalents 30,065 -Retirementbenefitassets 44,764 -Dividendspayable - 146,611Deferredincometaxliabilities - 55,018Bankoverdrafts - 196,818Otherpayables - 37,335Currentincometaxliabilities - 21,302Total 2,687,522 2,215,168

6 OTHER INCOME

2012 2011 Rs’000 Rs’000Rentalincome 8,936 8,739Managementfees 3,489 3,527Profit/(loss)ondisposalofProperty,PlantandEquipment 41,902 (518)Fuelstoragefee 16,472 34,581Throughputfee 7,641 8,094Tankerdischargefee 872 1,053Others 7,895 16,208 87,207 71,684

7 OPERATING PROFIT

Thefollowingitemshavebeen(credited)/chargedinarrivingatoperatingprofit: 2012 2011 Rs’000 Rs’000(Profit)/lossondisposalofproperty,plantandequipment (41,902) 518Depreciationonproperty,plantandequipment(Note12) -includedincostofsales 66,801 60,515-includedinadministrativeexpenses 13,230 14,649Impairmentofassets - 4,000Amortisationofintangibleassets(Note13) - 487Amortisationofprepaidoperatingleases(Note14) 68 70Feespaidtoauditor -auditservices 1,876 1,746 -auditrelatedservices 710 630Operatingleasechargesonland 3,818 3,886Operatingleasechargesonmotorvehicles 14,543 14,800OperatingleasechargesonvehiclesfordistributionpurposesRepairsandmaintenance: 40,938 42,502-includedincostofsales 2,108 1,573-includedinadministrativeexpenses 29,839 24,371Staffcosts(Note11)-includedincostofsales 12,418 12,060-includedinadministrativeexpenses 119,136 142,520Provisionforimpairmentofreceivables(Note18) 2,203 3,758Inventorieswrittendown - (6,053)Costofinventoriesrecognisedasexpense -includedincostofsales 11,803,494 11,426,913

8 FINANCE INCOME/(COSTS) - NET

Financecosts: Interestexpense (12,412) (9,250)Unrealisedexchangelossonbankaccounts - (16,054) (12,412) (25,304)

Financeincome: Interestincome 437 1,086Unrealisedexchangegainonbankaccounts 7,749 - 8,186 1,086Netfinanceincome/(costs): (4,226) (24,218)




70 71

9 INCOME TAX EXPENSE 2012 2011 Rs’000 Rs’000Chargefortheyear Basedontheprofitfortheyear,asadjustedfortaxpurposes,at17%(2011-15%) 38,535 58,292CorporateSocialResponsibilityprovision“CSR” 7,525 6,573(Over)/underprovisionofincometaxinpreviousyear (1,857) 2,367Deferredincometax(Note20) 13,422 6,990Effectofchangeintaxrate(Note20) 7,336 -Chargetoincomestatement 64,961 74,222

Currentincometax(asset)/liabilities At01January 21,302 27,384Chargefortheyear 44,203 67,232Taxliabilityonforeignremittances - 338Paidduringtheyear,basedon-Previousyear’sprofit (18,947) (25,251)-Currentyear’sprofit,CSRandTDS (50,951) (48,401)At31December (4,393) 21,302

AreconciliationbetweentheeffectiverateofincometaxoftheCompanyof 26.5%(2011–18.60%)andtheapplicableincometaxrateof17%(2011-15.00%)follows:

(Asapercentageofprofitbeforetaxation) 2012 2011 % %Applicable income tax rate 17.00 15.00Impactof: Depreciationonnon-qualifyingassets 0.90 0.62Expensesnotallowable 0.30 1.15Shareofprofitofjointventure (0.70) (0.39)(Over)/underprovisionofincometaxinpreviousyear (0.80) 0.59Underprovisionofdeferredtaxliabilityinpreviousyear 3.70 -Effectofchangeintaxrates 3.00 -CorporateSocialResponsibility 3.10 1.63Effectiveincometaxrate 26.50 18.60

10 EARNINGS PER SHARE

ThecalculationofearningspershareisbasedontheCompany’sprofitfortheyearofRs 180,868,000 (2011-Rs324,860,000)andon29,322,252ordinarysharesinissueandoutstandingduringthetwoyearsended31December2012.Therewerenopotentiallydilutivesharesoutstandingat31December2012or2011.Dilutedearningspersharearethereforethesameasbasicearningspershare.

11 STAFF COSTS

2012 2011 Rs’000 Rs’000 Wages and salaries 118,586 118,523Socialsecuritycosts 1,434 1,342Pensioncosts–definedbenefitplan(Note21) 18,796 20,351Pensionexitfee - 26,318Otherbenefits 20,357 21,809Terminationbenefits 51 916Rechargeofcoststorelatedcompanies(Note28) ( 27,670) (34,679) 131,554 154,580 2012 2011 Number Number Numberofemployeesatyearend 122 120

Directors’ emoluments included in staff costs are as follows: 2012 2011 Rs’000 Rs’000 Short-termbenefits 9,753 14,544Post-employmentbenefits 1,541 2,181 11,295 16,725

Therechargeofcostsisinrespectof12(2011-14)AfricaDownstreamOilProducts(ADOP)employeesbasedinMauritiuswhosecostsareincurredbytheCompanyandrechargedtoothergroupcompanies.




72 73

12 P

ROPE

RTY,

PLA

NT

AN

D E

qU

IPM

ENT

Buildings

Capital

Freehold

onleasehold

Plantand

Computer

Furnitureand

expenditure

Freeholdland

buildings

land

equipment

Motorvehicles

equipment

fittings

inprogress

Total

Rs

’000

Rs’00

0 Rs

’000

Rs’00

0 Rs

’000

Rs’00

0 Rs

’000

Rs’00

0 Rs

’000

Cost:

At01January2011

58,859

126,064

109,290

1,008,758

2,154

30,639

28,930

325

1,365,019

Additions

-

9,069

14,027

94,600

-

-

-

12,710

130,406

Assetscapitalised

-

-

-

325

-

-

-

(325)

-

Writeoffs/adjustments

-

-

-

(19)

-

-

-

-(19)

Disposals

- (4,433)

(5,154)

(45,866)

-

(1,672)

(8,297)

-

(65,422)

At31December2011

58,859

130,700

118,163

1,057,798

2,154

28,967

20,633

12,710

1,429,984

Additions

32,125

11,387

2,480

111,060

-

1,540

3

64,261

222,856

Assets capitalised

-

5,223

-

2,473

-

-

-

(7,696)

-

Writeoffs/adjustments

-

127

(2)(145)

-

-

-

-(20)

Disposals

-(618)

(4,841)

(108,900)

-

(3,007)

(315)

-

(117,681)

At31December201290,984

146,819

115,800

1,062,286

2,154

27,500

20,321

69,275

1,535,139

Accumulateddepreciation:

At01January2011

-

54,260

54,723

589,651

2,154

27,052

18,062

-

745,902

Chargefortheyear

-

5,496

5,145

60,615

-2,299

1,609

-

75,164

Impairmentloss

-

-

-

4,000

-

-

-

-4,000

Disposals

-(4,409)

(4,750)

(44,785)

-

(1,672)

(8,272)

-

(63,888)

At31December2011

-

55,347

55,118

609,481

2,154

27,679

11,399

-

761,178

Chargefortheyear

-

6,566

5,874

64,710

-1,296

1,585

-

80,031

Adjustments

-

-

-

(20)

-

-

-

-(20)

Disposals

-(616)

(1,239)

(80,502)

-

(2,854)

(291)

-

(85,502)

At31December2012

-

61,297

59,753

593,669

2,154

26,121

12,693

-

755,687

Netbookamount:

At31December2012

90,984

85,522

56,047

468,617

-

1,379

7,628

69,275

779,452

At31December2011

58,859

75,353

63,045

448,317

-

1,288

9,234

12,710

668,806

Included incapitalexpenditureinprogressareplantandequipmentamountingtoR

s 69

,275

,419(2011-Rs12,709,865)inthecourseofconstruction.

13 INTANGIBLE ASSETS Computer software Rs’000Cost: At01January2011,31December2011andat31December2012 21,304

Accumulatedamortisation: At01January2011 20,817Amortisationfortheyear 487

At31December2011 21,304Amortisationfortheyear -At31December2012 21,304

Netbookamount: At31December2012 -At31December2011 -

14 PREPAID OPERATING LEASES

Rs’000Cost: At01January2011 1,619Disposals (146)At31December2011 1,473Disposals -At31December2012 1,473

Amortisation: At01January2011 741Chargefortheyear 70Disposals (146)At 31 December 2011 665Chargefortheyear 68Disposals -At 31 December 2012 733

Netbookamount: At 31 December 2012 740At31December2011 808

Operatingleasesrepresentupfrontleasepaymentsoncertainleaseofland.




74 75

15 OTHER LONG TERM ASSETS 2012 2011 Rs’000 Rs’000

LoanstoDealers 41 2,088 41 2,088

LoanstoDealersrelatetoaloanagreementbetweentheCompanyandanEbèneretailerfortheconstructionofapetrolstationatEbène.

16 INTEREST IN JOINT VENTURE 2012 2011 Rs’000 Rs’000Cost: At01Januaryand31December 15,000 15,000Shareofpost-acquisitionreserves: At01January 10,711 24,384Shareofprofitafterincometax 10,323 10,327Dividendsreceived (17,500) (24,000)At31December 3,534 10,711Netbookamount: At31December 18,534 25,711

TheCompany’sinterestinitsjointventure,whichisunlisted,isasfollows:

Place of Description of % % incorporation Activity shares held holding holding 2012 2011EnergyStorageCompanyLimited Mauritius LPGstorage Ordinaryshares 50.0 50.0

Keyfinancialinformationofthejointventureissummarisedbelow: 2012 2011 Rs’000 Rs’000 Totalassets 64,464 80,076Totalliabilities 27,396 29,182Revenue 32,148 31,358ProfitandTotalComprehensiveIncomefortheyear 21,174 20,127

17 INVENTORIES 2012 2011 Rs’000 Rs’000 Goodsforresale(atcost) 770,534 742,227Spares,accessoriesandsupplies(atnetrealisablevalue) 16,998 24,428 787,532 766,655

18 TRADE AND OTHER RECEIVABLES Restated Restated 2012 2011 2010 Rs’000 Rs’000 Rs’000

Tradereceivables,aspreviouslystated 921,672 652,078 554,210Prioryearreclassification(Note29) - 275,600 219,851Tradereceivables,asrestated 921,672 927,678 774,061Less:provisionforimpairmentofreceivables (16,453) (21,473) (23,124)Tradereceivables–net 905,219 906,205 750,937Otherreceivables 32,120 33,985 19,285Less:provisionforimpairmentofotherreceivables (1,231) (1,398) (2,935)Otherreceivables–net 28,940 32,587 16,350Tradereceivablesfromrelatedcompanies(Note28(vii)) 98,231 148,794 201,068Valueaddedtaxrecoverable 10,000 23,136 4,705Prepayments 1,832 37,903 50,327 110,063 209,833 256,100 1,044,222 1,148,625 1,023,387

Thecarryingamountofreceivablesandprepaymentsapproximatetheirfairvalues.

Tradereceivables thatare less than threemonthspastduearenotconsidered impairedexceptwheremanagement identifies specificinstanceswhereatradereceivablewouldbesubjecttoimpairment.Asof31December2012,tradereceivablesofRs 296,229,000(2011-Rs383,206,000)werepastduebutnotimpaired.Theserelatetoanumberofindependentcustomersforwhomthereisnorecenthistoryofdefault.Theageinganalysisofthesetradereceivablesareasfollows:

2012 2011 2010 Rs’000 Rs’000 Rs’000 Upto30days 992,908 1,065,593 957,243




76 77

18 TRADE AND OTHER RECEIVABLES (Continued)

Asof31December2012,tradereceivablesofRs 16,453,000(2011-Rs21,473,000)wereimpaired.TheamountoftheprovisionwasRs 16,453,000asof31December2012(2011-Rs21,473,000).Theindividuallyimpairedreceivablesrelatetocustomers,whichareinunexpectedlydifficulteconomicsituations.Theageingofthesereceivablesisasfollows:

2012 2011 2010 Rs’000 Rs’000 Rs’000 3to6months(grossreceivable) 6,468 7,732 11,0773to6months(Provisionforimpairment) 6,468 7,732 11,077 Over6months(grossreceivable) 9,985 13,741 12,047Over6months(Provisionforimpairment) 9,985 13,741 12,047

ThecarryingamountsoftheCompany’stradeandotherreceivablesaredenominatedinthefollowingcurrencies: 2012 2011 2010 Rs’000 Rs’000 Rs’000Currency Mauritianrupee 738,840 724,759 576,353UnitedStatesdollar 305,382 423,866 447,034 1,044,222 1,148,625 1,023,387

MovementsontheCompany’sprovisionforimpairmentoftradeandotherreceivablesareasfollows: 2012 2011 2010 Rs’000 Rs’000 Rs’000 At01January 22,871 26,059 15,930Provisionforimpairmentoftradeandotherreceivables 2,203 3,758 13,658Receivableswrittenoffduringtheyearasuncollectible (7,389) (6,946) (3,529)At31December 17,685 22,871 26,059

Thecreationandreleaseofprovisionforimpairedreceivableshavebeenincludedin‘administrativeexpenses’inprofitorloss.Amountschargedtotheallowanceaccountaregenerallywrittenoff,whenthereisnoexpectationofrecoveringadditionalcash.

Themaximumexposuretocreditriskatthereportingdateisthefairvalueofeachclassofreceivable.At31December2012,theCompanyheldbankguaranteesassecurityonreceivablesamountingtoRs 13,200,000(2011-Rs14,205,000).

19 SHARE CAPITAL

2012 2011 2012 2011 Number Number Rs’000 Rs’000 Authorised,Issuedandfullypaid: OrdinarysharesofNilparvalue 29,322,252 29,322,252 293,223 293,223

20 DEFERRED INCOME TAx LIABILITIES

Thegrossmovementonthedeferredincometaxaccountisasfollows:

2012 2011 Rs’000 Rs’000 At01January 55,018 48,028Effectofchangeintaxrateonprioryearbalance 7,336 -Chargefortheyear(Note9) 13,422 6,990At31December 75,776 55,018

Deferredincometaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttooffsetcurrenttaxassetsagainstcurrenttaxliabilitiesandwhenthedeferredincometaxesrelatetothesamefiscalauthority.

Themovementsindeferredincometaxassetsandliabilitiesduringtheyearareshownbelow:

Accelerated Provision for Retirement Capital tax impairment of benefit Other allowances receivables obligations differences Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 At01January2011 58,084 (3,909) (2,956) (3,191) 48,028Charge/(credit)fortheyear 5,538 478 666 308 6,990At31December2011 63,622 (3,431) (2,290) (2,883) 55,018Effectofchangeintaxrate 8,483 ( 457) ( 305) ( 385) 7,336Charge/(credit)fortheyear (1,088) 882 10,360 3,268 13,422At31December2012 71,017 (3,006) 7,765 - 75,776




78 79

21 RETIREMENT BENEFIT ASSETS

Pensionbenefits

Theamountsrecognisedinthestatementoffinancialpositionaredeterminedasfollows:

2012 2011 Rs’000 Rs’000 Presentvalueoffundedobligations 275,235 241,642Fairvalueofplanassets (231,477) (190,416) 43,758 51,226Unrecognisedactuarialloss (89,436) (95,990)(Asset)/liabilityinthestatementoffinancialposition (45,678) (44,764)

Theamountsrecognisedinprofitorlossareasfollows: 2012 2011 Rs’000 Rs’000 Currentservicecost 7,985 7,351Schemeexpenses 857 997Costofinsuringriskbenefits 1,283 1,160Interestcost 22,680 20,878Expectedreturnonplanassets (19,119) (13,725)Actuarialloss 5,110 3,690Totalincludedinstaffcosts(Note11) 18,796 20,351

TheactualreturnonplanassetsamountedRs 38,334,961(2011-Rs(9,667,448)).

Themovementinthe(asset)/liabilityrecognisedinthebalancesheetisasfollows:

2012 2011 Rs’000 Rs’000 At01January (44,764) 19,708Totalexpense–asshownabove 18,796 20,351Employer’scontributions (19,710) (84,823)At31December (45,678) (44,764)

21 RETIREMENT BENEFIT ASSETS (Continued)

Themovementinpresentvalueoffundedobligationsisasfollows:

2012 2011 Rs’000 Rs’000 At01January 241,642 189,589Currentservicecost 7,985 7,351Interestcost 22,680 20,878Actuariallosses 13,241 27,630Benefitspaid (10,313) (3,806)At31December 275,235 241,642

Themovementinfairvalueofplanassetsisasfollows:

At01January 190,416 121,224Expectedreturnonplanassets 19,119 13,725Employer’scontribution 19,710 84,823Schemeexpenses (857) (997)Costofinsuringriskbenefits ( 1,283) ( 1,160)Actuarialgains/(losses) 9,216 (23,393)Benefitspaid ( 4,844) ( 3,806)At31December 231,477 190,416

Planassetsarecomprisedasfollows:

2012 2012 2011 2011 Rs’000 % Rs’000 % Overseasfixedinterestsecurities 140,945 61 116,192 61Overseasequities 90,532 39 74,224 39 231,477 100 190,416 100


Theexpectedreturnonplanassets isdeterminedbyconsidering theexpectedreturnsavailableon theassetsunderlying thecurrentinvestment policy. Expected returns on overseas equities reflect long-term government bond yields plus an approximate equity riskpremium.Expectedyieldsasfixedinterestsecuritiesarebasedongovernmentbondyieldsofapproximately10%perannum.

Theprincipalactuarialassumptionsusedwereasfollows:

2012 2011 % % Discountrate 8.50 9.25Expectedrateofreturnonplanassets 8.50 9.25Futuresalaryincreases 6.00 7.25Futurepensionincreases 3.00 3.00



80 81

21 RETIREMENT BENEFIT ASSETS (Continued)

Planassets

NoneoftheplanassetsareinvestedinsharesoftheCompanyorinpropertyusedbytheCompany.

Mortality rate

Assumptionsregardingfuturemortalityexperiencearesetbasedonadviceinaccordancewithpublishedstatisticsandexperience.Theaveragelifeexpectancyinyearsofapensionerretiringatage60onthereportingdateisasfollows:

2012 2011 Male 21 18Female 24 23

Theaveragelifeexpectancyinyearsofapensionerretiringatage60,20yearsafterthereportingdateisasfollows:

2012 2011 Male 21 18Female 24 23

2011 2010 2009 2008 2007 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000At31December: Presentvalueofdefinedbenefitobligations 275,235 241,642 189,589 171,121 154,542Fairvalueofplanassets 231,477 190,416 121,224 103,217 82,294Deficit/(surplus) 43,758 51,226 68,365 67,904 72,248

Experienceadjustmentsonplanliabilities 13,241 27,630 - - 22,358

Experienceadjustmentsonplanassets 9,216 (23,393) (3,935) 2,498 (19,670)

TheCompany’sbestestimateofthecontributionsexpectedtobepaidfortheyearending31December2012isRs19,800,000.

22 TRADE AND OTHER PAYABLES

2012 2011 2010 Rs’000 Rs’000 Rs’000Tradepayables,aspreviouslystated 1,416,153 1,474,521 1,587,530Prioryearreclassification(Note29) - 16,188 9,422Tradepayables,asrestated 1,416,153 1,490,709 1,596,952Payabletorelatedparties(Note28(vii)) 29,071 123,777 222,564Otherpayablesandaccruals 93,372 79,759 114,300 1,538,596 1,694,245 1,933,816

23 DEPOSITS ON LPG CYLINDERS

2012 2011 Rs’000 Rs’000 At01January 247,785 218,435Deposits/(refunds)–net 25,047 29,350At31December 272,832 247,785

24 CASH, CASH EQUIVALENTS AND BANK OVERDRAFTS

Cash,cashequivalentsandbankoverdraftsincludethefollowingforthepurposesofthecashflowstatement. 2012 2011 2010 Rs’000 Rs’000 Rs’000 Cashandcashequivalents,aspreviouslystated 14,741 175,516 435,994Prioryearreclassification(Note29) (145,451) (210,429)Cashandcashequivalents,asrestated 14,741 30,065 225,565Bankoverdrafts,aspreviouslystated (391,278) (82,857) (610)Prioryearreclassification(Note29) - (113,961) -Bankoverdrafts,asrestated (391,278) (196,818) (610) (376,537) (166,753) 224,955

Bankoverdraftsarerepayableondemandandbearaverageinterestratesof6.51%annually(2011:6.88%annually)

25 DIVIDENDS

Thecompanydeclaredthefollowingdividendsduringtheyear. 2012 2011 Rs’000 Rs’000 Rs 6.10perordinaryshare(2011-Rs6.10) 178,866 178,866Rs 2.00perordinaryshare(2011-Rs5.00) 58,644 146,611 237,510 325,477

ThedividendofRs6.10declaredin2012representsthefinaldividendinrespectofthefinancialyearended31December2011.ThedividendofRs2.00declaredin2012representstheinterimdividendinrelationtothefinancialyearended31December2012.

Duringtheyear,thecompanywrotebackunclaimeddividendsfortheyears2002to2006amountingtoRs1,139,244.(2011-Rsnil)




82 83

26 OPERATING LEASES

TheCompanyleasesvariousplotsoflandandvehiclesundernon-cancellableoperatingleaseagreements.Theleaseshavevaryingterms,escalationclausesandrenewalrights.TheleaseexpenditurechargedtoprofitorlossduringtheyearisdisclosedinNote7.

Thefutureaggregateminimumleasepaymentsundernon-cancellablemotorvehicleleasesareasfollows: 2012 2011 Rs’000 Rs’000 Within1year 21,952 23,891Between1and5years 35,254 41,059Afterfiveyears 23,699 22,408

Thefutureaggregateminimumleasepaymentsundernon-cancellableleaseholdlandleasesareasfollows: 2012 2011 Rs’000 Rs’000 Within1year 3,602 3,177Between1and5years 10,280 13,966Afterfiveyears 1,072 2,152

27 CONTINGENT LIABILITIES

At31December2012,theCompanyhadcontingentliabilitiesamountingtoRs32,589,000(31December2011–nil)consistingprincipallyofVATclaimedandcorporatetaxonreceiptofRs.62,986,400representingproceedsfromtheassignmentoftheCompany’seconomicrightsintheShelltrademarkin2008andfromthedismissalofanex-employee,bothofwhichitiscontestingandforwhichnoliabilityhasbeenrecognisedinthesefinancialstatements.

TheCompanyhasalsoreceivedaclaimfromoneofitspreviousretailers.Managementdoesnotconsiderthatthereisanymeritinthesaidclaimandthereforebelievesthatitisnotprobablethatthesaidclaimwillresultinamaterialliability,ifany.

28 RELATED PARTY TRANSACTIONS

At31December2012,theCompanyiscontrolledbyVivoEnergyMauritiusHoldingsBVwhichowns77.15%oftheCompany’sshares.Theremaining22.85%ofthesharesarewidelyheldandarelistedontheStockExchangeofMauritius.TheintermediateandultimateparentsoftheCompanyareVivoEnergyHoldingBVandHVInvestmentsBV,companiesbasedinNetherlands.Fellowsubsidiariesareentitieswhicharecontrolledbytheultimateparentdirectlyorindirectlythroughoneormoreintermediaries.AssociatesareentitiesinwhichtheCom-panyhassignificantinfluencebutwhichitdoesnotcontrol.Thefollowingtransactionswerecarriedoutwithrelatedparties:

28 RELATED PARTY TRANSACTIONS (Continued) 2012 2011 Rs’000 Rs’000(i)PurchasesofgoodsandservicesfromfellowSubsidiaries Purchasesofgoods: ShellandVivoLubricantsSA(lubricantsfreight) 10,011 -

Purchasesofservices: VivoEnergySouthAfrica(Pty)Ltd 93,661 -

TheabovetransactionsrepresenttheCompany’sshareofregionalservicecostforbusinesssupportservicesandasperthecostcontributionagreementbetweenVivoEnergyMauritiusLimitedandVivoEnergySouthAfrica(Pty)Limited(ex-ADOP).TheservicesarechargedonaGeneralorSpecificbasisasfollows:

Generalservices-ProportionofCompany’sturnovertotheturnoverofallVivoEnergy’soperatingunitsinAfricaSpecificservices-Standardchargeoronatimeandmaterialsbasis(includingdisbursements)

2012 2011 Rs’000 Rs’000

(ii)Salesofgoodsandservices (a)Salesofgoodstofellowsubsidiary: VitolAviation 811,652 62,943(b)Salesofservices: EnergyStorageCompanyLtd(jointventure)(managementservices) 2,000 2,000EnergyStorageCompanyLtd(jointventure)(rent) 288 288VivoEnergyIndianOceanHoldings(managementservices)(fellowsubsidiary) 1,160 1,178 3,448 3,466

Theabovetransactionswerecarriedoutonnormalcommercialtermsandconditions.

(iii)Keymanagementpersonnel(includingfulltimedirectors) 2012 2011 Number Number SharesheldintheCompany-Directly - 200 -Indirectly - 900 - 1,100Emoluments 24,544 33,462Postemploymentbenefits 3,712 3,598 28,256 37,060

In2012,therewasnoclaimmadetoShellInternationalPetroleumCompanyLimited.In2011,outoftheRs37,060,000,Rs.3,335,883wereclaimedtoShellInternationalPetroleumCompanyLimited.




84 85

28 RELATED PARTY TRANSACTIONS (Continued)

2012 2011 Rs’000 Rs’000 (iv)Expenses Expensespaid: VivoEnergySA(Pty)Ltd(ex-ADOP)(fellowsubsidiary) 46,119 -SociétéMalgachedesPétrolesVivoEnergy(fellowsubsidiary) 1,402 -SOPAF(formerfellowsubsidiary) - 42,178ShellTrustBermudaLimited - 27,884 47,521 70,062

Theexpensesrelatedtotheabovetransactionswerereclaimedfromtheaboverelatedcompanies.TheseexpenseswereinvoicedatcostandincludedstaffcostsofRs27,670,000.(2011-Rs34,679).

(v)Dividendsreceived EnergyStorageCompanyLtd(jointventure) 17,500 24,000

(vi)Dividendspaid VivoEnergyMauritiusHoldingsBV(parent) 296,365 - (vii)Outstandingbalances Receivablefromrelatedparties: VitolAviation(fellowsubsidiary) 87,118 63,302EnergyStorageCompanyLtd(jointventure) 320 -ShellAviation - 64,733ShellInternationalPetroleumCompany - 20,759VivoEnergySouthAfrica 10,793 - 98,231 148,794 Payabletorelatedparties: VitolAviation(fellowsubsidiary) 512 -ShellOverseasHoldingsLimited - 109,958ShellAviation - 13,819VivoEnergySouthAfrica 28,559 - 29,071 123,777

Theamountsreceivablefrom,andpayableto,relatedpartiesareunsecured,interestfreeandhavenofixedrepaymentterms.

29 PRIOR YEAR RESTATEMENT

TheCompanypreviouslyaccounted foroutstandingcheques(cheques issuedandnotclearedatyearend)andoutstanding lodgements(chequesreceivedbutnotclearedatyearend)atyearendwithincashandcashequivalentsandbankoverdraft.TheCompanyhasmadethefollowingprioryearrestatementstoreinstatebacktheoutstandingcheques(chequesissuedandnotclearedatyearend)andoutstandinglodgements(chequesreceivedbutnotclearedatyearend)atyeartoTradepayablesandTradereceivablesrespectivelytocomplywiththerequirementsofIAS39,‘FinancialInstruments-RecognitionandMeasurement’.Theprioryearrestatementshavenotimpactedprioryearretained earnings.

Statement of financial position 2011 2010 Rs Rs Trade and other receivables Tradereceivables,aspreviouslystated 652,078 554,210Oustandinglodgementsreclassifiedfromcashandcashequivalents 145,451 219,851Oustandinglodgementsreclassifiedfrombankoverdraft 130,149 -Tradereceivables,asrestated 927,678 774,061

Trade and other payables Tradepayables,aspreviouslystated 1,474,521 1,587,530Unpresentedchequesreclassifiedfromcashandcashequivalents - 9,422Unpresentedchequesreclassifiedfrombankoverdraft 16,188 -Tradepayables,asrestated 1,490,709 1,596,952

Cash and cash equivalents Cashandcashequivalents,aspreviouslystated 175,516 435,994Unpresentedchequesreclassifiedtotradepayables - 9,422Outstandinglodgementsreclassifiedtotradereceivables (145,451) (219,851)Cashandcashequivalents,asrestated 30,065 225,565

Bank overdraft Bankoverdraft,aspreviouslystated 82,857 610Unpresentedchequesreclassifiedtotradepayables (16,188) -Outstandinglodgementsreclassifiedtotradereceivables 130,149 -Cashandcashequivalents,asrestated 196,818 610




86 87

30 THREE YEAR SUMMARY

2012 2011 2010 Rs’000 Rs’000 Rs’000Statement of Comprehensive Income Sales 12,595,242 12,313,299 9,453,712Operatingprofit 239,732 412,973 371,695Financeincome 8,186 1,086 15,497Financecost (12,412) (25,304) (5,166)Shareofprofitofjointventure 10,323 10,327 8,043Profitbeforeincometax 245,829 399,082 390,069Incometaxexpense (64,961) (74,222) (65,146)Profitfortheyear 180,868 324,860 324,923Dividendsdeclaredpershare Rs 8.10 11.10 10.00Basicanddilutedearningspershare 6.17 11.08 11.08

30 THREE YEAR SUMMARY (Continued)

2012 Restated Restated Rs’000 2011 2010 Rs’000 Rs’000Statement of financial position

ASSETS Non-current assets Property,plantandequipment 779,452 668,806 619,117Intangibleassets - - 487Prepaidoperatingleases 740 808 878Interestinjointventure 18,534 25,711 39,384Otherlongtermassets 41 2,088 4,119Retirementbenefitasset 45,678 44,764 - 844,445 742,177 663,985

Current assets Inventories 787,532 766,655 808,015Receivablesandprepayments 1,044,222 1,148,625 1,023,387Cashandcashequivalents 14,741 30,065 225,565IncomeTaxAsset 4,393 - - 1,850,888 1,945,345 2,056,967Total assets 2,695,333 2,687,522 2,720,952 EqUITY Sharecapital 293,223 293,223 293,223Retainedearnings 123,628 179,131 179,748Total equity 416,851 472,354 472,971

LIABILITIES Non-current liabilities Deferredincometaxliabilities 75,776 55,018 48,028Retirementbenefitobligations - - 19,708 75,776 55,018 67,736

Current liabilities Bankoverdrafts 391,278 196,818 610Tradeandotherpayables 1,538,596 1,694,245 1,933,816DepositsonLPGcylinders 272,832 247,785 218,435Currentincometaxliabilities - 21,302 27,384 2,202,706- 2,160,150 2,180,245Total liabilities 2,278,482 2,215,168 2,247,981Total equity and liabilities 2,695,333 2,687,522 2,720,952




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31 FINANCIAL INSTRUMENTS BY CATEGORY Loans and receivables 2011 2010 Rs’000 Rs’000

Financial assets Tradeandotherreceivables 1,032,390 1,087,586Cashandcashequivalents 14,741 30,065 1,047,131 1,117,651 At amortised cost

2012 2011 Rs’000 Rs’000Financial liabilities Bankoverdraft 391,278 196,818Tradeandotherpayables 1,538,596 1,694,245DepositonLPGcylinders 272,832 247,785 2,202,706 2,138,848

32 PARENT AND ULTIMATE PARENT COMPANIES

At31December2012,thedirectorsconsiderVivoEnergyMauritiusHoldingsB.V.(incorporatedintheNetherlands)astheparentcom-pany.TheintermediateandultimateparentsoftheCompanyareVivoEnergyHoldingBVandHVInvestmentsBV,companiesbasedinNetherlands.

33 INCORPORATION AND REGISTERED OFFICE

TheCompanyisincorporatedanddomiciledinMauritiusasapubliccompanywithlimitedliability.TheaddressofitsregisteredofficeisRocheBois,PortLouis.

34 CURRENCY

ThefinancialstatementsarepresentedinthousandsofMauritianrupees.


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