Annual rt2016 - Innodisinnodisgroup.com/media/29371/7572_-_innodis_ar_2016_web.pdf ·...

AnnualReport

2016

Financial Highlights 006Group Structure 007Overview of Activities 008-009Chairman and CEO’s Report 012-017Board of Directors 020-023Corporate Governance Report 026-040Secretary’s Certificate 041Other Statutory Disclosures 042Independent Auditors’ Report 046-047Consolidated and Separate Statements of Profit or Loss and Other Comprehensive Income 050Consolidated and Separate Statements of Financial Position 051-052Consolidated and Separate Statements of Changes in Equity 053-055Consolidated and Separate Statement of Cash Flows 056-057Notes to the Consolidated and Separate Financial Statements 060-134

The KingofMauritian

Barbecues

TURNOVER 2016

Rs 4,287BILLION

FINANCIALHIGHLIGHTS

INNODIS LTD

100%

100%100%

100%56.4 % 100%

100% 100%

100% 100% 100%

60 % 75 %

50.1 %

51 %Supercash Ltd

Challenge Hypermarkets Ltd

HWFRL Investments Ltd

Société Enatou Innodis Poultry Ltd

Peninsula Rice Milling Ltd

Redbridge Investments Ltd

Poulet Arc-en-Ciel Ltée Société Centre Point Société Narien

Green Island Milling Ltd

Moçambique Farms, Limitada

Essentia Ltd

Meaders Feeds Ltd

Mauritius Farms Ltd

GROUPSTRUCTURE

4,15

6

4,19

3

4,294

4,287

2013

TURNOVER (Rs B)

2014 2015 2016

264

211

227

224

2013

OPERATING PROFIT (Rs M)

2014 2015 2016

4.10 3.15

3.18

3.07

2013

Earnings per Share (Rs)

2014 2015 2016

1.80 1.85

1.85

1.85

2013

Dividend per Share (Rs)

2014 2015 2016

151

116

117

113

2013

Profit attribuable to Owners of the Company (Rs M)

2014 2015 2016

INNODIS ANNUAL REPORT // 2016006 007 2016 // INNODIS ANNUAL REPORT

AGRO-INDUSTRY

Innodis Ltd (Poultry Division)Meaders Feeds Ltd

(Animal Feeds)

Moçambique Farms, LimitadaMozambique

Poulet Arc-en-Ciel Ltée

Chilled Foods

Frozen Foods Non-Foods

Dry Goods

IMPORTS AND DISTRIBUTIVE TRADE

Sterilised Milk

Juice

Rice Milling

Yoghurt

Ice Cream

FRANCHISING

Point Frais

Supercash Ltd

RETAILING

MANUFACTURING

OVERVIEW OFACTIVITIES


CoolTemptations

CHAIRMAN AND CEO’SREPORT

D E A R S H A R E H O L D E R S ,

The global economy has continued to struggle during the past year with uneven geographic growth. While Europe remains submerged under a wave of uncertainty in the aftermath of the

‘Brexit’ announcement, elsewhere, the presidential elections in the US, the ongoing crisis in the Middle East and the continued volatility of commodity prices combine for an unlikely quick turn-around of the world economy. Not surprisingly, when it comes to our island nation, the IMF has alluded to weak external demand as one of the reasons for our moderate GDP growth of 3.4%1 in 2015.

In Mauritius, while politics have dominated the headlines for the most part of the year, our hope is that the focus will soon shift back to economic considerations. In this respect, the timely execution of the Public Sector Investment Programme for the period FY 2016/17 to FY 2020/21 should set the foundation for a more robust future growth.

As things stand, a resurgence in business confidence and consumption would be well received, as we continue to face tough challenges in the food and distribution industry, namely with growing competition and the rise in bargaining power of modern trade outlets, in particular hard discounters. To preserve market share, we have revised our selling prices in key product segments to keep up with the competition. This has however affected our turnover and profitability.

Nevertheless, with a tight grip on costs and the introduction of innovative product lines, we have managed to keep overall performance stable with a Group turnover of Rs 4.287 billion for the financial year 2015/2016 compared to Rs 4.294 billion for the same period last year, while Group profit attributable to the owners of the company amounted to Rs 112.6 million (2014/2015: Rs 116.7 million). EPS stood at Rs 3.07 for the period against Rs 3.18 last year. A dividend of Rs 1.85 per share was declared for the year under review.

M A N A G E M E N T A N D B O A R D O F D I R E C T O R S

In July 2016, we announced the forthcoming retirement of our current CEO at the end of his contract on the 31st December 2016. The latter has played a pivotal role in the growth and diversification of the Group for more than 40 years. Although he is taking his retirement, he will remain on the Board as a non-executive director. In our July communiqué, we also announced the appointment of Jean-Pierre Lim Kong as the succeeding Chief Executive Officer.

We are confident that the Group will benefit from Jean-Pierre’s experience and skill-set. He is poised to quickly fit into his new role as he is already familiar with our operations and culture, having held the position of General Manager at Innodis in the past. Jean-Pierre will join us as from the 1st January 2017, but our current CEO has agreed to remain available to ensure a smooth handing over. Jean-Pierre will be appointed as a member of the Board in addition to his position as CEO.

P E R F O R M A N C E BY CLUSTER

T H E P O U LT R Y D I V I S I O N

During the year under review, our poultry operations, which were previously grouped under the poultry business cluster of Innodis Ltd, were transferred to Innodis Poultry Limited, a new fully-owned subsidiary of Innodis Ltd. The new entity is operational since the 1st January 2016. The main objective of this restructuring exercise is to promote efficiency by encouraging our production team to focus essentially on cost control and meeting production KPIs.

As far as farm performance is concerned, during the second part of the year, we suffered from a shortfall in chick production as two breeding flocks did not perform according to standard. Our broiler production was hence affected to some extent, which in turn impacted on sales. Normal production was however resumed during the first quarter of the new financial year.

The costs of imported feed raw materials also increased in the last quarter of the year under review as a result of an increase in the prices of imported maize and soybeans, hence impacting on our margins.

We operate today in a mature market, where growth is limited in relation to our traditional range of products. However, the introduction of innovative packaging for our prime chicken and new products in the value-added segment should contribute to a more dynamic and attractive offering.

T H E D A I R Y D I V I S I O N

The use of latest technology and manufacturing processes has always been central to our dairy unit at Phoenix. The past year has been no exception in this regard. We have introduced new packaging equipment which has enabled us to launch re-sealable pouches in the DairyVale™ and Bingo™ lines, hence offering more convenience to consumers. These have been very well received. Sales in our dairy segment have improved overall by around 7% over the previous year.

Innovation is another key area of focus in our dairy business. New products have been introduced during the year, namely new flavours in our fat-free DairyVale™ yoghurt range. We have also been developing other flavours, such as DairyVale™ Fruits des Bois in

the drinking yoghurt category, DairyVale™ Goyave and more importantly, our Greek style yoghurt, which we are most excited about. The first two have been launched at the beginning of the 1st quarter of the new financial year, while our creamy Greek style yoghurt, rich in protein and calcium, should hit the shelves in October 2016. It will be the first Greek style yoghurt to be produced in Mauritius.

Our ice cream range has performed satisfactorily, in spite of strong competition in modern trade. TREAT™ has undergone an uplifting of its packaging to better reflect the quality of the products distributed under the brand.

During the new financial year, investment in cutting-edge technology and R&D will remain at the forefront of our strategy to ensure that we grow sustainably and to incorporate best environmental practices in our manufacturing processes. We will also be developing further our dairy portfolio.

During the year under review, our poultry operations, which

were previously grouped under the poultry business cluster of

Innodis Ltd, were transferred to Innodis Poultry Limited, a new fully-

owned subsidiary of Innodis Ltd.

In our July communiqué, we also announced the appointment of Jean-Pierre Lim Kong as the succeeding

Chief Executive Officer.

Our creamy Greek style yoghurt, rich

in protein and calcium, should

hit the shelves in October 2016. It will be the first

Greek style yoghurt to be produced in

Mauritius.

Victor Seeyave Chairman

1 Statistics Mauritius: 3.5%


T H E C O M M E R C I A L D I V I S I O N

The year under review was a challenging one for our commercial division, with strong competition among distributors as well as among modern trade retail outlets. Recurrent discounts and promotions have become the name of the game in the industry and are putting pressure on our margins. Moreover, the fall in prices of some commodities, such as milk powder, has also weighed negatively upon our turnover growth, as the increase in sales volumes did not completely mitigate the price fall.

To address the above concerns, we have invested further in marketing and branding initiatives to develop brand awareness and loyalty, with focus on the quality and health features of our products. Going forward, we will be dedicating more time and resources to our own local brands, while continuing to consolidate the market shares of our leading brands such as Ceres™, La Vache qui rit™, Flora™, Blue Band™ and Doux™, among others.

Consumer GoodsOur performance was satisfactory in the consumer goods division, although we faced competition in the rice market, characterised by low brand loyalty.

We also suffered from short supply of Bois Cheri™ tea due to unfavourable climatic conditions. To mitigate supply issues in the future, new tea plants have been planted by our partner, St Aubin. However, the young plants will take a few years before they mature. In the meantime, tea manufacturers are also discussing with the authorities to find ways to rejuvenate the tea industry in Mauritius.

Sales of our cheeses sustained its upward trend over the year, especially our Twin Cows™ cheddar, while La Vache qui rit™, Kiri™ and Floridia™ brands maintained their leading positions in their respective categories.

During the year, we have successfully launched our Lorenz™ range of potato chips. Lorenz™ is the leading umbrella brand in Germany in its category, comprising sub-brands like Naturals, Crunchips and Tacitos.

Chilled and Frozen FoodsSales of chilled and frozen chicken under our brands Prodigal™, Carmen™ and Le Poulet Fermier™ were at par with the previous year, although competition remained prevalent. The main objective of our nation-wide Prodigal™ advertising campaign in October and November 2016 is to reaffirm our flagship brand as a safe, flavourful and convenient one that is perfectly suited for all traditional Mauritian meals.

Our efforts to improve the market share of Doux™, our leading brand of value-added chicken products met with success. Flora™ and Blue Band™ brands of margarine also performed well with higher sales volumes and improved market shares compared to the previous corresponding period.

Turnover was however affected in this segment by a shortfall of local and imported fish and other seafood, as well as competition from small operators in the red meat segment with lower quality brands.

Point FraisSales in our network of Point Frais franchised outlets have improved compared to the previous period. During the year, we have dedicated additional resources to Point Frais to reinforce the entrepreneurial skills of our franchisees in key areas, such as quality, hygiene standards and customer service. We have also initiated a programme of refurbishment and uplifting of our franchise outlets, as part of our commitment to continuously improve the customer’s shopping experience.

We will continue to be rigorous in the selection of our franchised partners as we look forward to expanding our network while maintaining the quality standards of the franchise. We are confident that our investment in this franchise as well as the Coin Frais corners in hyper/supermarkets will be a contributor of future growth for the Group.

O U RS U B S I D I A R I E S

M O Ç A M B I Q U E FA R M S ,L I M I TA D A

Since January 2016, we have increased our stake in our subsidiary, Moçambique Farms, Limitada, from 50.1% to 75% - a move that reflects our belief in the potential of the local poultry business in Mozambique. We have taken over full control of the management of operations since the beginning of the calendar year, and have rolled out a programme of targeting and eliminating unnecessary costs. Our farms are now operating at full capacity and our production KPIs are sound. We have also adopted a new, tighter policy on sales, with priority given to clients agreeing to payment terms more favourable to the company.

We are pleased to report that these measures have resulted in a significant progress in the performance during the second semester of the financial year under review. Our cash flow position has improved. We are now operating at full occupancy on our own farms and are looking at opportunities to increase production by renting and managing external farms.

While this improvement in our operations is quite satisfactory, our future growth will depend not only on increasing output, but also on the success of the measures announced by the Mozambican Government to increase foreign investment and more importantly, to alleviate the foreign currency shortage, which has affected our ability to source raw materials at reasonable prices.

For the next financial year, the Mozambican Government is banking on a GDP growth of 5.5%, as outlined in its draft Economic and Social Plan for 2017. To that effect, it has expressed willingness to take necessary measures to improve the quality and transparency of the financial and foreign exchange system. The objective is to preserve the value of the Mozambican currency and to promote macroeconomic stability.

There are also indications that an import ban for chicken is under consideration and food production in Mozambique will be made a priority - initiatives which bode well for our local poultry business.

M E A D E R S F E E D S LT D

Meaders Feeds Ltd fared reasonably well during the year, increasing its turnover from Rs 1.19 billion in 2015 to Rs 1.28 billion in 2016, with volume sales up by 7.3%. Profitability remained sound at Rs 83.1 million (2014/2015: Rs 85.2 million), with the slight decline attributable to deferred tax treatments and additional provisions for impairment on trade receivables.

The company has recently completed a rebranding exercise to enhance its presence in the animal feed industry. The new visual identity integrates sustainability principles, with the colour green symbolising our agricultural crops, nourishing feed and growth on the one hand, and the colour blue epitomising ecology, infinite horizons and trust on the other hand. This visual entity, together with our new slogan “Alimentons la croissance”, supports our vision to be the preferred supplier of animal feed in Mauritius, in the Indian Ocean and in Africa.

Speaking of the region, our operations in Seychelles have recorded promising results for the past 18 months. Meaders Seychelles Ltd, the new subsidiary of Meaders Feeds Ltd, posted a turnover of SCR 38.7 million and profits before tax of SCR 2.4 million for the said period.

Meaders Feeds Ltd has also opened a new feed depot at La Ferme, Rodrigues, to be closer to our clients and provide them with a better service.

We are pleased to report that these measures [in relation to Moçambique Farms, Limitada] have resulted in a significant progress in the performance

during the second semester of the financial year under review.

The main objective of our nation-wide Prodigal™ advertising campaign in

October and November 2016 is to reaffirm our flagship brand as a safe, flavourful and convenient one that is perfectly suited for

all traditional Mauritian meals.

Jean How Hong Chief Executive Officer



S U P E R C A S H LT D

Supercash has been going through difficult times in recent years, due to a change in industry dynamics, namely with the emergence of hard discounters, the gradual disappearance of traditional small shops and loss leader practices by hyper/supermarkets.

During the year, a series of measures were undertaken to get Supercash back on track, including the closing down of our Quay D outlet, rationalisation of product categories and review of margins.

Although profitable, the Supercash X-press pilot project will not be extended further, as margins are too low for the project to be sustainable in the long run. Management will henceforth closely monitor the financial situation of our remaining outlets at Rose-Belle, Phoenix and Rodrigues. New product categories, such as fast moving Aardee™ domestic appliances from Dubai, should be introduced in October 2016 to give a new direction to the enterprise and revive sales. Supercash has also secured the distributorship of premium Mexican Corona™ beer, recognised worldwide for its high quality and refreshing taste.

P E N I N S U L A R I C E M I L L I N G C O . LT D

Our subsidiary engaged in rice milling, has experienced a rather difficult year. Our flagship brand Rimilda™ has had to compete with a multitude of imported rice brands, many of which are misleading in the sense that they are not 100% pure basmati - unlike our Rimilda™, which is still today the only brand having obtained the Special Grade basmati certification from the MSB.

As far as our partner Vita Rice is concerned, we have been apprised that the latter is in the process of revamping its business model and will be having recourse to out-growers instead of cultivating the rice itself on leasehold land. The efforts of Vita Rice to market Mighty RiceTM in the United States, Europe and Singapore are slowly bearing fruits.

For the year ahead, we expect sales volumes to improve, following better procurement of bulk rice. We also hope that the rice market will soon be strictly regulated so that only brands supported by official basmati certifications would be allowed on the shelves.

P O U L E T A R C - E N - C I E L LT É E

In spite of the competition in the poultry industry, Poulet Arc-en-Ciel Ltée has managed to maintain its sales volume over the previous year, thanks to its good relationship with - and high level of service to - its regular clients. Furthermore, a tight control on costs, coupled with an improvement in production KPIs, has enabled us to improve our profitability by 26% to reach Rs 15.4 million.

As far as the new financial year goes, the salmonella scare in September 2016 has affected sales and this will be reflected in the first quarter results of the company. However, consumers have come to realise that the salmonella issue was largely overblown and consumption of chicken is now slowly returning to normal levels. Looking ahead, we expect better results in the coming months, particularly with the end of year festivities.

CORPORATE SOCIAL RESPONSIBILITY

Innodis Foundation has supported 16 NGOs for the FY 15/16, disbursing an aggregate amount of Rs 2.95 million in its efforts to combat poverty. In line with our sustainability policy, we have favoured projects which have made education and training their key components, so that the beneficiaries are not only cared for, but also given tools that may allow them to one day claim their independence and pursue their dreams. Throughout the years, our partners have shared with us heart-warming success stories of young people who have broken free from the poverty trap and moved on to embrace respectable careers.

As the newly announced CSR framework will be rolled out, with 50% (and subsequently 75%) of our CSR funds due to be transferred to the National CSR Foundation through the MRA, we anticipate that our internal structure will also be called upon to evolve, with a reduced budget to allocate to our personal CSR initiatives. We are however confident that this matter will be dealt with by our CSR Committee in a most equitable manner for the benefit of our existing partners as well as all vulnerable families and individuals that we have supported so far.

OUTLOOK

The food and distribution industry will most likely remain competitive throughout the next financial year, and we expect that margins will continue to be under pressure. We have to cater today for a market which is both complex and fragmented. While the need for quality is shared across all market segments, we are witnessing the growth of a category of consumers who are willing to stretch their budgets for more upmarket and healthier food items. At the same time, low prices and promotional offers are still significant crowd pullers in retail outlets.

Fortunately, we have a business model which is deeply rooted in delivering quality and which caters to the complexity of the marketplace. Our key brands target all segments of the population, but we also continuously strive to respond to specific market trends and introduce innovative products all year round. In this regard, we are expecting some exciting developments in our non-food offering during the third quarter.

However, we believe that expanding our product range is not sufficient to sustain both volume growth and profitability. That is why we have initiated an exercise to reassess our sales policies and identify any non-productive brands or activities with the aim of rationalising our offerings and

ensuring that overall performance is not stalled by a few under-achievers. We are also reviewing our sales and distribution expenses to identify areas where further savings can be made, so as to alleviate the pressures on our margins.

Moreover, the recent food scares that our country has experienced have validated our policy of pursuing voluntary third party certifications such as HACCP and ISO 22000. Our traditional commitment to quality and food security has allowed us to immediately reassure consumers regarding the safety of our products when concerns arose. There is little doubt that our ‘Exigence Qualité’ motto will remain an integral part of our future strategy.

As usual, as a final note to this report, we would like to extend our thanks to all our trading partners, Board members, our resourceful management team and dedicated members of staff, and of course, to all our shareholders for their continued support and belief in our endeavours.

Rimilda™ is still today the only brand having obtained the Special

Grade basmati certification from the MSB.

Our ‘Exigence Qualité’ motto will remain an integral part of our future strategy.



ineachBite

A Delight

BOARDOF DIRECTORSANNUAL REPORT

The Directors are pleased to present the annual report together with the audited financial statements of Innodis Ltd (the “Company”) and its subsidiaries (collectively referred to as the “Group”) for the year ended 30 June 2016.

The financial statements of the Group and the Company are set out on pages 50 to 134. The auditors’ report on these consolidated and separate financial statements is on pages 46 and 47.

REVIEW OF BUSINESS

The principal activities of the Group comprise production of poultry and dairy products, poultry farming, animal feeds manufacturing, distribution and marketing of food and non-food products. During the year, a restructuring exercise was carried out, whereby the poultry division of Innodis Ltd was transferred to a new wholly-owned subsidiary of the Company, named Innodis Poultry Ltd.

The principal activities of the Company comprise production of dairy products, distribution and marketing of foods and non-food products.

Segment information is disclosed in Note 6 to the consolidated and separate financial statements.

RESULTS

For the year under review, the Group and the Company recorded a turnover of Rs 4.287 billion (2015 – Rs 4.294 billion) and Rs 2.632 billion (2015 – Rs 2.866 billion) respectively, whilst profits after tax attributable to shareholders for the Group and the Company were Rs 113 million (2015 – Rs117 million) and Rs 133 million (2015 – Rs 50 million) respectively.

DIVIDENDS

Total dividends declared and paid by the Group and the Company for the year ended 30 June 2016 were Rs 95 million (2015 – Rs 99 million) and Rs 68 million (2015 – Rs 68 million) respectively.

BOARD OF DIRECTORS

The following directors held office during the year ended 30 June 2016:

Innodis Ltd

Executive directors

Jean How Hong (Chief Executive Officer)

Rahim Bholah

Sonny Wong Lun Sang

Non-executive directors

Victor Seeyave (Chairman)

Sir René Seeyave Kt., CBE

Jacques Wing Soon Leung Wan Kin

Independent directors

Maurice de Marassé Enouf

Gil de Sornay

Imrith Ramtohul

Peninsula Rice Milling Co LtdJean How Hong (Chairman)

Victor Seeyave

Sonny Wong Lun Sang

BOARD OF DIRECTORS

Challenge Hypermarkets LtdJean How Hong (Chairman)

Victor Seeyave



HWFRL Investments LtdJean How Hong (Chairman)

Victor Seeyave


Moçambique Farms, Limitada Jean How Hong (Chairman)

Victor Seeyave

Susana Luciano – resigned on 8 December 2015

Ross George Ellis – resigned on 8 December 2015

Craig Irvine – resigned on 19 September 2016

N. Vincent Reynolds Moothoo – appointed on 8 December 2015

Jacques Wing Soon Leung Wan Kin – Alternate to Victor Seeyave

Mauritius Farms LimitedJean How Hong (Chairman)


Vivekanand Ramtohul

Poulet Arc-en-Ciel LtéeJean How Hong (Chairman)

Victor Seeyave


N. Vincent Reynolds Moothoo

Gérard Jean Patrick Hardy - resigned on 7 September 2015

Dominique Rocky Forget


Gerard Yoon Kong Wong Chong

Gérard Louis Boullé

Gaetan Philip Sébastien Rae - appointed on 14 December 2015

Redbridge Investments LtdJean How Hong (Chairman)

Victor Seeyave

Vivekanand Ramtohul

Essentia LtdJean How Hong (Chairman)


Vivekanand Ramtohul

Green Island Milling LimitedJean How Hong (Chairman)

Rahim Bholah

Graeme Lance Robertson

Rachmat Imanuel Suhirman

Meaders Feeds LimitedYannick Lagesse (Chairman)

Robert Joseph Bernard Montocchio

Jean How Hong

Jean Baptiste Wiehe


Jocelyn Fanchette

Ramtohul Vivekanand – Alternate to Maurice de Marassé Enouf

Rahim Bholah – Alternate to Jean How Hong

Emmanuel Wiehe – Alternate to Jean Baptiste Wiehe

Johann Montocchio – Alternate to Robert Joseph Bernard Montocchio

Supercash LtdJean How Hong (Chairman)

Victor Seeyave

Sonny Wong Lun Sang

P. Frais Franchise LtdJean How Hong (Chairman)

Sonny Wong Lun Sang

Vivekanand Ramtohul

Innodis Poultry LtdVictor Seeyave (Chairman)

Jean How Hong

Vivekanand Ramtohul


N. Vincent Reynolds Moothoo


DIRECTORS’ PROFILE

Jean How HongExecutive Director

Chief Executive Officer since February 2009. Jean holds a Diploma in Sugar Technology (School of Agriculture, University of Mauritius). He had previously assumed functions of Executive Director of Mauritius Farms Ltd, General Manager (Commercial Division) of Happy World Ltd and Chief Operating Officer of the Company from August 2005 to December 2008. He chairs the Corporate Governance Committee of Meaders Feeds Ltd and does not hold directorships in other listed companies.

Rahim BholahExecutive Director

Rahim Bholah joined Innodis Ltd in 1993 as Production Manager at the poultry production plant and has today 25 years of hands-on experience in the manufacturing sector, within textiles, poultry and dairy industries. He is also running the Peninsula Rice Milling operations, which is a subsidiary entity of Innodis Ltd. He holds a Bachelor (Hons) degree in Production Engineering and Production Management from the University of Nottingham (UK). He also possesses a Postgraduate Diploma in Management. He has extensively led the company towards the achievement of growth through initiatives in quality management, value engineering, innovation, productivity enhancement and market share gain both locally and regionally. ‘Our fundamental strengths are our strong relationships with our suppliers and retailers and our flexibility. We continue to diversify our product mix to meet new customer expectations and we are aggressively seizing opportunities created by healthy eating.’ says Rahim - director since 2014. He does not hold directorships in other listed companies.

Sonny Wong Lun SangExecutive Director

Sonny has more than sixteen years of experience in the food sector as Production & Quality Manager, Sales & Marketing Manager and is currently the General Manager of the Group’s commercial division. He holds an MBA from ‘IAE – Institut en Administration des Entreprises’ of Poitiers, a Master-DESS in project management from the University of Bordeaux and a Master-DEPA in entrepreneurship from the IFE of Réduit. He does not hold directorships in other listed companies.

Victor SeeyaveNon-Executive Chairman

Victor is the holder of a BA in Economics (UK) and an MBA (USA). He is currently the Managing Director of Altima Ltd and previously held several management positions in the foods division of the Group. He is a director of Swan General Ltd and of Swan Life Ltd. He is currently a member of the Corporate Governance Committee.

Sir René Seeyave Kt., CBENon-Executive Director

A prominent and respected entrepreneur, Sir René has been the prime mover in some of the most successful ventures that the country has known, amongst which the textile, food and distribution sectors. For his contribution to the Mauritian economy, Sir René was the youngest person in the private sector to be knighted by H.M The Queen of England in 1985. During his career, Sir René has been entrusted with key positions in several public and private sector institutions. Today, Sir René chairs the Board of the Altima Group, which has completed several property projects in Ebène Cybercity and has launched a management company in association with Alter Domus, a large international group offering corporate management services.

Jacques Wing Soon Leung Wan KinNon-Executive Director

Jacques is a Fellow Member of the Association of Chartered Certified Accountants UK. He is the General Manager - Finance of Altima Group and has had valuable exposure to the affairs of Innodis Ltd, having previously held management responsibilities in the food division of the Group. Jacques is currently a member of the Audit and Risk Committee of Innodis Ltd. He does not hold directorships in other listed companies.

Maurice de Marassé EnoufIndependent Director

Maurice retired in 2001 after 29 years of service as Finance Manager of the WEAL group of Companies. He acts as Non-executive Director on the board of Terra Mauricia Ltd and as Independent Director on the board of Mauritius Oil Refineries Ltd. He is currently the Chairman of the Audit and Risk Committee of Innodis Ltd and of Meaders Feeds Ltd; a member of the Audit Committees of the Mauritius Oil Refineries Ltd and Terra Mauricia Ltd; and a member of the Corporate Governance Committee of Innodis Ltd.

Gil de SornayIndependent Director

Gil joined Swan Insurance Co. Ltd in 1958 and was appointed General Manager in 1976. He retired in 1996 and acted as Adviser to the Group Chief Executive of Swan Insurance Co. Ltd up to December 2000. Gil is currently the Chairman of the Corporate Governance Committee of Innodis Ltd. He is also a member of the Audit and Risk Committee of Innodis Ltd. He does not hold directorships in other listed Companies.

Imrith Ramtohul, FCCA, CFAIndependent Director

Imrith is presently the Senior Investment Consultant at Aon Hewitt Ltd (Mauritius). He has also previously held positions at Mauritius Union Group, the Stock Exchange of Mauritius and at subsidiaries of South African banking groups Rand Merchant Bank and Nedbank. Imrith is a member of the Mauritian Financial Reporting Monitoring Panel (FRMP) and a member of the Global Investment Performance Standards (GIPS) Asset Owners Subcommittee. Imrith, who has more than 16 years’ experience in the financial services sector, has been cited in a number of media outlets. He holds the Chartered Financial Analyst designation and is a Fellow of the Association of Chartered Certified Accountants UK (FCCA). Imrith also graduated from the University of Cape Town with a Bachelor of Business Science (Honours) degree. He is a Director of IPRO Growth Fund Ltd.

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

Directors acknowledge their responsibilities for:

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

(ii) the preparation of consolidated and separate financial statements which fairly present the state of affairs of the Group and the Company as at the end of the financial year and the cash flows for that period, and which comply with International Financial Reporting Standards (IFRS), the Financial Reporting Act and in compliance with the Mauritius Companies Act;

(iii) the use of appropriate accounting policies supported by reasonable and prudent judgements and estimates;

(iv) the Group and the Company’s adherence to the Code of Corporate Governance; and

(v) having made an assessment of the Group and Company as a going concern and have reasons to believe it will continue to operate for the foreseeable future.

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

The Directors report that:

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

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

(iii) International Financial Reporting Standards have been adhered to. Any departure has been disclosed, explained and quantified in the consolidated and separate financial statements; and

(iv) The Code of Corporate Governance has been adhered to in all material aspects and explanations have been provided for any non-compliance.

Approved by the Board of Directors on 28 September 2016 and signed on its behalf by:

Victor Seeyave Maurice de Marassé Enouf

Chairman Director

BOARDOF DIRECTORS


HeavenlyFragrant

CORPORATEGOVERNANCE REPORT The Corporate Governance Report includes Other Statutory Disclosure Pursuant to Section 221 of the Mauritius Companies Act 2001.

Innodis Ltd was incorporated on 25 April 1973 and has been listed on the official market of the Stock Exchange of Mauritius Ltd since 1996.

STATEMENT OF COMPLIANCE

The Board of Directors of Innodis Ltd ensures that the principles of good corporate governance, as applicable in Mauritius, are fully adhered to and form an integral part in the way in which the Group’s business is conducted. It is also committed to fair financial disclosure for its shareholders and all the stakeholders at large.

BOARD, DIRECTORS AND COMMITTEES

The Company has a unitary Board of directors which consists of three executive directors, three non-executive directors and three independent non-executive directors. The directors come from diverse business backgrounds and possess the necessary knowledge, skills, objectivity, integrity, experience and commitment to make sound judgements on various key issues relevant to the business of the Company, independent of management. The list of the directors and their profiles are included on pages 20 to 22 of the Annual Report.

The Company complies with the Code of Corporate Governance which stipulates that the Company shall have at least 2 independent and 2 executive directors.

The Board meets on a quarterly basis and at such ad hoc times as may be required. Its main functions include the following:

• Reviewing and evaluating present and future opportunities, threats and risks in the external environment and current and future strengths, weaknesses and risks relating to the Company;-

• Determining strategic options, selecting those to be pursued, and resolving the means to implement and support them;-

• Determining the business strategies and plans that underpin the corporate strategy;-

• Ensuring that the Company’s organisational structure and capabilities are appropriate for implementing the chosen strategies;-

• Delegating such authority and power to management as may be deemed appropriate and monitoring and evaluating the implementation of policies, strategies and business plans;-

• Ensuring that internal controls are effective;-

• Communicating with senior management;-

• Ensuring that communications both to and from shareholders and relevant stakeholders and all strategic partners are effective;-

• Understanding and taking into account the interests of shareholders and relevant stakeholders in policy and strategy implementation.

Appointment and re-election of Directors

The directors are normally appointed by shareholders by an ordinary resolution at the Annual Meeting. In compliance with the Constitution of the Company, the Board may also appoint any person to be a director, either to fill a casual vacancy, or as an addition to the existing directors. Moreover, the Board may appoint any of the Managers of the Company as an executive director and may limit the powers of the latter.

All directors, whether appointed by a resolution of shareholders or by the directors, shall hold office only until the next Annual Meeting, at which time they shall retire, or shall be eligible for re-election.


Board Committees

The Board has two standing committees to assist in the discharge of its duties. The committees, which are set out below, meet regularly under terms of reference set by the Board. The Chairman of each committee has the responsibility to report to the Board regarding all decisions and matters arising at each Board meeting. The committees may from time to time seek independent professional and consultancy services, and any recommendations in connection therewith are subject to the approval of the Board.

Directors’ self-appraisal

The last Directors’ self-appraisal was carried out in May 2015. A fresh appraisal has been earmarked during the financial year 2016/2017.

Section 2.10.4 of the Code of Corporate Governance with respect to the individual evaluation of directors has therefore not been complied with. The reason for non-compliance is provided on page 40.

Chairperson

Victor Seeyave is the current Chairman. The Chairman has no executive or management responsibilities and chairs meetings of the Board and of Shareholders.

The Chairperson’s primary function is to:

• Preside over the meetings of directors and ensure the smooth functioning of the Board in the interests of good governance;

• Provide overall leadership and encourage active participation of all directors; and

• Ensure that all the relevant information and facts are placed before the Board to enable the directors to reach informed decisions, and maintain sound relations with the Company’s shareholders.

Chief Executive Officer (CEO)

The CEO is responsible for the day-to-day management of the Company and works in close collaboration with the management team. The CEO also reports to the Board of Directors.

Jean How Hong, the current CEO, will retire at the expiry of his contract on 31 December 2016, and Jean Pierre Lim Kong will take over as CEO as from 01 Jan 2017 for an initial period of 5 years.

Leadership

Directors and members of Management exercise the utmost good faith, honesty and integrity in all their dealings with or on behalf of the Company. They are well versed with the day-to-day transactions of the Company and are sufficiently experienced and qualified to fulfil their roles and functions.


CORPORATEGOVERNANCE REPORT BOARD, DIRECTORS AND COMMITTEES

Corporate Governance Committee

The Corporate Governance Committee comprises two independent directors, including its Chairperson and one non-executive director as follows:

• Gil de Sornay (Chairman) – Independent Director

• Victor Seeyave – Non-Executive Director

• Maurice de Marassé Enouf – Independent Director

Given the nature, size and moderate complexity of the business, the functions that would have normally devolved to remuneration committee and to a nomination committee are discharged by the Corporate Governance Committee, which submits its recommendations to the Board for approval.

The committee members met 3 times during the year. The mandate of the Corporate Governance Committee is to:

• determine and develop the general policy regarding legal compliance, ethics of the Group and corporate governance in accordance with the Code of Corporate Governance;

• assist the Board in establishing a formal and transparent procedure for developing a remuneration policy for senior management and making recommendations to the Board on all new Board appointments;

• ensure that the Board has a right balance of skills, expertise and independence;

• ensure that any new director is fully aware of his/her roles, duties, responsibilities, obligations and potential liabilities as a director;

• ensure that a succession planning exists in respect of the Chief Executive Officer and members of senior management; and

• have unrestricted access to any employee information relevant to the performance of his/her duties.

Audit and Risk Committee

The Audit and Risk Committee consists of two independent directors, including its Chairperson and one Non-Executive Director as follows:

• Maurice de Marassé Enouf (Chairman) – Independent Director

• Gil de Sornay – Independent Director

• Jacques Wing Soon Leung Wan Kin – Non-Executive Director

The Audit and Risk Committee met 6 times during the year and the members of the Committee have examined and tabled their views on financial reports prior to publication, the audited consolidated and separate financial statements, as well as reports from the Internal and External Auditors.


Audit and Risk Committee

The mandate of the Audit and Risk Committee is to:

review and recommend to the Board, for approval, the audited consolidated and financial statements and the abridged audited consolidated results as at June 30 (the end of the financial year), as well as the unaudited quarterly abridged consolidated financial statements for publication in accordance with the Securities Act 2005;

• evaluate the work of the external auditors;

• ensure that significant adjustments, unadjusted differences, disagreements with Management and management letters are discussed with the external auditors;

• review the contents of the annual report before its release;

• review and discuss with Management the recommendations made by internal and external auditors and their implementation;

• review the effectiveness of the system for monitoring compliance with laws and regulations and the results of Management’s investigation and follow-up of any fraudulent acts and/or non-compliance; and

• oversee the Company’s compliance with legal and regulatory provisions, its Constitution, code of conduct, by-laws and any rules established by the Board.

Internal Audit Function

The Internal Audit Executive reports to the Audit Committee and administratively to the Chief Executive Officer. The Audit Committee approves the yearly plan of the internal audit manager which comprises the following main responsibilities:

• Determining the adequacy and effectiveness of the systems of internal accounting and financial reporting of the Company;

• Reviewing management controls designed to safeguard Company resources and verify the existence of such resources;

• Determining whether adequate controls are incorporated into information technology systems and the overall IT administrative functions;

• Appraising the use of resources with regard to cost, efficiency and effectiveness;

• Reviewing compliance with Company policies, plans and procedures to ensure achievement of business objectives;

• Investigating suspected fraudulent activities within the organisation and notifying the Audit and Risk Committee and Management of the results;

• Coordinating with and having oversight of other control and monitoring functions (risk management, quality assurance, security and safety);

• Issuing periodic reports to the Audit and Risk Committee on the results of audit activities and management plans to address audit observations; and

• Following-up of implementations of action plans to address significant weaknesses identified.

The internal audit team has unrestricted access to the records, management and employees of the Group. The Internal Audit Executive has the responsibility of ensuring that internal controls are implemented at Group level, except for Meaders Feeds Ltd which has its own internal audit function.


CORPORATEGOVERNANCE REPORT BOARD, DIRECTORS AND COMMITTEES

Risk Management Function

The Directors recognise that the Board has the overall responsibility for the risk management and internal control mechanisms of the Company. Management assists the Board in implementing, operating and monitoring the internal control systems which manage the risks of calamities and failure to achieve business objectives, and provide reasonable but not absolute safeguards against material misstatements or losses. The systems of internal controls put in place by management include:

• the maintenance of proper accounting records;

• the implementation of the policies and strategies approved by the Board;

• the regular assessment of specific risk managements such as – market risks, credit risks, liquidity risks, operation risks, commercial risks, technological risks, compliance risks and human resource risks; and

• the overseeing and reviewing on an ongoing basis of the risks associated with occupational health and safety, as well as environmental issues.

Management has a well-designed structure for the identification and management of risks through stringent controls, which are reviewed on a regular basis by the internal audit department. This provides the directors a certain level of assurance that risk management processes are in place and effective.

Procurement Function

One of the key risk areas of the Group is the procurement function. As such, Management has set up a separate procurement committee. The aims of the Procurement Committee are to prioritise and manage risks across the entire supply chain. The Procurement Committee currently reports to the Chief Executive Officer and its main terms of reference are to:

• identify, and manage procurement risks according to their chances of occurrence and severity;

• provide guidelines on procurement;

• make recommendations for the selection of suppliers to ensure best value for money is received, and the adequacy of stocks, taking into consideration cash flow requirements; and

• set the highest possible ethical standards and best practices for procurement through defined policies and monitoring.


Directors’ attendance at meetings for the period from 1 July 2015 to 30 June 2016

The record of attendance at Board and Committee meetings is shown in the summary table below:

Board Meetings

28 Sep 2015 13 Nov 2015 9 Dec 2015 12 Feb 2016 11 May 2016 20 June 2016

Sir René Seeyave √ √ √ √ √ √

Victor Seeyave √ √ √ √ √ √

Jean How Hong √ √ √ √ √ √

Maurice de Marassé Enouf √ √ √ √ √ √

Gil de Sornay √ √ √ √ √ √

Imrith Ramtohul √ √ √ √ √ √

Jacques Leung Wan Kin √ x √ x √ √

Sonny Wong Lun Sang √ √ √ √ √ √

Rahim Bholah √ √ √ √ √ √

Audit and Risk Committee Meetings

22 Jul 2015 05 Aug 2015 23 Sep 2015 9 Nov 2015 5 Feb 2016 10 May 2016

Maurice de Marassé Enouf √ √ √ √ √ √

Gil de Sornay x √ √ √ √ √

Jacques Leung Wan Kin √ √ √ x √ √

Corporate Governance Committee Meetings

28 Sep 2015 13 Nov 2015 12 Feb 2016

Gil de Sornay √ √ √

Maurice de Marassé Enouf √ √ √

Victor Seeyave √ √ √

Common Directorships

Common directorships are disclosed on pages 20 to 22 under the Directors’ Profiles.


CORPORATEGOVERNANCE REPORT COMPANY SECRETARY

The secretary of the Company is Box Office Ltd.

The role of the Company secretary is to:

• ensure compliance with the Company’s constitution and all relevant statutory and regulatory requirements, codes of conduct and rules established by the Board; and

• provide guidance and advice to the Board on matters of ethics and good governance.

STATEMENT OF REMUNERATION PHILOSOPHY

The Board’s Corporate Governance Committee has the responsibility for reviewing the remuneration of key executives, including the Chief Executive Officer. The level of remuneration is based on a formal assessment of performance in accordance with agreed target parameters and is in line with market trends.

A statement showing the remuneration of executive and non-executive directors is shown below.

2016 2015 2016 2015

Consolidated Consolidated Separate Separate

Rs’000 Rs’000 Rs’000 Rs’000

Executive 21,122 17,993 15,337 13,922

Non – Executive 752 915 752 915

21,874 18,908 16,089 14,837

Number of directors whose emoluments fall within the following bands:

2016 2015 2016 2015

Consolidated Consolidated Separate Separate

Number Number Number Number

Between Rs 7,000,000 and Rs 10,000,000 1 1 1 1

Between Rs 1,000,000 and Rs 7,000,000 7 6 2 3

Section 2.8.2 of the Code of Corporate Governance with respect of disclosure of the individual remuneration of directors has not been complied with. The reason for non-compliance is provided on page 40.

DIRECTORS’ SERVICE CONTRACTS

There are no service contracts between the Company or any of its subsidiaries and their directors, with the exception of the service contract of the Chief Executive Officer ending in December 2016 and that of the managing director of Meaders Feeds Ltd.

SHARE OPTION PLAN

The Group and the Company have no share option plans.

SUBSTANTIAL SHAREHOLDERS

The shareholders holding more than 5% of the ordinary shares of the Company at 30 June 2016 were:

• Foods Div Ltd – 33.73%

• Altima Ltd – 13.07%

• National Pension Fund – 7.86%

• Swan Life Ltd – 6.35%

• Excelsior United Development Companies Limited – 5.53%

Summary of shareholders by category

Investment & Trust 1.897 %

Individual 11.960 %

Pension & Provident Funds 14.114 %

Insurance & Assurance 13.817 %

Other Corporate Bodies 58.212 %

SHAREHOLDING PROFILE

Size of shareholding No of shareholders No of shares owned %

1 – 500 1,591 291,062 0.792

501 – 1,000 425 346,448 0.943

1,001 – 5,000 508 1,193,709 3.250

5,001 – 10,000 111 783,394 2.133

10,001 – 50,000 107 2,235,818 6.087

50,001 – 100,000 21 1,439,030 3.918

100,001 – 250,000 14 2,132,210 5.805

250,001 -1,000,000 7 2,405,245 6.548

Over 1,000,000 6 25,903,350 70.524

2,790 36,730,266 100


CORPORATEGOVERNANCE REPORT DIRECTORS’ AND SENIOR OFFICERS’ DEALING IN SHARES

The Directors use their best endeavours to follow the principles of the model Code on Securities Transactions by Directors (as detailed in Appendix 6 of the Stock Exchange listing rules).

The Directors’ and Senior Officers’ direct and indirect interests in shares of the Company at 30 June 2016 were as follows:

2016 2016 2015 2015Direct holding

NumberIndirect holding

%Direct holding

NumberIndirect holding

%

Directors:Sir René Seeyave 2,700 15.87 2,700 15.41Maurice de Marassé Enouf 533 - 533 -Jean How Hong 39,218 0.01 39,218 0.01Victor Seeyave - 30.45 - 27.08Gil de Sornay 13,697 - 13,697 -Jacques Wing Soon Leung Wan Kin 2,620 - 2,620 -Imrith Ramtohul 14,032 0.0041 9,332 0.0041Rahim Bholah 2,000 - 2,000 -

Sonny Wong - - - -

74,800 46.3341 70,100 42.5041

Senior Officers:Amrith Dass Nunkoo 310 - 310 -V.N Reynolds Moothoo - - - -Vivekanand Ramtohul - - - -Gerard Wong Chong 698 - 698 -Jocelyn Fanchette - - - -

Box Office Ltd - - - -

1,008 - 1,008 -

STAKEHOLDERS’ RELATIONS AND COMMUNICATION

The Board aims to properly understand the information needs of all shareholders and strongly believes in an open and meaningful dialogue with all those involved with the Group. It ensures that shareholders and other stakeholders are kept informed on matters affecting the Group. The Group’s website (www.innodisgroup.com) is used to provide relevant information. Open lines of communication are maintained to ensure transparency and optimal disclosure. All Board members are requested to attend annual meetings, to which all shareholders are invited.

Share price information

For the year under review, Innodis share price has decreased by 21.57% from Rs 51.00 at 30 June 2015 to Rs 40.00 at 30 June 2016.

2016 2015

Share price (Rs) 40.00 51.00Earnings per share (Rs) 3.07 3.18Price Earnings Ratio (times) 13.03 16.04Dividend per share (Rs) 1.85 1.85Dividend yield (%) 4.63 3.63

TIME TABLE OF IMPORTANT EVENTS FOR SHAREHOLDERS

September Approval of audited consolidated and separate financial statements

September/October Presentation to Fund Managers

November Publication of first quarter results

December Declaration of interim dividends

Annual meeting of shareholders

February Publication of second quarter results

May Publication of third quarter results

June Declaration of final dividends

RELATED PARTY TRANSACTIONS

Related party transactions are set out in Note 29.

CONTRACT OF SIGNIFICANCE

The Company has a Technical and Advisory services agreement with Altima Ltd. There is no other contract of significance between the Company or any of its subsidiaries and a third party, in which a director is materially interested directly or indirectly, for the year under review.

DIVIDEND POLICY

The Board has not established a formal dividend policy. However, the Board endeavours to authorise distributions in the light of the company’s profitability, cash flow requirements and planned capital expenditure.


http://www.innodisgroup.com

CORPORATEGOVERNANCE REPORT SUSTAINABILITY REPORTING

Health, Safety and Environmental policies

The Group has developed and implemented social, safety, health and environmental policies and practices that in all material respects comply with existing legislative and regulatory frameworks.

The Group carries out regular risk assessments to ensure that all production units are operated in such a manner as to minimise damage to the environment and the neighbourhoods. Regular training sessions, both in-house and outsourced, are also provided to our staff to ensure that health and safety cultures prevail within the Group and that everyone is well informed about health and safety policies in place.

Health and Safety committees, consisting of representatives of both Management and employees, are held every two months. The objectives of this committee are to promote cooperation between the employer and the employees and to discuss projects and plans in order to promote the health and safety culture at Innodis.

The Group operates its day-to-day activities in a way that is aligned as far as possible with green, environmentally-friendly and energy-saving principles, paying special attention to the regular maintenance and optimal use of its fleet of vehicles to minimise carbon emissions. The used engine oil of our vehicles as well as the plastic, paper and carton waste products at our commercial division are routinely recycled. We also have a couple of projects in the pipeline to produce renewable energy.

The poultry sector is now ISO14001 certified (since December 2014). We are engaged in sustainable chicken production; which is the responsible use of the natural resources of air, water, energy and other natural inputs for rearing animals, as well as the animals, themselves, in terms of their own welfare. Sustainability also includes protecting and taking care of the members of our workforce that grow the animals and process the poultry products. To build trust and confidence among consumers, Innodis has been voluntarily pursuing third party certifications and adopting best practices for several years.

The ISO 14001 certification has helped us identify areas where we can further improve on waste handling and recycling, make best use of our natural resources, create opportunities for environmental benefits, care even more for our animals, water, energy utilisation, and protect the air and the soil.

The system that we have in place at Innodis is in accordance with best international standards and practices in relation to environment protection and community welfare. The implementation of our Environmental Management System is part of our drive to incorporate sustainability into every aspect of chicken production, for the ultimate benefit of the consumer.

Corporate Social Responsibility (CSR): Innodis Foundation

For the financial year ended 30 June 2016, Innodis Foundation has donated some Rs 3.0 million (2015: Rs 3.4 million) to sixteen NGO’s involved in activities that we consider to be high on our priority list of interventions. The beneficiaries are: Movement Civique de Baie du Tombeau, Centre de L’Amitie Camp La Paille, Association d’Alphabetisation de Fatima, College Technique St Gabriel, Association Anou Grandi, Trust Fund for Excellence in Sports (Mauritius and Rodrigues), Ecole Le Flamboyant, Batisseurs de Paix, Mahebourg Espoir Education Centre, Magic Fingers Association, Southern Handicapped Association, Salesian Home and Council of Religions.

All of them have benefited from our financial support in the past, except Salesian Home which has been included in our list for the first time.

The funds have been allotted mainly to the alleviation of poverty and development of vulnerable groups, including the physically and mentally handicapped, through education, training, and empowerment.

Since its inception in June 2010, Innodis Foundation has funded NGO projects to the tune of Rs 21.4 million under its corporate social responsibility (CSR) program.

SHAREHOLDERS’ AGREEMENT

There is no shareholders’ agreement which affects the governance of the Company by the Board.

MANAGEMENT AGREEMENT

There is no management agreement between Innodis or any of its subsidiaries with third parties, except in the case of our subsidiaries, Poulet Arc-en-Ciel Ltée and Innodis Poultry Ltd, which have a management agreement with Innodis Ltd.

CONSTITUTION OF THE COMPANY

The Constitution of the Company does not provide for any ownership restrictions of shares.

Save and except where the terms of issue of any class of shares – as may be determined by the Board - specifically provides otherwise, all new shares are, before issue, offered to existing holders in proportion to their existing shareholdings.

The shareholders of the Company approved, at a Special Meeting held on 18 of December 2013, a new constitution which replaced the memorandum and articles of association of the Company. This constitution, drafted in compliance with the prevailing legislations, in particular the Companies Act 2001 and the appendix 4 of the Listing Rules, also takes into account the prevailing Code of Corporate Governance.

Code of Ethics

The Group is committed to the highest standards of integrity and ethical conduct in dealing with all its stakeholders. Employees at all levels have partaken in the drawing up of the Group’s code of ethics, which reflects its diversity and unique culture. Adequate grievances and disciplinary procedures are in place to enable enforcement of the Code of ethics.


CORPORATEGOVERNANCE REPORT SENIOR MANAGEMENT TEAM

The Senior Management team, other than the CEO and Director. Jean How Hong, and the other Executive Directors, namely Sonny Wong Lun Sang (General Manager – Commercial) and Rahim Bholah (General Manager – Production), are as follows:

Vivekanand Ramtohul, FCCAGroup Finance ManagerVivek has been working with the Group for 15 years. He is a Fellow of the Association of Chartered Certified Accountants, UK.

Jocelyn FanchetteGeneral Manager - Meaders Feeds LtdJocelyn holds an MSc Animal Production from the University of Reading – UK, as well as a BSc (Hons) Agriculture, a Diploma in Agriculture & Sugar Technology, and a Diplome Superieur en Administration des Entreprises from the University of Mauritius.

Christina Sam See MoiSenior Manager – CommercialChristina joined the Company in 2000, right after graduating from university and has since worked in the marketing field. She holds a BSc (Hons.) Management from the London School of Economics and Political Science.

Reynolds Moothoo General Manager Agribusiness and Regional Development – Innodis Poultry LtdReynolds’ main responsibilities include the management of our local vertically integrated poultry operations, now regrouped under Innodis Poultry Ltd, as well as the development and oversight of our poultry-related activities in the region. Reynolds joined Innodis in 2005. He has over 37 years’ management experience in the agro-industry. He holds a Diploma in Agriculture, a Diploma in International Marketing and a Masters in Business Administration from Surrey University, UK.

Gerard Wong ChongGeneral Manager – Poulet Arc-en-Ciel LtéeGerard started his career in the sugar industry and has been working in the poultry business since 1978. He is currently responsible for the activities of Poulet Arc-en-Ciel Ltée. He holds a BSc in Agriculture.

Hansley Chadee IT ManagerRecipient of the state scholarship, Hansley holds a BEng Information System from Imperial College London, and an MPhil in Artificial Intelligence from Cambridge University. He is currently doing an MBA at Imperial College London. He has been with the Company, leading the IT department for the past 16 years.

MANAGEMENT TEAM

Amrith NunkooLogistics Manager He holds an MA Engineering from the University of Cambridge, UK. He is presently in charge of the Group’s dry warehouse and cold room activities. He is also in charge of the management of the fleet of vehicles and refrigeration systems.

Rajneetee BeeharryHuman Resources ManagerRajneetee has over 15 years of working experience within different areas that span over Human Resources, Hospitality, Quality Assurance, Training and Food & Beverage within Financial and Hospitality sector. She holds a BSc in Human Resources from the University of Mauritius and an MBA Degree from the (Management College of South Africa). She joined the Company in April 2016 and is currently leading the Human Resources department.

MANAGEMENT TEAM

Arvin SaddulManager - Supercash Ltd He has been working for the Group for 25 years. He holds a BEng mechanical Engineering from University of Manchester, UK. He is a Chartered Engineer and holds an MBA in Project Management

Deven RamasawmyInternal Audit ExecutiveHe is a member of the Association of Chartered Certified Accountants, UK. He joined the Group in 2014. Previously he has worked for Shibani Finance and Poivre Corporate Services as Internal Audit Manager.

ACKNOWLEDGEMENT

The Board would like to thank all employees for their continued dedication and loyalty.

Victor Seeyave Sophie Gellé, ACIS

Chairman Box Office Ltd, Company Secretary


CORPORATEGOVERNANCE REPORT STATEMENT OF COMPLIANCE

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

We, the Directors of Innodis Ltd, confirm, to the best of our knowledge that the Company has complied with the requirement of the Code of Corporate Governance, except for:

• section 2.8.2 - the reason being that the Board of Directors considers this information as very sensitive in this competitive market.

• section 2.10.4 - the reason being that an evaluation of directors were carried out last year and the next evaluation will be done in the next financial year.

Gil de Sornay Victor Seeyave

Chairman Director

SECRETARY’S CERTIFICATE UNDER SECTION 166(D) OF THE MAURITIUS COMPANIES ACT 2001

In accordance with Section 166(d) of the Mauritius Companies Act 2001, we hereby certify that to the best of our knowledge and belief, the Company has filed with the Registrar of Companies, all such returns as are required of the Company under the Mauritius Companies Act 2001.

Sophie Gellé, ACIS

Box Office Ltd

Company Secretary

Date: 28 September 2016

SECRETARY’SCERTIFICATE


AUDITORS’ REMUNERATION

2016 2015

Rs’000 Rs’000

Company: KPMG : Audit Fees 2,006 1,800

Advisory Services 50 275

Group: KPMG : Audit Fees 3,569 2,826

Advisory Services - 275

Ernst & Young : Internal Audit Services 360 340Tax Services 50 35

BDO Seychelles Audit Fees - 98

External Auditors

The Audit and Risk Committee has approved the re-appointment of KPMG to act as External Auditors of the Group for the next financial year. This approval is subject to ratification by the shareholders of Innodis Ltd by means of a resolution at the annual meeting. The next annual meeting is scheduled to be held in December 2016.

OTHER STATUTORYDISCLOSURES


DeliciouslyHealthy


INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF INNODIS LTD

REPORT ON THE FINANCIAL STATEMENTS

We have audited the consolidated and separate financial statements of Innodis Ltd (the “Company”), which comprise the consolidated and separate statements of financial position as at 30 June 2016 and the consolidated and separate statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and the notes to the consolidated and separate financial statements which include a summary of significant accounting policies and other explanatory notes, as set out on pages 60 to 134.

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

Directors’ Responsibility for the Financial Statements

The directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in compliance with the requirements of the Mauritius Companies Act and Financial Reporting Act, 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.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance 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 auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the 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.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF INNODIS LTD (CONTINUED)

REPORT ON THE FINANCIAL STATEMENTS (CONTINUED)

Opinion

In our opinion, these financial statements give a true and fair view of the consolidated and separate financial position of Innodis Ltd as at 30 June 2016 and of its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards and in compliance with the requirements of the Mauritius Companies Act and Financial Reporting Act.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Mauritius Companies Act

We have no relationship with or interests in the Company other than in our capacity as auditors and advisors and in arm’s length dealings in the ordinary course of business.

We have obtained all the information and explanations we have required.

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

Financial Reporting Act

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

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

KPMG John Chung, BSc, FCA

Ebène, Mauritius Licensed by FRC

Date: 28 September 2016


Grown

Natureby


CONSOLIDATED AND SEPARATE STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE YEAR ENDED 30 JUNE 2016

CONSOLIDATED SEPARATE

2016 2015 2016 2015

Note Rs’000 Rs’000 Rs’000 Rs’000

Revenue 4,286,989 4,293,739 2,632,082 2,866,966

Profit from operating activities 7 223,622 226,520 195,640 199,222

Finance income 9 26,671 29,991 20,689 20,128

Finance cost 9 (82,937) (100,685) (60,071) (62,798)

Share of profit of equity-accounted investees, net of tax 16 133 72 - -

Impairment of investment in subsidiary - - - 98,500

Profit before income tax 167,489 155,898 156,258 58,052

Income tax expense 10 (41,099) (24,343) (23,714) (7,951)

Profit for the year 126,390 131,555 132,544 50,101

Other comprehensive income

Items that will never be reclassified to profit or loss

Deferred tax movement 26 (7,871) (128) (7,337) (1,642)

Re-measurement of employee benefit liability 25 17,762 11,949 15,258 11,164

9,891 11,821 7,921 12,806

Items that are or may be reclassified to profit or loss

Foreign currency translation difference – foreign operations (26,199) (19,537) - -

Other comprehensive (loss)/income for the year (16,308) (7,716) 7,921 12,806

Total comprehensive income for the year 110,082 123,839 140,465 62,907

Profit attributable to:

Owners of the Company 112,591 116,619

Non-controlling interest 13,799 14,936

Profit for the year 126,390 131,555

Total comprehensive income attributable to:

Owners of the Company 75,527 118,032

Non-controlling interest 34,555 5,807

Total comprehensive income for the year 110,082 123,839

Earnings per share

Basic/diluted earnings per share (Rs) 11 3.07 3.18

CONSOLIDATED AND SEPARATE STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2016


2016 2015 2016 2015

Note Rs’000 Rs’000 Rs’000 Rs’000

ASSETSNon-current assets

Property, plant and equipment 12 1,656,826 1,669,374 324,414 857,676

Intangible assets and goodwill 14 5,809 5,840 - -

Biological assets 20(b) 6,030 6,959 - 6,959

Non-current receivables 19 12,943 13,515 12,943 13,515

Investment property 13 - - 488,119 -

Investments in subsidiaries 15(a) - - 649,334 183,976

Equity- accounted investees 16 - 6,620 - 7,446

Available-for-sale investments 17 209 209 209 209

Loans to subsidiaries 18 - - - 187,415

Total non-current assets 1,681,817 1,702,517 1,475,019 1,257,196

Current assets

Inventories 20(a) 1,227,971 1,219,014 826,042 780,865

Assets held for sale 22 13,000 - 7,400 -

Biological assets 20(b) 69,590 72,663 - 69,899

Trade and other receivables 21 723,912 669,112 648,273 697,862

Cash and cash equivalents 48,472 52,061 6,907 10,023

Total current assets 2,082,945 2,012,850 1,488,622 1,558,649

Total assets 3,764,762 3,715,367 2,963,641 2,815,845

EQUITY AND LIABILITIESShareholders’ equity

Share capital 23 367,303 367,303 367,303 367,303

Share premium 23 5,308 5,308 5,308 5,308

Revaluation reserve 23 342,963 387,802 321,979 332,197

Foreign currency translation reserve (24,886) (11,137) - -

Retained earnings 1,018,147 951,976 908,441 825,709

Total equity attributable to owners of the Company 1,708,835 1,701,252 1,603,031 1,530,517

Non-controlling interests 143,663 198,875 - -

Total shareholders’ equity 1,852,498 1,900,127 1,603,031 1,530,517

The notes on pages 60 to 134 form part of these consolidated and separate financial statements. The notes on pages 60 to 134 form part of these consolidated and separate financial statements.


CONSOLIDATED AND SEPARATE STATEMENTS OF FINANCIAL POSITION (CONTINUED)AS AT 30 JUNE 2016


2016 2015 2016 2015

Note Rs’000 Rs’000 Rs’000 Rs’000

Non-current liabilities

Borrowings 24 195,411 315,323 146,325 271,588

Retirement benefit obligations 25 88,653 139,739 54,928 127,074

Deferred tax liabilities – net 26 63,841 57,147 32,066 26,186

Total non-current liabilities 347,905 512,209 233,319 424,848

Current liabilities

Bank overdrafts 471,846 437,579 309,769 395,923

Current tax liabilities 32,543 14,257 13,954 9,558

Borrowings 24 640,121 460,130 442,481 233,064

Trade and other payables 27 419,849 391,065 361,087 221,935

Total current liabilities 1,564,359 1,303,031 1,127,291 860,480

Total liabilities 1,912,264 1,815,240 1,360,610 1,285,328

Total equity and liabilities 3,764,762 3,715,367 2,963,641 2,815,845

Approved by the Board on 28 September 2016 and signed on its behalf by:

Chairman Director

CONSOLIDATED AND SEPARATE STATEMENTS OF CHANGES IN EQUITYFOR THE YEAR ENDED 30 JUNE 2016

Share capital

Share premium

Revaluation reserve

Foreign currency

translation reserve

Retained earnings Total

Non-controlling

interest

Total shareholders’

equityCONSOLIDATED Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Balance as at 30 June 2014 367,303 5,308 394,956 729 884,333 1,651,171 186,916 1,838,087

Total comprehensive income for the year Profit for the year - - - - 116,619 116,619 14,936 131,555 Other comprehensive incomeForeign currency translationdifference – foreign operations - - - (10,408) - (10,408) (9,129) (19,537)Deferred tax surplus revaluation reserve (Note 26) - - (142) - - (142) - (142)Deferred tax on retirement benefit obligation (Note 26) - - 14 - - 14 - 14 Actuarial gain on unfunded retirement obligation (Note 25) - - - - 11,949 11,949 - 11,949 Total other comprehensive income - - (128) (10,408) 11,949 1,413 (9,129) (7,716)Revaluation reserve released (Note 23) - - (7,026) - (7,026) - - - Total comprehensive income for the year - - (7,154) (10,408) 135,594 118,032 5,807 123,839 Transaction with owners, recorded directly in equity Contribution by and distributions to owners Dividend - - - - (67,951) (67,951) (31,129) (99,080)Loan - - - - - - 37,281 37,281

As at 30 June 2015 367,303 5,308 387,802 (11,137) 951,976 1,701,252 198,875 1,900,127



CONSOLIDATED AND SEPARATE STATEMENTS OF CHANGES IN EQUITY (CONTINUED)FOR THE YEAR ENDED 30 JUNE 2016

Share capital

Share premium

Revaluation reserve

Retained earnings


equitySEPARATE Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At 1 July 2014 367,303 5,308 336,030 826,920 1,535,561 Total comprehensive income for the yearProfit for the year - - - 50,101 50,101 Other comprehensive incomeDeferred tax movement (Note 26) - - 1,642 - 1,642 Re-measurement of employee benefit liability (Note 25) - - - 11,164 11,164 Total other comprehensive income - - 1,642 11,164 12,806 Total comprehensive income - - 1,642 61,265 62,907 Revaluation reserve released (Note 23) - - (5,475) 5,475 - Transaction with owners, recorded directly in equity Contribution by and distributions to owners Dividend (Note 28) - - - (67,951) (67,951)At 30 June 2015 367,303 5,308 332,197 825,709 1,530,517 Total comprehensive income for the yearProfit for the year - - - 132,544 132,544 Other comprehensive incomeDeferred tax movement (Note 26) - - (4,743) (2,594) (7,337)Re-measurement of employee benefit liability (Note 25) - - - 15,258 15,258 Total other comprehensive income - - (4,743) 12,664 7,921 Total comprehensive income - - (4,743) 145,208 140,465 Revaluation reserve released (Note 23) - - (5,475) 5,475 - Transaction with owners, recorded directly in equity Contribution by and distributions to owners Dividend (Note 28) - - - (67,951) (67,951)

At 30 June 2016 367,303 5,308 321,979 908,441 1,603,031

CONSOLIDATED AND SEPARATE STATEMENTS OF CHANGES IN EQUITY (CONTINUED)FOR THE YEAR ENDED 30 JUNE 2016

Share capital

Share premium

Revaluation reserve

Foreign currency

translation reserve

Retained earnings Total

Non-controlling

interest


equityCONSOLIDATED Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Balance as at 30 June 2015

367,303 5,308 387,802 11,137 951,976

1,701,252 198,875 1,900,127

Total comprehensive income for the year Profit for the year - - - - 112,591 112,591 13,799 126,390 Other comprehensive incomeForeign currency translationdifference – foreign operations - - (33,206) (13,749) - (46,955) 20,756 (26,199)Deferred tax surplus revaluation reserve (Note 26) - - (4,851) - - (4,851) - (4,851)

Deferred tax on retirement benefit obligation (Note 26) - - - - (3,020) (3,020) -

(3,020)

Actuarial gain on unfunded retirement obligation (Note 25) - - - - 17,762 17,762 - 17,762 Total other comprehensive income - - (38,057) (13,749) 14,742 (37,064) 20,756 (16,308)Revaluation reserve released (Note 23) - - (6,782) - 6,782 - - - Total comprehensive income for the year - - (44,839) (13,749) 134,115 75,527 34,555 110,082 Transaction with owners, recorded directly in equity Contribution by and distributions to owners Dividend - - - - (67,944) (67,944) (27,282) (95,226)Loan - - - - - - (62,485) (62,485)

As at 30 June 2016 367,303 5,308 342,963 (24,886) 1,018,147 1,708,835 143,663 1,852,498



CONSOLIDATED AND SEPARATE STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2016


2016 2015 2016 2015

Note Rs’000 Rs’000 Rs’000 Rs’000

Cash flows from operating activities

Profit after income tax expense 126,390 131,555 132,544 50,101

Adjustments for:

Depreciation 12 108,997 109,597 57,723 62,301

Purchase of biological assets 20(b) (4,002) 3,222 76,858 (8,748)

Amortisation of premiums on leasehold land 19 572 480 572 480

Amortisation of intangible assets 14 31 760 - -

Depreciation of investment property 13 - 2,149 4,290 -

Impairment of subsidiaries 15(a) - - - 86,920

Impairment of equity accounted investees 16 4,300 318 5,126 -

Impairment of receivables - - - 11,580

Share of profit of equity-accounted investees, net of tax 16 (133) (72) - -

Impairment loss on measurement of assets held for sale 1,000 67 100 -

(Profit)/loss on disposal of property, plant and equipment 7 1,972 (301) (64,494) (888)

(Profit)/loss on disposal of investment - (700) - (700)

Interest income 9 (5,579) (13,495) - -

Interest expense 9 82,936 100,685 60,071 62,798

Dividend income 7 - - (29,100) (42,558)

Unrealised exchange (gain)/loss (775) (10,506) 382 (14,468)

Income tax expense 41,099 24,343 23,714 7,951

356,808 348,102 267,786 214,769

Movement in post-employment benefit plans (33,324) 4,155 (56,888) 2,905

Changes in inventories (8,958) (61,643) (45,177) (6,285)

Changes in receivables and prepayments* (54,800) 110,968 3,905 55,872

Changes in trade and other payables 28,784 (71,294) 139,152 (22,237)

288,510 330,288 308,778 245,024

Interest paid (82,936) (100,685) (60,071) (62,798)

Tax paid (30,668) (32,491) (21,250) (19,274)

Net cash from operating activities 174,906 197,112 227,457 162,952

* Included in changes in receivables and prepayments is a non-cash item of Rs 150 million representing investment in subsidiaries (see note 15a).

CONSOLIDATED AND SEPARATE STATEMENTS OF CASH FLOWS (CONTINUED)FOR THE YEAR ENDED 30 JUNE 2016


2016 2015 2016 2015

Note Rs’000 Rs’000 Rs’000 Rs’000

Cash flows from investing activities

Advances to subsidiaries - - (127,943) (43,294)

Proceeds from disposal of property, plant and

equipment 2,348 8,875 1,598 1,799

Proceeds from disposal of investment - 1,700 - 1,700

Interest received 9 5,579 13,495 - -

Dividend received - - 28,687 49,757

Payments for purchase of property, plant and equipment (130,691) (30,261) (32,387) (37,798)

Net cash used in investing activities (122,764) (6,191) (130,045) (27,836)

Cash flows from financing activities

Payments of finance lease liabilities (35,765) (50,178) (20,253) (29,154)

Loans received 65,266 - 73,830 -

Repayment of borrowings - (103,115) - (35,206)

(Decrease)/increase in net amount due to related parties (22,198) 37,281 - -

Dividends paid (99,080) (99,192) (67,951) (67,951)

Net cash used in financing activities (91,777) (215,204) (14,374) (132,311)

Net (decrease)/increase in cash and cash equivalents (39,635) (24,283) 83,038 2,805

Effects of exchange rate fluctuations on cash and cash equivalents 1,779 539 - -

Cash and cash equivalents at beginning of year (385,518) (361,774) (385,900) (388,705)

Cash and cash equivalents at end of year (423,374) (385,518) (302,862) (385,900)

Cash and cash equivalents consist of:

Cash and bank balances 48,472 52,061 6,907 10,023

Bank overdrafts (471,846) (437,579) (309,769) (395,923)

(423,374) (385,518) (302,862) (385,900)



PureGoodness


NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2016

1 REPORTING ENTITY

Innodis Ltd (the “Company”) is a public company domiciled in Mauritius. The address of the registered office is at Innodis Building, Caudan, Port Louis. The main activities of the Group and the Company are production of poultry and dairy products, poultry farming, animal feed manufacturing, rice milling, distribution and marketing of food and grocery products.

The financial statements include the consolidated financial statements of the parent company and its subsidiary companies (together referred as the “Group”) and the separate financial statements of the parent company (the “Company”).

2 BASIS OF PREPARATION

(a) Statement of compliance

The consolidated and separate financial statements have been prepared on going concern basis in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), and in compliance with requirements of the Mauritius Companies Act 2001 and the Financial Reporting Act.

(b) Basis of measurement

The consolidated and separate financial statements have been prepared under the historical cost basis except for the following material items in the consolidated and separate statements of financial position:

• Biological assets are measured at fair value less costs to sell;

• The liability for defined benefit obligations is recognised as the present value of defined obligations less the net total of the plan assets, plus unrecognised actuarial gains, less unrecognised past service cost and unrecognised actuarial losses;

• Land and buildings are measured at revalued amounts; and

• Assets held for sale are measured at the lower of their carrying amount and fair value less costs to sell.

(c) Functional and presentation currency

These consolidated and separate financial statements are presented in thousands of Mauritian Rupees (Rs’000), which is the Company’s functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated. All group entities have Mauritian Rupees as their functional currency except for the following subsidiary:

Subsidiary Functional currency

Moçambique Farms Limitada New Metical (MZN)

Meaders (Seychelles) Ltd uses Seychellois Rupee (SCR) as functional and presentation currency and is consolidated at Meaders Feeds Ltd.

(d) Use of estimates and judgements

In preparing these consolidated and separate financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.


2 BASIS OF PREPARATION (CONTINUED)

(d) Use of estimates and judgements (Continued)

(i) Judgements

Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the consolidated and separate financial statements is included in the following note:

• Note 15 – Consolidation: whether the Group has control over an investee.

• Note 24 & 30– Leases: whether an arrangement contains a lease.

(ii) Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending 30 June 2016 is included in the following notes:

• Note 4 – Valuation of financial instruments

• Note 3(m) – Impairment of assets: key assumptions underlying recoverable amounts;

• Note 20(a) – Valuation of inventories;

• Note 20(b) – Valuation of biological assets : key assumptions underlying value of assets;

• Note 25 – Measurement of defined benefit obligations: key actuarial assumptions;

• Note 26 – Recognition of deferred tax assets: availability of future taxable profit against which tax losses carried forward can be used;

• Note 33 – Recognition and measurement of contingencies: key assumptions about the likelihood and magnitude of an outflow of resources.

(iii) Going concern

The directors have prepared cash flow forecasts for at least the next 12 months based on reasonable and supportable assumptions, which will provide the Company with sufficient funds to finance future operations and support its subsidiaries (Supercash Ltd, HWFRL Investments Ltd and Moçambique Farms Limitada) and enable the Company to realise its assets and settle its liabilities in the normal course of business.

(iv) Useful lives of property, plant and equipment

Determining the carrying amounts of property, plant and equipment requires the estimation of the useful lives and residual values of these assets. The estimates of useful lives and residual values carry a degree of uncertainty. Management have used historical information relating to the Group and Company and the relevant industries in which the Group’s and Company’s entities operate in order to best determine the useful lives and residual values of property, plant and equipment. Management will increase the depreciation charge where useful lives are less or it will write off or write down technically obsolete or non-strategic assets that have been abandoned or sold.

(v) Determination of fair values

Information about determination of fair values and valuation of financial instruments are described in Notes 3(c) and 4.




(e) Changes in accounting policies

There were no new standards and interpretations effective for the year under review which significantly impacted the consolidated and separate financial statements. The accounting policies adopted by the Group and the Company are consistent with those of the previous years.

(f) New or revised accounting standards and interpretations have been issued but not yet effective for the year ended 30 June 2016

Up to the date of issue of these financial statements, the IASB has issued a number of amendments, new standards and interpretations which are not yet effective for the year ended 30 June 2016 and which have not been adopted in these financial statements.

The Group and the Company are in the process of making an assessment of what the impact of these amendments, new standards and new interpretations is expected to be in the period of initial application.

All Standards and Interpretations will be adopted at their effective date (except for those Standards and Interpretations that are not applicable to the entity).

The Group and the Company are currently in the process of assessing the impact of the amendments on these consolidated and separate financial statements.

The standards that need to be considered for financial years ending on or after 30 June 2016 are listed below.

Standard/ Interpretation

Effective for accounting period beginning

on or afterClarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38) 1 July 2016Agriculture: Bearer Plants (Amendment to IAS 16 and IAS 41) 1 July 2016Equity Method in Separate Financial Statements (Amendments to IAS 27) 1 July 2016Disclosure Initiative (Amendments to IAS 1) 1 July 2016Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28) 1 July 2016IFRS 15 Revenue from Contracts with Customers 1 July 2018IFRS 9 Financial Instruments 1 July 2018IFRS 16 Leases 1 July 2019

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

The amendments to IAS 16 Property, Plant and Equipment explicitly state that revenue-based methods of depreciation cannot be used for property, plant and equipment.

The amendments to IAS 38 Intangible Assets introduce a rebuttable presumption that the use of revenue-based amortisation methods for intangible assets is inappropriate. The presumption can be overcome only when revenue and the consumption of the economic benefits of the intangible asset are ‘highly correlated’, or when the intangible asset is expressed as a measure of revenue.

The amendments apply prospectively for annual periods beginning on or after 1 July 2016 and early adoption is permitted.



(f) New or revised accounting standards and interpretations have been issued but not yet effective for the year ended 30 June 2016 (continued)

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

The amendments to IAS 16 Property, Plant and Equipment and IAS 41 Agriculture require a bearer plant (which is a living plant used solely to grow produce over several periods) to be accounted for as property, plant and equipment in accordance with IAS 16 Property, Plant and Equipment instead of IAS 41 Agriculture. The produce growing on bearer plants will remain within the scope of IAS 41.

The amendments apply prospectively for annual periods beginning on or after 1 January 2016 and early adoption is permitted.

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

The amendments allow an entity to apply the equity method in its separate financial statements to account for its investments in subsidiaries, associates and joint ventures.

The amendments apply retrospectively for annual periods beginning on or after 1 January 2016 and early adoption is permitted.

Disclosure Initiative (Amendments to IAS 1)

The amendments provide additional guidance on the application of materiality and aggregation when preparing financial statements. The amendments also clarify presentation principles applicable to of the order of notes, OCI of equity accounted investees and subtotals presented in the statement of financial position and statement of profit or loss and other comprehensive income.

The amendments apply for annual periods beginning on or after 1 January 2016 and early application is permitted.

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

The amendment to IFRS 10 Consolidated Financial Statements clarifies which subsidiaries of an investment entity are consolidated instead of being measured at fair value through profit and loss. The amendment also modifies the condition in the general consolidation exemption that requires an entity’s parent or ultimate parent to prepare consolidated financial statements. The amendment clarifies that this condition is also met where the ultimate parent or any intermediary parent of a parent entity measures subsidiaries at fair value through profit or loss in accordance with IFRS 10 and not only where the ultimate parent or intermediate parent consolidates its subsidiaries.

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

The amendment to IFRS 12 Disclosure of Interests in Other Entities requires an entity that prepares financial statements in which all its subsidiaries are measured at fair value through profit or loss in accordance with IFRS 10 to make disclosures required by IFRS 12 relating to investment entities.

The amendment to IAS 28 Investments in Associates and Joint Ventures modifies the conditions where an entity need not apply the equity method to its investments in associates or joint ventures to align these to the amended IFRS 10 conditions for not presenting consolidated financial statements. The amendments introduce relief when applying the equity method which permits a non-investment entity investor in an associate or joint venture that is an investment entity to retain the fair value through profit or loss measurement applied by the associate or joint venture to its subsidiaries.

The amendments apply retrospectively for annual periods beginning on or after 1 January 2016, with early application permitted.





(f) New or revised accounting standards and interpretations have been issued but not yet effective for the year ended 30 June 2016 (continued)

IFRS 15 Revenue from contracts with customers

This standard replaces IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfer of Assets from Customers and SIC-31 Revenue – Barter of Transactions Involving Advertising Services.

The standard contains a single model that applies to contracts with customers and two approaches to recognising revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognised.

This new standard will most likely have a significant impact on the Group and the Company, which will include a possible change in the timing of when revenue is recognised and the amount of revenue recognised. The Group and the Company are currently in the process of performing a more detailed assessment of the impact of this standard on the Group and the Company and will provide more information in the year ending 30 June 2017 consolidated and separate financial statements.

The standard is effective for annual periods beginning on or after 1 July 2018, with early adoption permitted under IFRS.


IFRS 9 Financial Instruments

On 24 July 2014 the IASB issued the final IFRS 9 Financial Instruments Standard, which replaces earlier versions of IFRS 9 and completes the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement.

This standard will have a significant impact on the Group and the Company, which will include changes in the measurement bases of the Group’s and the Company’s financial assets to amortised cost, fair value through other comprehensive income or fair value through profit or loss. Even though these measurement categories are similar to IAS 39, the criteria for classification into these categories are significantly different. In addition, the IFRS 9 impairment model has been changed from an “incurred loss” model from IAS 39 to an “expected credit loss” model, which is expected to increase the provision for bad debts recognised by the Group and the Company.

The standard is effective for annual periods beginning on or after 1 July 2018 with retrospective application, early adoption is permitted.

IFRS 16 Leases

IFRS 16 was published in January 2016. It sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract, i.e. the customer (‘lessee’) and the supplier (‘lessor’). IFRS 16 replaces the previous leases Standard, IAS 17 Leases, and related Interpretations. IFRS 16 has one model for lessees which will result in almost all leases being included on the Statement of Financial Position. No significant changes have been included for lessors.

The standard is effective for annual periods beginning on or after 1 January 2019, with early adoption permitted only if the entity also adopts IFRS 15. The transitional requirements are different for lessees and lessors. The Group and Company are assessing the potential impact on the financial statements resulting from the application of IFRS 16.


3 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these consolidated and separate financial statements, and have been applied consistently by Group entities.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are all entities controlled by the Group. The Group controls an entity when it is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date from which control ceases.

The accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted by the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

In the Company’s financial statements, investments in subsidiaries are measured at cost. The carrying amount is reduced if there is any indication of impairment in value.

A listing of the principal subsidiaries is shown in Note 15(a).

The accounting policies with respect to business combinations are set out in Note 3(f)(i).

(ii) Non-controlling interests (NCI)

NCI are measured at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition.

Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

(iii) Loss of control

Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary with any non-controlling interests and other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as a financial asset depending on level of influence retained.

(iv) Interests in equity-accounted investees

The Group’s interests in equity-accounted investees comprise interests in associates.

Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies.

Interests in equity-accounted investees are accounted for using the equity method. They are initially recognised at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of profit or loss and other comprehensive income of equity-accounted investees, until the date on which significant influence ceases. In the separate financial statements, the interests in equity-accounted investees are carried at cost less any impairment losses.

(v) Transactions eliminated on consolidation

Intra-group balances and any unrealised income and expenses arising from intra-group transactions are eliminated in preparing the consolidated and separate financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investments to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.



3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(b) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group companies at exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated to the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in profit or loss.

Foreign currency differences are generally recognised in profit or loss. However, foreign currency differences arising from translation of the following items are recognised in other comprehensive income:

• available-for-sale equity investments (except on impairment, in which case foreign currency differences that have been recognised in other comprehensive income are reclassified to profit or loss).

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into Mauritian Rupee at exchange rates at the reporting date. The income and expenses of foreign operations are translated into Mauritian Rupee at exchange rates at the dates of the transactions.

Foreign currency differences are recognised in other comprehensive income, and presented in the translation reserve, except to the extent that the translation difference is allocated to non-controlling interest.

When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint control is lost, the cumulative amount of the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. If the Group disposes of only part of its interest in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to non-controlling interest. When the Group disposes of only part of an associate or joint venture while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

If the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, then foreign currency differences arising from such item form part of a net investment in the foreign operation. Accordingly such differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve.



(c) Financial instruments

Financial assets and liabilities are recognised on the statement of financial position when the Group and the Company become party to the contractual provisions of the financial instruments.

Except where stated separately, the carrying amounts of the Group’s and the Company’s financial instruments approximate their fair values. The classification of financial instruments depends on the nature and purpose of the financial instrument and is determined at the time of initial recognition.

Non-derivative financial instruments

The Group and the Company classify non-derivative financial assets as loans and receivables and available-for-sale financial assets.

The Group and the Company classify non-derivative financial liabilities into the other financial liabilities category.

Non-derivative financial assets comprise available-for-sale investments, loans to subsidiaries, trade and other receivables and cash and cash equivalents.

Non-derivative financial liabilities comprise of borrowings, bank overdrafts and trade and other payables.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group and the Company have a legal right to offset the amounts and intend either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs. Subsequent to initial recognition non-derivative financial instruments are measured as follows:

(i) Available-for-sale financial assets

The Group’s investments in equity securities are classified as available-for-sale financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment, and foreign exchange gains and losses on available-for-sale monetary items are recognised directly in other comprehensive income and accumulated in the fair value reserve. When an investment is derecognised, the cumulative gain or loss in equity is transferred to profit or loss.

Available-for-sale investments which do not have a quoted market price and whose fair value cannot be reliably measured, are carried at cost, less any impairment. The fair value of the available-for-sale investments that could not be reliably measured due to unavailability of information on the market are kept at cost.




(c) Financial instruments (continued)

Non-derivative financial instruments (continued)

(ii) Loans and receivables

Loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or, where appropriate, a shorter period.

(iii) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group’s and the Company’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Cash and cash equivalents are measured at amortised cost which is equivalent to their fair value.

(iv) Derecognition of financial assets

The Group and the Company derecognise a financial asset only when the contractual rights to the cash flows from the asset expire or they transfer the financial assets and substantially all the risks and rewards of ownership of the asset to another entity.

If the Group and the Company neither transfer nor retain substantially all the risks and rewards of ownership and continue to control the transferred asset, the Group and the Company recognise their retained interest in the asset and an associated liability for amounts they may have to pay. If the Group and the Company retain substantially all the risks and rewards of ownership of a transferred financial asset, the Group and the Company continue to recognise the financial asset and also recognise a collateralised borrowing for the proceeds received.

(v) Other financial liabilities

Other financial liabilities comprise borrowings, bank overdrafts and trade and other payables and are recognised initially on the trade date, which is the date that the Group and the Company become a party to the contractual provisions of the instrument.

Other financial liabilities are initially measured at fair value less, for instruments not at fair value through profit or loss, any directly attributable transaction costs.

Other financial liabilities are subsequently measured at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.



(c) Financial instruments (continued)

Non-derivative financial instruments (continued)

(vi) Derecognition of financial liabilities

The Group and the Company derecognise financial liabilities when, and only when, the Group’s and the Company’s obligations are discharged, cancelled, or expire.

(d) Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity.

(e) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the cost of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

Following initial recognition at cost, freehold land, buildings and plant and machinery are revalued on average every 5 years. Any revaluation surplus is credited to revaluation reserve as part of other comprehensive income, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss. A revaluation deficit is recognised in profit or loss, except to the extent that it offsets an existing surplus on the same recognised in the asset revaluation reserve. The revaluation reserve is realised over the period of the useful life of the property by transferring the realised portion from the revaluation reserve to retained earnings.

The carrying values of property, plant and equipment are reviewed for impairment at each reporting date or when events or changes in circumstances indicate that the carrying value may not be recoverable.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised net within “other income” in profit and loss. At the time of disposal of the assets, any revaluation surpluses are transferred to retained earnings from revaluation reserve.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

The estimated useful lives, residual values and depreciation methods are reviewed at each year end, with the effect of any changes accounted for as a change in estimates. The change is accounted for on a prospective basis.




(e) Property, plant and equipment (continued)

(i) Recognition and measurement (continued)

Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group and the Company will obtain ownership by the end of the lease term.

(ii) Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and the Company and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

(iii) Depreciation

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Assets held under finance leases are depreciated over the shorter of the lease term and their useful lives.

The depreciation rates for the current and comparative periods are as follows:

Buildings - 2% - 4% p.a

Improvement to buildings - 20%-33% p.a

Furniture and equipment - 2% - 33% p.a

Plant and machinery (excluding rice milling equipment) - 4% - 33% p.a

Motor vehicles - 7.5% -33% p.a

Rice milling equipment is depreciated on the basis of machine usage.

Freehold land and work-in-progress are not depreciated.

Work-in-progress relates to:

• extension of premises and will be transferred to buildings once work is completed.

• acquisition of plant and machinery which will be transferred once commissioning is completed.



(f) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. All the intangible assets of the Group and the Company have been assessed as having finite useful lives. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.

Intangible assets are amortised over their useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in profit or loss in the expense category consistent with the function of the intangible asset.

Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss when incurred.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised.

(i) Goodwill

From 1 July 2010 the Group has applied IFRS 3 Business Combinations (2008) in accounting for business combinations.

Business combinations are accounted for using the acquisition method as at the acquisition date, which is when control is transferred to the Group. The Group controls an entity when it is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable.

The Group measures goodwill at the acquisition date as:

• the fair value of the consideration transferred; plus

• the recognised amount of any non-controlling interests in the acquiree; plus

• if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree; less

• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.




(f) Intangible assets (continued)

(i) Goodwill (continued)

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.

If share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree’s employees (acquiree’s awards) and relate to past services, then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market based value of the replacement awards compared with the market based value of the acquiree’s awards and the extent to which the replacement awards relate to past and/or future service.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurred in connection with business combinations were capitalised as part of the cost of the acquisition.

Acquisitions of non-controlling interests

For each business combination, the Group elects to measure any non-controlling interests in the acquiree either:

• at fair value; or

• at their proportionate share of the acquiree’s identifiable net assets, which are generally at fair value.

Changes in the Group’s interests in a subsidiary that do not result in a loss of control are accounted for as transactions with owners in their capacity as owners. Adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary. No adjustments are made to goodwill and no gain or loss is recognised in profit or loss.

Subsequent measurement

Goodwill is measured at cost less accumulated impairment losses. In respect of equity-accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and any impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity accounted investee.

The Group tests goodwill annually for impairment or more frequently if there are indicators that goodwill might be impaired. The recoverable amounts are determined based on value-in-use calculations using cash flow projections.

(ii) Other intangible assets

Other intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less accumulated amortisation and accumulated impairment losses. These represent trademarks and licences.



(f) Intangible assets (continued)

(ii) Other intangible assets (continued)

A summary of the policies applied to the Group’s and the Company’s intangible assets is as follows for the current and comparative periods:

Computer software and distribution rights Brand and licencesUseful lives 3 years 5 - 20 yearsAmortisation method Amortised on a straight line basis Amortised on a straight line basisUsed over its estimated useful life over its estimated useful lifeInternally generated Acquired Acquiredor acquired

Amortisation methods, useful lives and residual values are reviewed at each reporting period and adjusted if appropriate

(g) Biological assets

Biological assets are measured at fair value less costs to sell, with any change therein recognised in profit or loss.

Live broiler chicks and hatching eggs are assessed based on fair values less estimated costs to sell at appropriate reporting dates. Gains and losses arising from changes in the fair values are recorded in profit or loss for the period in which they arise. The determination of fair value is based on active market values, where appropriate, or management’s assessment of the fair value based on available data and benchmark statistics.

Breeding stock includes grandparent breeding and parent-rearing and laying stock. Breeding stock is capitalised at cost at the beginning of its productive cycle and is depreciated on a straight-line method over the anticipated productive cycle to its estimated net realisable value.

All the expenses incurred in establishing and maintaining the assets are recognised in profit or loss. All costs incurred in acquiring biological assets are capitalised.

(h) Investment property

Investment properties are properties held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in production or supply of goods or services or for administrative purposes.

Investment properties are measured initially at cost, including transaction cost. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met and excludes the cost of day to day servicing of an investment property. Subsequent to initial recognition, investment properties are measured at cost less provisions for depreciation and impairment.




(h) Investment property (continued)

Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised in profit or loss in the year of retirement or disposal.

Transfers

Transfers from land and buildings to investment property are accounted at carrying amount.

The depreciation rate for Investment property is 2%.

(i) Leased assets

Determining whether an arrangement contains a lease

At inception of an arrangement, the Group and the Company determine whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfilment of the arrangement is dependent on the use of that specified asset and the arrangement conveys to the Group and the Company the right to control the use of the specified asset.

At inception or upon reassessment of the arrangement, the Group and the Company separate payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group and the Company conclude for a finance lease that is impracticable to separate payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed finance charge on the liability is recognised using the Group’s and the Company’s incremental borrowing rate.

The Group and the Company as lessee

Leased assets

Leases in terms of which the Group and the Company assume substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

Other leases are operating leases and the leased assets are not recognised on the consolidated and separate statements of financial position.



(i) Leased assets (continued)

Lease payments

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustments are confirmed.

The Group and the Company as lessor

Leases where the Group and the Company do not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs in negotiating an operating lease are added to the carrying amount of the leases asset and recognised over the lease term on the same bases as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

(j) Non-current receivables

Non-current receivables relate to premiums paid on acquisition of leasehold land. Premiums paid on acquisition of leasehold land are amortised over the lease terms ranging between 45 and 60 years.

(k) Assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use.

Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets, investment property or biological assets, which continue to be measured in accordance with the Group’s other accounting policies. Impairment losses on initial classification as held-for-sale or held-for distribution and subsequent gains and losses on re-measurement are recognised in profit or loss.

Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortised or depreciated, and any equity-accounted investee is no longer equity accounted.




(l) Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in first-out principle and on a weighted average cost basis in some subsidiaries, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

The cost of items transferred from biological assets is their fair value less costs to sell at the date of transfer.

(m) Impairment

(i) Non-derivative financial assets

Financial assets not classified as at fair value through profit or loss, including an interest in an equity accounted investee, are assessed at each reporting date to determine whether there is objective evidence of impairment.

Objective evidence that financial assets are impaired includes:

• default or delinquency by a debtor;

• restructuring of an amount due to the Group and the Company on terms that the Group and the Company would not consider otherwise;

• indications that a debtor or issuer will enter bankruptcy;

• adverse changes in the payment status of borrowers or issuers in the Group and the Company;

• the disappearance of an active market for a security because of financial difficulties or;

• observable data indicating that there is measurable decrease in expected cash flows from a group of financial assets.

For an investment in equity security, objective evidence of impairment includes a significant or prolonged declined in its fair value below its cost. The Group and the Company consider a decline of 20% to be significant and a period of 9 months to be prolonged.



(m) Impairment (continued)

(i) Non-derivative financial assets (continued)

Financial assets measured at amortised cost

The Group and the Company consider evidence of impairment for these assets at both an individual asset and a collective level. All individually significant assets are individually assessed for impairment. Those found not to be impaired are then collectively assessed for any impairment that has been incurred but not yet individually identified. Assets that are not individually significant are collectively assessed for impairment. Collective assessment is carried out by grouping together assets with similar risk characteristics.

In assessing collective impairment, the Group and the Company use historical information on the timing of recoveries and the amount of loss incurred, and make an adjustment if current economic and credit conditions are such that actual losses are likely to be greater or lesser than suggested by historical trends.

An impairment loss is calculated as the difference between an asset’s carrying amount, and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account. When the Group and the Company consider that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through profit or loss.

Available-for-sale financial assets

Impairment losses on available-for-sale financial assets are recognised by reclassifying the losses accumulated in the fair value reserve to profit or loss. The amount reclassified is the difference in the acquisition cost (net of any principal repayment and amortisation) and the current fair value, less any impairment loss previously recognised in profit or loss. If the fair value of an impaired available-for-sale debt security subsequently increases and the increase can be related objectively to the event occurring after the impairment loss was recognised, then the impairment loss is reversed through profit or loss; otherwise, it is reversed through other comprehensive income.

Equity accounted investees

An impairment loss in respect of an equity accounted investee is measured by comparing the recoverable amount of the investment with its carrying amount. An impairment loss is recognised in profit or loss under administrative expenses, and is reversed if there has been a favourable change in the estimates used to determine the recoverable amount.




(m) Impairment (continued)

(ii) Non-financial assets

At each reporting date, the Group and the Company review the carrying amounts of their non-financial assets (other than biological assets measured at fair value, investment property, inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash generating units. Goodwill arising from a business combination is allocated to cash generating units or groups of cash generating units that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset or the cash generating unit.

An impairment loss is recognised if the carrying amount of an asset or cash generating unit exceeds its recoverable amount.

Impairment losses are recognised in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the cash generating unit, and then to reduce the carrying amounts of the other assets in the cash generating units on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(n) Retirement benefit obligations

The Group and the Company operate various pension schemes. The schemes are generally funded through payments to trustees-administered funds, determined by annual actuarial calculations. The Group and the Company have both defined contribution plan and defined benefit plan.

(i) Defined contribution plans

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

Contributions to the National Pension Fund and defined contribution pension plan are expensed in profit or loss in the period in which they fall due.



(n) Retirement benefit obligations (continued)

(ii) Defined benefit plan

A defined plan is a post-employment plan other than a defined contribution plan. Under a defined benefit plan, the amount of pension benefit that an employee will receive on retirement is defined, usually dependent on one or more factors such as age, years of service and compensation.

The Group’s and the Company’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group and the Company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in other comprehensive income. The Group and the Company determine the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The Group and the Company recognise gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid if the Group and the Company have a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.




(o) Revenue

(i) Goods sold

Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts, volume rebate and value added tax. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably and there is no continuing management involvement with the goods.

The timing of the transfer of risks and rewards varies depending on the individual terms of the sales agreement.

(ii) Rental income

Rental income from investment property is recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease. Rental income from investment property is recognised as other income.

(p) Dividend income

Dividend income is recognised in profit or loss on the date that the Group’s and the Company’s right to receive payment is established, which in case of quoted securities is the ex-dividend date.

(q) Finance income and finance costs

Finance income comprises interest income, foreign exchange gains, net gains on forward contract and the reclassification of net gains or losses previously recognised in other comprehensive income. Interest income is recognised as it accrues, using the effective interest method.

Finance expenses comprise interest expenses on loans borrowings, overdrafts, finance leases and loss on forward contracts. Borrowing costs not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

(r) Income tax expense

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income, in which case it is recognised in equity or other comprehensive income.

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.



(r) Income tax expense (continued)

Current tax assets and liabilities are offset only if certain criteria are met.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

• temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

• temporary differences related to investments in subsidiaries and associates to the extent that the Group and the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on business plans for individual subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves.

Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.

Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group and Company expect at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and deferred tax liabilities are offset only if the following criteria are met:

(a) The entity has a legally enforceable right to set off current tax assets against current tax liabilities; and

(b) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

(i) the same taxable entity; or

(ii) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.




(r) Income tax expense (continued)

Value Added Tax

Revenues, expenses and assets are recognised net of the amount of value added tax except:

• where the value added tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the value added tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• receivables and payables that are stated with the amount of value added tax included.

The net amount of value added tax recoverable from, or payable to, the taxation authority is included as part of accounts receivables or payables in the statement of financial position.

Corporate Social Responsibility (CSR)

In line with the definition within the Income Tax Act 1995, Corporate Social Responsibility (CSR) is regarded as a tax and is therefore subsumed with the income tax recognised in profit or loss and the income tax liability on the statement of financial position.

The CSR charge for the current year is measured at the amount expected to be paid to the Mauritian tax authorities. The CSR rate and laws used to compute the amount are those charged or substantively enacted by the reporting date.

For this year, the Innodis Foundation, which manages the CSR funds of Innodis Group, has given its financial backing to projects of selected NGOs to the tune of some Rs 3.0 Million as at 30 June 2016 and Rs 3.4 Million as at 30 June 2015. The Foundation has allocated funds to projects which are in line with its four priority action areas, namely the:

• assistance to the alleviation of poverty;

• promotion of education and training to vulnerable groups;

• assisting in developing a healthy nutrition programme for the needy; and

• supporting projects for the protection of the environment.

(s) Related parties

For the purposes of these consolidated and separate financial statements, parties are considered to be related to the Group and the Company if they have the ability, directly or indirectly, to control the Group and the Company or exercise significant influence over the Group and the Company in making financial and operating decision, or vice versa, or where the Group and the Company are subject to common control.

(t) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.



(u) Earnings per share

The Group presents basic earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit for the year attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares in issue during the year. Diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.

(v) Segment reporting

An operating segment is a component of the Group or Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components.

All operating segments operating results are reviewed regularly by the Chief Executive Officer to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial position is available.

(w) Provisions

Provisions are recognised when the Group and the Company have a legal or constructive obligation as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation.

4 DETERMINATION OF FAIR VALUES

A number of the Group’s and Company’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

(a) Biological assets

Live broiler chicks and hatching eggs are assessed based on fair values less estimated costs to sell at appropriate reporting dates.

The determination of fair value is based on active market values, where appropriate, or management’s assessment of the fair value based on available data and benchmark statistics.

(b) Trade and other receivables

The fair value of trade and other receivables, which is determined for disclosure purposes, is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date for all long term receivables.



4 DETERMINATION OF FAIR VALUES (CONTINUED)

(c) Property, plant and equipment

The fair value of property is the estimated amount for which a property could be exchanged on the date of acquisition between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably. The fair value of items of property, plant and equipment is based on market approach and cost approach using quoted market prices for similar items, when available and replacement cost when appropriate. Depreciated replacement cost estimates reflect adjustments for physical deterioration as well as functional and economic obsolescence. Further information is included in Note 12.

(d) Inventories

The fair value of inventories acquired in a business combination is determined based on the estimated selling price in the ordinary course of business less the estimated cost of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the inventories.

(e) Available-for-sale investments

The Group’s and the Company’s available-for-sale investments are valued at quoted market prices at the reporting date. Those investments which do not have a quoted market price and whose fair value cannot be reliably measured are carried at cost, less any impairment.

(f) Non-derivative financial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.

(g) Assets held for sale

The Group’s and the Company’s assets held for sale are measured at the lower of their carrying amount and fair value less costs to sell.

(h) Fair value hierarchy

The Group and the Company classify financial instruments measured at fair values using the following fair value hierarchy that reflect the significance of the inputs used in making the measurements:

• Level 1: Quoted (unadjusted) prices in an active market for an identical instrument.

• Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

• Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

Fair values of financial assets and financial liabilities that are traded in active markets are based on quoted market prices.



(h) Fair value hierarchy (continued)

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

CARRYING AMOUNTS FAIR VALUE

Loans and receivables

Available- for-sale/

held for sale

Other financial

liabilities Total Level 1 Level 2 Level 3 TotalCONSOLIDATED Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

30 Jun 16Financial assets measured at fair value

SIT Land Holdings Ltd - 39 - 39 - - 39 39 Progos - 50 - 50 - - 50 50 Ecocentre Ltée - 120 - 120 - - 120 120

Financial assets not measured at fair valueNon-current receivables 12,943 - - 12,943 - - - - Trade and other receivables 723,912 - - 723,912 - - - - Cash and cash equivalents 48,472 - - 48,472 - - - -

785,327 209 - 785,536 - - 209 209

Financial liabilities not measured at fair value Borrowings - - 835,532 835,532 - - - - Bank overdrafts - - 471,846 471,846 - - - - Trade and other payables - - 419,849 419,849 - - - -

- - 1,727,227 1,727,227 - - - -







Available- for-sale

Other financial liabilities Total Level 1 Level 2 Level 3 Total

CONSOLIDATED Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

30 Jun 15Financial assets measured at fair valueSIT Land Holdings Ltd - 39 - 39 - - 39 39 Progos - 50 - 50 - - 50 50 Ecocentre Ltée - 120 - 120 - - 120 120 Financial assets not measured at fair valueNon-current receivables 13,515 - - 13,515 - - - - Trade and other receivables 669,112 - - 669,112 - - - - Cash and cash equivalents 52,061 - - 52,061 - - - -

734,688 209 - 734,897 - - 209 209 Financial liabilities not measured at fair value Borrowings - - 775,453 775,453 - - - - Bank overdrafts - - 437,579 437,579 - - - - Trade and other payables - - 391,065 391,065 - - - -

- - 1,604,097 1,604,097 - - - -






Available-for-sale

Other financial

liabilities Total Level 1 Level 2 Level 3 TotalSEPARATE Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

30 Jun 16Financial assets measured at fair valueSIT Land Holdings Ltd - 39 - 39 - - 39 39 Progos - 50 - 50 - - 50 50 Ecocentre Ltée - 120 - 120 - - 120 120 Financial assets not measured at fair valueNon-current receivables 12,943 - - 12,943 - - - - Trade and other receivables 648,273 - - 648,273 - - - - Cash and cash equivalents 6,907 - - 6,907 - - - - Debt Investment in foreign subsidiary 315,358 - - 315,358 - - - -


- - 1,259,662 1,259,662 - - - -






Loans and

receivablesAvailable-

for-sale

Other financial

liabilities Total Level 1 Level 2 Level 3 TotalSEPARATE Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

30 Jun 15Financial assets measured at fair valueSIT Land Holdings Ltd - 39 - 39 - - 39 39 Progos - 50 - 50 - - 50 50 Ecocentre Ltée - 120 - 120 - - 120 120 Financial assets not measured at fair valueNon-current receivables 13,515 - - 13,515 - - - - Trade and other receivables 697,862 - - 697,862 - - - - Cash and cash equivalents 10,023 - - 10,023 - - - - Loans to subsidiaries 187,415 - - 187,415 - - - -


- - 1,122,510 1,122,510 - - - -

There have been no transfers during the year between levels 1 and 2.

There have been no movements during the year for investments categorised in level 3.

(i) Available-for-sale investments

Methodologies would be applied consistently from year to year, except where a change would result in better estimates of fair value.

Below are a number of the most widely used methodologies:

• Price of recent transaction

• Multiples

• Net assets

• Discounted cash flows or earnings (of underlying business)

• Discounted cash flows (from the investment)

• Industry valuation benchmarks


5 FINANCIAL RISK MANAGEMENT

Financial risk factors

The Group and the Company have exposure to the following risks from their use of financial instruments:

• Credit risk

• Liquidity risk

• Market risk

This note presents information about the Group’s and the Company’s exposure to each of the above risks, the Group’s and the Company’s objectives, policies and processes for measuring and managing risk, and the Group’s and the Company’s management of capital. Quantitative disclosures have also been included.

The Group Audit and Risk Committee oversees how management monitors compliance with the Group’s and the Company’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group and the Company. The Group Audit and Risk Committee is assisted in its role by Internal Audit. Internal Audit undertakes both regular and adhoc reviews of risk management controls and procedures, the results of which are reported to the Audit and Risk Committee.

(i) Credit risk

Credit risk is the risk of loss due to the inability or unwillingness of a counterparty to meet their obligations as and when they fall due. Credit risk is managed on a Group basis and arises principally from the Group’s and the Company’s aggregate balance of amounts receivable.

Loans to subsidiaries

The Company manages its credit risk with regards to loans to subsidiaries by actively monitoring the operations and financial performance of its subsidiaries.

Trade and other receivables

Trade receivables comprise a large, widespread customer base. These risks are controlled by the application of credit limits, credit controlling procedures and credit insurance.

The Group and the Company do not require collateral in respect of trade and other receivables.

The Group and the Company establish an allowance for impairment that represents their estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a known loss component based on historical data for similar financial assets.

The Group and the Company have no significant concentrations of credit risk. The Group’s and the Company’s policies ensure that the vetting criteria including internal ratings take into consideration economic realities. These ratings do not preclude the monitoring of outstanding debts continuously and relevant diminution in value recognised as and when they become apparent. The maximum exposure to credit risk is represented by the carrying amount of the trade and other receivables in the consolidated and separate statements of financial position.



5 FINANCIAL RISK MANAGEMENT (CONTINUED)Financial risk factors (continued)

(i) Credit risk (continued)

Loans to subsidiaries

The maximum exposure to credit risk is represented by the carrying amount of the loans to subsidiaries in the separate financial statements.

Trade and other receivables

At 30 June 2016, the ageing of trade receivables that were not impaired, was as follows:

Total

Neither past due nor

impaired < 30 days 31 – 60 days 61 – 90 days >90 daysCONSOLIDATED Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

2016 493,500 270,400 133,373 44,325 32,987 12,4152015 473,087 309,254 128,846 12,130 11,775 11,082

Total

Neither past due nor

impaired < 30 days 31 – 60 days 61 – 90 days >90 daysSEPARATE Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

2016 309,292 136,841 105,234 31,404 28,167 7,6462015 308,162 182,813 104,136 8,801 4,687 7,725

Management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk, including underlying customers’ credit ratings if they are available.

An analysis of the credit quality of trade and other receivables that are neither past due nor impaired is as follows:


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Trading history with the Group/Company:Four or more years 183,508 240,184 66,448 142,225

Less than four years 86,892 69,070 70,393 40,588

Balance at 30 June 270,400 309,254 136,841 182,813



(i) Credit risk (continued)

Trade and other receivables (continued)

The movement in allowance for impairment in respect of trade receivables during the year was as follows:


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Balance at 1 July 24,839 19,972 27,151 25,151 Charge for the year 5,268 4,867 - 2,000

Recovered (173) - - -

Balance at 30 June 29,934 24,839 27,151 27,151

At 30 June 2016, at Group level, there was an impairment loss of Rs 5.3m related to long outstanding customers. Although the goods sold to the customer were subject to a retention of title clause, the Group has no indication that the customer is still in possession of the goods. The impairment loss at 30 June 2016 related to several customers that have indicated that they are not expecting to be able to pay their outstanding balances, mainly due to economic circumstances.

Cash and cash equivalents

Cash and cash equivalents are held in a number of reputable financial institutions. Accordingly, the Group and the Company have no significant concentration of credit risk with respect to cash and cash equivalents.

(ii) Liquidity risk

Liquidity risk is the risk that the Group and the Company will not be able to meet their financial obligations as they fall due. The Group’s and the Company’s approach to managing liquidity is to ensure, as far as possible, that they will always have sufficient liquidity to meet their liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s and the Company’s reputation.

The Group’s and the Company’s liquidity risk consist mainly of the amount borrowed from time to time. The details of borrowings are disclosed in Note 24. The Group and the Company have credit facilities from its bankers and these facilities are reviewed on an annual basis.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements.




(ii) Liquidity risk (continued)

CONTRACTUAL CASH FLOWS

Carrying value

Less than one year

Between 1 and 2 years

Between 2 and 5 years Total

CONSOLIDATED Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At 30 June 2016Non-derivative financial instrumentsBank overdrafts 471,846 471,846 - - 471,846 Borrowings 835,532 654,932 66,809 153,875 875,616 Trade and other payables 419,849 419,849 - - 419,849

1,727,227 1,546,627 66,809 153,875 1,767,311


Carrying value

Less than one year



CONSOLIDATED Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At 30 June 2015Non-derivative financial instrumentsBank overdrafts 437,579 437,579 - - 437,579 Borrowings 775,453 552,743 102,665 170,460 825,868 Trade and other payables 391,065 391,065 - - 391,065

1,604,097 1,381,387 102,665 170,460 1,654,512


Carrying Value

Less than one year



SEPARATE Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At 30 June 2016Non-derivative financial instruments 309,769 309,769 - - 309,769 Bank overdrafts 588,806 488,806 39,325 106,661 634,792 Borrowings 361,087 361,087 - - 361,087

Trade and other payables 1,259,662 1,159,662 39,325 106,661 1,305,648


Carrying Value

Less than one year



SEPARATE Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At 30 June 2015Non-derivative financial instruments 395,923 395,923 - - 395,923 Bank overdrafts 504,652 321,426 53,654 165,298 540,378 Borrowings 221,935 221,934 - - 221,934

Trade and other payables 1,122,510 939,283 53,654 165,298 1,158,235



(iii) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s and the Company’s income or the value of their holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Foreign currency risk

The Group and the Company are exposed to currency risks from their imports both for their commercial and production activities. As such they are subject to risks from changes in currency values that could affect earnings. Given the limited availability of financial instruments locally, short term transaction risks arising from currency fluctuations are not hedged.

Subject to cost and availability of finance, the Group and the Company aim to minimise their foreign exposure by borrowing in local currency.

Retranslation risks are not hedged.

The currency profile of the financial assets and liabilities is summarised as follows:


Financial assets

Financial liabilities

Financial assets


Rs’000 Rs’000 Rs’000 Rs’000

2016Australian Dollar 887 25,006 887 25,006 Euro 1,793 47,588 1,793 42,782 Mauritian Rupee 734,805 1,408,811 959,840 1,030,217 Pound Sterling 15 1,334 15 1,334 South African Rand 6,376 86,536 6,376 86,536 United States Dollar 14,779 73,787 14,779 73,787 Seychelles Rupee 11,112 10,275 - - Mozambican Meticais 15,769 73,890 - -

785,536 1,727,227 983,690 1,259,662




(iii) Market risk (continued)

Foreign currency risk (continued)


Financial assets


Financial assets


Rs’000 Rs’000 Rs’000 Rs’000

2015Australian Dollar 940 2,569 940 2,569 Euro 22,042 22,780 19,270 20,841 Mauritian Rupee 637,670 1,452,581 857,489 1,060,755 Pound Sterling 86 - 86 - South African Rand 9,445 41,394 9,445 37,361 United States Dollar 44,277 6,132 21,794 984 Seychelles Rupee 4,667 5,266 - - Mozambican Meticais 15,770 73,375 - -

734,897 1,604,097 909,024 1,122,510

The following exchange rates were applied during the year:

AVERAGE RATE SPOT RATE

2016 2015 2016 2015

Rs Rs Rs Rs

Euro 37.81 39.65 40.52 40.1Australian Dollar 25.71 26.45 27.16 27.3South African Rand 2.52 2.75 2.49 2.65United States Dollar 34.03 35.3 36.48 35.25Mozambican Meticais 0.71 0.98 0.54 0.96Seychelles Rupee 2.43 2.34 2.44 2.87Pound Sterling 49.55 55.68 48.96 56.15

Foreign currency sensitivity analysis

Foreign exchange risk arises from changes in foreign exchange rates. Fluctuations in the above currencies by 10% would result in a gain or loss recognised in profit or loss and equity as shown below. The analysis does not take the currency positions that are denominated in the functional currencies of relevant operations because they do not create any foreign currency exposure. Also, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year end exposure does not represent the exposure during the year.




Foreign currency risk (continued)

Appreciation/ (depreciation) in foreign

exchange ratesEffect on

profit or lossEffect on

equity

Appreciation/ (depreciation)

in foreign exchange rates

Effect on profit or loss

Effect on equity

CONSOLIDATED % Rs’000 Rs’000 % Rs’000 Rs’0002016 2016 2016 2015 2015 2015

United States Dollar 10 (5,901) 5,901 10 3,815 (3,815) (10) 5,901 (5,901) (10) (3,815) 3,815

South African Rand 10 (8,016) 8,016 10 (3,195) 3,195 (10) 8,016 (8,016) (10) 3,195 (3,195)

Euro 10 (4,579) 4,579 10 (74) 74 (10) 4,579 (4,579) (10) 74 (74)

Meticais 10 (5,812) 5,812 10 (1,887) 1,887 (10) 5,812 (5,812) (10) 1,887 (1,887)

Australian Dollar 10 (2,412) 2,412 10 (163) 163 (10) 2,412 (2,412) (10) 163 (163)

Pound Sterling 10 (132) 132 10 9 (9) (10) 132 (132) (10) (9) 9

Seychelles Rupee 10 84 (84) 10 (60) 60

(10) (84) 84 (10) 60 (60)

Appreciation/ (depreciation) in foreign

exchange ratesEffect on

profit or lossEffect on

equity

Appreciation/ (depreciation)

in foreign exchange rates

Effect on profit or loss

Effect on equity

SEPARATE % Rs’000 Rs’000 % Rs’000 Rs’0002016 2016 2016 2015 2015 2015

United States Dollar 10 (5,901) 5,901 10 2,081 (2,081) (10) 5,901 (5,901) (10) (2,081) 2,081

South African Rand 10 (8,016) 8,016 10 (2,792) 2,792 (10) 8,016 (8,016) (10) 2,792 (2,792)

Euro 10 (4,099) 4,099 10 (157) 157 (10) 4,099 (4,099) (10) 157 (157)

Australian Dollar 10 (2,412) 2,412 10 (163) 163

(10) 2,412 (2,412) (10) 163 (163)

Interest rate risk

The Group’s and the Company’s interest rate risk arises from borrowings. Borrowings issued at variable rates expose the Group and the Company to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group and the Company to fair value interest rate risk.

The Group and the Company have an interest rate policy which aims at minimising the annual interest costs and to reduce volatility. Given the lack of a local bond market and the restricted capital market, the Group and the Company borrow mainly from banks, which are variable indexed to the prime lending rate. Fixed rate loans, especially of long duration, are not competitively priced by banks to allow a dynamic management of the risk. The policy is thus implemented broadly and cost of debt is managed by effective negotiation directly with banks and leasing companies.





Interest rate risk (continued)

The interest rate profile of the financial assets and financial liabilities of the Group and the Company at 30 June 2016 was:

Variable rate instruments

CONSOLIDATED SEPARATECONSOLIDATED AND SEPARATE CONSOLIDATED SEPARATE

CONSOLIDATED AND SEPARATE

2016 2016 2016 2015 2015 2015Rs’000 Rs’000 Interest Rate Rs’000 Rs’000 Interest Rate

Borrowings (835,532) (588,806) 5.25%-7.65% (775,453) (504,652) 7.25% - 14%Bank overdrafts (471,846) (309,769) 6.25%-17% (437,579) (395,923) 7.25%-14%Cash and cash equivalents 48,472 6,907 2%-5% 52,061 10,023 2%-4%

Lease liabilities carry fixed rates of interest and are therefore not exposed to variability in market interest rates.

Interest rate sensitivity analysis

PROFIT OR LOSS EQUITY

100bp 100bp 100bp 100bpIncrease Decrease Increase Decrease

CONSOLIDATED Rs’000 Rs’000 Rs’000 Rs’000

30 Jun 16Variable rate instruments: Interest on borrowings (8,355) 8,355 (8,355) 8,355Interest on bank overdrafts (4,718) 4,718 (4,718) 4,718 Interest on cash and cash equivalents 485 (485) 485 (485)

Cash flow sensitivity (net) (12,588) 12,588 (12,588) 12,588

30 Jun 15Variable rate instruments:Interest on borrowings (7,754) 7,754 (7,754) 7,754 Interest on bank overdrafts (4,376) 4,376 (4,376) 4,376 Interest on cash and cash equivalents 521 (521) 521 (521)





Interest rate risk (continued)

Interest rate sensitivity analysis (continued)

PROFIT OR LOSS EQUITY

100bp 100bp 100bp 100bpIncrease Decrease Increase Decrease

SEPARATE Rs’000 Rs’000 Rs’000 Rs’000





The sensitivity analysis has been determined based on the exposure to interest rate for the financial liabilities as at the reporting date. For floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the reporting date was outstanding for the whole year.

Capital risk managementThe Group’s and Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The Company and Group monitor capital using a ratio of adjusted net debt to adjusted equity. For this purpose, adjusted net debt is defined as total liabilities, comprising interest-bearing loans and borrowings and obligation under finance leases, less cash and cash equivalents.



5 FINANCIAL RISK MANAGEMENT (CONTINUED)Capital risk management (continued)

Gearing Ratio


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Total borrowings 1,307,378 1,213,032 898,575 900,575

Less : Cash and bank balances (48,472) (52,061) (6,907) (10,023)

Adjusted Net Debt 1,258,906 1,160,971 891,668 890,552

Total Equity 1,852,498 1,900,127 1,603,031 1,530,517

Adjusted net debt to equity 68% 61% 56% 58%

6 SEGMENT REPORTING Operating segments presented are those components of the Group that engage in business activities from which they may earn revenues and incur expenses, including revenues and expenses that relate to transaction with any of the Group’s other components.

Inter-segment pricing is determined on an arm’s length basis. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly investments and related revenue, loans and borrowings and related expenses, corporate assets and head office expenses.

Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible assets other than goodwill.

The following factors have been taken into consideration on determining the operating segment.

· The nature of the business activities of each component. Each operating segment has a distinct economic activity.

· The existence of managers responsible for the components. Each operating segment has a different manager, who is responsible for the financial results produced.

· For each operating segment, the results are presented separately to the Board.

Segments

The Group has the following strategic divisions, which are its reportable segments. These divisions offer different products and services, and are managed separately because they require different technology and marketing strategies.

· Wholesale & Retail;

· Production and Distribution: poultry farming, distribution of chicken, ice cream, yoghurt and other frozen food items, manufacturing, marketing and distribution of food and grocery products;

· Others: manufacture and distribution of animal feeds.

The Group’s Chief Executive officer reviews the internal management reports of each division at least quarterly.


6 SEGMENT REPORTING (CONTINUED)Information related to each reportable segment is set out below. Segment profit (loss) before tax is used to measure performance because management believes that this information is the most relevant in evaluating the results of the respective segments relative to other entities that operate in the same industries.

Segment informationWholesale &

retailProduction &

distribution Others Adjustments* TotalCONSOLIDATED Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Year ended 30 June 2016External Revenue 282,957 3,512,271 1,279,005 (787,244) 4,286,989 Segment revenue 282,957 3,512,271 1,279,005 (787,244) 4,286,989 Segment profit/(loss) from operating activities (11,060) 207,793 114,355 (88,019) 223,069

68,917 4,355,462 839,097 (1,498,714) 3,764,762 Segment assetsSegment liabilities 89,755 2,113,444 384,321 (771,640) 1,815,880 Shareholders fund (20,838) 2,178,125 408,806 (857,258) 1,708,835 Non-controlling interest - - - 143,663 143,663 Current and deferred taxation - 63,895 45,002 (12,513) 96,384 Total equity and liabilities 3,764,762 Other segment items- Purchase of property, plant and equipment - 161,269 - - 161,269 - Depreciation 3,645 83,683 21,669 - 108,997

- Amortisation of intangible assets - - 31 - 31

*These relates to consolidation adjustments



6 SEGMENT REPORTING (CONTINUED)

Segment information (continued) Wholesale &

retailProduction &

distribution Others Adjustments TotalCONSOLIDATED Rs’000 Rs’000 Rs’000 Rs’000 Rs’000Year ended 30 June 2015External revenue 367,350 3,363,198 1,192,873 (629,682) 4,293,739 Segment revenue 367,350 3,363,198 1,192,873 (629,682) 4,293,739 Segment (loss)/profit from operating activities (9,912) 125,795 112,867 (2,230) 226,520

105,394 3,802,491 802,746 (995,264) 3,715,367 Segment assetsSegment liabilities 130,623 426,116 416,756 770,341 1,743,836 Shareholders fund (18,058) 1,715,007 376,495 (372,192) 1,701,252 Non-controlling interest - - - 198,875 198,875 Current and deferred taxation - 37,783 29,413 4,208 71,404 Total equity and liabilities 3,715,367 Other segment items- Purchase of property, plant and equipment - 129,506 - - 129,506 - Depreciation 4,964 85,251 19,382 - 109,597 - Amortisation of intangible assets - - 760 - 760

Geographic information

The geographic information below analyses the Group’s revenue and non-current assets by the company’s country of domiciled. In presenting the following information, segment revenue has been based on the geographic location of customers and segment assets were based on the geographic location of the assets.

2016 2015

Rs’000 Rs’000

RevenueMauritius 4,079,982 4,109,004 All foreign countries:Mozambique 119,017 184,735 Seychelles 87,990 -

4,286,989 4,293,739

Non-current assetsMauritius 1,569,512 1,510,630 All foreign countries:Mozambique 111,110 191,887 Seychelles 1,195 -

1,681,817 1,702,517

Non-current assets exclude financial instruments, deferred tax assets and employee benefit assets


7 PROFIT FROM OPERATING ACTIVITIESThe following items have been (credited)/charged in arriving at profit from operating activities:


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Dividend income - - (29,100) (42,558)Depreciation on property, plant and equipment :- Owned assets 75,495 86,143 37,248 48,082 - Assets under finance leases 33,502 23,454 20,475 14,219 Amortisation of premiums on leasehold land 572 480 572 480 Operating lease expenses 62,207 57,983 61,690 57,983 (Loss)/Profit on disposal of property plant and equipment (1,972) 301 64,494 888 Amortisation/impairment on intangible assets:- Brand, licences, trademarks, etc. 31 138 - - - Goodwill - 622 - - Cost of inventories expensed:- Raw material 1,896,355 2,654,434 783,346 1,193,254 - Finished goods 1,608,503 812,532 1,352,906 1,087,335 Staff costs (Note 8) 349,846 375,083 195,748 282,543

Repairs and maintenance 17,350 14,544 13,751 11,916

8 STAFF COST


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Wages and salaries 337,886 328,790 192,457 245,662

Social security and pension costs 11,960 46,293 3,291 36,881

349,846 375,083 195,748 282,543

Number of persons employed at year end:

2016 2015 2016 2015

Number Number Number Number

Full time 1,090 1,114 429 794

Part time 218 209 138 190

1,308 1,323 567 984

During the year 430 employees were transferred from Innodis Ltd to Innodis Poultry Ltd (a wholly owned subsidiary).



9 NET FINANCE COSTS


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Interest income (5,579) (13,495) - -

Net foreign exchange transaction gains (21,092) (16,496) (20,689) (20,128)

(26,671) (29,991) (20,689) (20,128)

Interest expense:- Overdrafts 41,902 50,127 20,103 25,839 - Loans 20,993 19,409 20,817 19,409 - Finance leases 5,774 5,530 5,268 5,232

- Other interest 14,268 25,619 13,883 12,318

82,937 100,685 60,071 62,798

Net finance costs 56,266 70,694 39,382 42,670

10 INCOME TAX EXPENSE


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Income tax based on adjusted profits at 15% (2015: 15%) 38,332 23,762 23,112 15,440 Deferred taxation (Note 26) (1,177) (3,224) (1,457) (9,749)

Corporate social responsibility 3,944 3,805 2,059 2,260

41,099 24,343 23,714 7,951

Reconciliation of effective taxation

Profit before taxation 167,489 155,898 156,258 58,052

Income tax at 15% (2015: 15%) 25,123 23,385 23,439 8,708 Non-deductible expenses (5,089) (105) 3,394 15,038 Exempt income (2,790) (1,675) (14,768) (7,668)Change in recognised deductible temporary difference 17,890 (1,395) 11,047 (638)Corporate Social Responsibility 3,944 3,805 2,059 2,260 Movement in deferred tax (1,177) 3,224 (1,457) (9,749)Overprovision in deferred tax - (3,224) - - Unrecognised tax losses 2,677 - - -

Effect of tax rates in foreign jurisdiction 521 328 - -

41,099 24,343 23,714 7,951

11 EARNINGS PER SHARE Basic/diluted earnings per share

The calculation of earnings per share has been based on the Group’s profit attributable to Owners of the Company after taxation and non-controlling interest for the year of Rs 112,591,000 (2015 – Rs 116,619,000) and on 36,730,266 (2015 - 36,730,266) ordinary shares issue.

Basic and diluted earnings per share were the same for both years since there was no potential dilutive ordinary shares at 30 June 2016.


12 PROPERTY, PLANT AND EQUIPMENT

Freehold land Buildings

Improvement to buildings

Plant and machinery

Furniture and

equipmentMotor

vehiclesWork in

progress TotalCONSOLIDATED Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Cost/revaluedBalance at 1 July 2014 315,970 709,577 13,715 752,620 592,214 218,135 154,443 2,756,674 Additions - 13,547 - 46,162 16,155 25,732 27,910 129,506 Disposals (6,500) - - - - (11,022) - (17,522)Revaluation - - - - - (1,307) - (1,307)Foreign currency translation - (2,835) - (2,868) (8) (94) - (5,805)At 1 July 2015 309,470 720,289 13,715 795,914 608,361 231,444 182,353 2,861,546 Additions - 42,589 - 67,280 22,415 12,612 16,373 161,269 Disposals - - - (1,015) (592) (10,543) - (12,150)Reclassification to assets held for sale (14,000) - - - - - - (14,000)Foreign currency translation (5,853) 20,859 (3,303) 108,605 (161,511) 5,381 (26,053) (61,875)Balance at 30 June 2016 289,617 783,737 10,412 970,784 468,673 238,894 172,673 2,934,790 Accumulated depreciation/ and impairment lossesBalance at 1 July 2014 - 18,717 2,304 592,966 350,393 135,454 - 1,099,834 Depreciation for the year - 19,208 417 42,891 24,633 22,448 - 109,597 Foreign currency translation - (1,603) - (3,790) (1,647) (1,572) - (8,612)Disposal adjustment - - - - - (8,647) - (8,647)At 1 July 2015 - 36,322 2,721 632,067 373,379 147,683 - 1,192,172 Depreciation for the year - 17,733 359 50,753 18,048 22,104 - 108,997 Foreign currency translation - - (408) (10,352) (1,522) - - (12,282)Disposal adjustment - - - (399) (169) (10,355) - (10,923)Balance at 30 June 2016 - 54,055 2,672 672,069 389,736 159,432 - 1,277,964 Carrying amounts:Balance as 30 June 2016 289,617 729,682 7,740 298,715 78,937 79,462 172,673 1,656,826

At 30 June 2015 309,470 683,967 10,994 163,847 234,982 83,761 182,353 1,669,374



12 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)Freehold

land BuildingsPlant and

machineryFurniture and

equipmentMotor

vehiclesWork in

progress TotalSEPARATE Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Cost/RevaluedBalance at 1 July 2014 172,519 486,633 498,669 299,366 162,395 3,116 1,622,698 Additions - 9,916 20,444 7,946 13,581 - 51,887 Disposals - - - - (6,917) - (6,917)Balance at 1 July 2015 172,519 496,549 519,113 307,312 169,059 3,116 1,667,668 Additions - 1,135 29,654 20,810 10,752 615 62,966 Disposals - - (180,257) (7,885) (9,950) - (198,092)Reclassification to investment property (146,500) (364,835) - - - - (511,335)Reclassification to assets held for sale (7,500) - - - - - (7,500)Balance at 30 June 2016 18,519 132,849 368,510 320,237 169,861 3,731 1,013,707 Accumulated depreciation and impairment lossesBalance at 1 July 2014 - 10,231 362,134 276,887 104,445 - 753,697 Depreciation for the year - 10,208 21,972 13,504 16,617 - 62,301 Disposal adjustment - - - - (6,005) - (6,005)Balance at 1 July 2015 - 20,439 384,106 290,391 115,057 - 809,993 Depreciation for the year - 5,897 21,305 14,420 16,101 - 57,723 Disposal adjustment - (143,631) (6,104) (9,762) - (159,497)Reclassification to investment property - (18,926) - - - - (18,926)

- 7,410 261,780 298,707 121,396 - 689,293 Carrying amounts:At 30 June 2016 18,519 125,439 106,730 21,530 48,465 3,731 324,414

At 30 June 2015 172,519 476,110 135,007 16,921 54,002 3,116 857,676


12 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)(i) Security

The land and building are secured by a fixed charge for Rs 200,000. The movable and immovable assets are subject to a floating charge for Rs 906,800,000. Bank borrowings are secured by fixed and floating charges over the assets of the Group.

The Group has a floating charge of USD 2.9 million on its plant and machinery pledge in favour of bank overdraft facilities for Mozambique Farms Limitada.

(ii) Valuation

The freehold land and buildings of the Group and the Company, were revalued on 30 June 2013 by Messrs Broll Indian Ocean Ltd and Société D’Hotman De Speville, Chartered Valuation Surveyors, on an open market value basis. Land and buildings for Mozambique Farms Limitada were revalued on a replacement cost basis by REAL ESTATE CONSULTING, LDA. The directors consider the current value to be at least equal to its carrying amount.

The valuation has been derived using the Sales Comparison Approach and the Depreciated Replacement Cost Approach.

The carrying amounts of property, plant and equipment that would have been included in the financial statements had the assets been carried at cost are as follows:


Rs’000 Rs’000

At 30 June 2016 1,283,845 327,101

At 30 June 2015 1,226,017 360,854

(iii) Investment Property

During the year, at the Company level, freehold land buildings that were previously used by the poultry division of Innodis Ltd have been transferred to investment property as they are now being leased to Innodis Poultry Ltd, a new subsidiary of Innodis Ltd.

(iv) Assets held for sale

Freehold land, valued at Rs13 million for the Group and Rs7.4 million for the Company (note 22) have been reclassified as assets held for sale since the directors have the intention to dispose of the property. There exists a potential buyer with whom negotiation is being carried and the transaction is expected to be finalised by end of financial year 2017.



12 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)(v) Finance lease

Included in the Group’s and the Company’s property, plant and equipment are motor vehicles and plant and machinery held under finance leases. Details are as follows:


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Leased motor vehiclesCarrying amount 44,547 50,405 42,990 42,762 Depreciation charge 15,200 13,575 14,511 12,954 Leased plant and machineryCarrying amount 123,116 109,639 34,392 29,695

Depreciation charge 18,302 14,688 5,964 6,000

13 INVESTMENT PROPERTY


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

CostAt 1 July 12,500 12,500 - -

Transfer from property, plant and equipment - - 492,409 -

At 30 June 12,500 12,500 492,409 -

Accumulated depreciationAt 1 July 12,500 10,351 - -

Charge for the year - 2,149 4,290

At 30 June 12,500 12,500 4,290 -

Carrying amounts

At 30 June - - 488,119 -


14 INTANGIBLE ASSETS AND GOODWILL


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Cost

At 1 July and 30 June 120,652 120,652 105,743 105,743

AmortisationAt 1 July 114,812 114,052 105,743 105,743

Charge for the year 31 760 - -

At 30 June 114,843 114,812 105,743 105,743 Carrying amounts

At 30 June 5,809 5,840 - -

Goodwill has been allocated for impairment testing purposes as follows:

SEPARATE AND CONSOLIDATED CONSOLIDATED CONSOLIDATED CONSOLIDATED CONSOLIDATED

Brands & licenses

Computer software and

distribution rights

Goodwill on acquisition of

Peninsula Rice Milling Co Ltd

Goodwill on acquisition of

Poulet Arc-en-Ciel Ltée Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

CostAt 1 July 2015 and 30 June 2016 105,743 2,474 4,000 8,435 120,652 AmortisationAt 1 July 2015 105,743 2,179 2,683 4,207 114,812 Charge for the year - 31 - - 31 At 30 June 2016 105,743 2,210 2,683 4,207 114,843 Carrying amountsAt 30 June 2016 - 264 1,317 4,228 5,809

At 30 June 2015 - 295 1,317 4,228 5,840



15 (a) INVESTMENT IN SUBSIDIARIES

2016 2015

SEPARATE Rs’000 Rs’000

CostAt 1 July 300,939 300,939

Additions * 465,358 -

At 30 June 766,297 300,939 ImpairmentAt 1 July 116,963 30,043 Charge for the year

- 86,920

At 30 June 116,963 116,963 Carrying amounts

At 30 June 649,334 183,976

* Included in investments in subsidiaries are loans advanced for which the repayment is neither planned nor likely to occur in the foreseeable future.

The Company has used the following assumptions to consolidate investees which are not wholly or virtually-wholly owned:

1. Whether it has power over the investees;

2. Whether it has exposure, or rights, to variable returns from its involvement with the investees; and

3. Whether it has the ability to use its power over the investees to affect the amount of the returns.


15 (a) INVESTMENTS IN SUBSIDIARIES (CONTINUED)Details of the Company’s subsidiaries are:

Name of subsidiariesCountry of incorporation

Class of shares held Holding Cost of investment Principal activity

2016 2015 2016 2015

% % Rs’000 Rs’000

Société Enatou Mauritius 100 100 2,000 2,000 Investment holdingSupercash Ltd Mauritius Ordinary 100 100 20,000 20,000 WholesalePeninsula Rice Milling Co Ltd Mauritius Ordinary 100 100 43,750 43,750 Rice millingChallenge Hypermarkets Ltd Mauritius Ordinary 50.1 50.1 52,605 52,605 Property developmentHWFRL Investments Ltd Mauritius Ordinary 100 100 - - Investment holdingHWFRL Investments Ltd Mauritius Loan 100 100 315,358 - Mauritius Farms Limited Mauritius Ordinary 100 100 25,992 25,992 Investment holdingEssentia Ltd Mauritius Ordinary 100 100 1 1 Investment holdingMeaders Feeds Ltd Mauritius Ordinary 51 51 39,628 39,628 Feed Mill operations

Innodis Poultry Ltd Mauritius Ordinary 100 100 150,000 - Poultry farming and sales of chicken

649,334 83,976

The Company, indirectly, holds investments in the following subsidiaries:

Name of subsidiariesCountry of incorporation Effective holding Principal activity

2016 2015

% %

Société Narien Mauritius 100 100 Property holdingRedbridge Investments Ltd Mauritius 100 100 Property developmentSociété Centre Point Mauritius 50.1 50.1 Property developmentMoçambique Farms Limitada Mozambique 75 50.1 Broiler growing and processingPoulet Arc-en-Ciel Ltée Mauritius 56.4 56.4 Poultry farming and sales of chickenGreen Island Milling Limited Mauritius 60 60 Rice MillingMeaders Seychelles Ltd Seychelles 41 41 Distributor of Feeds and Day old chicks



15 (b) NON-CONTROLLING INTERESTSThe following table summarises the information relating to each of the Group’s subsidiaries that has a material NCI, before any intra-group eliminations.

Poulet Arc-en-Ciel

LtéeMeaders

Feeds Ltd

Moçambique Farms,

Limitada

Green Island Milling

Limited

Challenge Hypermarkets

LtdNCI percentage 43.60% 49% 25% 40% 49.90%

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

As at 30 June 2016Non-current assets 66,345 398,221 111,110 31,298 103,500 Current assets 71,160 440,875 27,429 - 48,699 Non-current liabilities (9,919) (87,332) (51,611) - - Current liabilities (41,545) (341,859) (32,935) (1,580) (6,810)Net assets 86,041 409,905 53,993 29,718 145,389 Carrying amount of NCI 37,514 200,853 13,498 11,887 72,549 Revenue 257,057 1,279,005 119,017 - - Profit/(loss) 15,010 82,945 (13,403) (2,524) 81 OCI (2,092) 140 - - - Total comprehensive income 12,918 83,085 (13,403) (2,524) 81 Profit allocated to NCI 6,544 40,643 (3,350) (1,009) 40 OCI allocated to NCI (912) 68 - - - Total comprehensive income allocated to NCI 5,632 40,711 (3,350) (1,009) 40 Cash flows generated from/(used in) operating activities 8,228 144,293 (46,298) - - Cash flows used in investment activities (2,287) (72,345) (3,002) - - Cash flows (used in)/generated from financing activities (937) (77,342) 27,088 - - Net movement in cash and cash equivalents 5,004 (5,394) (22,212) - - Dividends paid to non-controlling interests during the year 2,782 24,500 - - -


15 (b) NON-CONTROLLING INTERESTS (CONTINUED)Poulet

Arc-en-Ciel Ltée

Meaders Feeds Ltd

Moçambique Farms,

Limitada Green Island

Milling Limited

Challenge Hypermarkets

LtdNCI percentage 43.60% 49% 49.90% 40% 49.90%

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

As at 30 June 2015Non-current assets 70,828 398,221 191,888 33,557 103,512 Current assets 58,722 440,875 27,090 - 43,339 Non-current liabilities (13,060) (87,464) (374,440) - - Current liabilities (40,404) (341,860) (73,890) (1,314) (1,545)Net assets 76,086 409,772 (229,352) 32,243 145,306 Carrying amount of NCI 33,173 200,788 (114,447) 12,897 72,508 Revenue 253,315 1,192,873 184,735 - - Profit/(loss) 12,276 85,805 (63,014) (974) 2,254 OCI 1,759 (537) - - - Total comprehensive income 14,035 85,268 (63,014) (974) 2,254 Profit allocated to NCI 5,352 42,044 (31,444) (390) 1,125 OCI allocated to NCI 767 (263) - - - Total comprehensive income allocated to NCI 6,119 41,781 (31,444) (390) 1,125 Cash flows generated from/(used in) operating activities 14,327 53,524 (14,799) - (2,029)Cash flows used in investment activities (5,563) (37,612) (16,834) - - Cash flows (used in)/generated from financing activities (6,116) (37,833) - - Net movement in cash and cash equivalents 2,648 (21,921) 1,198 - (2,029)

Dividends paid to non-controlling interests during the year 1,390 24,500 - - 5,240



16 EQUITY-ACCOUNTED INVESTEES

2016 2015

CONSOLIDATED Rs’000 Rs’000

At 1 July 6,620 6,866 Share of profit of equity accounted investees 133 72 Share of net asset on winding up of investee (2,453) -

Impairment (4,300) (318)

At 30 June - 6,620

2016 2015

SEPARATE Rs’000 Rs’000

Cost

At 1 July and 30 June 23,146 23,146

Accumulated impairmentAt 1 July 15,700 15,700

Impairment 7,446 -

23,146 15,700

Carrying amounts

At 30 June - 7,446

Details of the Company’s material associates, not adjusted for the percentage ownership held by the Group are:

Name of companyCountry of incorporation Activities

Class of shares held % Holding

2016 2015Promotion et Diversification Mauritius Ordinary 50 50Publicitaire Limitée AdvertisingSalière de l’Ouest Limitée Mauritius Manufacturing Ordinary 48 48Ariva Ltée Mauritius Shipping Agent Ordinary 8.41 8.41

By virtue of the Company’s representation on the Board of Ariva Ltée, the Company deems to have significant influence as investee, and hence continue to treat this investment as associate.

Disclosed judgements applied in concluding that there is significant influence as shareholding is more than 20%.

The summarised financial information of the Group’s equity-accounted investees is not material, hence has not been reported in the consolidated financial statements.


17 AVAILABLE-FOR-SALE INVESTMENTS

2016 2015

Unquoted Unquoted

CONSOLIDATED AND SEPARATE Rs’000 Rs’000

Cost paid

At 1 July and 30 June 209 209

Details of the Group’s and Company’s unquoted investments are:

Name of CompaniesCountry of incorporation

Description of shares held

Value of investments

Rs’000

Progos Mauritius Ordinary 50Ecocentre Ltée Mauritius Ordinary 30Ecocentre Ltée Mauritius Preference 90SIT Land Holdings Ltd Mauritius Ordinary 39

209

19 NON-CURRENT RECEIVABLESCONSOLIDATED AND SEPARATE Rs’000

Premiums on acquisition of leasehold landCostAt 1 July 2015 & 30 June 2016 23,102 AmortisationAt 1 July 2015 9,587 Charge for the year 572 At 30 June 2016 10,159 Carrying amountsAt 30 June 2016 12,943

At 30 June 2015 13,515



19 NON-CURRENT RECEIVABLES (CONTINUED)Premiums paid on acquisition of leasehold land are amortised over the lease terms ranging between 45 and 66 years.

20 (a) INVENTORIES


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Raw materials 401,063 376,363 43,763 8,594 Finished goods 815,440 833,843 776,479 764,192 Consumables 2,088 598 1,608 597 Spare parts 9,380 8,210 4,192 7,482

1,227,971 1,219,014 826,042 780,865

Cost of inventories expensed 3,504,858 3,466,966 2,136,252 2,280,589

20 (b) BIOLOGICAL ASSETS


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

At 1 July 79,622 82,844 76,858 68,110 Purchases 116,937 17,979 - 17,978 Sales/transfer to inventories (376,262) (684,236) (76,858) (461,538)Net increase due to hatching 257,631 658,555 - 447,828

Change in fair value less estimated costs to sell (2,308) 4,480 - 4,480

At 30 June 75,620 79,622 - 76,858

Non-current 6,030 6,959 - 6,959 Current 69,590 72,663 - 69,899

75,620 79,622 - 76,858


20 (b) BIOLOGICAL ASSETS (CONTINUED) (i) Measurement of fair values

Fair value hierarchy

The fair value measurements for biological assets amounting to Rs 75,622,000 have been categorized as Level 3 fair value based on inputs to the valuation techniques used.

(ii) Valuation techniques and significant unobservable inputs

The following table shows the valuation techniques used in measuring fair values, as well as the significant unobservable inputs used:

Type Valuation techniques Significant unobservable inputs

Livestock

Livestock comprise of live chickens and eggs. Livestock are fair valued based on the market price less cost to sale of chickens of similar ages and weights.

Mortality rate

Hatchability rate

Expected feed consumption

21 TRADE AND OTHER RECEIVABLES


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Trade receivables – gross 523,434 497,926 336,443 335,313

Less: accumulated impairment (29,934) (24,839) (27,151) (27,151)Trade receivables – net 493,500 473,087 309,292 308,162 Amounts owed by subsidiaries - - 177,485 186,034 Amounts owed by associate 4,757 2,233 4,757 2,233 Amounts owed by related parties 18,681 18,724 314 314 Other receivables 206,974 175,068 156,425 201,119

723,912 669,112 648,273 697,862

Transactions between related parties are carried out in the normal course of business and any amount receivables are repaid as per the Group’s and the Company’s credit terms. An ageing analysis of the Group’s and the Company’s trade receivables is provided in Note 5(i).

22 ASSETS HELD FOR SALE CONSOLIDATED SEPARATE

2016 2015 2016 2015

Note Rs’000 Rs’000 Rs’000 Rs’000

Land 12(iv) 13,000 - 7,400 -

The fair value measurement for the assets held for sale is based on prices negotiated with a potential buyer.



23 SHAREHOLDERS’ EQUITYShare capital

2016 2015 2016 2015

Number Number Rs’000 Rs’000

Authorised

Ordinary shares of Rs 10 each 50,000,000 50,000,000 500,000 500,000

Issued and fully paid

Ordinary shares of Rs 10 each 36,730,266 36,730,266 367,303 367,303

Share premium

A share premium arises when the value of the consideration received for the issue of shares exceeds the nominal value of the shares issued. The share premium account is regarded as permanent capital of the Company and only certain expenses of a capital nature may be set-off against it, namely:

(i) the preliminary expenses of the Company; or

(ii) the expenses of, or the commission paid on, the creation or issue of any shares.

The share premium account may also be applied:

(i) in paying up shares of the Company to be issued to shareholders of the Company as fully paid shares;

(ii) to reflect the decrease in the share premium account arising from shares acquired or redeemed.

Revaluation reserve

The revaluation reserve arises from the revaluation of the Group’s and the Company’s land and buildings and plant and machinery.

This reserve is reduced by the transfers to retained earnings:

(i) on an annual basis of an amount equivalent to the depreciation on the revaluation surplus, net of the deferred tax impact; and

(ii) on disposal of the revalued property, plant and equipment of the remaining revaluation surplus on the property, plant and equipment disposed of, net of the deferred tax impact.

(iii) The revaluation reserve is used to record increases in the fair value of land and buildings. Subsequently when the land and building is being depreciated, proportionately a release of the fair value reserve is released to equity.

(iv) The foreign currency translation reserve records exchange differences arising from the translation of the financial statements of subsidiaries on consolidation.


23 SHAREHOLDERS’ EQUITY (CONTINUED)Revaluation reserve (continued)

The revaluation reserve may be applied in paying up shares of the Company and its subsidiaries to be issued to their shareholders as fully paid shares.


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

As at 1 July 387,802 394,956 332,197 336,030

Foreign currency translation difference/foreign operations (33,206) - - -

354,596 394,956 332,197 336,030

Deferred taxation arising on revaluation of land and building (4,851) (128) (4,743) 1,642

Release to retained earnings (6,782) (7,026) (5,475) (5,475)

As at 30 June 342,963 387,802 321,979 332,197

Foreign currency translation reserve

The foreign currency translation reserve consists of the Group’s share of the exchange difference arising on the consolidation of the subsidiary whose financial statements are presented in Mozambican Meticais

24 BORROWINGS


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

CurrentSecured bank loans 615,535 417,256 420,038 212,811 Lease liabilities 24,586 42,874 22,443 20,253

640,121 460,130 442,481 233,064

Non-currentSecured bank loans 100,701 233,715 100,317 233,714 Lease liabilities 94,710 81,608 46,008 37,874

195,411 315,323 146,325 271,588

Total borrowings 835,532 775,453 588,806 504,652



24 BORROWINGS (CONTINUED)

Terms and repayment schedules

The terms and conditions of outstanding loans are as follows:

CONSOLIDATED

CurrencyNominal

interest rateYear of

maturity Face value Carrying value Face value Carrying value

2016 2016 2015 2015

Rs’000 Rs’000 Rs’000 Rs’000

Short term loan MUR 6.10% - 11.5% 2016 445,496 445,496 299,485 299,485 Import loan USD 6.10% - 11.5% 2016 46,318 46,318 43,524 43,524 Import loan EUR 6.10% - 11.5% 2016 40,366 40,366 35,851 35,851 Import loan ZAR 6.10% - 11.5% 2016 63,607 63,607 57,061 57,061 Import loan AUD 6.10% - 11.5% 2016 19,747 19,747 - - Import loan SGD 6.10% - 11.5% 2016 - - 1,376 1,376 Import loan MUR 6.10% - 11.5% 2016 - - - - Long term loan MUR 7.25% 2018 100,702 100,702 234,099 234,099 Obligation under finance lease MUR 7% - 10.5% 2016 24,586 24,586 22,449 22,449 Obligation under finance lease MUR 7% - 10.5% 2019 94,710 94,710 81,608 81,608

835,532 835,532 775,453 775,453

SEPARATE

CurrencyNominal

interest rateYear of

maturity Face value Carrying value Face value Carrying value

2016 2016 2015 2015

Rs’000 Rs’000 Rs’000 Rs’000

Short term loan MUR 6.10% - 11.5% 2016 250,000 250,000 75,000 75,000 Import loan USD 6.10% - 11.5% 2016 46,318 46,318 43,524 43,524 Import loan EUR 6.10% - 11.5% 2016 40,366 40,366 35,851 35,851 Import loan ZAR 6.10% - 11.5% 2016 63,607 63,607 57,060 57,060 Import loan AUD 6.10% - 11.5% 2016 19,747 19,747 - - Import loan SGD 6.10% - 11.5% 2016 - - 1,376 1,376 Long term loan MUR 7.25% 2018 100,317 100,317 233,714 233,714 Obligation under finance lease MUR 7% - 10.5% 2015 22,443 22,443 20,253 20,253 Obligation under finance lease MUR 7% - 10.5% 2019 46,008 46,008 37,874 37,874

588,806 588,806 504,652 504,652

The Company loans are secured by floating charges on the immovable assets of the Company and its subsidiaries and the rates of interest vary between 6.10% and 11.5% (2015 – between 6.10% and 11.5%) per annum.

Bank overdrafts

The bank overdrafts and other facilities are secured by floating charges of Rs 906,900,000 (2015 – Rs 755,000,000) on all the assets of the Company and its subsidiaries.


24 BORROWINGS (CONTINUED)

Finance lease liabilities – minimum lease payments

Finance lease liabilities are payable as follows:

CONSOLIDATED

Future minimum lease payments Interest

Present value of minimum lease

payments

Future minimum lease

payments Interest

Present value of

minimum lease payments

2016 2016 2016 2015 2015 2015Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Less than one year 30,953 6,367 24,586 47,049 4,175 42,874 Between one and five years 99,903 5,193 94,710 85,095 3,487 81,608

130,856 11,560 119,296 132,144 7,662 124,482

SEPARATE

Future minimum lease payments Interest

Present value of minimum lease

payments

Future minimum lease

payments Interest

Present value of

minimum lease payments

2016 2016 2016 2015 2015 2015Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Less than one year 26,615 4,172 22,443 23,922 3,669 20,253 Between one and five years 50,547 4,539 46,008 41,231 3,357 37,874

77,162 8,711 68,451 65,153 7,026 58,127

Leasing agreements

Finance leases relate to plant and machinery and motor vehicles with lease terms of 5 years on average. The Group and Company have option to purchase the equipment and motor vehicles at the residual value as mentioned on the lease contract. The Group’s and Company’s obligations under finance lease are secured by the lessor’s title to the leased assets.



25 RETIREMENT BENEFITS OBLIGATIONS


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Amounts recognised in the statements of financial position at year endPresent value of funded obligations 279,876 336,250 246,151 323,585

Fair value of plan assets (191,223) (196,511) (191,223) (196,511)

Present value of net obligations 88,653 139,739 54,928 127,074

Liability recognised in statement of financial position at year end 88,653 139,739 54,928 127,074

Amounts recognised in the statements of profit or loss and other comprehensive incomeCurrent service costs 12,968 15,259 12,081 14,122 Interest costs 9,646 11,305 8,779 10,340 Fund expenses & life insurance 1,397 1,101 1,397 1,101 Contributions by employees (3,633) (3,259) (3,635) (3,258)Past service cost - (9,452) (22,313) (8,972)

Curtailment/settlement (gain) (42,134) - (41,814) - Net (gain)/cost for the year recognised in profit or loss (21,756) 14,954 (45,505) 13,333

Remeasurement recognised in OCI (17,762) (11,949) (15,258) (11,164)

Net (gain)/cost for the year (39,518) 3,005 (60,763) 2,169 Net interest cost for the year Interest on obligation 20,185 23,827 19,318 22,862

Expected return on plan assets (10,539) (12,522) (10,539) (12,522)

Net interest cost 9,646 11,305 8,779 10,340


25 RETIREMENT BENEFITS OBLIGATIONS (CONTINUED)


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Remeasurement recognised in other comprehensive income for the year:Actuarial gains on the obligation 34,053 11,087 31,548 10,302

Actuarial gains/(losses) on the plan assets (16,291) 862 (16,290) 862

Remeasurement recognised in OCI - gain 17,762 11,949 15,258 11,164

Changes in the Present Value of the obligationPresent value of obligation at start of year 336,250 331,127 323,585 318,951 Past service cost - (9,452) (22,313) (8,972)Interest cost 20,185 23,827 19,318 22,862 Current service cost 12,968 15,259 12,081 14,122 Benefits paid (13,340) (13,570) (13,159) (13,076)Curtailment/settlement (gain) on obligation (42,134) - (41,814) -

Expected obligation at end of year 313,929 347,337 277,698 333,887

Present value of obligation at end of year 279,876 336,250 246,150 323,585 Remeasurement recognised in OCI at end of year - gain 34,053 11,087 31,548 10,302





2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Changes in the Fair Value of the plan assetsFair value of plan assets at start of period 196,511 183,617 196,511 183,617 Expected return on plan assets 10,543 12,522 10,543 12,522 Contributions to plan assets 11,860 11,120 11,860 11,120 Benefits paid out of plan assets (10,003) (10,509) (10,004) (10,509)

Fund expenses & life insurance (1,397) (1,101) (1,397) (1,101)

Expected fair value at end of year 207,514 195,649 207,513 195,649

Fair value of plan assets at end of year 191,223 196,511 191,223 196,511

Remeasurement recognised in OCI at end of year - (gain)/losses 16,291 (862) 16,290 (862)Movement in liability recognised in the statement of financial positionAt 1 July 139,739 147,533 127,074 135,333 Expense recognised in the statement of comprehensive income (21,756) 14,954 (45,505) 13,333 Actuarial (gain) on unfunded retirement benefit (17,762) (11,949) (15,258) (11,164)Contributions paid (11,568) (10,799) (11,384) (10,428)

At 30 June 88,653 139,739 54,927 127,074

Principal actuarial assumptions at end of yearDiscount rate (%) 6.50-7 7 7 7 Expected rate of return on plan assets (%) 7 7 7 7 Future salary increases (%) 3-5 3 3 3




2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Experience adjustments on:Plan liabilities 34,053 11,087 31,548 10,302 Plan assets 16,291 (862) 16,290 862 SensitivityEffect on present value of unfunded obligations1% increase in discount rate 258,732 308,214 237,963 302,834 1% decrease in discount rate 289,353 355,292 256,614 347,362 1% increase in salary increase 281,318 347,750 249,750 339,864 1% decrease in salary increase 265,402 314,878 243,509 309,467

The above sensitivity analysis has been carried out by recalculating the present value of obligation at end of year after increasing or decreasing the discount rate or the future salary increases while leaving all other assumptions unchanged.

The major categories of plan assets at the reporting date for each category are as follows:

SEPARATE

2016 2015

Rs’000 Rs’000

Local equities 61,531 54,041 Overseas equities 68,084 69,565 Fixed interest 39,366 45,591

Cash and others 22,242 27,314 Total market value of assets 191,223 196,511

Present value of plan liability (246,150) (323,585)Deficit (54,927) (127,074)

Unrecognised actuarial loss - -

(54,927) (127,074)

Reconciliation of the present value of obligationPresent value of obligation at start of year 323,585 318,951 Current service cost 12,081 14,122 Interest cost 19,318 22,862 Past service costs (22,313) (8,972)Benefits paid (13,159) (13,076)Curtailment/settlement (gain) on obligation (41,814) - Actuarial (gain) on obligation (31,548) (10,302)

Present value of obligation at end of year 246,150 323,585




SEPARATE

2016 2015

Rs’000 Rs’000

Reconciliation of fair value of plan assetsFair value of plan assets at start of year 196,511 183,617 Expected return 10,543 12,522 Contributions paid 11,860 11,120 Benefits paid (10,003) (10,509)Actuarial (loss)/gain (16,291) 862 Fund expenses and life insurance (1,397) (1,101)

Fair value of plan assets at end of year 191,223 196,511

Expected contribution for next year

The Group and the Company are expected to contribute Rs 6 million and Rs 4 million respectively to the pension scheme for the year ending 30 June 2017 (2016: Rs 4 million and Rs 3.5 million respectively).

Actuarial risk · Interest risk

The present value of the obligation is calculated using a discount rate based on the yields of long term government bonds. An increase or decrease in the discount rate of 1 basis point will have a significant impact on the liabilities as can be seen in the sensitivity section of the results.

· Salary risk

The present value of the liability is calculated based on the future salary increase of the non-members and members of the Defined Contribution plan. Sensitivity analysis of salary increase assumption has been performed to assess its impact on the liability. An increase in salary increase assumption leads to an increase the present value of the obligations.

· Longevity risk

The present value of the obligation for the Defined Contribution members and present value of future pension in payment are calculated based on the best estimate of plan participants’ mortality after retirement. Sensitivity has also been performed in respect of the mortality assumption. An increase in the life expectancy of the plan participants will increase the liability.


26 DEFERRED TAX ASSETS AND LIABILITIESThe movement in temporary differences during the year were as follows:

CONSOLIDATED

ASSETS LIABILITIES NET

2016 2015 2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Tax losses carried forward 11,714 5,896 - - 11,714 5,896 Accelerated capital allowances - - (66,665) (61,336) (66,665) (61,336)Surplus on revaluation of building - - (43,254) (38,082) (43,254) (38,082)Retirement and other obligations 14,021 21,705 - - 14,021 21,705 Provision for impairment of receivables 20,343 14,670 - - 20,343 14,670

46,078 42,271 (109,919) (99,418) (63,841) (57,147)

SEPARATE

ASSETS LIABILITIES NET

2016 2015 2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Accelerated capital allowances - - (16,663) (20,605) (16,663) (20,605)Surplus on revaluation of building - - (44,161) (39,418) (44,161) (39,418)Retirement and other obligations 9,338 19,062 - - 9,338 19,062 Provision for impairment of investment 19,420 14,775 - - 19,420 14,775

28,758 33,837 (60,824) (60,023) (32,066) (26,186)



26 DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED) The movements in temporary differences during the year were as follows:

Balance at 1 July 2014

Recognised in profit or loss

Recognised in equity

Balance at 30 June 2015




CONSOLIDATED Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Property, plant and equipment (67,271) 5,935 - (61,336) (12,772) - (74,108)Revaluation of property, plant and equipment (37,940) - (142) (38,082) (59) (4,851) (42,992)Employee benefits 23,426 (1,735) 14 21,705 (3,614) (3,020) 15,071 Provisions 14,670 - - 14,670 5,934 - 20,604 Tax losses carried forward 6,872 (976) - 5,896 11,688 - 17,584

(60,243) 3,224 (128) (57,147) 1,177 (7,871) (63,841)








SEPARATE Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Property, plant and equipment (21,053) 448 - (20,605) 3,942 - (16,663)Revaluation adjustment (41,060) - 1,642 (39,418) - (4,743) (44,161)Employee benefits 20,300 (1,238) - 19,062 (7,130) (2,594) 9,338 Provisions 4,236 10,539 - 14,775 4,645 - 19,420

(37,577) 9,749 1,642 (26,186) (1,457) (7,337) (32,066)


27 TRADE AND OTHER PAYABLES


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Trade payables 194,047 224,460 40,557 60,675 Bills payable 65,143 59,173 60,337 59,173 Accruals and other payables 156,919 106,339 123,026 71,545 Amounts owed to subsidiaries - - 133,427 29,449 Amount owed to related parties 3,740 1,093 3,740 1,093

419,849 391,065 361,087 221,935

Amounts owed to associates and related parties are unsecured, interest free and with no fixed repayment terms.

Amounts owed to subsidiaries are unsecured, interest free and repayable on demand.

28 DIVIDENDS

SEPARATE

2016 2015

Rs’000 Rs’000

Paid 31,220 31,220

Proposed 36,731 36,731

67,951 67,951

SEPARATE

2016 2015

Rs Rs

Dividend per share 1.85 1.85

29 RELATED PARTY TRANSACTIONSFor the purpose of these financial statements, parties are considered to be related to the Group and the Company if they have the ability, directly or indirectly to control the Group or exercise significant influence over the Group in making financial and operating decisions, or vice-versa, or where the Company is subject to common control or common significant influence. Related parties may be individuals or other entities.



29 RELATED PARTY TRANSACTIONS (CONTINUED)

Nature of transaction/balance at year end

Nature of relationship

Name of related party

Terms and conditions

Transaction for the year Balance at 30 June

2016 2015 2016 2015

CONSOLIDATED Rs’000 Rs’000 Rs’000 Rs’000

Sales/(purchases) of goods and services Associate

Promotion et Diversification Publicitaire Limitée

Normal course of business 2,524 (806) 2,922 398

AssociateSalière de l’Ouest Limitée

Normal course of business - - 1,835 1,835

2,524 (806) 4,757 2,233

Sales of goods and services Shareholder Altima Ltd

Normal course of business 314 314 314 314

Purchases of goods and services Associate

Salière de l’Ouest Limitée

Normal course of business (15,684) (15,510) - -

Payment for services received Shareholder Altima Ltd

Technical fees of 0.35 % of turnover is charged (8,244) (8,256) (3,740) (1,093)

Current account Shareholder Altima LtdRepayable on demand 18,367 - 18,367 18,410








2016 2015 2016 2015

SEPARATE Rs’000 Rs’000 Rs’000 Rs’000

Sales/(purchases) of goods and services Subsidiary

Challenge Hypermarkets Ltd

Normal course of business 288 - (23,241) (23,529)

SubsidiaryPoulet Arc-en-Ciel Ltée

Normal course of business (6,239) - 11,162 17,401

SubsidiaryInnodis Poultry Ltd

Normal course of business 288,926 - (121,348) -

SubsidiaryMeaders Feeds Ltd

Normal course of business 768 396,207 - (23,321)

283,744 396,207 (133,427) (29,449)

Payment for services received

Shareholder Altima Ltd

Technical fees of 0.35 % of turnover is charged (8,244) (8,256) (3,740) (1,093)

Sales/(purchases) of goods and services Subsidiary Supercash Ltd

Normal course of business 50,687 72,053 47,684 65,611

SubsidiaryMauritius Farm Ltd

Normal course of business (34,261) - 20,629 52,243

SubsidiaryPeninsula Rice Milling Ltd

Normal course of business 27,465 50,208 37,027 47,394

SubsidiaryP. Frais Franchise Ltd

Normal course of business 6,013 - 6,673 15

SubsidiaryInnodis Poultry Ltd

Normal course of business 962 - 65,047 -

Subsidiary Société EnatouNormal course of business - - 23 23

SubsidiaryRedbridge Investments Ltd

Normal course of business - - 96 96

Subsidiary Société NarienNormal course of business 23 - 23 -









2016 2015 2016 2015

SEPARATE (CONTINUED) Rs’000 Rs’000 Rs’000 Rs’000

Sales/(purchases) of goods and services Subsidiary

Moçambique Farms Limitada

Normal course of business (20,483) - 146 20,629

Subsidiary Essentia LtdNormal course of business - - 23

23

SubsidiaryMeaders Feeds Ltd

Normal course of business 173 462 29 -

SubsidiaryPoulet Arc-en-Ciel Ltée

Normal course of business 49,274 69,787 - -

SubsidiaryGreen Island Milling Ltd

Normal course of business - - 85 -

79,853 192,510 177,485 186,034

Sales/(purchases) of goods and services Associate

Promotion et Diversification Publicitaire Limitée

Normal course of business 2,524 (806) 2,922 398

AssociateSalière de l’Ouest Limitée

Normal course of business - - 1,835 1,835

2,524 (806) 4,757 2,233

Current account Shareholder Altima Ltd 314 314 314 314




2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Directors remuneration 21,874 18,908 16,089 14,837


Key management personnel’s emoluments 2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Short-term employment benefit 23,769 21,044 17,984 15,538

Post-employment benefit 613 613 613 613

24,382 21,657 18,597 16,151



30 OPERATING LEASE COMMITMENTSThe future aggregate minimum lease payments under non-cancellable operating leases are as follows:

Leases as Lessee


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Not later than 1 year 56,778 60,231 50,812 54,401 Later than 1 year and not later than 2 years 59,617 63,243 53,352 57,121 Later than 2 years and not later than 5 years 178,850 189,728 168,060 179,932

295,245 313,202 272,224 291,454

Leases as Lessor


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Not later than 1 year 11,932 11,660 5,966 5,830 Later than 1 year and not later than 2 years 19,688 19,239 6,563 6,413 Later than 2 years and not later than 5 years - - 7,219 7,054

31,620 30,899 19,748 19,297

Leases as LesseeThe Group and the Company lease warehouse facilities and commercial buildings under operating lease. The leases are normally for a period of 5 to 10 years, with an option to renew the lease after that date. Lease payments are increased every year to reflect market rentals.

Leases as LessorThe Company leases out their investment property and commercial buildings. The leases are normally for a period of 5 years with an option to renew after that date.

The rate is increased on an annually basis to reflect market rate.


31 MAJOR SHAREHOLDERSThe major shareholders of the Company and their holdings are as follows:

· Foods Div Ltd – 33.73%

· Altima Ltd – 13.07%

· National Pension Fund – 7.86%

· Swan Life Ltd – 6.35%

· Excelsior United Development Companies Limited – 5.53%

32 CAPITAL COMMITMENTSCapital expenditure authorised at the reporting date but not yet contracted for is as follows:


2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000

Property, plant and equipment 192,600 135,733 159,000 124,300

33 CONTINGENT LIABILITIESAt the reporting date, the Group had contingent liabilities in respect of company guarantees arising in the ordinary course of business from which it is anticipated that no material liabilities will arise. The Group had given company guarantees amounting to Rs 5.3million (2015 - Rs 3.8 million) in favour of third parties.

34 FINANCIAL GUARANTEEInnodis Ltd, the holding company, has confirmed through a letter of financial guarantee, that it will financially be supporting Supercash Ltd, HWFRL Investments Ltd and Mocambique Farms Limitada to enable them to meet their obligations as and when they fall due, for a period of more than twelve months.


THREE YEAR SUMMARY

2016 2015 2014

CONSOLIDATED Rs’000 Rs’000 Rs’000

Issued share capital 367,303 367,303 367,303 Share premium 5,308 5,308 5,305 Revaluation reserve 342,891 387,802 394,956 Foreign currency translation reserve (24,886) (11,137) (729)Retained earnings 1,018,147 951,976 884,333 Profit before income tax 167,489 155,898 165,668 Profit after tax attributable to owners of the company 112,591 116,619 115,714 Dividends proposed and paid 95,226 99,080 94,767 Revenue 4,286,989 4,293,739 4,193,470 Non-current assets 1,681,817 1,702,517 1,730,550 Current assets 2,082,945 2,012,850 2,042,067 Capital and reserves 1,708,835 1,701,252 1,651,171 Non-controlling interests 143,663 198,875 186,916 Non-current liabilities 347,905 512,209 329,505 Current liabilities 1,564,359 1,303,031 1,605,025

2016 2015 2014

SEPARATE Rs’000 Rs’000 Rs’000

Issued share capital 367,303 367,303 367,303 Share premium 5,308 5,308 5,308 Revaluation reserve 321,979 332,197 336,030 Retained earnings 908,441 825,709 826,920 Profit before income tax 156,258 58,052 160,837 Profit after income tax 132,544 50,101 148,094 Dividends proposed and paid 67,951 67,951 67,951 Revenue 2,632,082 2,866,966 2,847,293 Non-current assets 1,475,019 1,257,196 1,349,559 Current assets 1,488,622 1,558,649 1,562,359 Capital and reserves 1,603,031 1,530,517 1,535,561 Non-current liabilities 233,319 424,848 232,926

Current liabilities 1,127,291 860,480 1,143,431

Number of ordinary shares issued 36,730,266 36,730,266 36,730,266

NOTES

INNODIS ANNUAL REPORT // 2016134 2016 // INNODIS ANNUAL REPORT

2016 // INNODIS ANNUAL REPORTINNODIS ANNUAL REPORT // 2016

NOTES NOTES

INNODIS ANNUAL REPORT // 2016

NOTES

GPO Box 841Innodis BuildingCaudan, Port-LouisMauritius

T. (+230) 206 0800F. (+230) 466 5253

[email protected]

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