Omnicane annual · PDF fileOther Statutory Disclosures 66 Certificate of Company Secretary 67...

2010Omnicane

annual RepORt

Group Structure 04 Administration 04 Group Profile 2010 06 Board of Directors 08 Senior Management 09 Snapshots 10 Operating Locations & Operations 14 Chairperson’s Report 17 Financial and Operations Data 18 Key Figures 19 CeO’s Review of Operations 21 energies Integration Chart 38 Corporate Governance Report 40Senior Management Profile 52 Shareholders Analysis 65

Other Statutory Disclosures 66 Certificate of Company Secretary 67 Independent Auditors’ Report 68Statement of Comprehensive Income 69 Statement of Financial Position 70 Statement of Changes in equity 71 Statement of Cash Flows 72 Notes to Statement of Cash Flows 73 Notes to the Financial Statements 74 Notice of Meeting to Shareholders 115 Proxy Form for 85th Annual Meeting 117

CBO Carbon burn-outOMOL Omnicane Milling Operations LimitedOTEOL Omnicane Thermal energy Operations Limited

Table of Abbreviations

MTMD Mon Trésor and Mon Désert LimitedMDIT Mauritius Development Investment TrustPWS Plantation white sugar

OAOL Omnicane Agricultural Operations LimitedOMCL Omnicane Management and Consultancy LimitedUSA Union St AubinVRS Voluntary Retirement Scheme

Contents 2010OMnICAnE ANNUAL RePORT

Dear Shareholder,

The Board of Directors is pleased to present the Annual Report of Omnicane Limited for the year ended 31 December 2010.

This report was approved by the Board of Directors on 29 March 2011.

Kishore Sunil Banymandhub Jacques M. d’UnienvilleChairperson Chief Executive Officer

Legal Advisers

Robert Ahnee, CSK

De Comarmond & Koenig

Benoit Chambers

Bankers

AfrAsia Bank Ltd

Barclays Bank plc

SBI (Mauritius) Ltd

Bramer Banking Corporation Ltd

Bank One Limited

The Hongkong and Shanghai

Banking Corporation Ltd

The Mauritius Commercial Bank Ltd

Mauritius Post and Cooperative Bank Ltd

State Bank of Mauritius Ltd

Banque des Mascareignes Ltée

Habib Bank Ltd

Corporate Advisers

Infinite Corporate Finance Ltd

Notary

etude Maigrot

OMnICAnE LIMITED

Cane Growing

Omnicane Agricultural Operations Limited 100%

Sugar Milling

Omnicane Milling Holdings (Mon Trésor) Limited 80%

— Omnicane Milling Operations Limited 16.85%

Omnicane Milling Holdings (Britannia Highlands) Limited 80%

— Omnicane Milling Operations Limited 83.149%

GROUP STRUCTURE

Managers & Secretaries

Omnicane Management & Consultancy Limited

Registered Office

7th Floor, Anglo-Mauritius HouseAdolphe de Plevitz Street, Port Louis

Postal Address

PO Box 159, Port Louis

Telephone

(230) 212 3251

Telefax

(230) 211 7093

e-mail

[email protected]

Transfer Secretaries

Mauritius Computing Services Ltd18 edith Cavell StreetPort Louis

Auditors

BDO & Co

ADMInISTRATIOn

Energy Production

Omnicane Thermal Energy Holdings (St Aubin) LImited 100%

— Omnicane Thermal Energy Operations (St Aubin) Limited 60%

Omnicane Holdings (La Baraque) Thermal Energy Limited 100%

— Omnicane Thermal Energy Operations (La Baraque) Limited 60%

Haulage

Omnicane Logistics Operations Limited 100%

Other Activities

Exotic Exports Ltd 100%

Floreal Ltd 100%

09Omnicane Annual Report 201008 Omnicane

Annual Report 2010

OmnicaneManagement & Consultancy

Limited

OmnicaneLimited

OmnicaneHoldingsLimited

Coal Terminal (Management)

Co. Ltd.

FlorealLimited

OmnicaneMilling

OperationsLimited

OmnicaneAgricultural Operations

Limited

FAW Investment

Limited

100%

100%

60%

23.37%

70.25%

83.15%

80%

16.85%

80%

100%

100%

100%

Omnicane Thermal Energy

Operations (La Baraque)

Limited

Omnicane

Thermal Energy

Holdings (La Baraque)

Limited

OmnicaneMilling

Holdings(Britannia Highlands)

Limited

OmnicaneMilling

Holdings(Mon Trésor)

Limited

Exotic Exports Limited

100%

OmnicaneLogistics

OperationsLimited

100%

17.35%

60%


Holdings (St Aubin)

Limited


Operations (St Aubin)

Limited

100%


Annual Report 2010

Board of Directors Senior Management

NON-eXeCUTIVe CHAIRPeRSON

Kishore Sunil BanymandhubNon-executive Chairperson

eXeCUTIVe

Jacques M. d’UnienvilleBComChief Executive Officer

nelson MirthilFCCAChief Financial Officer

NON-eXeCUTIVe

Premsagar Bholah, OSK(Alternate: Chandan Lautan)FCCAChief Operating Officer, Sugar Investment Trust

Marc Hein(Alternate: Nishi I. Vythilingum-Kichenin)LLB (Hons), Licence en droitBarrister, Head of Jurisconsult Chambers

Georges Leung ShingBSc (econ), FCA, ATIIConsultant

Hugues Maigrot, GOSKNotary Public

Jacques de navacelleMaîtrise de philosophieChief executive Officer, Mauritius UnionAssurance Co. Ltd

Ritesh Sumputh(Alternate: Geerendra Gocool)LLB (Hons)Barrister

Bertrand ThevenauGeneral ManagerTropic Knits Limited

Pierre M d’UnienvilleManaging Director, Infinite Corporate Finance Ltd

Anbanaden VeerasamyPermanent SecretaryMinistry of Social Security, National Solidarity andSenior Citizens

The following directors held office at 31 December 2010:

at 31 December 2010at 31 December 2010


Annual Report 2010

nAME POST JOInED

D’UnIEnVILLE, Jacques M. Chief Executive Officer 2005

AH-CHAM, Eddie Company Secretary 1996

AUDIBERT, Francois Chief Operations Officer, Agricultural Operations 1977

AUFFRAY-MOOnIEn, SabineHuman Resources Coordinator, Milling Operations - La Baraque

1997

AUTREY, Jean Claude Science and Technology Coordinator 2008

BOREL, EmmanuelPower Plant Manager, Thermal Energy Operations (La Baraque)

2006

CABOCHE, Jean Luc Site Manager, Milling Operations - St Aubin 1991

CALLEECHURn, PrithvirajAssistant Plant Manager, Thermal Energy Operations (La Baraque)

2007

CHASTEAU DE BALYOn, Gérard Chief Strategy Officer 2009

DALAIS, Jocelyn Estate Accountant, Agricultural Operations 1980

DE GUARDIA DE POnTE, JosephGarage and Transport Manager, Agricultural Operations- Britannia

1990

DOOKHUn, Avinash Group Systems Administrator 2007

FAYOLLE, LindsayOperations Manager, Milling Operations - La Baraque

1976

GOUPILLE, Roger MéeGarage and Transport Manager, Agricultural Operations - Mon Trésor

1992

GREnADE, SylvainOperations Accountant, Milling Operations - La Baraque

1987

JULIEn, Jean PierreMaintenance Manager, Milling Operations - La Baraque

1997

KHAn ITOOLA, Rechard Group Database Administrator 1988

KOnG WIn CHAnG, JackChief Operations Officer, Milling Operations - La Baraque

1975

LUTCHMAnEn, Rudley Financial Accountant 2004

MAMET, Patrick Field Manager, Agricultural Operations, Britannia 1980

MAUREL, GuyTechnical Manager (Projects), Milling Operations - La Baraque

1973

MIRTHIL, nelson Chief Finance Officer 2003

MOHUn, navinduth Internal Auditor 2005

MOTET, Jean MarcField Manager, Agricultural Operations, Mon Trésor

1975

nG MAn CHUEn, Jean LucProject & Finance Accountant, Milling Operations - La Baraque

2003

PLAnCHE, Gaëtan Chief Purchasing Officer 1971

RAMLUGOn, RajivsinghSafety & Environmental Manager, Milling Operations - La Baraque

2007

ROBERT, FrédèricPlant Manager, Thermal Energy Operations (St Aubin)

2005

SAGnIER, PierreProject Development Manager, Thermal Energy Operations (La Baraque)

2008

SEEBARUTH, Oudesh Group Accountant & Head of Treasury 1989

SEELARBOKUS, HahmidHuman Resources Manager, Agricultural Operations

2000

SOOBHAnY, ImranFinance Manager, Thermal Energy Operations (La Baraque & St Aubin)

2007

THEVEnAU, Daniel Site Manager, Milling Operations - La Baraque 1978

He Jean-François Dobelle, Ambassador of France (left) and colleagues, with Mr Jacques M. d’ Unienville, the Group’s CeO.

Opening ceremony of the annual conference of the Federation of SADC Sugar Producers.

Hon. Satya Veyash Faugoo, Minister of Agro-Industry and Food Security (5th from left), watching sorting of potato tubers with the Group’s CeO.

The newly built sugar refinery with its state-of-the-art infrastructure and equipment.

The control room of the sugar refinery.

He Bian Yanhua (centre), Ambassador of the People’s Republic of China with Mr Jacques M. d’ Unienville (left), Group’s CeO and Mr Jack Kong Win Chang (right), COO of Omnicane Milling Operations Limited.

He Alessandro Mariani (left), head of the delegation of the european Union, Dr Tjaša Živko and the Group’s CeO.

TECHNOLOGY

2010Snapshots


Annual Report 2010

PERSONALITIES

Members of the South African Canegrowers Council at the power plant of Omnicane (La Baraque).

2010Snapshots

Visit of members of the Crève Coeur Citizens Association.

Ceremony on the final day of milling at the Union St Aubin factory on 7th December 2010, after 162 years of operation.

Mrs Danwatee etwary receiving the keys to her new house from Hon. Dr Arvin Boolell (right), Minister of Foreign Affairs, Regional Integration and International Trade in the presence of Hon. Xavier Luc Duval, GCSK (left), Vice-Prime Minister and Minister of Social Integration and economic empowerment, Mr Alain Auriant, President of the Mouvement Forces Vives Quartier eDC Rose-Belle and Mr Jacques M. d’Unienville, CeO of Omnicane.

Members of the winning team, of Royal College Curepipe, with (left to right) Mr Jacques M. d’Unienville, CeO of Omnicane, Mr Jacques Dinan, coordinator of the Omnicane Award, Lady Sarojini Jugnauth,the Rt Honourable Sir AneroodJugnauth, President of the Republicof Mauritius, Mrs Zybia Issack, French teacher, and Mr Allybye Aubdoolah, economics teacher, both of Royal College Curepipe.

Searching forbones of the dodo and ofother extinct species atMare aux Songes by amultidisciplinary team ofscientists fromthe Netherlands and theUnited Kingdom.

Signature of agreement between the Mauritius Family Planning Welfare Association and Omnicane Foundation for the financing of a campaign of immunisation against cervical cancer.

Pupils attending courses in Information Technology at La Baraque Learning Centre, a joint venture between Omnicane Foundation and eNL Foundation.

Donation of 15-seat utility van to the Mauritius Heart Foundation.

Prize-giving ceremonyfor the village of L’escalier’s best-ranking pupils at theCertificate of Primaryeducation examinations.

Allocation of plots of land to employees in the framework of the VRS, eRS and Blueprint schemes.

REFORM PROCESS

SOCIAL RESPONSIBILITY


Annual Report 2010

Cane Sugar Energy Haulage Flowers Growing Milling Production

Mon Trésor

Britannia

Highlands

Benares

Omnicane Milling Operations Limited

Omnicane Thermal Energy Operations (St Aubin) Limited

Omnicane Thermal Energy Operations (La Baraque) Limited

Omnicane Logistics Operations Limited

Exotic Exports Limited

PLAINES WILHEMS

BLACK RIVER

SAVANNE

GRAND PORT

PORT LOUIS

Port Louis

Highlands

Riche en Eau

Mon Trésor

BritanniaLa Baraque

Benares

Union St Aubin

CaneGrowing

EnergyProduction

SugarMilling

LogisticsFlowers

Mon Trésor

Britannia

Highlands

Benares

Omnicane Milling Operations Limited



Exotic Exports

Omnicane Logistics Operations Limited

OPeRATING LOCATIONS

& OPeRATIONS


Annual Report 2010

Chairperson’s Report

17Omnicane Annual Report 2010

Kishore Sunil BanymandhubChairperson

26 March 2010

As a newcomer to the Board of Directors of Omnicane, I would like to pay tribute to my predecessors for their vision and commitment, which have transformed the Company from a basic-commodity producer into a diversified entity.

This transformation has entailed the modernisation of the Company’s cane-production and -processing methods and facilities, the rationalisation of its milling operations into a single unit capable of handling forty percent of the country’s production of cane, the construction of a state-of-the-art sugar refinery and feeder warehouse, and one of the largest bagasse-and-coal cogeneration power plants in the world. Food production meanwhile remains an important activity for the Company, which is committed to crop diversification with large-scale potato production in pursuance of the country’s food-security objectives.

The Omnicane vision, as established in the branding exercise carried out in mid-2009, is to make the utmost sustainable use of the natural resources at the Company’s disposal for the benefit of all – and more crucially, to develop and produce cleaner, more reliable energy to power the nation’s further economic development. Sugar cane being one of the most versatile sources of energy under the sun, the production of energy is today the most important economic driver of our Company.

As the area under cane recedes in Mauritius for various reasons mainly associated with development, it is important to increase productivity in a sustainable way to compensate for the loss in cultivated land areas. Our strategic vision includes expansion into new ventures in Mauritius. The last remaining project in the transformation of the Company involves the construction of a bioethanol distillery of a capacity of 22,000 m3 annually. This will be implemented once agreement is reached with Government and all stakeholders.

The Company’s extensive property holdings also represent an area for development. We are in the process of identifying the various opportunities which exist in this area, with the aim of striking a balance between generating immediate cash revenues to fund our other projects and undertaking projects that will ensure a steady stream of revenues from this activity over future years. Our interest also lies in wind energy, in pursuance of the vision of Mauritius as an île durable.

Our vision extends beyond our borders wherever suitable opportunities exist. As a first step in this direction, the Company has entered into an agreement with a company in Kenya for the management of a sugar-cane cluster aiming to produce some 80,000 tonnes of sugar annually, as well as electricity through cogeneration and bioethanol from molasses.

On the issue of Governance, the Company is constantly reviewing its policies and practices to ensure that it complies with the best standards of corporate governance, audit and risk management. Appropriate committees of the Board have been established and meet regularly in order to achieve these objectives.

Finally, Omnicane would not be fulfilling its role as a leading economic operator if it did not have at heart the well-being of the communities among which its business units operate. This we do through our Corporate Social Responsibility (CSR) programme, with a whole range of specific initiatives aimed at poverty alleviation and the promotion of health, education and sports at both local and national level.

In conclusion, I would like to commend the Chief executive Officer for his dynamism, his spirit of entrepreneurship, and his human touch. To all the Company’s employees, I would like to convey the appreciation of the Board for their commitment to our objectives and their valued support in 2010.

CHAIRPERSOn’SREPORT

Kishore Sunil Banymandhub Chairperson

16 Omnicane Annual Report 2010

“Our vision extends beyond our borders wherever suitable opportunities exist. As a first step in this direction, the Company has entered into an agreement with a company in Kenya”

“On the issue of Governance, the Company is constantly reviewing its policies and practices to ensure that it complies with the best standards of corporate governance, audit and risk management.”

“Omnicane would not be fulfilling its role as a leading economic operator if it did not have at heart the well-being of the communities among which its business units operate.”

Aa

2008 2009

Omnicane market price per share (Rs).

2010

7478

62

2008 2009

Omnicane return on equity (%).

2010

4.47

4.404.

80

earnings per share (Rs).

2008 2009 2010

3.713.864.24

Sugar produced (tonnes per hectare).

20102008 2009

6.678.

30

9.21

7.40 9.

19

10.5

2

6.18 8.

68

9.44

Cane production (tonnes per hectare).

20102008 2009

64.9

581.6

0 95.2

6

66.5

0 87.5

7 104.

64

58.8

2

81.7

2

94.3

4

Sugar accrued (tonnes).

20102008 2009

7, 6

61

531

8, 2

70

453

11, 1

25 12, 2

95

11, 4

97

7,17

2

555

Mon Trésor Britannia Highlands



Milling 2008 2009 2010

Sugar produced by the mills 147,522 149,364 138,781

Sugar refined - 300 104,483

Sugar accrued (@98.5 pol) as miller (tonnes) 32,169 32,758 30,209

Cane crushed 1,495,437 1,477,545 1,355,351

OPERATIOnAL DATA

Growing 2008 2009 2010

Area harvested (hectares) 2,878 2,817 2,779

Cane production (tonnes) 248,092 260,948 237,610

Sugar produced (tonnes) 24,765 26,946 24,645

Sugar accrued as planter (tonnes) 19,317 21,018 19,224

Sugar yield per hectare 8.6 9.6 8.9

Area harvested mechanically / total harvest area (%) 57.28 59.25 58.15

energy 2008 2009 2010

GWH exported 743 617 656

Coal 602 485 527

Bagasse 141 132 129

FInAnCIAL DATA

2008 2009 2010

earnings per share (Rs) 4.24 3.86 3.71

Dividend per share (Rs) 2.00 2.00 2.50

Return on equity (%) 4.80 4.40 4.47

Net asset value per share (Rs) 87.90 86.88 83.13

Gearing (%) 51.99 53.16 52.12

effective tax rate (%) (2.50) 6.50 29.58

No. of ordinary shares (‘000) 67,012 67,012 67,012

KEY FIGURESOPERATIOnS & FInAnCIAL DATA


Annual Report 2010

“The Company’s main focus for the year under review was the sugar refinery’s aim of attaining cruising speed after exporting its first consignment to europe in December 2009.”

“the closure of the Union St Aubin factory […] constitutes the conclusion of the industry’s centralisation programme for the south of Mauritius, whose entire sugar-cane production will now be processed by Omnicane at La Baraque.”

“the Company’s industrial complex at La Baraque now lacks only a bioethanol distillery for the Omnicane flexi-factory concept to be fully realised. Significant progress was made towards this goal”

“as a result of adverse weather conditions during both the growth and the maturing periods, the Company’s cane and sugar outputs were lower than in 2009”

The Company’s main focus for the year under review was the sugar refinery’s aim of attaining

cruising speed after exporting its first consignment to europe in December 2009. However,

unexpected technical problems linked to a steep learning curve constituted major obstacles

towards that key objective, and it was only with the expertise of external consultants of

international repute in sugar refining and related aspects, as well as the commitment of the

refinery’s employees at all levels, that sources of problems were identified and corrective

measures taken. Those measures were implemented throughout the year and into 2011. At the

end of the year, 104,483 tonnes of refined sugar had been produced, of which 101,871 tonnes

were exported to europe and 2,612 tonnes were sold domestically.

As in 2009, some 61,175 tonnes of cane syrup from the Union St Aubin factory were successfully

processed at La Baraque. However, in line with the Multi Annual Adaptation Strategy Sugar

Sector 2006–2015 Action Plan, the Company made a formal application to Government in

October 2010 for the closure of the Union St Aubin factory. This request, which was met in

March 2011, constitutes the conclusion of the industry’s centralisation programme for the

south of Mauritius, whose entire sugar-cane production will now be processed by Omnicane

at La Baraque.

With its fully integrated cane-crushing and sugar-production facilities, bulk PWS warehouse of

55,000-tonne capacity, sugar refinery, and cogeneration power plant, the Company’s industrial

complex at La Baraque now lacks only a bioethanol distillery for the Omnicane flexi-factory

concept to be fully realised. Significant progress was made towards this goal with the creation

of Omnicane ethanol Holding Limited, with a proposed shareholding open to all stakeholders

of the industry, to acquire control of Alcodis Ltd, and the completion of plans to build a distillery

to produce bioethanol from molasses. Subject to the necessary regulatory authorisations,

construction of the distillery could be initiated in mid-2011.

Another new venture successfully pursued was our project of putting up a special plant for

burning out residual carbon in the ashes left over from the burning of coal at our power plants,

both to render the final ashes thus produced suitable as an additive to bulk cement for the

construction industry and to produce additional energy. All the studies and tests carried out in

regard to this project were conclusive.

On the agricultural side, as a result of adverse weather conditions during both the growth and

the maturing periods, the Company’s cane and sugar outputs were lower than in 2009, when

they were among the best in the island. Potato production, for its part, was practically of the

same order as in 2009, having suffered, also as a result of unfavourable weather conditions,

from severe infection by bacterial wilt, which affected both the tonnage and the quality of the

tubers harvested. Our mechanisation programme was pursued, however, and the crop is now

totally mechanised. We also pursued our involvement in CopéSud, the cooperative company

regrouping potato producers in the south of Mauritius, and made use of the cooperative’s cold-

storage facilities erected on the premises of our former sugar factory at Britannia.

The Company’s energy segment operated well within the parameters of its respective units’

power-purchase agreements with the CeB. Sales of electricity during the year, in terms of the

relevant plant’s capacity, was of the order of 84% for La Baraque and 81% for St Aubin. Despite

some major maintenance work to be carried out at the La Baraque plant in 2011, after 5 years

of operation, we are confident that the segment’s overall results can be maintained at the same

level as in 2010.

OVeRVIeW

CeO’S ReVIeW OF OPeRATIONS


CeO’s Review of Operations

CEO’SREVIEW OF OPERATIOnS

Jacques M. d’Unienville Chief executive Officer


FINANCIAL HIGHLIGHTS

Statements of Comprehensive Income

Group turnover rose by Rs 287.6 million as a consequence of a full year of operation for the refinery and higher sales of electricity. The full effect of these factors was, however, partly offset by a reduction in the price of raw sugar and an inferior sugar crop. The energy segment continued to account for an important share of total turnover (69.6%, after 71.3% in 2009), although, with the refinery soon to operate at full capacity, the contribution of the sugar sector should rise to about 37% by the end of 2012.

Operating profit was down by Rs 82.1 million to Rs 615.2 million, mainly as a result of a reduction of Rs 1,200 per tonne in the price of raw sugar, which stood at Rs 13,500 per tonne (2009: Rs 14,700 per tonne). In addition, following an agreement between the Mauritius Sugar Producers’ Association and the industry’s trade unions, a general salary increase of about 11% was granted to all employees, resulting in a significant rise in their emoluments.

Finance costs were down by Rs 131.1 million as a result of improved cash flow due to the sale of our shareholding in MDIT, a sale of land at La Cambuse, and the annual servicing of the Group’s energy companies’ debts. An amount of Rs 70.5 million relating to a gain realised on exchange is included against finance costs.

exceptional items rose to Rs 372.9 million (2009: Rs 285.8 million), mainly as a result of the sale of 65 acres of land at La Cambuse for a net profit of Rs 293.7 million. Other, smaller plots of land, situated in the region of Highlands, Ébène and Deux Bras were also sold.

Taxation increased considerably, to Rs 132.8 million from Rs 22.6 million in 2009, as a result of a deferred tax charge arising from the subsidiaries Omnicane Thermal energy Operations (La Baraque) Limited and Omnicane Milling Operations Limited.

earnings Per Share and Dividend Distribution

earnings per share were marginally down, by 3.9% to Rs 3.71 (2009: Rs 3.86), but dividend per share was increased to Rs 2.50 (2009: Rs 2.00).

The dividend payment represented 67.3% of distributable earnings for the year (51.8% for 2009).

Statements of Cash Flows

The negative amount of cash and cash equivalents at the start of the year (Rs 1,174.5 million) was reduced considerably, to Rs 389.1 million at the end of the year.

The main movements to be noted in the Statement of Cash Flows are as follows:

• A net inflow of Rs 682.1 million from operating activities (2009: Rs 510.2 million), due to improved working-capital requirements and lower interest payments

• A net inflow of Rs 112.2 million from investing activities (as compared with an outflow of Rs 611.7 million in 2009), due to proceeds received from the sale of land at La Cambuse and lower capital expenditure

• A marginal net movement in cash flow from financing activities, as a long-term loan was used to refinance the loan taken for the construction of the refinery.

Statements of Financial Position

The Group’s assets are underpinned primarily by its land base and its milling and energy companies’ plant and equipment.

The Group’s total assets fell by Rs 372.4 million to Rs 14.8 billion, mainly as a result of reduced trade and other receivables and depreciation of property, plant and equipment.

The Group’s gearing ratio of 53.16% (inclusive of cash at bank) at the end of 2009 fell to 52.12% at the end of 2010 as a result of reducing our bank loans. However, the full effect of the drop in gearing ratio was offset by the deferred tax adjustment made as a result of the new income tax introduced in the Finance Act 2010 and relating to future gains from immovable property.

Net Asset Value (NAV)

The effect of the deferred tax adjustment of Rs 421.5 million on future gains on immovable property, partly offset by a revaluation-of-investment adjustment of Rs 117.4 million, dragged the Group’s NAV per share down to Rs 83.13 (2009: Rs 86.88).

“Group turnover rose by Rs 287.6 million as a consequence of a full year of operation for the refinery and higher sales of electricity.”

“Finance costs were down by Rs 131.1 million as a result of improved cash flow”

“earnings per share were marginally down, by 3.9% to Rs 3.71 (2009: Rs 3.86), but dividend per share was increased to Rs 2.50 (2009: Rs 2.00)”

The Semdex, the index of the Stock exchange of Mauritius, rose by 18.46% during the 2010 financial year, whereas the share price of Omnicane Limited gave up 5.13% during the same period. The Company’s share price in fact bottomed at Rs 57.00 on 27 August 2010 and picked up as from 12 October 2010 to reach Rs 74.00 at the end of the year (end-2009: Rs 78.00).

The overall below-par performance of Omnicane’s share price in 2010, as compared with the Semdex, can be explained by several factors, including notably the euro crisis, the appreciation of the rupee, which further reduced sugar revenue, forecasts of a lower sugar crop, and the refinery not operating at full capacity.

Furthermore, the banks, which are the heavyweights on the Stock exchange, were the power horses that pulled the Semdex up with good results.

Omnicane ranked 9th in terms of market capitalisation and 14th in terms of annualised return since listing, for 2010.

Debt Analysis

The Group has invested massively since 2005 to realise the Sugar Reform Plan in the south of Mauritius through centralisation, the upgrading of its milling infrastructure and capacity at La Baraque, and the construction of two power plants. The latter were initially 80% project-financed through long-term debts of 15 years and are ring-fenced projects where the risks are mainly on the project cash flows with no recourse to the shareholders.

The Group’s gearing was up to 53.16% in 2009 when Omnicane acquired a controlling interest in the energy and milling companies, thus consolidating their debts. The gearing was, however, reduced to 52.12% as at 31 December 2010, when net debt was down by Rs 543.6 million.

The Group has a strategy to reduce its overall debt, mainly at the level of Omnicane Limited, through the sale of non-strategic sugar land. The equity contribution of the SIT and small planters in the share capital of the refinery will also contribute to further reducing debts.

At the level of the Group’s other entities, where the debt is on a project-financed basis, repayment will be made in line with the tenure of the loans, through the cash flow generated.

A breakdown of the Group’s debts by segment is shown below:

“Omnicane ranked 9th in terms of market capitalisation and 14th in terms of annualised return since listing, for 2010.”

“The Group has invested massively since 2005 to realise the Sugar Reform Plan in the south of Mauritius through centralisation, the upgrading of its milling infrastructure and capacity at La Baraque, and the construction of two power plants.”

CeO’s Review of Operations CeO’s Review Of Operations

237, 910

260, 948

248, 092

Total cane harvested (tonnes)

2008

2009

2010

2, 779

2, 817

2, 878

Total area harvested (hectares)

2008

2009

2010


Annual Report 2010

Acquisition Loan(*) Sugar Energy Total

2010 2009

Rs ’000 Rs ’000 Rs ’000 Rs ’000 Rs ’000

Short term borrowings 130,406 274,107 177,696 582,209 1,080,510

Long term borrowings 538,142 998,105 3,555,698 5,091,945 4,351,799

Bank Overdraft - 1,092,826 6,706 1,099,532 1,985,266

Cash resources - (96,166) (614,291) (710,457) (810,737)

668,548 2,268,873 3,125,809 6,063,229 6,606,838

(*) Loan raised by Omnicane Limited in 2008 to acquire a controlling interest in milling and energy entities.

Share Price Performance from Jan 2010 - Dec 2010

90.0

80.0

70.0

60.0

50.0

40.0

30.0

20.0

10.0

0.0

1-Ja

n

26-F

eb

30-M

ar

30-A

pr

31-M

ay

30-J

un

30-J

ul

31-A

ug

30-S

ep

29-O

ct

30-N

ov

30-D

ec

2,000.0

1,950.0

1,900.0

1,850.0

1,800.0

1,750.0

1,700.0

1,650.0

1,600.0

1,550.0

SemdexOmnicane

eNeRGY

Omnicane has three units involved in electric-power generation. They are owned and operated by Omnicane Milling Operations Limited, Omnicane Thermal energy Operations (St Aubin) Limited, and Omnicane Thermal energy Operations (La Baraque) Limited, respectively.

Omnicane Milling Operations Limited generates electric power with a 12-MW backpressure-type bagasse cogeneration plant. It supplies the sugar mill of Union St Aubin with its steam and electricity requirements, and any surplus electricity that it produces is exported to the national grid.

Omnicane Thermal energy Operations (St Aubin) Limited is equipped with a 34.5-MW condensing-type coal generator. It has been in operation since 2005.

Omnicane Thermal energy Operations (La Baraque) Limited is one of the largest coal/bagasse cogeneration plants in the world and is equipped with two units of 44.5 MW each. These are of the condensing type with extraction and use either bagasse or coal as fuel. During the 2010 sugar-cane season, the plant received 348,000 tonnes of bagasse from the sugar mill at La Baraque.

The total of electricity exported by Omnicane in 2010 (656,310 MWh) was higher than in 2009 (617,721 MWh) as a result of increased energy demand from the Central electricity Board (CeB).

The operating profit of Omnicane Thermal Operations (St Aubin) Limited decreased slightly, to Rs 194.1 million from Rs 208.9 million in 2009. Finance costs were slightly down, to Rs 100.9 million, consisting mainly of loan repayments, and its net profit for the year amounted to Rs 81.9 million.

The operating results for 2011 are expected to be slightly better than in 2010, mainly because of lower finance costs.

Omnicane Thermal energy Operations (La Baraque) Limited generated a turnover of Rs 1.6 billion for the year (2009: Rs 1.5 billion). The operating profit was Rs 553.4 million (2009: Rs 484.1 million) whilst finance costs, consisting mainly of loan repayments, were Rs 233 million. Net profit for the year was Rs 141.5 million, slightly higher than the Rs 130.3 million achieved in 2009.



In 2010, Omnicane’s

power plants exported

656 GWh to the national grid.

656 GWh

CeB and other IPPs - 71.94 %

Omnicane Thermal energy Operations (St Aubin) Limited - 8.37 %

Omnicane Milling Operations Limited - 0.63 %

Omnicane Thermal energy Operations (La Baraque) Limited - 19.06 %

Power PlantElectricity

Exported in 2010 (MWh)

Exported Electricity as a Percentage of

Total Electricity Generated in

Mauritius in 2010


445,758 19.06 %


195,712 8.37%

Omnicane Milling Operations Limited 14,839 0.63 %

Total 656,310 28.06 %

In 2010, the Group’s three power plants exported a total of 656,310 MWh of electricity to the national grid as follows:

AGRICULTURe

Sugar Cane

Growing

Abundant rainfall, in excess of 50% of the long-term mean, at the usually dry period between October and December 2009 provided a good start for the 2010 sugar-cane crop. However, rainfall recorded during the period from January to March was excessive, around 45% above the long-term mean, resulting in waterlogging and soil erosion in many areas of the estate lands. The adverse weather induced a decrease in sunshine hours, which were below normal during that period. The overall result was a reduction in cane growth in all areas, given that these adverse factors prevailed at the time when the crop is in its exponential period of biomass accumulation.

The maturation period was also affected by wet conditions from June to August, and the severe drought which occurred from September to December, although favourable to sucrose accumulation, was detrimental to the yield of late maturers and the start of the 2011 sugar-cane crop.

The 2,779 hectares harvested on the three operation sites of the Company produced 237,610 tonnes of cane, giving an average cane yield of 85.50 tonnes (2009: 92.63 tonnes) and a sugar yield of 8.87 tonnes (2009: 9.57 tonnes) per hectare. Sugar yield was lower by 7.3% in 2010.

As the drought conditions persisted in the early months of 2011, growth was considerably affected, especially in lowland areas. It is estimated that the output for the crop in 2011 will be 8–10% lower than that achieved in 2010.

Potatoes

Potato production by Omnicane in 2010 amounted to 2,050 tonnes, slightly less than the 2,100 harvested in 2009.

Plantation started at the end of April. However, the first fields planted in April and May were severely affected by bacterial wilt, which is favoured by high temperatures and excessive rainfall.

The dry weather conditions which prevailed from September to December were also detrimental to the crop, resulting in both lower yield and poorer quality.

The Company’s involvement in CopéSud was pursued, and part of the crop was stored in the cold rooms of that company in the former sugar factory at Britannia, which were used to their full capacity of 2,500 tonnes by the southern region’s various producers.

With the closure of Union St Aubin

in the framework of the reform

process, one single mill, at

La Baraque, will henceforth be in

operation in the south of Mauritius.

One



In 2010, Omnicane’s factories at La Baraque and

Union St Aubin processed 1,355,351 tonnes of sugar cane.

1,355,351 tonnesAverage yield(tonnes cane per hectare)

85.5

92.6

86.2

138, 770

147, 522

149, 364

2008

2009

2010

Sugar yield(tonnes sugar per hectare)

8.9

8.6

138, 770

149, 364

147, 522 2008

2009

2010

9.6

SUGAR MILLING

In 2010 Omnicane’s two factories at La Baraque and Union St Aubin started their operations on 9 and 10 June respectively. They crushed 1,355,351 tonnes of cane overall (1,047,568 tonnes at La Baraque and 307,783 tonnes at Union St Aubin), from which the factory at La Baraque produced 137,305 tonnes of plantation white sugar (PWS). As in 2009, the syrup (61,175 tonnes) made from the cane crushed at Union St Aubin was transferred to La Baraque for further processing.

The refinery produced 104,483 tonnes of white refined sugar for export and 2,612 tonnes for the domestic market.

Comparative Performance Data

Cane crushed was 8.2% less than in 2009, when total cane processed was 1,477,545 tonnes. A reduction of about 1,334 ha in area harvested, from 19,903 ha in 2009, contributed to the lower tonnage.

Adverse weather conditions, however, both early in the year in the growth phase and early in the harvest season, were the main culprit, and dry conditions in the second half of the crop season was another major factor responsible for lower cane production in the south of Mauritius. Drought and higher-than-normal temperatures caused some cane desiccation, resulting in higher richesse, which translated into an increased sugar extraction of 10.13% against 10.04 % the previous year. This was achieved despite repeated cane fires, mainly in the fields of small planters in the former factory areas of Mon Trésor and St Félix, which made it necessary to harvest a high percentage of immature cane with lower mixed juice purity.

It is of note that in 2010, factory stoppages due to lack of cane at La Baraque and Union St Aubin totalled 210 and 47 hours respectively, compared with 128 and 90 hours in 2009, whereas mechanical and electrical breakdowns accounted for 332 and 399 hours of stoppage respectively, compared with 224 and 435 hours in 2009.

The 2010 crop’s combined average crushing rate was 8,970 (2009: 9,116) tonnes per day, for a period of 154 (2009: 162) days. There were 36 stoppages, amounting to a total 173 hours, for lack of cane. Reduced mill extraction, at 97.3, was the same as the previous year and below the island’s mean of 97.6. Reduced overall recovery was at 86.0 again, the same as in 2009 and 0.1 below the island’s mean. energy produced by the Union St Aubin factory was only 14.8 GWh, down from 17.3 GWh in 2009 as a result of the lower tonnage of cane processed, which in turn meant less bagasse available for energy generation.

Capacity tests to crush more than 400 tonnes cane per hour (TCH) and 9,000 tonnes cane per day (TCD) were carried out at La Baraque during the weeks ending 30 October and 13 November and were conclusive. Cane reception during morning peak hours exceeded 600 TCH.

USA Factory Closure

In a letter dated 14 October 2010, Omnicane Milling Operations Ltd officially submitted a request to the Ministry of Agro-Industry and Food Security for the closure of the Union St Aubin sugar factory after the 2010 crop.

The decision for closure is in line with the Multi Annual Adaptation Strategy – Sugar Sector Action Plan 2006–2015 and is vital for the sector to remain sustainable and economically viable. It is worth noting that the eventual closure of Union St Aubin was taken into account during the design and upgrading stages of the factory at La Baraque, whose capacity was increased to 425 TCH, with peaks of 450 TCH.

It is to be noted that, as from crop 2009, Union St Aubin had already discontinued sugar production, and the totality of cane syrup it produced was transported by tanker lorries to La Baraque for further processing and transformation into refined sugar, with the boiling house at La Baraque therefore processing the equivalent of more than 450 TCH.

The closure of Union St Aubin implies that cane from the Union St Aubin factory area will be transported directly to the sugar factory at La Baraque as from crop 2011 via public and private roads. Steps will be taken to minimise traffic disturbance, especially during morning peak traffic hours.

A risk-management review has been initiated to ensure proper handling of any crisis, such as long breakdowns, that might occur.

Cane Unloading Zones and services to planters

All unloading/loading zones involved in the reception and transfer of cane across the Omnicane region are now being regrouped under a single Management. All logistics of cane handling, transfer and cost control are under review for the 2011 crop, taking into account the closure of Union St Aubin, which will entail the departure of some personnel under the Blueprint package and of 10 other staff whose contracts have expired.

Omnicane’s Planters Advisory Department is being reinforced, with the objective of giving more support in regard to cane cultivation to the small planters of our region.

Total sugar produced (@ 98.5 pol) as miller (tonnes)

138, 781

149, 364

147, 5222008

2009

2010

30,209

32,758

32,169

Sugar accrued (@ 98.5 pol)as miller (tonnes)

2008

2009

2010



SUGAR ReFININGThe Omnicane sugar refinery produces white refined sugar from plantation white sugar (PWS). The PWS produced but not refined during the crop period is stored in the PWS bulk feeder warehouse upstream of the refinery for refining during the intercrop period.

The refinery began production in 2009 and exported white refined sugar for the first time on 24 December 2009, in bulk in 25-tonne-capacity containers. A minor share of production is sold on the domestic market, packed in 50-kg bags.

The refinery’s production of 300 tonnes in 2009 was exported to the european market. In 2010, total production went up to 104,483 tonnes, of which 2,612 tonnes were sold domestically and 101,871 were exported to europe.

As a result of problems encountered with persistent lumping of the sugar exported to europe by both of Mauritius’s two refineries (Omnicane’s and FUeL’s), remedial measures were implemented in consultation with Südzucker, with whom the Mauritius Sugar Syndicate has an exclusive agreement for the purchase of exported Mauritian white refined sugar. To minimise the likelihood of caking at both refineries, the latter operated alternately at 50% and 85% capacity – with one operating at 50% and shipping its product direct to Südzucker’s customers while the other operated at 85% and shipped its product to Südzucker’s facilities in Rivalta, Italy, for rebagging, and vice versa.

A tentative programme was agreed with the Mauritius Sugar Syndicate, whereby the Omnicane refinery at La Baraque would produce 140,930 tonnes of refined sugar in 2011, including 6,000 tonnes for the domestic market.

A summary of our refinery’s past and forecast production is given below.

In 2010, our refinery produced 104,483 tonnes of

refined white sugar, of which 101,871 tonnes

were exported to Europe.

104,483 tonnes



Refined sugar (tonnes) 2009 (Actual) 2010 (Actual) 2011 (Forecast)

export 300 101,871 134,930

Local market - 2,612 6,000

Total refined sugar 300 104,483 140,930

Summary of Past and Forecast Sugar Production La Baraque Refinery

“In the framework of the retirement schemes […], plots of land, with amenities, were allocated to members of personnel taking advantage of these conditions”

“the Omnicane refinery at La Baraque would produce 140,930 tonnes of refined sugar in 2011”

“Valorisation of the Company’s land holdings in the south-east of Mauritius will be the subject of strategic thinking in 2011. Their proximity to the airport and to the beach”

SUGAR ReFINING (Continued)

The operation of the refinery has proved more intricate than initially anticipated for refined eeC Gd 2 sugar, especially with a new bagging system for transport in 25-tonne containers from Mauritius to europe.

In keeping with the refinery’s paramount goal of satisfying its customers’ requirements and delivering sugar at the expected standards, resort was made to experts of international repute in sugar-processing and refining as well as in instrumentation and automation. To minimise the risk of sugar-lumping and at the same time increase the refinery’s capacity to 750 tonnes per day, it was decided to implement straight 3 massecuite boiling, install a new Gaudfrin filter and five curing bins, and build an additional 2,500-tonne conditioning silo.

It is planned to commission the straight boiling system and the Gaudfrin syrup filter in May 2011, whereas the cold commissioning of the new installation for the refinery upgrade is scheduled for August 2011, with sugar-loading in early September 2011.

The new weekly production capacity will then be 4,550 tonnes on average.

Refinery Audits

Auditors of some Südzucker clients inspected our refinery and expressed satisfaction with the refinery’s quality-control procedures and food-safety environment.


CeO’s Review of OperationsCeO’s Review of Operations

LAND-DeVeLOPMeNT PROJeCTS

Morcellement projects

The Company’s land developments in 2010 were centred on Highlands, where progress of Phases III and V was on target. Phase III, which comprises 217 plots and had received its morcellement permit in February 2009, is practically completed. The Letter of Intent for Phase V, which consists of 101 plots, was issued in December 2009. The infrastructural works being undertaken allow for pre-sale agreements (bordereaux) to be issued to prospective buyers. The infrastructural works are scheduled to be completed in June 2011, whereas the final permits are expected during the final months of 2011.

During the first six months of 2011, application for various permits will be lodged for Phase IV of the Group’s land development in Highlands. This project of some 100 hectares will consist of five different working sites.

It is of note that the proximity of the Valentina–Verdun–Terre Rouge road to these sites will constitute an additional advantage for buyers.

Land Development Projects in the Framework of VRS2 and Blueprint

In the framework of the retirement schemes in force, both ‘voluntary’ (VRS) and ‘early’ (eRS), and in accordance with the regulations laid down in the Blueprint for the closure of factories, plots of land, with amenities, were allocated to members of personnel taking advantage of these conditions, as outlined hereunder.

Britannia and BenaresThe site agreed upon, located at Tyack, for the 209 former employees of Britannia Sugar estate and Benares Sugar Co. Limited, is being developed.

Infrastructural works, in accordance with the Letter of Intent issued by the Ministry of Housing and Lands on 21 October 2010, are to be completed by 20 January 2012 at latest.

Drawing of lots for the plots was carried out in the presence of Honourable Satya Veyash Faugoo, Minister of Agro-Industry and Food Security, on 20 December 2010.

Mon Trésor and Mon Désert

The sites for the 285 former employees of Omnicane benefiting from the VRS scheme are located at Mémoire, Plaine Magnien, and Trois Boutiques, Union Vale.

Sites for 140 beneficiaries in the framework of the Blueprint are located at Mémoire and Desplaces, in Plaine Magnien.

Infrastructural works have already been completed, and drawing of lots took place on 25 November 2010 in the presence of Honourable Satya Veyash Faugoo, Minister of Agro-Industry and Food Security.

The morcellement permit is awaited and, once received, will allow the drawing of title deeds in favour of the beneficiaries.

St FélixThe agreed site, of an extent of 12.6 hectares, for the 144 ex-employees of St Félix Milling Co. Ltd benefiting from Blueprint conditions, is located at Chemin Grenier.

Implementation of infrastructural works should start once the Letter of Intent, is issued.

OMOL La Baraque

The site for the housing estate of the 57 former employees who retired under the early Retirement Scheme (eRS) is located at Plein Bois and belongs to eNL Land Ltd (formerly The Savannah Sugar estates Co. Ltd). The Letter of Intent was issued on 5 October 2010. Infrastructural works will be initiated as from 2011.

Future Land Development Plans

Valorisation of the Company’s land holdings in the south-east of Mauritius will be the subject of strategic thinking in 2011. Their proximity to the airport and to the beach and the ease of access afforded to urban centres by the adjoining motorway contribute unquestionably to the tremendous potential of these land assets.


NeW PROJeCTS

Bioethanol Distillery

Omnicane ethanol Holding Limited has been set up to acquire control of Alcodis Ltd to produce ethanol in Mauritius. We are, however, still waiting for authorisations from the regulatory authorities before proceeding with implementation of the project.

The project consists in relocating part of the existing distillery equipment of Alcodis Ltd from Rose Belle to La Baraque. The fermentation section will be completely replaced, and a new state-of-the-art effluent-treatment plant will be built to ensure strict adherence to the national environmental standards pertaining to effluent release. Project costs include renovation of the existing equipment, construction of the new fermentation unit and effluent-treatment plant, a new dehydration unit, and plant automation.

The renovated distillery will be designed to process molasses accruing to the Mauritian community of planters (small, medium, and large) – i.e. up to 90,000 metric tonnes per year – to produce up to 22.5 million litres of ethanol annually.

Initially, the unit will process 65,000 tonnes of molasses annually to produce some 15 million litres of anhydrous ethanol. The ethanol produced will be sold locally and blended with gasoline for marketing as e10 fuel in Mauritius. Should more molasses be available for transformation, the excess ethanol produced will be exported to europe.

Government’s new policy, enunciated on 13 August 2010 by the Minister of Finance and indicating that an environmental fee will be levied on exports of molasses as from the 2012 crop to encourage local value addition in the form of e10 fuel, favours the production of dehydrated ethanol for that purpose.

Our ethanol company will produce liquid fertiliser and food-grade carbon dioxide in addition to ethanol.

The state-of-the-art distillery to be built at La Baraque

as the final step in the setting-up of the flexi-factory

will produce 22.5 million litres of hydrous bioethanol.

22.5 million litres



eNVIRONMeNTAL RePORTING

The stack emissions from the power plants of Omnicane Thermal energy Operations are monitored, and results confirm that these are compliant with the applicable emission standards.

The refinery plant and the power plants at La Baraque and St Aubin operate under eIA licences granted by the Ministry of environment under the ePA Act 2002. Furthermore, each of these entities has an approved environmental monitoring plan, and a report is submitted on a monthly basis to the Ministry of environment.

In line with the Industrial Waste Audit Regulations (2008), Omnicane Milling Operations Limited, Omnicane Thermal energy Operations (La Baraque) Limited, and Omnicane Thermal energy Operations (St Aubin) Limited, respectively, have submitted their Industrial Waste Audit Report as well as their environmental Management Plan to the Ministry of environment in 2010.

Regular surveys to detect noise levels are conducted at the sugar-factory sites and the power plants by an independent specialist, who has confirmed that the environmental noise levels around these sites are within the limits prescribed.

ACKNOWLeDGeMeNT I wish to express my sincere appreciation to the Chairperson and members of the Board of Directors of Omnicane for their enlightened advice and their sustained support throughout the year under review, which was very intense on the operational front. I am grateful to all the Group’s employees, and especially to senior Management, for their flexibility, dedication and unrelenting commitment to the objectives of Omnicane at a time of change.

NeW PROJeCTS (Continued)

Wind Farm at Britannia

In its endeavours to expand its activities in the field of renewable energy, Omnicane embarked in 2009 on preliminary studies with a view to setting up a 22-MW wind farm at Britannia.

The results of continuous wind assessment carried out over the thirteen months from February 2009 to March 2010 confirm the good wind regime of the site as initially identified in 2009 on the basis of eight months of wind data.

The project, which is in line with the Maurice Ile Durable concept and fits in with the long-term (2009–2025) energy strategy of Mauritius, has already been presented to the authorities for consideration.

Carbon Burn Out (CBO)

The fly ash and bottom ash resulting from the burning of coal in grid boilers in the power plants of La Baraque and St Aubin are at present buried in land cavities and depressions. Such sites are limited, and it was imperative to seek alternative modes of disposal.

Various research has been carried out across the world about using fly ash and bottom ash in industry, notably in the construction industry. But the presence of a high level of residual carbon in these by-products has so far been a major impediment to such use.

The idea behind our CBO project has been to burn the extra carbon in the fly ash and bottom ash so as to reduce their carbon content from 20% to 5% to enable the final product to be mixed with bulk cement, while also producing extra energy for our industrial cluster at La Baraque. Our intention is to start construction of the CBO unit in the course of 2011.


Annual Report 2010

CeO’s Review of Operations CeO’s Review of Operations

Jacques M d’UnienvilleChief Executive Officer


Annual Report 2010

C A N E

PW Sugar

Bagasse

VinasseD

igester

Vinasse

Bagasse

Steam

electricity

RenewableEnergy

Mix

BritanniaWind Farm

LiquidFertilisers

BiogasCO

2

IndustrialCementAdditiveRefined Sugar ElectricityBio-ethanol

Distillery

ConcentratedMolasses

Solids

Steam

electricity

Steam

electricity

CarbonBurnout

Energy PlantCogeneration(La Baraque)

Molasses

electricity

electricity

electricity

Fly/Bottom A

sh

Molasses

electricity

Fly/Bottom A

sh

Fly/Bottom A

sh

Wind energy

Milling(La Baraque)

Potatoes

vegetables

Fruits

Cane Growing

Refinery

Energy (St-Aubin)

Central Electric Cogeneration(La Baraque)

OMnICAnE EnERGIES InTEGRATIOn CHART

Hydraulic energyHydropower Plant

of Britannia

Regulatory Compliance

Omnicane Limited (formerly Mon Trésor and Mon Désert Limited, incorporated in 1926 under the laws of Mauritius) is a public company forming part of the Official List of the Stock exchange of Mauritius. It is governed by a modern constitution based on the provisions of the Companies Act 2001.

Statement On Corporate Governance

Corporate governance relates to the system by which companies are directed and controlled with a view to achieving sustainable strategic goals to satisfy the stakeholders, including shareholders, employees and customers while complying with legal and regulatory requirements and meeting environmental and broader community needs.

Corporate governance also implies mitigating conflicts of interest, promoting transparency and committing to ethical values and business conduct.

Board And Board Committees

The Company has a unitary board of directors which comprises 12 directors; 2 executives and 10 non-executives. The Board is ultimately responsible for ensuring that the business is a going concern, and to this end effectively controls the group and its management and is involved in all decisions that are material for this purpose.

Board meetings are held on a quarterly basis and whenever the Board needs to consider and decide on important issues relating to the Group’s business. There is a provision in the company’s constitution for decisions taken between meetings to be confirmed by way of directors’ resolutions. Board meetings are also attended by senior members of staff, who report on operations, and by the Company’s consultants, who provide expert advice. At the quarterly meetings, a report is presented by the Chief executive Officer on the financial performance of the Company and actual results are compared with those of the previous year’s corresponding period and with the budget. The report summarises issues affecting the Group’s business, notably its agricultural, milling and energy operations.

CORPORATe GOVeRNANCe RePORT

Corporate Governance Report Corporate Governance Report


Annual Report 2010

The roles of the chairperson and the chief executive are separated and the chairperson is a non-executive independent director.

Members of the board have access to the advice of the company secretary.

During the year under review, seven Board meetings were held. The attendance at these meetings is given on page 49.

The following directors held office at 31 December 2010:

Directors Alternate Directors

Sunil Banymandhub (Appointed in May 2010) Non-executive, Chairperson

Jacques M. d’Unienville executive

Nelson Mirthil executive

Georges Leung Shing Non-executive

Pierre M. d’Unienville (Appointed in May 2010) Non-executive

Premsagar Bholah Non-executive Chandan Lautan

Marc Hein Non-executive Imalambaal Vythilingum- Kichenin

Hugues Maigrot Non-executive

Jacques de Navacelle Non-executive

Ritesh Sumputh Non-executive Geerendra Gocool

Bertrand Thevenau Non-executive

Anbanaden Veerasamy Non-executive



Annual Report 2010

DIReCTORS’ PROFILeS

Sunil Banymandhub

Non-executive Chairperson

Appointed to the Board in May 2010

Sunil Banymandhub holds a BSc in Civil engineering from the University of Manchester and an MSc in Business Studies from the London Business School. He is an associate member of the Institute of Chartered Accountants of england and Wales. He has wide experience having held key functions in the private sector, the most recent ones being the General Manager of Caltex Ltd and Chief executive Officer of CIM Financial group. He is now the Managing Director of his own company known as Starjobs.

Premsagar Bholah, OSK

Non-executive director

Appointed to the Board in 2005.

Premsagar Bholah is a Fellow of the Chartered Association of Certified Accountants. He started his career at De Chazal Du Mée and was a manager in the Audit and Business Advisory Division of De Chazal Du Mée in 2005, when he joined the Sugar Investment Trust as Chief Operating Officer. He has a wide experience of the sugar industry, both in Mauritius and overseas. While he was at De Chazal Du Mée, he worked on assignments in Burundi, Ivory Coast, Rwanda, Malawi, Tanzania, Madagascar, Kosovo, Yugoslavia, Haiti, and the Fiji Islands.

He is a non-executive director of Omnicane Milling Operations Limited, Omnicane Management & Consultancy Ltd, Omnicane Holdings Ltd, Omnicane Thermal energy Operations (La Baraque) Limited and Omnicane Thermal energy Operations (St Aubin) Limited, as well as of Consolidated energy Limited, Black Rock Development Co Ltd, Black Rock Management & Co Ltd, Compagnie Thermique de Belle Vue Ltée, Coral Cover Resorts (Mtius) Ltd, CTBV Management Co Ltée, Sugarworld Limited, Sir S Ramgoolam Botanical Garden Investment Co Ltd, Ng Tower IV, Le Bouchon Development Co Ltd, and FUeL Steam and Power Generation Co. Ltd.

Marc Hein



Marc Hein is a barrister. He holds a Bachelor’s degree in Law and a Licence en droit. He started practising law in Mauritius in 1980 at the Chambers of Sir Raymond Hein Q.C. In 1989, he set up his own Chambers, Juristconsult Chambers. He is the legal adviser of several well-known local and multinational corporations, trusts, banks, financial institutions and fund managers. He is a director of several Mauritian companies, global business companies and offshore investment funds.

Georges Leung Shing



Georges Leung Shing holds a Bachelor’s degree in economics and is a Chartered Tax Adviser and a Fellow Chartered Accountant. He started his career in Mauritius in 1973 as Accountant of the Mauritius Chamber of Agriculture, and was appointed Senior economist the next year. In 1981, he joined Lonrho Sugar Corporation Ltd as Finance Manager and was appointed executive Chairperson of Lonrho (Mauritius) Ltd before its take-over by Illovo Sugar Ltd in July 1997. He retired as Managing Director of MTMD on 31 March 2007 and served as consultant to the MTMD Group for the year ended 31 March 2008.

He has served on most sugar-sector institutions in Mauritius, the Mauritius employers’ Federation and the Joint economic Council. He is the Chairman of the Financial Reporting Monitoring Panel and a board member of the Mauritius Institute of Directors. He is also the Chairperson of The Mauritius Development Investment Trust Company Ltd (MDIT), the first approved investment trust in Mauritius, and a director of Mauritius Chemical & Fertilizer Industry Ltd and of Mauritius Stationery Manufacturers Ltd.

Pierre M. d’Unienville


Appointed to the Board in May 2010

Pierre M d’Unienville holds a Licence es Sciences economiques from the University of Aix-Marseille III and post graduate specialization In Finance and Strategy from IeP Paris. He is currently the Deal executive of Infinite Corporate Finance and he has more than 16 years working experiencee in audit, finance and senior management positions. He is a non-executive board director of Amro Chemicals, Union Sugar estate Ltd and Le Warehouse Ltd.

Hugues Maigrot, GOSK



Hugues Maigrot was appointed Notary Public in 1971. He is legal adviser to a number of listed and large private companies. He is the non-executive Chairperson of Harel Frères Ltd.

Jacques M. d’Unienville

Executive director


Jacques M. d’Unienville holds a Bachelor’s degree in Commerce. Before joining Société Usinière du Sud (SUDS) as Chief executive Officer in 2005, he was the Managing Director of Société de Traitement et d’Assainissement des Mascareignes. He has held office as Chief executive Officer of MTMD (now Omnicane Limited) as from 1 April 2007. He is also the Chairperson of Omnicane Thermal energy (La Baraque) Limited and of Omnicane Thermal energy (St Aubin) Limited.

He is a board member of several sugar-sector institutions in Mauritius and was the President of the Mauritius Sugar Producers’ Association in 2005, 2006 and 2009. He is a director of Compagnie de Beau Vallon Ltée.


Jacques de Navacelle



Jacques de Navacelle holds a Maîtrise de philosophie and is a graduate of the Institut de Commerce International. After 27 years with the Barclays group in France, South Africa and Mauritius, he joined Mauritius Union Assurance Co. Ltd in May 2005 as Chief executive Officer. He is the Chairperson of Transparency Mauritius, the non-executive Chairperson of Compagnie de Beau Vallon Ltée, and Compagnie Sucrière de Riche en eau Ltée, and director of Ascencia and United Basalt Products.

Ritesh Sumputh



Ritesh Sumputh holds a Bachelor’s degree in Law and a Postgraduate Diploma in Bar Vocational Course. He was called to the Bar of england and Wales in 2001 and to the Mauritian Bar in 2002. He practices as a barrister in fields of Criminal Law, Labour Law, Industrial Relations, Disciplinary Committees, Company Law, Land Law, and Family Law. He is the non-executive Chairperson of the Sugar Investment Trust.

Bertrand Thevenau



Bertrand Thevenau holds a Diplôme universitaire de technologie, option Marketing international. He has a wide experience of the Mauritian industrial sector. He is currently the executive Director of Tropic Knits Ltd (Ciel Textile).

Nelson Mirthil

Executive director


Nelson Mirthil is a Fellow of the Chartered Association of Certified Accountants. He started his career in the Audit Department of De Chazal Du Mée. He worked in the Audit Department of ernst & Young from 1995, where he was promoted to the position of Audit Manager. He joined Omnicane Group in 2003 as Chief Finance Officer.

Anbanaden Veerasamy



Anbanaden Veerasamy holds a Diploma in Public Administration and Management. Over the past 30 years, he has occupied various senior positions in the Public Service, notably in the Ministry of Social Security, National Solidarity, Senior Citizens’ Welfare and Reform Institutions, the Ministry of Agro-Industry and Fisheries, the Ministry of Local Government and Rodrigues, and the Ministry of Youth and Sports. He is, since 2009, the Permanent Secretary at the Ministry of Social Security, National Solidarity, Senior Citizens’ Welfare and Reform Institutions. He is a non-executive board director the BPML, National economic Social Council and the Mauritius Housing Corporation.

Directors’ Directorship in Listed Companies

DIRECTORS

new

Mau

riti

us H

otel

Ltd

MD

IT

MSM

Un

ited

Bas

alt P

rod

uct L

td

Asc

enci

a Li

mit

ed

Har

el F

rère

s

The

An

glo

-Mau

riti

us

Ass

uran

ce S

ocie

ty L

td

Sunil Banymandhub •

Georges Leung Shing • •

Jacques de Navacelle • •

Hugues Maigrot • •

BOARD COMMITTEES

A structure of Board Committees has been set up to assist the Board in the discharge of its duties and responsibilities.

The current Board Committees are as follows:-

• Audit Committee

• Corporate Governance Committee

• Investment Committee

• Property Development Committee

each Board Committee operates under clearly defined terms of reference and regularly reports and recommends specific matters to the Board for approval.

The Company Secretary acts as secretary to all the committees.

Audit Committee

Members:

Georges Leung Shing, Chairperson

Premsagar Bholah

Bertrand Thevenau

The Audit Committee is governed by a charter and its primary objective is to assist the Board in fulfilling its oversight responsibilities. The committee thus reviews the financial-reporting process, the system of internal control and management of financial risks, the audit process, and the process for monitoring the Group’s compliance with the laws and regulations obtaining in Mauritius as well as its own code of business conduct. In performing its duties, the committee maintains effective working relationships with the Board of Directors, with Management, and with the Group’s internal and external auditors.

The Committee consists of three non-executive directors, and its meetings are attended by the Chief executive Officer, the Chief Finance Officer, the internal and external auditors, and any other managers as deemed necessary.

The Group’s internal Audit Department is headed by a fully qualified accountant, who carries out a continual audit of the Group’s operations. At each meeting of the Audit Committee, the internal auditor reports on all internal audit issues of the group highlighting any deficiencies and recommending corrective measures.

The Committee is also responsible for reviewing the adequacy and overall effectiveness of the group’s risk management system.


Annual Report 2010

RISK MAnAGEMEnT

Omnicane’s approach to risk management is to make it an integral part of the conduct of every aspect of its business. Proactive management ensures that decisions are taken to achieve the most appropriate balance between risks and returns at all times, to transfer risks wherever possible, and to take the necessary measures to mitigate key risks. We apply this approach:

• To both ongoing activities and new projects

• At both the operating and the strategic levels

• With regard to both technical performance and compliance with legislation, regulations, policies and

• contractual obligations

Financial-risk management is analysed in Note 3 to the Financial Statements, on pages 84 to 87, and includes a discussion of the following types of risk:

• Capital risk

• Market risk

• Currency risk

• Cash flow and fair value interest-rate risk

• Price risk

• Credit risk

• Liquidity risk

each operating unit and subsidiary is responsible in its own right for regularly assessing opportunities and risks in accordance with best practice.

The following sections describe the Group’s approach with regard to its electricity-generation and sugar-production operations.

Risks Linked to the Production of electricity

The Group controls two major power companies, namely Omnicane Thermal energy Operations (La Baraque) Limited and Omnicane Thermal energy Operations (St Aubin) Limited. These two companies together produce about 30% of the total electric energy consumed in Mauritius, and as such are exposed to public scrutiny and to monitoring by the relevant authorities. Both companies’ power plants operate within the strict confines of power-purchase agreements (PPAs) signed with the Central electricity Board.

The power plants have been constructed to comply with strict regulations and stringent pre-defined criteria with respect to environmental issues such as:

• Quality of gaseous emissions

• Quality of effluents

• Noise limitation

These are monitored on a continuous basis.

The plants have also been designed to be able to meet precisely defined kWh despatch mechanisms and levels.

The PPAs signed include protection mechanisms against price fluctuations due to variations in the cost of coal or other elements of production cost. It is, however, difficult to guarantee that such mechanisms would totally mitigate all incidences due to major fluctuations of such costs.

The technical management of the Group’s power plants is provided, through a management-assistance contract, by the Group’s strategic partner Séchilienne-Sidec, who have recruited international specialist staff for the operation, control and management of the plants.

Risks Linked to Climatic Conditions

The Group’s power plants have contracted comprehensive insurance policies to cater for all material damages and cumulative losses with regard to natural catastrophes such as tropical cyclones and floods.

Insurance Cover

The Group’s power plants are at present covered by insurance policies with regard to the following:

• Damages and loss of profits

• Civil and professional liability

• Terrorism risk

• Damages to third parties, consequential on damage to the environment

• Automobile and personal accidents

Furthermore, the policies are reviewed every year and this exercise, considering the present volatility of the insurance market, could result in a substantial increase in premium costs. Any increase in premium costs could adversely affect the profitability of the business should the ‘fixed’ portion of the contract not allow us the opportunity to cater for such a cost increase.

Miscellaneous Risks

Besides the risks detailed above, the Group’s power plants are exposed to the following miscellaneous risks:

• Risks in respect of damage to the public environment, subsequent to fire, explosion, pollution

• Risks arising from failure, by the plants’ original equipment manufacturers, to meet their guarantees

• Risks linked to the procurement of combustibles such as coal and bagasse

• Risks arising from labour disputes

Risks Associated with Sugar Production

The risks associated with sugar production are well known and can be summed up as related to abiotic factors (drought, cyclones and floods) and biotic factors (pests and diseases). The risks associated with abiotic factors are covered by insurance. Good production-management systems mitigate risks associated with biotic factors, and since 1980, there has been no epidemic affecting cane cultivation in Mauritius. Nevertheless, it is a fact that, as with all crop production, there is an inherent agricultural risk.

Risks Associated with Sugar Factory Operations

The operation of the Group’s sugar factory at La Baraque is compliant with all applicable environmental and safety legislations and is also in line with sugar-production best practice.

The factories of Omnicane Milling Operations Limited at La Baraque and Union St Aubin are certified to GMP B2 standard. GMP, which stands for Good Manufacturing Practices, consists of internal agreements between members of a specific industry regarding sanitary practices and bio-security. The GMP B2 standard relates to the feed-compound industry, and matches both ISO 9001:2000 and HACCP (Hazard Analysis & Critical Control Points) rules. This certification guarantees that the molasses produced and exported by Omnicane Milling Operations Limited are compliant with applicable international hygiene norms.

Further Development of Risk Management Strategies

In 2010, Omnicane Group requested the assistance of ernst & Young for the implementation of a Risk Management System in order to understand the risks it is exposed to and consequently, take mitigation measures to steer the business for the maximum benefit of all.

A business risk identification and assessment exercise, facilitated by ernst & Young, was held with members of Omnicane management during which they were invited to identify the key risks facing the group and to comment on the effectiveness of the existing controls to mitigate these risks.



Annual Report 2010

RISK MAnAGEMEnT (Continued)

Corporate Governance Committee

Members:

• Hugues Maigrot, Chairperson

• Jacques de Navacelle

• Anbanaden Veerasamy

The Corporate Governance Committee encompasses the Nomination Committee, as well as the Remuneration Committee. It ensures compliance with the Code of Corporate Governance for Mauritius and considers the Company’s annual report before its circulation to the Board for approval.

The committee is responsible for the nomination of key personnel and makes recommendations to the Board regarding the remuneration of senior and middle Management. It may call on external expert advice for determining the remuneration of key personnel.

Investment Committee

Members:

• Marc Hein, Chairperson

• Sunil Banymandhub

• Premsagar Bholah

• Jacques de Navacelle

• Jacques M. d’Unienville

The Investment Committee was set up primarily to ensure that the Company’s investments are in line with the Board’s strategy. It monitors and reviews progress on the Group’s investment objectives and the strategic plan laid out to achieve them.

Property Development Committee

Members:

• Jacques de Navacelle, Chairperson

• Premsagar Bholah

• Marc Hein

• Nelson Mirthil

• Jacques M. d’Unienville

The Property Development Committee oversees procedures relating to all the Company’s land-development projects to ensure that they are conducted in a transparent manner and in the best interests of the Company. It focuses on identifying, assessing and selecting the best contractors, through tenders, and on monitoring progress in the works involved, to ensure their timely execution. It also deals with all land-related matters, and makes recommendations to the Board accordingly.


BOARD AnD COMMITTEE ATTEnDAnCE

The following table gives the record of attendance at meeting of Omnicane Board and its committees for the year ended 31 December 2010.

DirectorsBoard of Directors

Corporate Governance

Audit InvestmentProperty

Development

Number of meetings held 7 3 4 4 4

Sunil Banymandhub(Appointed in May 2010)

4 1

Premsagar Bholah 4 1 3 4

Marc Hein 6 2 4 3

Georges Leung Shing 7 4 1

Hugues Maigrot 7 3

Jacques M. d’Unienville 7 4 4

Pierre M. d’Unienville(Appointed in May 2010)

5

Nelson Mirthil 7 3

Jacques de Navacelle 5 3 3 3

Ritesh Sumputh 2

Bertrand Thevenau 6 2

Anbanaden Veerasamy 3 3

Directors’ Interests (direct and indirect as at 31 December 2010)

Direct Indirect

Sunil Banymandhub Nil Nil

Premsagar Bholah Nil Nil

Marc Hein 22,651 14,975

Georges Leung Shing Nil Nil

Hugues Maigrot Nil Nil

Jacques M. d’Unienville Nil Nil

Pierre M.d’Unienville Nil Nil

Nelson Mirthil Nil Nil

Jacques de Navacelle Nil 190

Ritesh Sumputh Nil Nil

Bertrand Thevenau Nil Nil

Anbanaden Veerasamy Nil Nil

Chandan Lauthan (Alternate Director) Nil Nil

Geerendra Gocool (Alternate Director) Nil Nil

Imalambaal Vythilingum-Kichenin (Alternate Director) Nil Nil

Share Dealings by Directors

The directors ensure that their dealings in the Company’s shares are conducted in accordance with the principles of the Model Code for Securities Transactions by Directors of Listed Companies, as detailed in Appendix 6 of the Stock exchange of Mauritius Listing Rules.

Upon appointment to the Board, the directors are required to inform the Company Secretary of the number of shares held directly and indirectly by them in the Company. This declaration is entered into a Directors’ Interests Register, which is maintained by the Company Secretary and updated with any subsequent transactions made by the directors.

During the financial year under review, none of the directors, except for Mr Marc Hein who bought 3,375 shares.


Annual Report 2010


BOARD AnD COMMITTEE ATTEnDAnCE (Continued))

Share Option Plans

Omnicane has no share option plans.

Related Party Transactions

Note 38 of the financial statements for the year ended 31 December 2010 situated on page 112 of the financial statements details all the related party transactions between the Company or any of its subsidiaries or associates and a director, chief executive, controlling shareholder or companies owned or controlled by a director, chief executive or controlling shareholder. In addition, shareholders are apprised of related party transactions through the issue of circulars by the Companyin compliance with the Listing Rules of the Stock exchange of Mauritius Limited.

Directors’ Remuneration and Benefits (See table)

DirectorAmount (Rs ’000)

Sunil Banymandhub 187.6

Jacques M. d’Unienville 220.5

Georges Leung Shing 290.6

Premsagar Bholah 271.5

Anbanaden Veerasamy 175.8

Jacques de Navacelle 233.9

Marc Hein 226.8

Nelson Mirthil 195

Hugues Maigrot 246

Ritesh Sumputh 144

Bertrand Thevenau 175.8

Pierre M. d’Unienville 90

Interest of Directors in Contracts

Significant Contracts

The Company has a management contract with Omnicane Management & Consultancy Limited, a wholly owned subsidiary of the controlling shareholder, Omnicane Holdings Limited.

Directors and officers liability insurance

The company has arranged for appropriate insurance cover in respect of legal actions against its directors and officers.

Material Clauses of the Company’s Constitution

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

Shareholders’ agreement

There is currently no shareholders’ agreement affecting the governance of the Company by the Board.

Particulars of Directorate in Subsidiaries (See table)

Om

nica

ne A

gicu

ltur

al O

per

atio

ns L

imite

d

Om

nica

ne M

illin

g H

oldi

ngs

(Brit

anni

a H

ighl

ands

) Lim

ited

exot

ic e

xpor

ts L

imite

d

Flor

eal L

imite

d

Om

nica

ne M

illin

g H

oldi

ngs

(Mon

Tre

sor)

Lim

ited

Om

nica

ne M

illin

g O

per

atio

ns L

imite

d

Om

nica

ne T

herm

al e

nerg

y H

oldi

ngs

(St A

ubin

) Lim

ited

Om

nica

ne H

oldi

ngs

(La

Bara

que)

The

rmal

ene

rgy

Lim

ited

Om

nica

ne T

herm

al e

nerg

y O

per

atio

ns (S

t Aub

in) L

imite

d

Om

nica

ne T

herm

al e

nerg

y O

per

atio

ns (L

a Ba

raqu

e) L

imite

d

Om

nica

ne L

ogis

tics

Op

erat

ions

Lim

ited

eddie Ah-Cham • • • • • • • •

Gerard Chung Kwan Fang •

Francois Vitry Audibert • • • •

Assenjee Gurib •

Lindsay Fayolle •

Joseph de Guardia de Ponte

•

Jack Kong Win Chang • • • • •

Jacques M. d’Unienville • • • • • • • • • • •

Roger Mée Goupille •

Nelson Mirthil • • • • • • • • •

Dawood Mahomed Beg •

Ahsveenee K. Ramnarain •

Guy Maurel • • •

Pascal Langeron • •

Louis Decrop • •

Thierry Merven • • •


Annual Report 2010

6. LUTCHMANeN, RudleyFINANCIAL ACCOUNTANT

Rudley Lutchmanen is a Fellow of the Chartered Association of Certified Accountants and holds an MSc degree in Finance. He has 10 years of experience in auditing, financial accounting and business modelling.

7. PLANCHe, GaëtanCHIeF PURCHASING OFFICeR

Gaëtan Planche is an affiliate member of the Chartered Institute of Purchasing & Supply. He has 37 years’ experience in the purchasing sector.

8. AH-CHAM, eddieCOMPANY SeCReTARY

eddie Ah-Cham is a Fellow of the Chartered Association of Certified Accountants (FCCA). He has 13 years’ experience, in external and internal auditing and in corporate management.

9. CHASTeAU De BALYON, GérardCHIeF STRATeGY OFFICeR

Gérard Chasteau de Balyon is a professional engineer and an MBA, with a degree in sugar engineering and agriculture from Louisiana State University and a diploma from the Mauritius College of Agriculture. He is a member of the Institute of Mechanical engineers and has 40 years’ experience in industrial engineering.

10. MOHUN, NavinduthINTeRNAL AUDITOR

Navinduth Mohun is a member of the Association of Chartered Certified Accountants (ACCA) and holds a BSc degree in Accounting and Finance. He has 5 years’ experience in internal and external auditing.

1. d’UNIeNVILLe, Jacques M.CHIeF eXeCUTIVe OFFICeR

Jacques M. d’Unienville holds a Bachelor’s degree in Commerce and has 15 years of work experience in France, the Seychelles and Mauritius. His expertise lies in the strategic development of new projects in the following sectors: sugar production and refining, independent power production, waste and environment management, and renewable energy projects. He currently serves as Vice-President of the Mauritius Sugar Syndicate.

2. SeeBARUTH, OudeshGROUP ACCOUNTANT & HeAD OF TReASURY

Oudesh Seebaruth is a graduate of the Chartered Institute of Management Accountant and has more than 27 years experience in auditing, financial reporting, treasury management, risk management and business modelling.

3. AUTReY, Jean ClaudeSCIeNCe AND TeCHNOLOGY COORDINATOR

Jean Claude Autrey, C.S.K., Fellow of the Society of Biology (London) and Chartered Biologist, holds a BSc degree in Botany, an MSc degree in Plant Pathology, a PhD in Plant Virology, and a DSc in Biological Sciences. A former Director of the Mauritius Sugar Industry Research Institute, he has more than 40 years’ experience in the sugar industry. He serves on several local and international bodies in the sugar industry and in research. Jean Claude Autrey is currently the General Secretary of the International Society of Sugar Cane Technologists and the Chair of the ACP Scientific Committee on sugar.

4. MIRTHIL, NelsonCHIeF FINANCe OFFICeR

Nelson Mirthil is a Fellow of the Chartered Association of Certified Accountants. He has 20 years’ experience in auditing, corporate finance, project management and financial accounting. He has been involved in several overseas financial mission in Africa. On joining Omnicane in 2003, he acted as Fund Manager of MDIT, a listed investment company, until 2010.

5. DOOKHUN, Avinash GROUP SYSTeMS ADMINISTRATOR

Avinash Dookhun holds a honours degree in Information Technology from the British Computer Society (BCS), a ‘Brevet Technicien en electroTechnique’ from the Lycee Polytechnique Sir Guy Forget and hascompleted professional certifications from Microsoft, Hewlett Packard and City & Guilds of London Institute. He has 19 years’ work experience in IT and is a registered member of the BCS.

Omnicane

Management

& Consultancy

1

2

3

4 7 10

8

9

6

SENIOR MANAGEMENT PROFILE

Corporate Governance ReportCorporate Governance Report


Annual Report 2010

5

6. MAMeT, PatrickFIeLD MANAGeRAgricultural Operations, Britannia

Patrick Mamet has 28 years’ experience in site management in the sugar industry.

7. KHAN ITOOLA, RechardGROUP DATABASE ADMInISTRATOR

Rechard Khan Itoola holds a Bachelor in Science degree in Computer Science and Information Systems with specialisation in I.T. Management ,Diploma in Management of Information Systems (UK) and Diploma in Modern Management and Administration (UK). He has 23 years of experience in the IT field of the sugar industry.

8. DALAIS, JocelyneSTATe ACCOUNTANTAgricultural Operation

Jocelyn Dalais has completed ACCA (Association of Chartered Certified Accountants) Level 1 and he also

holds an Advanced Certificate in Business Management. He has 28 years’ experience in the finance and accounting sectors.

9. De GUARDIA De PONTe, Joseph GARAGe AND TRANSPORT MANAGeRAgricultural Operations, Britannia

Joseph de Guardia holds a Baccalauréat in Mechanical engineering. He has 33 years’ experience in mechanics, automotive engineering and the management of transport fleets in the sugar industry.

10. AUDIBeRT, FrançoisCHIeF OPeRATION OFFICeRAgricultural OperationsFrançois Vitry Audibert has 33 years’ experience in managing the sugar estates of Britannia, Riche Bois and Mon Trésor.

11. MOTeT, Jean MarcFIeLD MANAGeRAgricultural Operations, Mon Trésor

Jean Marc Motet has 33 years’ experience in site and operations management.

12. SeeLARBOKUS, HahmidHUMAN ReSOURCeS MANAGeRAgricultural Operations

Hahmid Seelarbokus holds a Bachelor’s degree in Administration and a Master’s degree in Business Administration. He has 21 years’ experience in administrative and human-resource management.

13. GOUPILLe, Roger MéeGARAGe AND TRANSPORT MANAGeRAgricultural Operations, Mon Trésor

Roger Mée Goupille holds a Diploma in Internal Combustion engines. He has 36 years’ experience in mechanical engineering and automotive management at sugar estates.

1. SAGnIER, PierrePROJeCT DeVeLOPMeNT MANAGeRThermal Energy Operations (La Baraque)

Pierre Sagnier holds a Diplôme d’ingénieur from the École des Hautes Études d’Ingénierie, France. He has 35 years’ international experience (in the USA, europe and Africa) in environmental and energy management.

2. BOREL, EmmanuelPOWeR PLANT MANAGeRThermal Energy Operations (La Baraque)

emmanuel Borel holds a Diplôme d’ingénieur from the École Nationale Supérieure d’Ingénieurs, of Poitiers, France. He has 13 years’ international experience in energy operations and power-plant management.

3. CALLEECHURn, PrithvirajASSISTANT PLANT MANAGeRMilling Operations – La Baraque

Prithviraj Calleechurn holds a Beng (Hons) degree in Mechanical engineering from the University of Mauritius and has 10 years’ experience in thermal-power operations.

4. ROBERT, FrédéricPLANT MANAGeRThermal Energy Operations (St Aubin)

Frédéric Robert is an experienced power-plant specialist, with 11 years’ experience in the management of thermal-power plants.

5. SOOBHAnY, ImranFINANCe MANAGeRThermal Energy Operations (La Baraque) and Thermal Energy Operations (St Aubin) .

He has completed his ACCA (Association of Chartered Certified Accountants) Level 2 and has 20 years’ experience in management and accounting.

Omnicane

Thermal energy

Operations

Omnicane

Agricultural

Operations

6

8

9

10

11

12

13

1

2

5

3 4

Corporate Governance Report


Corporate Governance Report


Annual Report 2010

7

OMNICANe

MILLING

OPeRATIONS


6. THEVEnAU, DanielSITe MANAGeRThermal Energy Operations (La Baraque)

Daniel Thevenau holds an Advanced Certificate in Business Management (ACBM) and an MeF-MIM Certificate in Sugar Manufacture. He has 30 years’ experience as a site manager in the sugar industry.

7. RAMLUGOn, RajivsinghSAFeTY & eNVIRONMeNTAL MANAGeRMilling Operations – La Baraque

Rajiv Ramlugon holds a BTech (Hons) degree in Civil engineering and an MSc degree in environmental engineering (from Newcastle University, UK.). He has 12 years’ experience in waste management, industrial-effluent treatment, biogas valorisation, and the implementation of quality- and environmental-management systems as well as of other management systems in industry.

8. GREnADE, SylvainOPeRATIONS ACCOUNTANTMilling Operations – La Baraque

Sylvain Grenade has a Diploma in Computer Programming and is a Certified Accounting Technician (CAT). He has 24 years’ experience in operations accounting and general management in the sugar industry.

9. FAYOLLE, LindsayOPeRATIONS MANAGeRMilling Operations – La Baraque

Lindsay Fayolle holds a Diploma in Agriculture and Sugar Technology and has 32 years’ experience in operations and process management in the sugar industry. He is responsible for operations at Omnicane Milling Operations Limited’s two sugar mills, at La Baraque and at St Aubin, as well as at the Company’s refinery.

10. nG MAn CHUEn, Jean LucPROJeCT & FINANCe ACCOUNTANTMilling Operations – La Baraque

Jean Luc Ng holds a BSc (Jt. Hons) degree in Computer Science and Accounting, ACA – Member of ICAeW (UK) and has 15 years’ experience in auditing, and in financial control and management.

1. AUFFRAY-MOOnIEn, SabineHUMAN ReSOURCeS COORDINATORMilling Operations – La Baraque

Sabine Auffray is a member of the Institute of Chartered Secretaries and Administrators (UK) (GradICSA). She has 12 years’ experience in the sugar industry in the fields of accounting and human-resource management.

2. KOnG WIn CHAnG, JackCHIeF OPeRATIONS OFFICeROperations Limited – La Baraque

Jack Kong Win Chang holds a Diploma in Management and a BSc (Hons) degree in electrical engineering (UK). He has 34 years’ work experience in Mauritius and abroad, in engineering and operations management at senior Management level. Prior to joining the sugar industry, Jack Chang worked in the tea and textile industries.

3. MAUREL, GuyTeCHNICAL MANAGeR (PROJeCTSMilling Operations – La Baraque

Guy Maurel holds a Diploma in Business Management, a Diplôme supérieur en administration des entreprises (DSAe) and a BSc (Hons) degree in Sugar Technology. He has 36 years’ experience at technical-management level in the sugar industry and in the energy sector.

4. JULIEn, Jean PierreMAINTeNANCe MANAGeRMilling Operations – La Baraque

Jean Pierre Julien holds a Beng (Hons) degree in Mechanical engineering and Computing (Australia) and a Certificate in Management. He has 11 years’ experience in industrial engineering and site management in the sugar industry.

5. CABOCHE, Jean LucSITe MANAGeR Milling Operations – St Aubin

Jean Luc Caboche holds an Advanced Diploma in Business Administration – ABe (UK) and has 17 years’ supervisory and management experience in maintenance.

2 6

3 7

4

5

8

9

1 10



Annual Report 2010

To strengthen its initiatives in the field of Corporate Social Responsibility (CSR), the Group has created a dedicated entity, Omnicane Foundation, which was legally incorporated in October 2009. By virtue of its registration with the National CSR Committee, the Foundation is able to initiate and implement projects pertaining to health, housing, education, sports and other areas. These projects aim to promote human development and, in many instances, to alleviate poverty.



Annual Report 2010

Corporate Social Responsibility

Omnicane Foundation has benefited from a CSR contribution of Rs 16,123,062 in 2010 comprising of 2% CSR tax from each subsidiary of Omnicane as well as a contribution of Rs 481,093 from Compagnie GrandPorienne Ltée.

Rs

Omnicane Limited 5,366,000

Omnicane Thermal Operations (St Aubin) Limited 1,639,000

Omnicane Thermal Operations (La Baraque) Limited 1,987,000

Omnicane Thermal Holdings (St Aubin) Limited 594,000

Omnicane Holdings (La Baraque) Thermal energy Limited 1,193,000

Floreal Ltd 51,000

Omnicane Holdings Limited 3,250,969

Omnicane Management & Consultancy Limited 1,527,000

Omnicane Agricultural Operations Limited 4,000

Omnicane Logistics Operations Limited 30,000

Contribution from Omnicane Group 15,641,969

Compagnie GrandPorienne Ltée 481,093

Total Contribution 16,123,062

The main projects realized in 2010 are:

1. Rs 800,000 for the construction of a new centre for Atelier Joie de Vivre in Chemin Grenier. This NGO caters for the vocational training of vulnerable children and school drop outs in the south.

2. Rs 5M of the construction of social houses for 21 families living in the pocket of Poverty of Residence Bethleem Rose Belle.

3. Rs 1M for the vaccination of 250 women and young girls from L’escalier and St Aubin regions against cervical cancer.

4. Rs 568,000 for the Omnicane Award intercollege competition which saw the participation of 27 colleges on the theme: “Maurice Ile Durable – What are the major challenges facing this vision and what strategies are needed to ensure its successful implementation”.

5. Rs 845,000 for the renovation and purchase of new medical check up materials for Positive Approach to Total Health. The latter is involved in providing a holistic approach to healing and provides free medical check ups in pockets of poverty.

6. Rs 667,000 for the setting up of the La Baraque Learning Centre in collaboration with eNL Foundation. This centre provides free courses in functional literacy and IT for the inhabitants of L’escalier, Plein Bois, Camp Tagore and La Sourdine.

7. Rs 500,000 to ANFeN for the setting up of a remedial school for vulnerable children in the region of Mahebourg.

8. Rs 500,000 for the construction of a centre for Association Sportive Sociale et educative de New Grove.

CSR Projects 2010

Omnicane has been very active on the social front in 2010 with the realisation of around 40 projects for a total amount of Rs 12,950,892 M.

The pie chart below shows the CSR contribution of Omnicane Foundation to projects in various areas:



Annual Report 2010

SHAREHOLDING STRUCTURE

The holding structure of the Company as at 31 December 2010 was as follows:

SHAREHOLDERS’ ANALYSIS AT DECEMBER 31, 2010

Defined Brackets Shareholder Count Ordinary Shares Percent

1 - 500 802 143,725 0.214

501 - 1,000 243 193,900 0.289

1,001 - 5,000 576 1,378,766 2.057

5,001 - 10,000 172 1,216,878 1.816

10,001 - 50,000 212 4,286,037 6.396

50,001 - 100,000 27 1,887,399 2.816

100,001 - 250,000 13 1,891,095 2.822

250,001 - 500,000 3 908,640 1.356

Over - 500,000 4 525,105,964 82.232

TOTAL 2,052 67,012,404 100

Summary by Shareholder Category

Count Shares Percent

Individuals 1,846 8,103,367 12.092

Insurance & AssuranceCompanies 13 1,105,074 1.649

Pension & Provident Funds 13 7,333,558 10.944

Investment & Trust Companies 16 106,463 0.159

Other Corporate Bodies 164 50,363,942 75.156

TOTAL 2,052 67,012,404 100

Others

OmnicaneLimited

OmnicaneHoldings

Ltd

70.25%

nationalPensions

Fund

10.13% 19.62%

Political Donations

Please refer to page 66, in Other Statutory Disclosures, for information regarding political and other donations.

Statement of Remuneration Philosophy

The remuneration philosophy of the group is to ensure that employees are rewarded for their contribution to the group’s operating and financial performance.

The Corporate Governance Committee which encompasses the Nomination Committee, as well as the Remuneration Committee is responsible for the remuneration strategy of the Group. The remuneration of the non-executive directors is approved by the shareholders whereas the Board and the Corporate Governance Committee approve the remuneration of the senior officers.

The Group also pays a performance related bonus scheme to all employees at every level across the group, and is designed and implemented on a financial year basis.

Code of ethics

The Company is committed to high standards of integrity and ethical conduct in dealing with all its stakeholders and fosters public accountability and transparency through regular and clear communication with stakeholders.

Health and Safety

Omnicane is committed to providing a healthy, safe and secure working environment for all its employees and visitors. The Group has put in place policies and practices that in all material aspects comply with regulatory guidelines and requirements.


The following shareholders held more than 5% of the issued share capital.

no .of shares held % holding

Omnicane Holdings Limited 47,074,792 70.2479

National Pensions Fund 6,784,944 10.1249


Annual Report 2010

Shareholder communication and events

The Company communicates to its shareholders through its Annual Report, the publication of It’s unaudited quarterly results, its dividend declarations and its Annual Meeting of Shareholders.

Besides occasional press communiqué and letters to shareholders, the website, hosted at www. omnicane.com is regularly updated with share information, interim audited financial statements and corporate events.

Shareholders’ Diary

Financial year end ………………………………….December

Annual meeting ……………….……………………June

Reports and profit statements

Quarterly Reports and Abridged end of year statements………………….March, May, August and November

Annual report and financial statements……………...June

Dividend

Final - Declared 21 December 2010

- Paid 25 March 2011

Stock Market information

The Company’s ordinary shares are listed on the Official List of the Stock exchange of Mauritius Limited. Accordingly, the Company is governed by the Listing Rules of the Stock exchange of Mauritius Limited.

For the graphical representation of the price movement of the Company’s ordinary shares from 1 January 2010 to 31 December 2010, please refer to page 23.

Dividend policy

The Company does not have any predetermined dividend policy. Payment of dividends is subject to the profitability of the Company, cash flow, working capital and capital expenditure requirements.

For the year under review, the Company has declared a final dividend of Rs 2.50 (2009: Rs2.00) per share.

SHAREHOLDERS’ ANALYSIS AT DECEMBER 31, 2010

Responsibilities in Matters of Financial Statement

Company law requires the directors to prepare financial statements for each financial year, which present fairly the financial position, financial performance, changes in equity, and cash flows of the Company and its subsidiaries. In preparing those financial statements, the direc-tors are required to:

• Select suitable accounting policies and then apply them consistently;

• Make judgements and estimates that are reasonable and prudent;

• State whether International Financial Reporting Standards have been followed, subject to any material departures disclosed and explained in the notes to financial statements;

• Prepare the financial statements on a going-concern basis unless it is inappropriate to presume that the Company any of its subsidiaries will continue in business.

The directors confirm that they have complied with the above requirements in preparing the financial statements.

The directors are responsible for keeping proper accounting records which disclose with rea-sonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements comply with the Companies Act 2001.

The directors are also responsible for safeguarding the assets of the Company and the Group, and hence for the implementation and operation of accounting and internal control systems that are designed to prevent and detect fraud and errors and of an effective risk management system.This is achieved through the Internal Audit Department headed by a fully qualified in-ternal auditor.

The internal auditor works according to an Internal Audit Plan which aims at covering over a period of time all operations of the Company and its subsidiaries by effecting regular visits on site, verifying that management controls and procedures are in place and followed and provid-ing corrective measures where weaknesses are detected.

The Internal Auditor writes a report on investigations, findings and recommendations after each site visit. At each meeting of the Audit Committee which usually preceeds a Board meet-ing, the Internal Auditor tables reports which are considered and approved by the Audit Com-mittee. At the next Board meeting, the Chairperson of the Audit Committee apprises the Board on the workings of the Internal Audit Department.

The Group’s external auditors, BDO & Co, have full and free access to the Board of Directors and its committees and discuss the audit and matters arising therefrom, such as their observations on the fairness of financial reporting and the adequacy of internal controls.

Sunil Banymandhub Jacques M. d’UnienvilleChairperson Chief Executive Officer


Annual Report 2010


Other Statutory Disclosures Certificate of Company Secretary

OTHeR STATUTORY DISCLOSUReS CeRTIFICATe OF COMPANY SeCReTARY


Annual Report 2010

Nature of Business

The Company’s main business is sugar growing.

The main activities of the Group consist principally of sugar cane growing, cane milling and sugar refining, and electricity production.

Auditors’ Report and Accounts

The auditors’ report is set out on page 68 and the statement of comprehensive income are set out on page 69.

Contracts of Significance

During the year under review, there were no contracts of significance to which Omnicane Limited, or any of its subsidiaries, was a party and in which a director of Omnicane Limited was materially interested, either directly of indirectly.

Service Contracts

None of the directors of the Company have service contracts with the Company or any of its subsidiaries.

Remuneration and Benefits

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

Directors of Omnicane Limited COMPAnY SUBSIDIARIES 2010 2009 2010 2009 Rs’000 Rs’000 Rs’000 Rs’000

Executive Directors (Full-time) 415 4,156 257 298 Non-Executive Directors 2,042 1,979 66 150

Details are provided in the Corporate Governance Report.

Directors of subsidiaries 2010 2009 Rs’000 Rs’000

- Executive (Full time) 340 448 - Non Executive 113 224

Directors and Senior Officers’ Interests

The Company directors and senior officers’ interests in the Company at 31 December 2010 were as follows: DIRECT InDIRECT Shares % Shares %

Marc Hein 22,651 0.0338 14,975 0.0223Jacques de Navacelle - - 190 0.0002

Donations THe GROUP THe COMPANY 2010 2009 2010 2009 Rs’000 Rs’000 Rs’000 Rs’000

Donations made during the year

- Charitable 15,742 120 5,466 6 - Political 4,000 - 2,000 -

The Group and the Company contributed Rs.15,641,969 and Rs.5,366,000 respectively in Omnicane Foundation during the year.

Fees payable to auditors BDO & Co:Audit fees 1,300 1,200 475 450 Other services 165 150 55 50

Approved by the Board of Directors on 29 March 2011 and signed on its behalf by:


This to certify that, in accordance with section 166(d) of the companies Act 2001, all such returns as required by the Company under the Companies Act 2001 have been filed with the Registrar of Companies.

Eddie Ah-Cham, F.C.C.A.for Omnicane Management & Consultancy Limited

Secretaries

18th May 2011

This report is made solely to the members of Omnicane Limited (the “Company”), as a body, in accordance with Section 205 of the Companies Act 2001. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Report on the Financial Statements

We have audited the group financial statements of Omnicane Limited and its subsidiaries (the “Group”) and the Company’s separate financial statements on pages 69 to 114 which comprise the statement of financial position at December 31, 2010, the statements of comprehensive income, statements of changes in equity and statements of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Directors’ Responsibility for the Financial Statements

The directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in compliance with the requirements of the Companies Act 2001. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements on pages 69 to 114 give a true and fair view of the financial position of the Group and of the Company at December 31, 2010, their financial performance and their cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with the Companies Act 2001.

Report on Other Legal and Regulatory Requirements

Companies Act 2001

We have no relationship with, or interests in, the Company or any of its subsidiaries, other than in our capacity as auditors, tax and business advisers and dealings in the ordinary course of business.

We have obtained all information and explanations we have required.

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

Financial Reporting Act 2004

The directors are responsible for preparing the Corporate Governance Report and making the disclosures required by Section 8.4 of the Code of Corporate Governance of Mauritius (“Code”). Our responsibility is to report on these disclosures.

In our opinion, the disclosures in the Corporate Governance Report are consistent with the requirements of the Code.0

BDO & Co per Shabnam Peerbocus, F.C.AChartered Accountants

29th March 2011

Independent Auditors’ Report



Statements of Comprehensive Income

for the year ended December 31, 2010

THE GROUP THE COMPANY Notes 2010 2009 2010 2009 Rs’000 Rs’000 Rs’000 Rs’000

Turnover 5 3,479,704 3,192,067 275,749 318,926Loss in fair value of consumable biologicalassets 23 (3,241) (3,429) (3,320) (7,202)Other operating income 6 11,760 1,370 1,273 1,370

3,488,223 3,190,008 273,702 313,094Operating expenses 7(b) (2,873,072) (2,492,734) (322,795) (303,107)

Operating profit 7 615,151 697,274 (49,093) 9,987Amortisation of VRS costs 20 (9,663) (5,369) (8,744) (4,449)Investment income 8 55,255 80,689 220,565 216,152Finance costs 9 (580,887) (711,980) (180,547) (216,197)Share of results of associates 17(a) (3,906) (788) - -

Profit before exceptional items 75,950 59,826 (17,819) 5,493Exceptional items 10 372,918 285,796 372,918 285,796

Profit before taxation 448,868 345,622 355,099 291,289Taxation 11(a) (132,779) (22,557) (7,737) 2,117

Profit for the year 316,089 323,065 347,362 293,406

Other comprehensive income:Gain on available-for-sale financial assets 18 117,436 17,894 11,269 11,127Deferred tax on revaluation of land 21 (421,498) - (337,455) -Fair value movement on disposal offinancial assets - (207,078) - (207,078)Cash flow hedge (36,625) - - -

Other comprehensive income for the year (340,687) (189,184) (326,186) (195,951)

Total comprehensive income for the year (24,598) 133,881 21,176 97,455

Profit attributable to:Owners of the parent 248,916 258,399 347,362 293,406Non-controlling interests 67,173 64,666 - -

316,089 323,065 347,362 293,406

Total comprehensive income attributable to:Owners of the parent (84,446) 69,215 21,176 97,455Non-controlling interests 59,848 64,666 - -

(24,598) 133,881 21,176 97,455

Earnings per share (Rs) 12 3.71 3.86 5.18 4.38

The notes on pages 78 to 114 form an integral part of these financial statements.Auditors’ report on page 68.

72 Omnicane Annual Report 2010 73Omnicane

Annual Report 2010

Statements of Changes in Equity

year ended December 31, 2010

THE GROUP Attributable to owners of the parent

Modernisation Fair and agricultural Non- Share Share Revaluation value Hedging diversification Retained Controlling Total Note capital premium reserve reserve reserve reserve earnings Total interests equity Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Balance at January 1, 2010 502,593 292,450 4,140,392 33,111 - 192,673 661,097 5,822,316 713,165 6,535,481Total comprehensive income for the year - - (421,498) 117,436 (29,300) - 248,916 (84,446) 59,848 (24,598)Transfer - - (32,733) - - (5,218) 37,951 - - -Dividends 33 - - - - - - (167,531) (167,531) (80,000) (247,531)Consolidation adjustments - - - - - - 241 241 121 362

Balance at December 31, 2010 502,593 292,450 3,686,161 150,547 (29,300) 187,455 780,674 5,570,580 693,134 6,263,714

Balance at January 1, 2009 502,593 292,450 4,143,564 222,295 - 206,186 523,394 5,890,482 708,499 6,598,981Total comprehensive income for the year - - - (189,184) - - 258,399 69,215 64,666 133,881Release on disposal of land - - (3,172) - - - - (3,172) - (3,172)Transfer - - - - - (13,513) 13,513 - - -Dividends 33 - - - - - - (134,024) (134,024) (60,000) (194,024)Consolidation adjustments - - - - - - (185) (185) - (185)

Balance at December 31, 2009 502,593 292,450 4,140,392 33,111 - 192,673 661,097 5,822,316 713,165 6,535,481

THE COMPANY

Modernisation and agricultural Share Share Revaluation Fair value diversification Retained Note capital premium reserve reserve reserve earnings Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Balance at January 1, 2010 502,593 292,450 3,580,527 16,544 192,673 509,349 5,094,136Total comprehensive income for the year - - (337,455) 11,269 - 347,362 21,176Transfer - - (32,733) - (5,218) 37,951 -

Dividends 33 - - - - - (167,531) (167,531)

Balance at December 31, 2010 502,593 292,450 3,210,339 27,813 187,455 727,131 4,947,781

Balance at January 1, 2009 502,593 292,450 3,583,699 212,495 206,186 336,454 5,133,877Total comprehensive income for the year - - - (195,951) - 293,406 97,455Transfer - - - - (13,513) 13,513 -Release (3,172) - - - (3,172)Dividends 33 - - - - - (134,024) (134,024)

Balance at December 31, 2009 502,593 292,450 3,580,527 16,544 192,673 509,349 5,094,136


Statements of Financial Position

December 31, 2010


ASSETS EMPLOYEDNon-current assetsProperty, plant and equipment 13 10,625,167 10,886,997 3,865,900 3,903,590Investment properties 14 9,643 9,643 9,643 9,643Intangible assets 15 1,161,708 1,147,446 220,434 220,486Investment in subsidiary companies 16 - - 1,364,831 1,364,831Investment in associated companies 17 26,771 30,677 10,688 10,688Investment in financial assets 18 178,656 60,944 54,424 43,155Bearer biological assets 19 175,182 178,038 134,315 137,601Deferred expenditure 20 89,118 26,751 74,457 22,160Deferred tax assets 21 14,039 94,902 - -

12,280,284 12,435,398 5,734,692 5,712,154Current assetsInventories 22 449,539 279,699 12,277 12,109Consumable biological assets 23 113,310 116,551 89,425 92,745Receivable from related parties 24 40,897 64,813 1,220,213 1,310,521Trade and other receivables 25 1,183,841 1,443,395 232,635 565,900Current tax assets 11(b) 153 242 153 -Cash in hand and at bank 710,457 810,737 11,761 12,860

2,498,197 2,715,437 1,566,464 1,994,135

Total assets 14,778,481 15,150,835 7,301,156 7,706,289

EQUITY AND LIABILITIES

Capital and reservesShare capital 26 502,593 502,593 502,593 502,593Share premium 292,450 292,450 292,450 292,450Revaluation and other reserves 27 3,994,863 4,366,176 3,425,607 3,789,744Retained earnings 780,674 661,097 727,131 509,349

Owners’ interests 5,570,580 5,822,316 4,947,781 5,094,136Non-controlling interests 693,134 713,165 - -

Total equity 6,263,714 6,535,481 4,947,781 5,094,136

Non-current liabilitiesBorrowings 28 5,091,945 4,351,799 538,142 652,976Deferred tax liabilities 21 475,591 25,479 346,314 4,264Retirement benefit obligations 29 88,988 85,992 21,569 13,165

5,656,524 4,463,270 906,025 670,405Current liabilitiesPayable to related parties 30 47,152 14,223 31,408 13,203Trade and other payables 31 670,025 583,490 75,544 40,821Current tax liabilities 11 19,757 16,852 - 3,102Borrowings 28 1,681,741 3,065,776 1,127,881 1,701,309Provisions for VRS and Blue print costs 32 272,037 337,719 44,986 49,289Proposed dividend 33 167,531 134,024 167,531 134,024

2,858,243 4,152,084 1,447,350 1,941,748

Total equity and liabilities 14,778,481 15,150,835 7,301,156 7,706,289

The financial statements have been approved for issue by the Board of Directors on 29 March 2011.




Annual Report 2010

Notes to the Statements of Cash Flows


Statements of Cash Flowsyear ended December 31, 2010

THE GROUP THE COMPANY 2010 2009 2010 2009 Rs’000 Rs’000 Rs’000 Rs’000

(a) Operating profit before working capital changes as follows:Profit before tax 448,868 345,622 355,099 291,289Adjustments for:Depreciation of property, plant and equipment 399,073 349,148 17,777 21,576Amortisation of intangible assets 21,362 21,811 52 52Retirement benefit obligations 2,996 (4,676) 8,404 7,415Dividend income (5,419) (16,952) (121,305) (98,086)Interest income (49,836) (63,737) (99,260) (118,066)Interest expense 651,433 726,934 180,360 218,223Profit on disposal of financial assets - (262,055) - (262,055)Share of results of associates 3,906 788 - -Profit on disposal of land (372,918) (23,741) (372,918) (23,741)Profit on disposal of plant and equipment (11,760) (1,370) (1,273) (1,370)Loss in fair value of consumable biological assets 3,241 3,429 3,320 7,202Amortisation of bearer biological assets 45,475 43,647 35,537 34,165Amortisation of VRS costs 9,663 5,369 8,744 4,449

Operating profit before working capital changes 1,146,084 1,124,217 14,537 81,053

(b) Working capital requirements comprise of the following:Inventories (169,840) 80,695 (168) 3,685Trade and other receivables 299,869 129,854 373,218 (198,422)Receivable from related parties 23,916 (36,838) 90,308 (189,651)Trade and other payables 86,535 (44,855) 34,723 (3,848)Payable to related parties 32,929 1,005 18,205 (80)Provisions for VRS and Blue print costs (65,682) - (4,303) -

Total working capital requirements 207,727 129,861 511,983 (388,316)

(c) Income tax paidTaxation is reconciled to the amounts disclosed inthe statement of comprehensive income as follows:Amounts due at beginning of the year (16,610) (12,894) (3,102) (6,971)Per statement of comprehensive income (23,302) (20,647) (3,142) (3,014)Amounts due at the end of the year 19,604 16,610 (153) 3,102

Total income tax paid (20,308) (16,931) (6,397) (6,883)

(d) Dividends paidDividends are reconciled to the amounts disclosedin the statement of comprehensive income as follows:Amounts due at beginning of the year (134,024) (67,012) (134,024) (67,012)Dividends declared 167,531 (134,024) (167,531) (134,024)Amounts due at the end of the year (167,531) 134,024 167,531 134,024

Dividends paid (134,024) (67,012) (134,024) (67,012)

(e) Cash and cash equivalents Cash and cash equivalents consist of cash in hand and balances with banks and bank overdrafts. Cash and cash equivalents are represented by: THE GROUP THE COMPANY 2010 2009 2010 2009 Rs’000 Rs’000 Rs’000 Rs’000

Cash in hand and at bank 566,303 646,583 11,761 12,860 Debt service reserve account 144,154 164,154 - - Bank overdrafts (1,099,532) (1,985,266) (997,475) (1,203,088)

(389,075) (1,174,529) (985,714) (1,190,228)


Cash flows from operating activitiesOperating profit before working capital changes a 1,146,084 1,124,217 14,537 81,053Working capital requirements b 207,727 129,861 511,983 (388,316)

Net cash generated from/ (absorbed in) operations 1,353,811 1,254,078 526,520 (307,263)

Interest paid (651,433) (726,934) (180,360) (214,085)Income tax paid c (20,308) (16,931) (6,397) (6,883)

Cash inflow/(outflow) from operating activities 682,070 510,213 339,763 (528,231)

Cash flows from investing activitiesPurchase of property, plant and equipment (184,072) (879,504) (26,735) (63,370)Investment in bearer biological assets (42,619) (43,574) (32,251) (31,832)Intangible assets (35,624) (69,775) - (1,038)Acquisition of investments in financial assets (276) - - -Acquisition of investments in associates - (10,588) - (10,588)Proceeds on disposal of land 376,579 - 376,579 -Proceeds on disposal of plant and equipment 14,975 5,493 4,307 5,493Proceeds from disposal of financial assets - 310,000 - 310,000Deferred expenditure - VRS costs (72,030) (4,397) (61,041) (4,394)Interest received 49,836 63,737 99,260 115,953Dividends received from subsidiary companies - - 119,419 83,800Dividends received from available-for-sale investments 5,419 16,952 1,886 14,286

Cash flow from/(used in) investing activities 112,188 (611,656) 481,424 418,310

Financing activitiesDividends paid to company’s shareholders d (134,024) (67,012) (134,024) (67,012)Dividends paid to minority shareholders (80,000) (60,000) - -Payments of long-term borrowings (866,570) (246,307) (205,921) (108,035)Proceeds from long-term borrowings 1,390,250 381,709 - -Net repayments from short-term borrowings (281,835) - (276,728) -

Cash flow from/(used in) financing activities 27,821 8,390 (616,673) (175,047)

Increase/(decrease) in cash and cash equivalents 822,079 (93,053) 204,514 (284,968)

Cash and cash equivalents at beginning of the year (1,174,529) (1,081,476) (1,190,228) (905,260)Effect of foreign exchange rate changes (36,625) - - -

Cash and cash equivalents at closing of the year e (389,075) (1,174,529) (985,714) (1,190,228)



Annual Report 2010

(a) Basis of preparation (Continued)

distributed is recognised in profit or loss. This IFRIC will not have any impact on the Group’s financial statements.

IFRIC 18, ‘Transfers of Assets from Customers’, addresses the treatment for assets transferred from a customer in return for connection to a network or ongoing access to goods or services, or both. It requires the transferred assets to be recognised initially at fair value and the related revenue to be recognised immediately; or, if there is a future service obligation, revenue is deferred and recognised over the relevant service period. This IFRIC will not have any impact on the Group’s financial statements.

Amendments to IFRS 1, ‘Additional Exemptions for First-time Adopters’ exempt entities that use the full cost method for oil and gas properties from retrospective application of IFRSs. It also exempts entities with existing leasing contracts from reassessing the classification of those contracts in accordance with IFRIC 4, ‘Determining whether an arrangement contains a lease’. The amendment is not expected to have any impact on the Group’s financial statements.

Amendments to IFRS 2, ‘Group Cash-settled Share-based Payment Transactions’. In addition to incorporating IFRIC 8, ‘Scope of IFRS 2’, and IFRIC 11, ‘IFRS 2 – Group and treasury share transactions’, the amendments expand on the guidance in IFRIC 11 to address the classification of group arrangements that were not covered by that interpretation. This amendment is not expected to have any impact on the Group’s financial statements.

Improvements to IFRSs (issued May 22, 2008)

IFRS 5 (Amendment), ‘Non-current Assets Held for Sale and Discontinued Operations’, clarifies that all of a subsidiary’s assets and liabilities are classified as held for sale if a partial disposal sale plan results in loss of control. Relevant disclosure should be made for this subsidiary if the definition of a discontinued operation is met.

The amendment will not have an impact on the Group’s operations.

Improvements to IFRSs (issued April 16, 2009)

IAS 1 (Amendment), ‘Presentation of Financial Statements’. The amendment clarifies that the potential settlement of a liability by the issue of equity is not relevant to its classification as current

or non-current. By amending the definition of current liability, the amendment permits a liability to be classified as non-current (provided that the entity has an unconditional right to defer settlement by transfer of cash or other assets for at least 12 months after the accounting period) notwithstanding the fact that the entity could be required by the counterparty to settle in shares at any time. This amendment is not expected to have any impact on the Group’s financial statements.

IAS 7 (Amendment), ‘Statement of Cash Flows’, clarifies that only expenditure that results in a recognised asset in the statement of financial position can be classified as a cash flow from investing activities. This amendment is unlikely to have an impact on the Group’s financial statements.

IAS 17 (Amendment) ‘Leases’, clarifies that when a lease includes both land and buildings, classification as a finance or operating lease is performed separately in accordance with IAS 17’s general principles. Prior to the amendment, IAS 17 generally required a lease of land with an indefinite useful life to be classified as an operating lease, unless title passed at the end of the lease term. A lease newly classified as a finance lease should be recognised retrospectively. The amendment will not have an impact on the Group’s operations.

IAS 18 (Amendment), ‘Revenue’. An additional paragraph has been added to the appendix to IAS 18, providing guidance on whether an entity is acting as principal or agent.

IAS 36 (Amendment), ‘Impairment of Assets’, clarifies that for the purpose of impairment testing, the cash- generating unit or groups of cash-generating units to which goodwill is allocated should not be larger than an operating segment (as defined by IFRS 8, ‘Operating segments’) before aggregation. The amendment will not have an impact on the Group’s operations.

IAS 38 (Amendment), ‘Intangible Assets’, clarifies guidance in measuring the fair value of an intangible asset acquired in a business combination and it permits the grouping of intangible assets as a single asset if each asset has similar useful economic lives. The amendment removes the exceptions from recognising intangible assets on the basis that their fair values cannot be reliably measured.

Notes to the Financial Statements (Continued)


1 GENERAL INFORMATION

Omnicane Limited is a limited liability company incorporated and domiciled in Mauritius. The address of its registered office is 7th Floor, Anglo-Mauritius House, Adolphe de Plevitz Street, Port Louis.

These financial statements will be submitted for consideration and approval at the forthcoming Annual Meeting of Shareholders of the company.

2 SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

(a) Basis of preparation

The financial statements of Omnicane Limited (the “Company”) and its subsidiaries (the”Group”) comply with the Companies Act 2001 and are prepared in accordance with International Financial Reporting Standards (IFRS).

Where necessary, comparative figures have been amended to conform with changes in presentation in the current year. The financial statements are prepared under the historical cost convention, except that:

(i) Freehold Land is carried at revalued amount;

(ii) Investment properties are stated at fair value;

(iii) Consumable biological assets are stated at fair value; and

(iv) Available-for-sale securities are stated at their fair value.

Standards, Amendments to published Standards and Interpretations effective in the reporting period

IAS 27, ‘Consolidated and Separate Financial Statements’ (Revised 2008), requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The revised standard also specifies the accounting when control is lost. Any remaining interest in the entity

is remeasured to fair value, and a gain or loss is recognised as profit or loss.

This IAS will not have any impact on the Group’s financial statements.

IFRS 3, ‘Business Combinations’ (Revised 2008), continues to apply the acquisition method to business combinations, with some significant changes. For example, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently remeasured through the statement of comprehensive income. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs should be expensed. This IFRS will not have any impact on the Group’s financial statements.

Amendments to IAS 39, ‘Eligible hedged items’, prohibit designating inflation as a hedgeable component of a fixed rate debt. In a hedge of one-sided risk with options, it prohibits including time value in the hedged risk. The amendment is not expected to have any impact on the Group’s financial statements.

Amendments to IFRS 1 and IAS 27, ‘Cost of an Investment in a Subsidiary’, clarify that the cost of a subsidiary, jointly controlled entity or associate in a parent’s separate financial statements, on transition to IFRS, is determined under IAS 27 or as a deemed cost. Dividends from a subsidiary, jointly controlled entity or associate are recognised as income. There is no longer a distinction between pre-acquisition and post-acquisition dividends.

The cost of the investment of a new parent in a group (in a reorganisation meeting certain criteria) is measured at the carrying amount of its share of equity as shown in the separate financial statements of the previous parent. The amendment is not expected to have any impact on the Group’s financial statements.

IFRIC 17, ‘Distributions of Non-cash Assets to Owners’, clarifies that a dividend payable is recognised when appropriately authorised and no longer at the entity’s discretion. An entity measures distributions of assets other than cash when it pays dividends to its owners, at the fair value of the net assets to be distributed. The difference between fair value of the dividend paid and the carrying amount of the net assets

Notes to the Financial Statements



Annual Report 2010

Amendment to IFRS 1 Limited Exemption from Comparatives IFRS 7 Disclosures for First-time Adopters (Effective July 1, 2010)

Improvements to IFRSs (issued May 6, 2010)

IFRS 1 First-time Adoption of International Financial Reporting Standards

IFRS 3 Business Combinations (Effective July 1, 2010)

IFRS 7 Financial Instruments: Disclosures

IAS 1 Presentation of Financial Statements

IAS 27 Consolidated and Separate Financial Statements (Effective July 1, 2010)

IAS 34 Interim Financial Reporting

IFRIC 13 Customer Loyalty Programmes

Where relevant, the Group is still evaluating the effects of these Standards, amendments to published Standards and Interpretations issued but not yet effective, on the presentation of its financial statements.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 4.

(b) Turnover

Turnover represents the gross proceeds of sugar, molasses, bagasse and income receivable for the supply of electricity to the National Grid of the Central Electricity Board.

Sugar and molasses proceeds are recognised on total production of the crop year. Bagasse proceeds are accounted as and when it is receivable for the Group. Sugar and molasses prices are based on prices recommended by the Mauritius Chamber of Agriculture for the crop year after consultation with the Mauritius Sugar Syndicate. The difference between the recommended price and the final price is reflected in the financial year in which it is established.

Other revenues earned by the Group are recognised on the following basis:

Dividend income - when the shareholders’ right to receive payment is established.

Interest income - on a time-proportion basis using the effective interest method.

SIFB compensation - on an accrual basis.

(c) Government grants

Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognised as income over the periods necessary to match them with the costs for which they are intended to compensate, on a systematic basis. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in the statement of comprehensive income in the period in which they become receivable.

(d) Property, plant and equipment

All property, plant and equipment are initially recorded at cost. Freehold Land is subsequently revalued. The last revaluation was carried out by Gexim land Consultants, property valuers in December 2007 based on open market value.

Increases in the carrying amount arising on revaluation are credited to revaluation and other reserves in shareholders’ equity. Decreases that offset previous increases of the same asset are charged against the revaluation reserve; all other decreases are charged to the statement of comprehensive income.

Depreciation is calculated on the straight line method to write off the cost of assets, or the revalued amounts, to their residual values over their estimated useful lives as follows:

The annual rates used for the purpose are :

Buildings 2 - 2.25 %Power Plant & Equipment 5 - 7 %Factory & Equipment 2 - 20 %Refinery Plant 5 %Plant & Equipment 5 - 20 %



2 SIGNIFICANT ACCOUNTING POLICIES (Continued)

(a) Basis of preparation (Continued)

Improvements to IFRSs (issued April 16, 2009) (cont’d)

Intangible assets acquired in a business combination that are separable or arise from contractual or other legal rights should be recognised. The amendment specifies different valuation techniques that may be used to value intangible assets where there is no active market. The amendment is unlikely to have an impact on the Group’s financial statements.

IAS 39 (Amendment), ‘Financial Instruments: Recognition and Measurement’ clarifies that the scope exemption within IAS 39 only applies to forward contracts that will result in a business combination at a future date, as long as the term of the forward contract does ‘not exceed a reasonable period normally necessary to obtain any required approvals and to complete the transaction’. The amendment removes reference to transactions between segments as being hedgeable transactions in individual or separate financial statements and clarifies that amounts deferred in equity are only reclassified to profit or loss when the underlying hedged cash flows affect profit or loss. The amendment is not expected to have an impact on the Group’s statement of comprehensive income.

IFRS 2 (Amendment), ‘Share-based Payment’, confirms that, transactions in which the entity acquires goods as part of the net assets acquired in a business combination as defined by IFRS 3 (2008) Business Combinations, contribution of a business on formation of a joint venture and common control transactions are excluded from the scope of IFRS 2 Share-based Payment. The amendment will not have an impact on the Group’s operations.

IFRS 5 (Amendment), ‘Non-current Assets Held for Sale and Discontinued Operations’. The amendment clarifies that IFRS 5 specifies the disclosures required in respect of non-current assets (or disposal groups) classified as held for sale or discontinued operations. It also clarifies that the general requirement of IAS 1 still apply, in particular paragraph 15 (to achieve a fair presentation) and paragraph 125 (sources of estimation uncertainty) of IAS 1. The amendment will not have an impact on the Group’s operations.

IFRS 8 (Amendment), ‘Operating Segments’, clarifies that the requirement for disclosing a measure of segment assets is only required when the Chief Operating Decision Maker reviews that information. This amendment is unlikely to have an impact on the Group’s financial statements.

IFRIC 9 (Amendment), ‘Reassessment of Embedded Derivatives’, clarifies that embedded derivatives in contracts acquired in a combination between entities or businesses under common control or the formation of a joint venture are outside the scope of IFRIC 9. This amendment is unlikely to have an impact on the Group’s financial statements.

IFRIC 16 (Amendment), ‘Hedges of a Net Investment in a Foreign Operation’, clarifies that hedging instruments may be held by any entity or entities within the group. This includes a foreign operation that itself is being hedged.

This amendment is unlikely to have an impact on the Group’s financial statements.

Standards, Amendments to published Standards and Interpretations issued but not yet effective

Certain standards, amendments to published standards and interpretations have been issued that are mandatory for accounting periods beginning on or after January 1, 2011 or later periods, but which the Group has not early adopted.

At the reporting date of these financial statements, the following were in issue but not yet effective:

Classification of Rights Issues (Amendment to IAS 32) (Effective February 1, 2010)

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (Effective July 1, 2010)

Amendments to IFRIC 14 Prepayments of a Minimum Funding Requirement

IAS 24 Related Party Disclosures (Revised 2009)

Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters (Amendments to IFRS1)

Deferred Tax: Recovery of Underlying Assets (Amendments to IAS 12)

IFRS 9 Financial Instruments

Disclosures – Transfers of Financial Assets (Amendments to IFRS 7)




Annual Report 2010

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the group’s share of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition.

Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investment in associates. Goodwill is tested annually for impairment and carried at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to each of the group’s cash generating units.

If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

Blue Print costs

The cash compensation together with the costs of land and infrastructure payable under the Blue Print and Early Retirement Scheme is capitalised as deferred expenditure. Such costs are charged to statement of comprehensive income when the associated benefits related to the special rights to acquire, convert and sell agricultural land are realised. At the end of each financial year, the carrying amount is subject to testing for impairment and reduced to the recoverable amount, if this is less.

Management contract - The Company

The Company had acquired the rights to manage its subsidiary Omnicane Milling Operations Limited under a management contract. The cost has been recognised as an intangible asset with indefinite life as the contract does not have a defined lifetime. The contract is assessed annually for impairment.

Energy management contract - The Group

Omnicane Milling Operations Limited acquired the rights to the management contract between Omnicane Milling Operations Limited, Omnicane Thermal Energy Operations (St Aubin) Limited and Omnicane Thermal Energy Operations (La Baraque) Limited, two energy generating entities.

This management contract will run for a period of twenty years in line with the provisions of the Purchasing Power Agreement between Omnicane Thermal Energy Operations (St Aubin) Limited and Central Electricity Board and between Omnicane Thermal Energy Operations (La Baraque) Limited and Central Electricity Board.

These rights have been recognised as an intan-gible asset and are amortised over the life of the contract.

Factory upgrading and modernising expenditure

Following the closure of Riche-en-Eau, Mon Tresor Mill and Saint Félix Mill, Omnicane Milling Operations Limited has become the sole cane receiving mill in the Southern region. Omnicane Milling operations Limited has therefore upgraded and modernised its factory to cater for the transfer of cane to its mill. The cost of upgrade and modernisation will be financed through special rights to acquire, convert and sell agricultural land under the provisions of the Sugar Industry Efficiency Act (SIE ACT). Omnicane Milling Operations Limited has recognised these rights as an intangible asset and valued them at the cost of the expenditure incurred. Management has determined that this intangible asset has an indefinite life and is assessed for impairment on an annual basis.

Rebranding cost

In 2009, the Group completed a rebranding exercise aiming at regrouping all members under a common brand.

All cost associated to the rebranding exercise has been capitalised and included as intangible assets. Rebranding cost is amortised over a period of 20 years, time at which a full review of the brand will be performed.

(h) Investment in subsidiaries

The Company

Investments in subsidiary companies are carried at cost. The carrying amount is reduced to recog-nise any impairment in the value of individual in-vestments.




(d) Property, plant and equipment (Continued)

Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount.

Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying amount and are taken into account in determining operating profit. On disposal of revalued assets, amounts in revaluation and other reserves relating to that asset are transferred to retained earnings.

(e) Investment properties

Investment properties consist of land held for capital appreciation and are stated at fair value. Gains or losses arising from changes in the fair value of investment properties are included in the statement of comprehensive income in the year in which they arise.

Investment properties have been valued at fair value by Gexim Land Consultants, property valu-ers, in December 2003. The valuation was arrived by reference to market evidence of transaction prices for similar properties.

(f) Borrowing costs

Borrowing costs directly attributable to the ac-quisition, construction or production of qualify-ing assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale are capitalised as part of the cost of the assets until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are charged to the statement of comprehensive income in the pe-riod in which they are incurred.

(g) Intangible assets

Intangible assets acquired seperately are mea-sured on initial recognition at cost. The cost of intangible assets acquired in a business combi-nation is fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.

Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected in the income statement in the year in which the expenditure is incurred.

The useful lives on intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortised over the 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 with a finite life is reviewed 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 is 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 the statement of comprehensive income in the expense category with the function of the intangible asset.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually either individually or at the cash generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

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 the statement of comprehensive income when the asset is derecognised.

Professional fees relating to the Power purchase agreement

In the case of professional fees incurred in relation to the Purchasing Power Agreement (PPA), the useful life is taken as the term of the contract, that is 20 years.

Accounting software

The accounting software has been granted for a period of three years with the option of renewal at the end of this period.




Annual Report 2010

(l) Consumable biological assets

Standing canes are measured at fair value. The fair value of the living plants held for sale is based on expected selling price and future direct costs to bring the biological assets to saleable condition, discounted at an appropriate discount rate to the reporting date.

(m) Deferred Expenditure

Voluntary Retirement Scheme (VRS) costs

VRS costs are capitalised as deferred expenditure when incurred as the costs will be recouped through the sale of land on which no land conversion tax will be payable. VRS costs is amortised over a period of seven years. The amortisation period is reviewed periodically to reflect the circumstances of the company. When the sale of land is realised, the corresponding unamortised portion of deferred cost will be recognised in the statement of comprehensive income.

(n) Deferred Taxation

Deferred income tax is provided, using the liability method, for all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes.

The principal temporary differences arise from depreciation on property, plant and equipment, revaluation of certain non-current assets, provisions for retirement benefit obligations and tax losses carried forward. Deferred tax assets relating to the carry forward of unused tax losses are recognised to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised.

(o) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined by the weighted average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads but excludes interest expense. Net realisable value is the estimate of the selling price in the ordinary course of business less the costs of completion and selling expenses.

(p) Land under development

Land under development comprise of cost of land to be sold and related infrastructural costs. This expenditure is released to the statement of comprehensive income to the extent cash is received on the sale of land.

(q) Retirement benefit obligations

Defined benefit pension plan

The cost of providing benefits are actuarially determined using the projected unit credit method. The present value of funded obligations is recognised in the statement of financial position as a non-current liability after adjusting for the fair value of plan assets, any unrecognised actuarial gains and losses and any unrecognised past service cost. The valuation of funded obligations is carried out annually by a firm of actuaries.

The current service cost and any recognised past service cost are included as an expense together with the associated interest cost, net of expected return on plan assets.

A portion of the actuarial gains and losses will be recognised as income or expense if the net cumulative unrecognised actuarial gains and losses at the end of the previous accounting period exceeded the greater of:

(i) 10% of the present value of the defined benefit obligation at that date; and

(ii) 10% of the fair value of plan assets at that date.

Other retirement benefits

The present value of other retirement benefits in respect of Labour Act gratuities is recognised in the statement of financial position as a non-current liability.

State plan and defined contribution pension plan

Contributions to the National Pension Scheme and defined contribution pension plan are expensed to the statement of comprehensive income in the period in which they fall due.




(h) Investment in subsidiaries (Continued)

The Group

The consolidated financial statements incorporate the financial statements of the company and enterprises controlled by the company (its subsidiaries) made up to the financial period. Control is achieved where the company has the power to govern the financial and operating policies of an investee enterprise so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the period are included in the consolidated statement of comprehensive income from the date of their acquisition or up to the date of their disposal. The consolidated financial statements have been prepared in accordance with the acquisition method.

Goodwill on acquisition of subsidiaries is included in intangible assets.

Any net excess of the group’s interest in the net fair value of the acquiree’s net identifiable assets over cost is recognised in the statement of comprehensive income as negative goodwill.

All significant intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless cost cannot be recovered.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by other members of the group.

(i) Investment in associated companies

The Company

Investments in associated companies are carried at cost. The carrying amount is reduced to recognise any impairment in the value of individual investments.

The Group

An associate is an equity over which the Group has significant influence but not control, or joint control.

Investments in associated companies are accounted for by the equity method.

Investment in associates are initially recorded at cost as adjusted by post acquisition changes in the Group’s share of the net assets of the associate less any impairment in the value of individual investments. When the Group’s share of losses exceeds its interests in an associate, the Group discontinues recognising further losses, unless it has a legal or constructive obligation to make payments on behalf of the associate.

Unrealised profits and losses are eliminated to the extent of the Group’s interests in the associate.

(j) Business combinations

The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair values at the acquisition date.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilites and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in the statement of comprehensive income.

(k) Bearer biological assets

Cane replantation costs are deferred at cost and amortised over 7 years.




Annual Report 2010

(vi) Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and bank overdrafts.

Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.

(vii) Equity instruments

Equity instruments are recorded at the proceeds received, net of direct issue costs.

(viii) Share capital

Ordinary shares are classified as equity.

(u) Provisions

Provisions are recognised when the Group has a present or constructive obligation as a result of past events which will probably result in an outflow of economic benefits that can be reasonably estimated. They are measured at the directors’ best estimate of the expenditure required to settle the obligation at the reporting date. Provisions are reviewed at each statement of financial position date and adjusted to reflect the current best estimate.

(v) Alternative Minimum Tax (AMT)

Alternative Minimum Tax (AMT) is provided for, where a Company which has a tax liability of less than 7.5% of its book profit pays a dividend. AMT is calculated as the lower of 10% of the dividend paid and 7.5% of book profit.

(w) Impairment of assets

Assets that have an indefinite useful life are not subject to amortisation but are tested annually for impairment.

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest

levels for which there are separately identifiable cash flows (cash-generating units).

(x) Related parties

Related parties are individuals and companies where the individual or company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions.

(y) Dividend distribution

Dividend distribution to the company’s share holders is recognised as a liability in the Group’s financial statements in the period in which the dividends are declared.

(z) Cash flow hedge

The Company has a subsidiary which has a foreign bank loan (hedge item) denominated in Euro and has its revenue stream (hedge instrument) in Euro. The subsidiary has a cash flow hedge whereby the foreign exchange exposure arising from translation of the bank loan is hedged against the revenue stream.

Exchange differences arising from the translation of the loan is taken to ‘Hedging reserve’. The realised gain/(loss) on repayment of the bank loan is then released to the statement of comprehensive income.

When the hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the statement of comprehensive income. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the statement of comprehensive income within finance costs.

(aa) Segment reporting

Segment information presented relate to the operating segments that are engaged in the business activities for which revenues are earned and expenses incurred.




(r) Foreign currencies

Transactions denominated in foreign currencies are recorded at the rate of exchange ruling on the transaction date.

Monetary assets and liabilities expressed in foreign currencies are translated into Mauritian Rupees at the rates of exchange ruling at the statement of financial position date. Exchange differences arising from foreign currencies transactions are accounted for in the statement of comprehensive income.

(s) Income tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.

(t) Financial instruments

The Group’s accounting policies in respect of the main financial instruments are set out below:

(i) Investment in financial assets

Initial recognition

Investments are recognised on a trade-date basis and are initially measured at cost.

Subsequent recognition

Available-for-sale securities

Available-for-sale securities are measured at subsequent reporting dates at fair value. Unrealised gains and losses on such securities are recognised directly in equity (revaluation and other reserves - fair value reserve) until the security is disposed of or found to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the net profit or loss for the period.

Fair value

The fair value of publicly traded available-for-sale securities is based on their market value which is calculated by reference to the Stock Exchange

prices at the close of business on statement of financial position date.

The unquoted investments are valued at cost less any impairment loss recognised to reflect irrecoverable amounts. In the opinion of the directors, cost is equivalent to fair value.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of trading the receivable. They are included in current assets when maturity is within twelve months after the end of the reporting period date or non-current assets for maturities greater than twelve months.

(iii) Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables.

The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of provision is recognised in the statement of comprehensive income.

(iv) Borrowings

Interest-bearing bank loans, debentures and overdrafts are recorded at the proceeds received, net of direct issue costs. Finance charges, including premiums payable on settlement or redemption, are accounted for on an accrual basis and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period.

(v) Trade payables

Trade payables are stated at fair value and subsequently measured at amortised cost using the effective interest method.




Annual Report 2010

(b) Credit risk (Continued)

The Group’s main debtors are the Mauritius Sugar Syndicate on account of sugar proceeds receivable, and the Central Electricity Board for the sale of electricity.

The Group’s energy cluster’s credit risk is highly mitigated by the fact that accounts receivable from its sole customer, the Central Electricity Board, is guaranteed by the Government.

(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash marketable funding through an adequate amount of committed credit facilities. The Group aims at maintaining flexibility in funding by keeping committed credit lines available.

Management monitors rolling forecasts of the Group’s liquidity reserve on the basis of expected cash flow and does not foresee any major liquidity risk over the next two years.

The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date:

THE GROUP Less than Between 1 Between 2 Over 1 year and 2 years and 5 years 5 years Rs’000 Rs’000 Rs’000 Rs’000

At December 31, 2010

Trade and other payables 670,025 - - - Borrowings 1,681,741 557,736 1,408,504 3,125,705 Payable to related parties 78,221 - - -


Trade and other payables 583,490 - - - Borrowings 3,065,776 318,442 953,607 3,079,750 Payable to related parties 14,223 1,572 1,478 -

THE COMPANY Less than Between 1 Between 2 Over 1 year and 2 years and 5 years 5 years Rs’000 Rs’000 Rs’000 Rs’000


Trade and other payables 75,545 - - - Borrowings 1,127,881 99,162 310,067 128,913 Payable to related parties 31,408 - - -


Trade and other payables 40,821 - - - Borrowings 1,701,309 125,005 292,302 235,669 Payable to related parties 13,203 49,929 126,119 50,000



3 FINANCIAL RISK MANAGEMENT

3.1 Financial Risk Factors

The Group’s activities expose it to a variety of financial risks; market risk (including currency risk, price risk and cash flow and fair value interest rate risk), credit risk and liquidity risk.

A description of the significant risk factors is given below together with the risk management policies applicable.

(a) Market risk

(i) Currency risk

The Group’s activities is mainly in the sugarcane growing and milling, and electricity production. The market strategy for the sale of raw and refined sugar rests with the Mauritius Sugar Syndicate (MSS) which is responsible for negotiating the sale of the sugar production of the country with potential buyers. There is a much wider and diverse demand for white sugar in Europe which mitigates the market risk. The Group invoices its refined sugar in Euro to the MSS. For electricity production, sale is made solely to the Central Electricity Board (CEB) and is based on a Power Purchase Agreement (PPA) for both energy companies. Coal used for electricity production is purchased in US dollar. However, any fluctuation in foreign currency is passed over to the CEB per the PPA.

At December 31, 2010, if the Rupee had weakened/strenghthened by 5% against the US Dollar and the Euro with all other variable held constant, post tax profit and equity would have been Rs.184,000 (2009: Rs.132,000) higher/ lower for the Company following changes in foreign exchange gains/losses on translation of US Dollar and Euro denominated cash balances.

At December 31, 2010, if the Rupee had weakened/strenghthened by 5% against the US Dollar and the Euro with all other variable held constant, post tax profit would have been Rs.5,004,000 higher/lower (2009: Rs.24,894,000 lower/higher) and equity Rs.20,920,000 lower/higher (2009: Rs.24,984,000) for the Group following changes in foreign exchange differences on translation of US Dollar and Euro denominated cash balances, trade receivables and bank borrowings.

(ii) Price risk

The Group is exposed to equity securities price risk because of investments in financial assets held by the Group and classified as available for-sale.

To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio.

Sensitivity analysis

The table below summarises the impact of increases/decreases in the fair value of the investments on the Group’s

equity. The analysis is based on the assumption that the fair value had increased/decreased by 5%.

Impact on equity


Categories of investments:

Available-for-sale 8,933 3,047 2,721 2,158

(iii) Cash flow and fair value interest rate risk

As the Group has no significant interest-bearing assets, its income and operating cash flows are substantially independent of changes in market interest rates. The Group’s interest rate risk arises from borrowings. Borrowings issued at variable rates expose the Group to cash flow interest-rate risk. At December 31, 2010 if interest rates on borrowings had been 50 basis points higher/lower with all other variables held constant, post-tax profit for the year would have been Rs.4,055,000 (2009: Rs.5,008,000) lower/higher for the Company and Rs.30,146,000 (2009: Rs.33,116,000) lower/higher for the Group, mainly as a result of higher/lower interest expense on floating rate borrowings.

(b) Credit risk

The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the group’s maximum exposure to credit risk without taking account of the value of any collateral obtained.




Annual Report 2010

3.4 Biological assets

The Group is exposed to fluctuations in the price of sugar and the incidence of exchange rate. The risk affects both the crop proceeds and the fair value of biological assets. The risk is not hedged.

4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

In the application of the Group’s accounting policies, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period of the revision and future periods if the revision affects both current and future periods.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the statement of financial position date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

(i) Estimated impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash-generating units and a suitable discount rate in order to calculate present value.

(ii) Consumable biological assets - Standing Canes

The fair value of consumable biological assets has been arrived at by discounting the present value of expected net cash flows from standing canes at the relevant market determined pre-tax rate.

The expected cash flows have been computed by estimating the expected crop and the sugar extraction rate and the forecasts of sugar prices which will prevail in the coming year for standing canes.

The harvesting costs and other direct expenses are based on the yearly budgets of the Group.

(iii) Other investments - Available for sale

Level 3 Available-for-sale investments are stated at cost since no reliable estimate could be obtained to compute the fair value of these securities. The directors used their judgement at year-end and reviewed the carrying amount of these investments and in their opinion there were no material difference between the carrying amount and the fair value of the unquoted securities. To their judgement, the carrying amount reflect the fair value of these investments.

(iv) Impairment of available-for-sale financial assets

The Group follow the guidance of IAS 39 on determining when an investment is other-than-temporarily impaired.

This determination requires significant judgement. In making this judgement, they evaluate, among other factors, the duration and extent to which the fair value of an investment is less than its cost, and the financial health of and near-term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow.

(v) IFRIC 4 - Whether arrangements contains a lease

In preparing these financial statements, the Directors have considered the implications of IFRIC 4 - “Whether an arrangement contains a lease” and have concluded that the Power Purchase Agreement of the energy subsidiaries with the Central Electricity Board does meet the criteria qualifying for a lease arrangement.



3 FINANCIAL RISK MANAGEMENT (Continued)

3.2 Capital risk management

The Group’s objective when managing capital is to safeguard the entity’s ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders.

The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders or sell assets to reduce debt.

Consistently with others in the industry, the Group monitors capital on the basis of the debt-to-adjusted capital ratio. This ratio is calculated as net debt over adjusted capital. Net debt is calculated as total debt (as shown in the statement of financial position) less cash in hand and at bank and short term deposits, adjusted capital comprises all components of equity (i.e. share capital, retained earnings and reserves).

3.3 Fair value estimation

The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting period. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1. Instruments included in level 1 comprise primarily quoted equity investments classified as trading securities or available-for-sale.

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

Specific valuation techniques used to value financial instruments include:

Quoted market prices or dealer quotes for similar instruments.

Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments.

The nominal value less estimated credit adjust-ments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cashflows at the current market interest rate that is available to the Group for similar financial instruments.

The debt-to-adjusted capital ratios at December 31, 2010 and December 31, 2009 were as follows:


Total debt 6,773,686 7,417,575 1,666,023 2,354,285 Less: cash in hand and at bank (710,457) (810,737) (11,761) (12,860)

Net debt 6,063,229 6,606,838 1,654,262 883,977

Shareholders interests 5,570,195 5,822,316 4,947,781 5,094,136

Debt to adjusted capital ratio 1.09 1.13 0.33 0.17




Annual Report 2010



5 TURNOVER


Sugar, molasses and bagasse 695,036 826,409 229,111 272,808 Refined sugar 299,750 862 - - Sugar insurance compensation 11,501 10,840 2,469 1,904 Electricity generation 2,418,601 2,274,955 - - Agricultural diversification and others 54,816 79,001 44,169 44,214

3,479,704 3,192,067 275,749 318,926

6 OTHER OPERATING INCOME


Profit on sale of plant and equipment 11,760 1,370 1,273 1,370

7 OPERATING PROFIT


Operating profit is arrived at after charging: Depreciation on property, plant and equipment 399,073 344,434 17,777 21,576 Amortisation of bearer biological assets 45,475 43,647 35,537 34,165 Amortisation of intangible assets 21,362 21,811 52 52 Raw materials and consumables used 1,385,300 1,327,843 37,698 36,340 Employees remuneration (note 7(a)) 362,721 305,692 90,360 68,078 and crediting: Profit on disposal of plant and equipment (11,760) (1,370) (1,273) (1,370)

(a) Employees remuneration


Wages and salaries 330,002 278,393 80,817 61,617 Pension costs 32,719 27,299 9,543 6,461

362,721 305,692 90,360 68,078

4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)

(vi) Recoverability of proceeds from sale of Land

At December 31, 2010, management considered the recoverability of proceeds from sale of land under Section 8 of the Land Acquisition Act. Proceeds have been determined on a case by case basis and take into account the location of the land, surveyors’ report and previous sale of similar properties in the vicinity.

(vii) Depreciation policies

Property, plant and equipment are depreciated to their residual values over their estimated useful lives. The residual value of an asset is the estimated net amount that the Group would currently obtain from the disposal of the asset if the asset was already of the age and in the condition expected at the end of its useful life.

The directors therefore make estimates based in historical experience and use best judgement to asses the useful lives of assets and to forecast the expected residual values of the assets at the end of their expected useful lives.

(viii) Pension benefits

The present value of the pension obligations depend on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of pension obligations.

The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, the Group considers the interest rates of high- quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability.




Annual Report 2010



11 TAXATION


(a) Charge for the year

Current tax on adjusted profit for the year at 15% (2009: 15%) 569 2,141 - - Alternative minimum tax 20,000 15,000 - - Under/(over) provision in previous year 2,733 404 3,142 (88) National Residential Property tax - 3,102 - 3,102 Deferred tax (note 21) 109,477 1,910 4,595 (5,131)

Tax charge/(credit) for the year 132,779 22,557 7,737 (2,117)

The Group’s profit before tax differs from the theoretical amount that would arise using the Group’s basic rate of the group as follows:


Profit before tax: 448,868 345,622 355,099 291,289

Tax calculated at current income tax rate of 15% (2009: 15%) 67,330 51,843 53,265 43,693

Income not subject to tax (57,431) (61,783) (74,321) (50,636) Expenses not deductible for tax purposes 58,503 14,093 25,651 1,812 Alternative Minimum Tax 20,000 15,000 - - National Residential Property tax - 3,102 - 3,102 Under/(over) provision in previous year 2,733 404 3,142 (88) Tax losses for which no deferred income tax asset was recognised 41,644 (102) - -

Tax charge/(credit) for the year 132,779 22,557 7,737 (2,117)



7 OPERATING PROFIT (Continued)


(b) Expenses by nature

Depreciation on property, plant and equipment 399,073 344,434 17,777 21,576 Amortisation of bearer biological assets 45,475 43,647 35,537 34,165 Amortisation of intangible assets 21,362 21,811 52 52 Raw materials and consumables used 1,385,300 1,327,843 37,698 36,340 Employees remuneration 362,721 305,692 90,360 68,078 Other expenses 659,141 449,307 141,371 142,896

2,873,072 2,492,734 322,795 303,107

8 INVESTMENT INCOME


Interest income 49,836 63,737 99,260 118,066 Dividend income 5,419 16,952 121,305 98,086

55,255 80,689 220,565 216,152

9 FINANCE COSTS


Foreign exchange transaction (gains)/losses (70,546) (14,954) 187 (2,026)

Interest expense:

- Bank overdrafts 123,295 165,545 89,737 103,427 - Bank and other loans 528,138 561,389 90,623 114,796

651,433 726,934 180,360 218,223

580,887 711,980 180,547 216,197

10 EXCEPTIONAL ITEMS


Profit on disposal of land 372,918 23,741 372,918 23,741 Profit on disposal of financial assets - 262,055 - 262,055

372,918 285,796 372,918 285,796


Annual Report 2010



13 PROPERTY, PLANT AND EQUIPMENT

(a) THE GROUP Freehold Leasehold Power Plant Factory & Refinery Plant and Work In Land Buildings Properties & Equipment Equipment Plant Equipment Progress Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

2010

Valuation / Cost 4,471,846 174,657 2,466 4,907,651 848,636 1,249,977 328,281 51,529 12,035,043 Accumulated

depreciation - (46,688) - (959,622) (99,982) (65,917) (237,667) - (1,409,876)

Net Book Value 4,471,846 127,969 2,466 3,948,029 748,654 1,184,060 90,614 51,529 10,625,167

2009

Valuation / Cost 4,515,460 175,346 2,466 4,844,787 837,911 1,196,544 361,509 21,185 11,955,208 Accumulated

depreciation - (43,078) - (706,348) (50,944) (4,842) (262,999) - (1,068,211)

Net Book Value 4,515,460 132,268 2,466 4,138,439 786,967 1,191,702 98,510 21,185 10,886,997

NET BOOK VALUES

Freehold Leasehold Power Plant Factory & Refinery Plant and Work In Land Buildings Properties & Equipment Equipment Plant Equipment Progress Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 2010

At January 1, 2010 4,515,460 132,268 2,466 4,138,439 786,967 1,191,702 98,510 21,185 10,886,997 Additions - 693 - 62,864 10,725 10,529 26,013 73,248 184,072 Disposals (43,614) - - - - - (3,215) - (46,829) Depreciation - (7,431) - (253,274) (49,038) (61,075) (28,255) - (399,073) Transfers - 2,439 - - - 42,904 (2,439) (42,904) -

At December 31, 2010 4,471,846 127,969 2,466 3,948,029 748,654 1,184,060 90,614 51,529 10,625,167

2009

At January 1, 2009 4,519,583 137,743 2,466 4,332,070 711,340 - 89,328 562,476 10,355,006 Additions - 2,206 - 57,458 17,485 769,892 40,576 736 888,353 Disposals (4,123) (988) - - (6,289) - (528) - (11,928) Depreciation - (6,693) - (251,089) (50,944) (4,842) (30,866) - (344,434) Transfers - - - - 115,375 426,652 - (542,027) -

At December 31, 2009 4,515,460 132,268 2,466 4,138,439 786,967 1,191,702 98,510 21,185 10,886,997

(i) Freehold Land has been revalued by Gexim Land Consultants, property valuers in December 2007 based on open market value. The revaluation surplus, net of deferred tax, was credited to revaluation reserve.

(ii) Borrowings are secured by floating charges on the assets of the group, including property, plant and equipment. (note 28)

(iii) If the freehold land was stated on the historical cost basis, the amounts would be as follows:

2010 2009 Freehold Freehold Land Land Rs’000 Rs’000

Cost 364,187 375,068



11 TAXATION (Continued)


(b) Current tax liability/(asset)

At January 1, 16,610 12,894 3,102 6,971

Movement during the year: Current 15% tax on the adjusted profit for the year 569 2,141 - - National Residential Property tax - 3,102 - 3,102 Alternative Minimum Tax 20,000 15,000 - - Under /(over) provision in previous year 2,733 404 3,142 (88)

23,302 20,647 3,142 3,014

Less: Alternative Minimum Tax paid Tax deducted at source (153) - (153) - Tax paid (20,155) (16,931) (6,244) (6,883)

(20,308) (16,931) (6,397) (6,883)

At December 31, 19,604 16,610 (153) 3,102

Disclosed as follows:

Current tax assets (153) (242) (153) - Current tax liabilities 19,757 16,852 - 3,102

19,604 16,610 (153) 3,102

12 EARNINGS PER SHARE


Basic earnings per share (Rs.) 3.71 3.86 5.18 4.38

Based on: Profit after tax and minority interests (Rs’000) 248,916 258,399 347,362 293,406 Number of ordinary shares in issue 67,012,404 67,012,404 67,012,404 67,012,404


Annual Report 2010



14 INVESTMENT PROPERTIES

Freehold Land

THE GROUP & THE COMPANY 2010 2009 Rs’000 Rs’000

NET BOOK VALUE

At January 1 and December 31, 9,643 9,643

(b) Investment properties have been valued at fair value by Gexim Land Consultants, property valuers, in December 2003.

The valuation was arrived by reference to market evidence of transaction prices for similar properties. There was no rental income and no direct operating expenses attributable to the investment properties.

The directors are of the opinion that the carrying value reflects the fair value at December 31, 2010.

15 INTANGIBLE ASSETS

a) THE GROUP

2010 2009

Software & Professional Centralisation Management Rebranding Fees Goodwill Costs Contracts Costs Total Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 COST At January 1, 85,052 73,253 466,506 555,200 11,333 1,191,344 1,121,569 Additions 7 - 35,617 - - 35,624 69,775

At December 31, 85,059 73,253 502,123 555,200 11,333 1,226,968 1,191,344

AMORTISATION At January 1, 14,115 - 12,432 16,784 567 43,898 22,087 Charge for the year 4,374 - - 16,784 204 21,362 21,811

At December 31, 18,489 - 12,432 33,568 771 65,260 43,898

CARRYING AMOUNT At December 31, 66,570 73,253 489,691 521,632 10,562 1,161,708 1,147,446

Goodwill is allocated to the cash generating units. The carrying amount of goodwill had been allocated as follows:

THE GROUP

2010 & 2009 Rs’000

Floreal Ltd 427 Omnicane Agricultural Operations Ltd 20,152 Omnicane Milling Holdings (Britannia Highlands) Ltd 6,077 Omnicane Thermal Energy Holdings (St Aubin) Ltd 46,597

73,253

Impairment assessment has been performed comparing net realisable value, based on land development potential and carrying amount. No impairment of goodwill is considered necessary.



13 PROPERTY, PLANT AND EQUIPMENT (Continued)

(b) THE COMPANY Freehold Leasehold Plant and Land Buildings Properties Equipment Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

2010

Valuation / Cost 3,747,501 66,881 2,466 252,009 4,068,857 Accumulated depreciation - (14,816) - (188,141) (202,957)

Net Book Value 3,747,501 52,065 2,466 63,868 3,865,900

2009

Valuation / Cost 3,791,115 23,466 2,466 322,317 4,139,364 Accumulated depreciation - (14,000) - (221,774) (235,774)

Net Book Value 3,791,115 9,466 2,466 100,543 3,903,590

NET BOOK VALUES Freehold Leasehold Plant and Land Buildings Properties Equipment Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

2010

At January 1, 2010 3,791,115 9,466 2,466 100,543 3,903,590 Additions - 10,988 - 15,747 26,735 Disposals (43,614) - - (3,034) (46,648) Depreciation - (1,175) - (16,602) (17,777) Transfer - 32,786 - (32,786) -

At December 31, 2010 3,747,501 52,065 2,466 63,868 3,865,900

2009

At January 1, 2009 3,795,238 7,611 2,466 60,604 3,865,919 Additions - 2,206 - 61,164 63,370 Disposals (4,123) - - - (4,123) Depreciation - (351) - (21,225) (21,576)

At December 31, 2009 3,791,115 9,466 2,466 100,543 3,903,590

(i) Freehold Land has been revalued by Gexim Land Consultants, property valuers in December 2007 based on open market value. The revaluation surplus, net of deferred tax, was credited to revaluation reserve.

(ii) Borrowings are secured by floating charges on the assets of the group, including property, plant and equipment. (note 28)

(iii) If the freehold land was stated on the historical cost basis, the amounts would be as follows:

2010 2009 Freehold Freehold Land Land Rs’000 Rs’000

Cost 199,707 210,588


Annual Report 2010



16 INVESTMENT IN SUBSIDIARY COMPANIES (Continued)

(a) Subsidiaries of Omnicane Limited:

2010 & 2009

% Holding Amount

Held by Type of Held other group Company shares held Activity Directly companies Rs’000

Direct Holding

. Omnicane Milling Holdings (Mon Trésor) Limited Ordinary Investment 80 - 118,242 . Omnicane Milling Holdings (Britannia Highlands) Ltd Ordinary Investment 80 - 272,036 . Floreal Limited Ordinary Investment 100 - 3,188 . FAW Investment Limited Ordinary Investment 100 - 148,206 . Exotic Exports Limited Ordinary Flower Export 100 - 642 . Omnicane Logistic Operations Limited Ordinary Transport 100 - 25 . Omnicane Thermal Energy Holdings (St Aubin) Ltd Ordinary Investment 100 - 287,271 . Omnicane Holdings (La Baraque) Thermal Energy Limited Ordinary Investment 100 - 535,221

1,364,831 Indirect Holding

. Omnicane Milling Operations Limited Ordinary Cane Milling & Sugar refining - 80 390,888

. Omnicane Agricultural Operations Ltd Ordinary Sugar Growing - 100 10,400 . Omnicane Thermal Energy Operations (St Aubin) Limited Ordinary Energy - 60 153,000 . Omnicane Thermal Energy Operations (La Baraque) Limited Ordinary Energy - 60 456,600

1,010,888

(b) The financial statements of all above subsidiaries, included in the consolidated financial statements, are co-terminous with those of the holding company. Except for FAW Investment Limited, which is incorporated in the Isle of Man, all the subsidiary companies are incorporated in the Republic of Mauritius.

17 INVESTMENT IN ASSOCIATED COMPANIES


At January 1, 30,677 20,890 10,688 100 Additions - 10,588 - 10,588 Share of results after taxation (3,906) (788) - - Movement in reserves - (13) - -

At December 31, 26,771 30,677 10,688 10,688



15 INTANGIBLE ASSETS (Continued)

(b) THE COMPANY 2010 2009

Rebranding Management costs Contract Total Total Rs’000 Rs’000 Rs’000 Rs’000

COST

At January 1, 1,038 219,500 220,538 219,500 Additions - - - 1,038

At December 31, 1,038 219,500 220,538 220,538

AMORTISATION

At January 1, 52 - 52 - Charge for the year 52 - 52 52

At December 31, 104 - 104 52

NET BOOK VALUES

At December 31, 934 219,500 220,434 220,486

16 INVESTMENT IN SUBSIDIARY COMPANIES

THE COMPANY

2010 & 2009 Rs’000 COST

At January 1, and December 31, 1,364,831


Annual Report 2010



19 BEARER BIOLOGICAL ASSETS


COST

At January 1, 353,546 331,310 271,459 260,965 Additions 42,619 43,574 32,251 31,832 Write off (34,744) (21,338) (22,220) (21,338)

At December 31, 361,421 353,546 281,490 271,459

AMORTISATION

At January 1, 175,508 153,199 133,858 121,031 Amortisation 45,475 43,647 35,537 34,165 Write off (34,744) (21,338) (22,220) (21,338)

At December 31, 186,239 175,508 147,175 133,858

NET BOOK VALUES 175,182 178,038 134,315 137,601

Bearer biological assets represent cane replantation expenditure that have an expected life cycle of 7 years as they would normally generate 7 years of crop harvest.

In line with IAS 41 - Agriculture, the replantation costs are deferred and amortised over 7 years.

20 DEFERRED EXPENDITURE


VOLUNTARY RETIREMENT SCHEME COSTS

COST

At January 1, 167,380 162,983 146,506 142,112 Infrastructure and other social costs 72,030 4,397 61,041 4,394

At December 31, 239,410 167,380 207,547 146,506

AMORTISATION

At January 1, 140,629 135,260 124,346 119,897 Charge for the year 9,663 5,369 8,744 4,449

At December 31, 150,292 140,629 133,090 124,346

CARRYING AMOUNT

At December 31, 89,118 26,751 74,457 22,160

The Voluntary Retirement Scheme costs comprise of compensation payments, provision for land infrastructure and other costs less refunds received from the Sugar Reform Trust (SRT). The net expenses are amortised over a period of 7 years.



17 INVESTMENT IN ASSOCIATED COMPANIES (Continued)

The results of the following associated companies have been included in the consolidated financial statements:

Year Country of Direct Indirect Profit/ Name end incorporation Interest Interest Assets Liabilities (Loss) Revenues % % Rs’000 Rs’000 Rs’000 Rs’000

2010


Co. Ltd December 31, Mauritius - 24.43 25,946 24,918 869 44,688 Copesud

(Mauritius) Ltée December 31, Mauritius 25.00 - 120,119 98,473 (16,638) 111,403

146,065 123,391 (15,769) 156,091

2009


Co. Ltd December 31, Mauritius - 24.43 48,870 48,711 809 44,308 Copesud

(Mauritius) Ltée December 31, Mauritius 25.00 - 114,788 76,503 (4,423) 41,860

163,658 125,214 (3,614) 86,168

18 INVESTMENT IN FINANCIAL ASSETS

(i) Non-Current

THE GROUP THE COMPANY

2010 2009 2010 2009

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

AVAILABLE-FOR-SALE

At January 1, 52,274 578 8,092 60,944 298,074 35,166 7,989 43,155 287,052 Additions - 176 100 276 - - - - - Disposal - - - - (255,024) - - - (255,024) Increase in fair value 28,937 88,499 - 117,436 17,894 11,269 - 11,269 11,127

At December 31, 81,211 89,253 8,192 178,656 60,944 46,435 7,989 54,424 43,155

(ii) Level 3 investments are stated at cost since reliable fair values cannot be obtained. At the reporting date, the Directors reviewed the carrying amount of investments and in their opinion, there is no objective evidence that the investments are impaired.


Annual Report 2010



21 DEFERRED INCOME TAXES (Continued)

(b) THE COMPANY 2010 2009 Rs’000 Rs’000

At January 1, 4,264 9,395 Charge to the income statement 4,595 (5,131) Charge to other comprehensive income 337,455 -

At December 31, 346,314 4,264

Deferred tax assets and liabilities, deferred tax movement in the statement of comprehensive income and other comprehensive income are attributable to the following items:

Movement in Movement in statement of other At At January 1, comprehensive comprehensive December 31, 2010 income income 2010 Rs’000 Rs’000 Rs’000 Rs’000

Deferred income tax liabilities

Biological assets 20,640 (478) - 20,162 Accumulated tax depreciation 660 1,707 - 2,367 VRS costs 3,324 7,845 - 11,169 Deferred tax on revaluation of

land (note 21(a)(i)) - - 337,455 337,455

24,624 9,074 337,455 371,153

Deferred income tax assets

Tax losses carried forward (10,993) (3,863) - (14,856) Provision for infrastucture costs (7,392) 644 - (6,748) Retirement benefit obligations (1,975) (1,260) - (3,235)

(20,360) (4,479) - (24,839)

Net deferred income tax liability 4,264 4,595 337,455 346,314

22 INVENTORIES


Spare parts and consumables - Growing 12,277 12,109 12,277 12,109 - Milling 52,928 59,045 - - - Energy production 383,162 207,787 - - - Others 1,172 758 - -

Total 449,539 279,699 12,277 12,109

(i) The cost of inventories recognised as expense and included in operating expenses amounted to Rs.1,385,315,132 (2009: Rs.1,327,843,164) for the Group and Rs.37,698,143 (2009: Rs.36,340,784) for the Company.

(ii) Borrowings are secured by floating charges on the assets of the group, including inventories. (note 28).



21 DEFERRED INCOME TAXES

Deferred income taxes are calculated on all temporary differences under the liability methods at 15% (2009: 15%).

Deferred income tax assets and liabilities are offset when the income taxes relate to the same fiscal authority.

(a) THE GROUP

The following amounts are shown in the statement of financial position: 2010 2009 Rs’000 Rs’000

Deferred tax liabilities 475,591 25,479 Deferred tax assets (14,039) (94,902)

461,552 (69,423)

Movement in deferred income tax 2010 2009 Rs’000 Rs’000

At January 1, (69,423) (71,333) Charge to the income statement 109,477 1,910 Charge to other comprehensive income 421,498 -

At December 31, 461,552 (69,423)

Deferred tax assets and liabilities, deferred tax movement in the statement of comprehensive income and other comprehensive income are attributable to the following items:

Movement in Movement in statement of other At At January 1, comprehensive comprehensive December 31, 2010 income income 2010 Rs’000 Rs’000 Rs’000 Rs’000

Deferred income tax liabilities

Biological assets 20,640 (478) - 20,162 Accumulated tax depreciation 318,704 (11,955) - 306,749 VRS costs 3,324 7,845 - 11,169 Deferred tax on revaluation of

land (note 21(a)(i)) - - 421,498 421,498

342,668 (4,588) 421,498 759,578

Deferred income tax assets

Tax losses carried forward (393,892) 115,962 - (277,930) Provision for infrastucture costs (7,392) 644 - (6,748) Retirement benefit obligations (10,807) (2,541) - (13,348)

(412,091) 114,065 - (298,026)

Net deferred income tax (asset)/liability (69,423) 109,477 421,498 461,552

(i) Pursuant to the Finance Act 2010, gains from sale of immovable property are now subject to income tax. Consequently a deferred tax liability has been recognised on revalued land classified as property, plant and equipment. The adjustment has been recognised in other comprehensive income.


Annual Report 2010



25 TRADE AND OTHER RECEIVABLES (Continued)

Trade debtors represents mainly electricity and sugar proceeds receivable. The sugar proceeds receivable are paid by the Mauritius Sugar Syndicate (MSS) as and when proceeds are received. Advances on sugar proceeds are paid by the MSS on a weekly basis and the final settlement for the crop year is made at latest in June of the following year. Refined sugar become receivable as and when the Group invoices the MSS.

Electricity and refined sugar proceeds receivable are generally paid within one month.

The carrying amounts of trade and other receivables approximate their fair values and no impairment was required.

Provision for impairment at December 31, 2010 was Rs.10,000,000 (2009: Rs.10,000,000) for the Group and the Company. Provision for impairment represents receivables due for more than one year.

At December 31, 2010, other receivables of Rs.54,702,000 (2009: Rs.61,113,000) were past due for the Group and the Company and no impairment was required.

The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies:


Mauritian Rupee 1,122,444 1,443,395 232,635 565,900 Euro 61,397 - - -

1,183,841 1,443,395 232,635 565,900

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above.

26 SHARE CAPITAL

THE GROUP & THE COMPANY

2010 & 2009 Rs’000 Issued and Fully paid

67,012,404 ordinary shares of Rs.7.50 each 502,593



23 CONSUMABLE BIOLOGICAL ASSETS


Standing canes (at fair value)

At January 1, 116,551 119,980 92,745 99,947 Loss in fair value (3,241) (3,429) (3,320) (7,202)

At December 31, 113,310 116,551 89,425 92,745

Consumable biological assets represent the fair value of standing canes. The fair value has been arrived at by discounting the present value of expected net cash flows at the relevant market determined pre-tax rate. The expected cash flows have been computed by estimating the expected crop, the sugar extraction rate and the forecasts of sugar prices which will prevail in the coming year.

The harvesting costs and other direct costs are based on yearly budgets.

The principal assumptions used are:

THE GROUP THE COMPANY 2010 2009 2010 2009

Expected price of sugar per ton (Rs) 14,500 15,000 14,500 15,000 Expected sugar accruing (Tons) 17,500 20,336 13,912 16,073 Expected average extraction rate (%) 10.43 10.41 10.43 10.41

24 RECEIVABLE FROM RELATED PARTIES


Holding company - 1,170 - 170 Subsidiary companies - - 1,183,388 1,252,427 Companies with common directors 21,173 35,456 21,173 36,455 Associated company 19,724 28,187 15,652 21,469

40,897 64,813 1,220,213 1,310,521

Receivable from related parties bear interest between 7.5% to 11% per annum (2009: 9.25% to 12%)

25 TRADE AND OTHER RECEIVABLES


Trade receivables 848,576 562,965 76,755 87,722 Prepayments and other receivables 240,248 746,193 60,863 368,010 Land expenses deferred 95,017 134,237 95,017 110,168

1,183,841 1,443,395 232,635 565,900


Annual Report 2010



27 REVALUATION AND OTHER RESERVES (Continued)

Hedging Reserve

The hedging reserve comprises of the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to the hedged transactions that have not yet occurred.

Modernisation and agricultural diversification Reserve

The modernisation and agricultural diversification reserve was created under the SIE Act 1988. Expenditure qualifying for the criterias under the Act are transferred, if any, to retained earnings on a yearly basis.

28 BORROWINGS


Non-current

Bank loans (note 28(a)) 5,091,945 4,351,799 538,142 652,976

Current

Bank overdrafts (note 28 (b)) 1,099,532 1,985,266 997,475 1,203,088 Bank loans (note 28 (a)) 582,209 798,675 130,406 221,493 Other loans - 281,835 - 276,728

1,681,741 3,065,776 1,127,881 1,701,309

Total Borrowings 6,773,686 7,417,575 1,666,023 2,354,285

(a) Bank loans

The bank loans are secured by floating charges on the group’s assets and bear interest at rates between 1.115% and 10.13% per annum.


The maturity of non-current bank loans are as follows:

- After one year and before two years 557,736 318,442 99,162 125,005 - After two years and before five years 1,408,504 953,607 310,067 292,302 - After five years 3,125,705 3,079,750 128,913 235,669

5,091,945 4,351,799 538,142 652,976

(b) Bank overdrafts

The bank overdrafts are secured by floating charges on the group’s assets. The rate of interest on bank overdrafts varied between 5.75% and 10.13% during the year.

(c) All rupee denominated bank overdrafts and bank borrowings bear interest rates which can fluctuate anytime when the banks modify their Prime Lending rates based on the Bank of Mauritius’s Repo rate. Euro denominated bank borrowings bear interest rates based on European Investment Bank and Euribor rates, which can fluctuate anytime.



27 REVALUATION AND OTHER RESERVES

(a) THE GROUP Modernisation Fair & agricultural Revaluation Value Hedging diversification Reserve Reserve Reserve Reserve Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At January 1, 2010 4,140,392 33,111 - 192,673 4,366,176 Gain on available-for-sale financial assets - 117,436 - - 117,436 Transfer to Retained Earnings (32,733) - - (5,218) (37,951) Cash flow hedge - - (29,300) - (29,300) Deferred tax on revaluation of land (421,498) - - - (421,498)

At December 31, 2010 3,686,161 150,547 (29,300) 187,455 3,994,863

At January 1, 2009 4,143,564 222,295 - 206,186 4,572,045 Fair value adjustment - (189,184) - - (189,184) Transfer to Retained Earnings - - - (13,513) (13,513) Release on sale of land (3,172) - - - (3,172)

At December 31, 2009 4,140,392 33,111 - 192,673 4,366,176

(a) THE COMPANY Modernisation Fair & agricultural Revaluation Value diversification Reserve Reserve Reserve Total Rs’000 Rs’000 Rs’000 Rs’000

At January 1, 2010 3,580,527 16,544 192,673 3,789,744 Gain on available-for-sale

financial assets - 11,269 - 11,269 Transfer to Retained Earnings (32,733) - (5,218) (37,951) Deferred tax on revaluation of land (337,455) - - (337,455)

At December 31, 2010 3,210,339 27,813 187,455 3,425,607

At January 1, 2009 3,583,699 212,495 206,186 4,002,380 Fair value adjustment - (195,951) - (195,951) Transfer to Retained Earnings - - (13,513) (13,513) Release on sale of land (3,172) - - (3,172)

At December 31, 2009 3,580,527 16,544 192,673 3,789,744

Revaluation Reserve

The revaluation reserve relates to the surplus, net of deferred tax on revaluation of property, plant and equipment.

Fair value Reserve

Fair value reserve comprises of the cumulative net change in the fair value of available-for-sale financial assets that has been recognised in other comprehensive income until the investments are derecognised.


Annual Report 2010



29 RETIREMENT BENEFIT OBLIGATIONS (Continued)

Defined benefit plan

Staff are covered by a contributory Death and Retirement (defined benefit) Scheme administered by the Anglo-Mauritius Assurance Society Limited and by a contributory defined benefit scheme (SIPF 2) managed by the Sugar Industry Fund Board.

Other retirement benefits

Other retirement benefits relate to gratuities on death and retirement that are based on length of service and salaries at the date of death or retirement.

(a) Defined benefit plan

(i) The amounts recognised in statement of financial position are as follows:


Present value of funded obligations 182,918 180,831 92,272 86,536 Fair value of plan assets (141,312) (150,483) (68,318) (84,222)

41,606 30,348 23,954 2,314 Unrecognised actuarial losses (31,006) (15,392) (34,778) (17,746)

Liability in the statement of financial position 10,600 14,956 (10,824) (15,432)

(ii) The movement in the present value of obligations for the year is as follows:


At January 1, 180,831 198,219 86,536 87,565 Current service cost 4,659 9,071 2,248 2,793 Interest cost 16,336 22,593 7,072 9,867 Actuarial losses/(gains) 11,037 (30,254) 15,133 (10,896) Benefits paid (35,759) (31,338) (23,309) (3,620) Contribution from plan participants 2,029 - 808 827 Curtailments losses 3,784 12,540 3,784 -

At December 31, 182,917 180,831 92,272 86,536

(iii) The movement in the fair value of plan assets for the year is as follows:


At January 1, 150,483 131,632 84,222 75,459 Expected return on plan assets 14,694 15,328 7,295 8,625 Contributions from employer 15,090 8,578 1,807 1,855 Contributions from participants 2,029 - 808 827 Benefits paid (35,759) (5,166) (23,309) (3,620) Asset (loss)/gain (5,225) 111 (2,505) 1,076

At December 31, 141,312 150,483 68,318 84,222



28 BORROWINGS (Continued)

(d) The carrying amounts of the group’s and the company’s borrowings are denominated in the following currencies:


Mauritian Rupee 6,255,186 6,917,061 1,666,023 2,354,285 Euro 518,500 500,514 - -

6,773,686 7,417,575 1,666,023 2,354,285

(e) The effective interest rates at the date of the statement of financial position were as follows:

2010 2009 Rs Euro Rs Euro

GROUP % % % %

Bank overdrafts 5.75 - 7.50 N/A 8.13 - 10.13 N/A Bank borrowings 8.375 - 9.45 1.115 8.50 - 10.13 4.00 - 4.50 Other loans N/A N/A 7.50 - 11.25 N/A

2010 2009 COMPANY Rs Rs % %

Bank overdrafts 5.75 - 7.50 8.13 - 8.65 Bank borrowings 8.375 - 8.50 8.50 - 10.13 Other loans N/A 7.50 - 11.25

29 RETIREMENT BENEFIT OBLIGATIONS


Amounts recognised in the statement of financial position:

Defined benefit plan 10,600 14,956 (10,824) (15,432) Other retirement benefits 78,388 71,036 32,393 28,597

88,988 85,992 21,569 13,165

Statement of comprehensive income charge: Defined benefit plan 10,734 32,405 6,415 5,532 Other retirement benefits 9,553 47,435 4,392 3,930

20,287 79,840 10,807 9,462

Retirement benefit obligations comprise mainly the group’s and the company’s pension scheme and other post retirement benefits.


Annual Report 2010




(viii) Expected contributions to post-employment benefit plans for the year ending December 31, 2011 for the Group and the Company are Rs.10,671,000 and Rs.1,952,000 respectively.

(ix) The principal actuarial assumptions used for accounting purposes were:

THE GROUP & THE COMPANY 2010 2009 % %

Discount rate 10.00 10.50 Expected return on plan assets 10.00 11.00 Future salary increases 8.00 6.00 Future pension increases 4.00 4.00

(b) Other retirement benefits

(i) The amounts recognised in the statement of financial position are as follows:


Present value of unfunded obligations 80,712 64,726 35,419 27,754 Unrecognised actuarial (loss)/gain (2,324) 6,310 (3,026) 843

78,388 71,036 32,393 28,597

(ii) The movement in the present value of obligations for the year is as follows:


At January 1, 64,726 73,522 27,754 24,188 Current service cost 3,450 2,922 1,507 1,159 Interest cost 6,618 7,876 2,885 2,771 Benefits paid (2,555) (51,415) (596) (191) Actuarial gain/(loss) 8,473 (1,945) 3,869 (173) Curtailments losses - 33,766 - -

At December 31, 80,712 64,726 35,419 27,754

(iii) The amounts recognised in statement of comprehensive income are as follows:


Current service cost 3,450 2,922 1,507 1,159 Interest cost 6,618 7,876 2,885 2,771 Actuarial losses (161) (3,439) - - Curtailments losses - 40,076 - -

Total, included in employee benefit expense 9,907 47,435 4,392 3,930




(iv) The amounts recognised in statement of comprehensive income are as follows:


Current service cost 4,659 9,071 2,248 2,793 Interest cost 16,336 22,593 7,072 9,867 Expected return on plan assets (14,694) (15,329) (7,295) (8,625) Net actuarial gains recognised 649 5,180 606 1,497 Curtailments losses 3,784 12,540 3,784 - Contribution by employees - (1,650) - -

Total, included in employee benefit expense 10,734 32,405 6,415 5,532

Actual return on plan assets 9,468 9,851 4,790 9,701

(v) Liability movements in the statement of financial positions:


At January 1, 14,956 15,652 (15,432) (19,109) Total expense as above 10,734 32,405 6,415 5,532 Contributions paid (15,090) (33,101) (1,807) (1,855)

At December 31, 10,600 14,956 (10,824) (15,432)

(vi) History of obligations, assets and experience adjustments:


Fair value of plan assets 141,312 150,484 68,318 84,222 Present value of defined benefit obligation (182,918) (180,831) (92,272) (86,535)

Deficit (41,606) (30,347) (23,954) (2,313)

Asset experience (losses)/gains (7,564) 28,805 (2,505) 1,076

(vii) Major asset categories as percentage of plan assets:

THE GROUP & THE COMPANY 2010 2009 % %

Local:

- Equities 29 27 - Property 25 25 - Fixed interest 22 25

Overseas:

- Equities 17 18 - Fixed interest 7 5

Total 100 100


Annual Report 2010



33 DIVIDENDS


Final proposed dividend of Rs.2.50 (2009: Rs.2.00) per share 167,531 134,024 167,531 134,024

34 OPERATING LEASE COMMITMENTS

Operating leases relate to lands leased from Government of Mauritius with lease terms of 99 years. Nothing in the lease arrangements, due to expire in year 2061, provides for any possibility of cancellation. The leases

do not provide for renewal.


Operating leases expensed during the year 719 1,518 145 815

At the reporting date the company has outstanding commitments under non-cancellable operating leases, which fall due as follows:


- Within one year 719 1,518 145 815 - Between two and five years 2,918 2,500 579 280 - After five years 38,850 47,000 1,560 1,490

42,487 51,018 2,284 2,585

35 CAPITAL COMMITMENTS


Capital expenditure approved by the Board: - not contracted 128,207 92,261 4,807 3,723 - contracted 184,500 36,933 - 24,378

312,707 129,194 4,807 28,101

36 HOLDING COMPANY

The ultimate holding company is Omnicane Holding Limited, a company incorporated in Mauritius.




(iv) Liability movements in the statement of financial position:


At January 1, 71,036 75,016 28,597 24,859 Total expense as above 9,907 47,435 4,392 3,930 Contributions paid (2,555) (51,415) (596) (192)

At December 31, 78,388 71,036 32,393 28,597

30 PAYABLE TO RELATED PARTIES


Holding company 2,292 1,020 2,292 - Subsidiary companies - - 9,014 - Subsidiary of holding company 44,860 13,203 20,102 13,203

47,152 14,223 31,408 13,203

The carrying amounts of amounts payable to related parties approximate their fair values.

31 TRADE AND OTHER PAYABLES


Trade payables 136,150 209,270 32,083 27,403 Other payables and accrued expenses 533,875 374,220 43,461 13,418

670,025 583,490 75,544 40,821

The carrying amounts of trade and other payables approximate their fair values.

32 PROVISIONS FOR VRS AND BLUE PRINT COSTS


Infrastructure and social costs 272,037 337,719 44,986 49,289

Provisions for VRS and Blue print costs relate to future expenditure for land and infrastructure costs for employees who opted for the VRS in case of Omnicane Limited and Omnicane Agricultural Operations Limited and Blue Print and Early Retirement Scheme for Omnicane Milling Operations Limited.


Annual Report 2010



39 SEGMENT INFORMATION

The Group is organised into the following main business segments :

Sugar Energy Total

2010 2009 2010 2009 2010 2009 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Primary reporting format - business segments

Segment revenue 1,061,103 917,113 2,418,601 2,274,954 3,479,704 3,192,067

Segment (loss)/profit (117,941) 6,732 733,092 690,542 615,151 697,274

Share of results of associates (3,906) (788) Investment income 55,255 80,689 Amortisation of VRS costs (9,663) (5,369) Exceptional items 372,918 285,796 Finance costs (580,887) (711,980)

Profit before tax 448,868 345,622 Taxation (132,779) (22,557)

Profit for the year 316,089 323,065 Non-controlling interests (67,173) (64,666)

Profit attributable to owners of the parent 248,916 258,399

Sugar Energy Total

2010 2009 2010 2009 2010 2009 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Segment assets 9,040,697 9,919,355 5,711,013 5,200,803 14,751,710 15,120,158

Associates 26,771 30,677

14,778,481 15,150,835

Segment liabilities 4,298,196 4,172,456 4,216,571 4,442,898 8,514,767 8,615,354

Owners’ interests 5,570,580 5,822,316 Non-controlling interests 693,134 713,165

14,778,481 15,150,835

Investment income 18,505 59,712 36,750 20,977 55,255 80,689 Interest expense 207,682 268,129 443,751 458,805 651,433 726,934 Capital expenditure 118,153 828,632 65,919 50,872 184,072 879,504 Depreciation 138,646 103,168 260,427 241,266 399,073 344,434



37 CONTINGENT LIABILITIES

A subsidiary has a court case against the Mauritius Revenue Authority (MRA) regarding capital allowances claimed in years 1999 to 2002 to which the MRA is not agreeable. The case is still pending as at date.

38 RELATED PARTY TRANSACTIONS

(a) THE GROUP

Sale of Sale/(Purchase) of Investment income/ investment supplies and services (expense) Amount due to Amount due from

2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Holding company - - - - - - 119,983 95,172 - 1,170 Associated company - - 28,782 33,596 2,041 (849) - - 19,724 28,187 Subsidiary of

holding company - - (58,139) (46,942) - - 44,860 13,203 - - Companies with

common directors - 310,000 - - - - - - 21,173 345,456

Total - 310,000 (29,357) (13,346) 2,041 (849) 164,843 108,375 40,897 374,813

The above transactions have been made at arms’ length, on normal commercial terms and in the normal course of business.

(b) THE COMPANY

Sale of Sale/(Purchase) of Investment income/ investment supplies and services (expense) Amount owed to Amount due from

2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Holding company - - - - - - 119,983 94,152 - 170 Subsidiaries - - 47,230 48,239 96,572 115,957 9,014 - 1,183,388 1,252,427 Associated company - - 28,782 33,596 2,041 (849) - - 15,652 21,469 Subsidiary of

holding company - - (34,038) (31,067) - - 20,102 13,203 - - Companies with

common directors - 310,000 - - - - - 276,728 21,173 346,455

Total - 310,000 41,974 50,768 98,613 115,108 149,099 384,083 1,220,213 1,620,521

The above transactions have been made at arms’ length, on normal commercial terms and in the normal course of business.

(i) KEY MANAGEMENT PERSONNEL COMPENSATION


Short-term benefits 14,425 10,554 3,327 4,432 Post-employment benefits 8,524 726 240 228

22,949 11,280 3,567 4,660


Annual Report 2010

Notice is hereby given that the 85th annual meeting of the members of the Company will be held in the conference room of the Port-Louis City Club, 8th Floor, Anglo-Mauritius House, Adolphe de Plevitz Street, Port-Louis, on 29 June 2011 at 10.00hrs to transact the following business:

1 To consider and approve the Annual Report including the audited financial statements for the year ended 31 December 2010.

2 to 5 To re-appoint as directors the following persons who retire by rotation in terms of Clause 20.5 of the Constitution and, being eligible, offer themselves for re-election (as separate resolutions):

2 Mr Premsagar Bholah

3 Mr Jacques M. d’Unienville

4 Mr Nelson Mirthil

5 Mr Anbanaden Veerasamy

6 To re-appoint Mr Hugues Maigrot as director to hold office until the next annual meeting in accordance with section 138(6) of the Companies Act 2001.

7 Dividends

To ratify the payment of the dividends of Rs 2.50 per share declared by the directors and paid on 25 March 2011.

8 Directors’ fees

To fix the directors’ fees for the year ending 31 December 2011.

9 To take note of the automatic re-appointed of the auditors under Section 200 of the Companies Act 2001 and to authorise the Board to fix their remuneration.

A member entitled to attend and vote is entitled to appoint a proxy to attend, speak and vote in his/her stead. The proxy need not be a member of the Company but the proxy forms should reach the Company’s registered office, 7th Floor, Anglo-Mauritius House, Adolphe de Plevitz Street, Port-Louis not less than twenty four hours before the time for holding the meeting.

By order of the Board

Eddie Ah Cham FCCAfor Omnicane Management & Consultancy LimitedSecretaries

18 May 2011

Notice of Meeting to Shareholders

40 THREE YEAR FINANCIAL SUMMARY

THE GROUP 2010 2009 2008 Rs’000 Rs’000 Rs’000

(a) Results

Turnover 3,479,704 3,192,067 460,515 Share of results of associates (3,906) (788) 23,578 Profit before taxation 448,868 345,622 315,212 Income tax expense (132,779) (22,557) 7,833

Profit for the year 316,089 323,065 323,045 Other comprehensive income for the year, net of tax (340,687) (189,184) (93,848)

Total comprehensive income for the year (24,598) 133,881 229,197

Profit attributable to:

- Owners of the parent 248,916 258,399 283,889 - Non-Controlling interests 67,173 64,666 39,156

316,089 323,065 323,045

Total comprehensive income attributable to:

- Owners of the parent (84,446) 69,215 190,041 - Non-Controlling interests 59,848 64,666 39,156

(24,598) 133,881 229,197

Earnings per share (Rs.) 3.71 3.86 4.24

(b) Statement of financial position

ASSETS

Non-current assets 12,280,284 12,435,398 12,106,394 Current assets 2,498,197 2,715,437 2,521,189

Total assets 14,778,481 15,150,835 14,627,583

EQUITY AND LIABILITIES

Owners’ interests 5,570,580 5,822,316 5,890,482 Non-controlling interests 693,134 713,165 708,499

Total equity 6,263,714 6,535,481 6,598,981

LIABILITIES

Non-current liabilities 5,656,524 4,463,270 5,058,357 Current liabilities 2,858,243 4,152,084 2,970,245

Total liabilities 8,514,767 8,615,354 8,028,602

Total equity and liabilities 14,778,481 15,150,835 14,627,583




Annual Report 2010

PROxY FORMFor the 85th Annual Meeting

I/We

of

being a shareholder/s of Omnicane Limited, do hereby appoint

Mr/Ms

of or failing him/her

Mr/Ms

of

as my/our proxy to vote for me/us at the meeting of the Company to be held on 29 June 2011 at 10:00 hrs and at any adjournment thereof.

I/We desire my/our vote(s) to be cast on the Resolution as follows: Mark with X where applicable

FOR AGAINST ABSTAIN

1To consider and approve the Annual Report including the audited financial statements for the year ended 31 December 2010.

2 To re-appoint as director Mr Premsagar Bholah

3 To re-appoint as director Mr Jacques M. d’Unienville

4 To re-appoint as director Mr Nelson Mirthil

5 To re-appoint as director Mr Anbanaden Veerasamy

6To re-appoint Mr Hugues Maigrot as director to hold office until the next annual meeting in accordance with section 138(6) of the Companies Act 2001.

7To ratify the payment of the dividends per share of Rs 2.50 declared by the directors and paid on 25 March 2011.

8 To fix the directors’ fees for the year ending 31 December 2011.

9To take note of the automatic re-appointed of the auditors under Section 200 of the Companies Act 2001 and to authorise the Board to fix their remuneration.

Signed this ……………… day of ……………………… 2011 Number of shares held

(1 share = 1 vote)Signature

1 A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend, speak and vote in his/her stead. A proxy need not be a member of the Company.

2 If this proxy form is returned without any indication as to how the proxy should vote, the proxy will be entitled to vote or abstain from voting as he/she thinks fit.

3 A minor must be assisted by his/her guardian.

4 The authority of a person signing a proxy in a representative capacity must be attached to the proxy unless that authority has already been recorded by the Company.

5 In order to be effective, proxy forms must reach the registered office of the Company, 7th floor, Anglo Mauritius House, Adolphe de Plevitz Street, Port-Louis not later that 10.00 on Tuesday 28 June 2011.

6 The delivery of the duly completed form shall not prelude any member or his/her duly authorised representative from attending the meeting, speaking and voting instead of such duly appointed proxy.

7 If two or more proxies attend the meeting, then that person attending the meeting whose name appears first on the proxy form, and whose name is not deleted, shall be regarded as the validly appointed proxy.

Notes:

www.omnicane.com

Omnicane annual · PDF fileOther Statutory Disclosures 66 Certificate of Company Secretary 67...

Documents

Transcript of Omnicane annual · PDF fileOther Statutory Disclosures 66 Certificate of Company Secretary 67...