THE BEE EQUITY PARTNERS LTD ANNUAL REPORT Bee - Annual Report 2017.compressed.pdfLtd, 6th Floor,...

ANNUAL REPORT

THE B

EE EQU

ITY PA

RTN

ERS LTD

AN

NU

AL REPO

RT 2017

Dear Shareholder,

The Board of Directors is pleased to present the Annual Report of The Bee Equity Partners Ltd (“The Bee”) for the year ended 30 June 2017. This report was approved by the Board on 1 September 2017.

On behalf of The Bee’s Board of Directors, we cordially invite you to attend the Annual Meeting of the Company which will be held:

Date: Friday 8 December 2017

Time: 14.30 hours

Place: 6th Floor, IBL House Caudan Waterfront Port Louis

The Notice for the meeting, containing the business to be transacted, is set out at pages 2 and 3.

We look forward to seeing you.

Sincerely,

Jean-Claude Béga Olivier Fayolle Chairman Director

TABLE OF CONTENTS

02 Notice of Annual Meeting

04 Directorate and Administration

05 Overview

07 Directors’ Profiles

10 Investment Committee Members’ Profiles

12 Chairman’s Message

14 CEO’s Report

18 Corporate Governance Report

32 Statement of Compliance

34 Statement of Directors’ Responsibilities

35 Statutory Disclosures

40 Company Secretary’s Certificate

41 Independent Auditor’s Report

46 Statements of Financial Position

47 Statements of Profit or Loss and Other Comprehensive Income

48 Statements of Changes in Equity

49 Statements of Cash Flows

50 Notes to the Financial Statements

83 Proxy Form

1THE BEE EQUITY PARTNERS LTD

ANNUAL REPORT 2017

Notice is hereby given that the Annual Meeting of the Shareholders of The Bee Equity Partners Ltd will be held at 6th Floor, IBL House, Caudan Waterfront, Port Louis on Friday, 8 December 2017 at 14.30 hours to transact the following business in the manner required for the passing of the following RESOLUTIONS:

AS ORDINARY RESOLUTIONS:

1. To consider the Annual Report.

2. To receive the report of the Auditors.

3. To consider and adopt the Group’s and Company’s audited financial statements for the year ended 30 June 2017.

4. To elect, as Director of the Company, Mr. Jean-Claude Béga1 who has been nominated by the Board and who offers himself for election.

5. To elect, as Director of the Company, Mr. Yann Duchesne1 who has been nominated by the Board and who offers himself for election.

6. To re-elect as Director of the Company until the next Annual Meeting, in accordance with Section 138(6) of the Companies Act 2001, Mr. Dayanidhi Gujadhur1, who offers himself for re-election.

7. To fix the remuneration of the Directors for the financial year ending 30 June 2018 and to ratify the emoluments paid to the Directors for the financial year ended 30 June 2017.

8. To reappoint Messrs. Deloitte as Auditors for the ensuing year and to authorise the Board of Directors to fix their remuneration.

9. To ratify the emoluments paid to Messrs. Deloitte for the financial year ended 30 June 2017.

AS SPECIAL RESOLUTION:

1. That Clause 23 of the Constitution of the Company under the heading “APPOINTMENT AND REMOVAL OF DIRECTORS” be amended by the addition thereto of the following New Sub Paragraph 23.7 and that the actual Sub Paragraphs 23.7 and 23.8 be renumbered accordingly:

«23.7 Retirement of Directors by rotation.

At the next Annual General Meeting of the Company and at each subsequent Annual General Meeting, two (2) Directors for the time being appointed by the General Meeting, shall retire from office but shall be re-eligible.

23.7.1 Any retiring Director shall retain office until the dissolution or adjournment of the meeting at which he is due to retire.

23.7.2 The Directors to retire in every year shall be those who have been longest in office since their last election, but as between persons who became Directors on the same day, those to retire shall, unless they otherwise agree among themselves, be determined by lot.

NOTICE OF ANNUAL MEETING

2THE BEE EQUITY PARTNERS LTDANNUAL REPORT 2017

23.7.3 The Company at the Annual General Meeting at which a Director so retires may fill the vacated office by electing a person thereto but no person other than a retiring Director shall unless recommended by the Directors be eligible for election to the office of Director unless not less than twenty eight days before the last day on which notice of the Annual General Meeting of the Company is required to be given by the Board, there shall have been left at the registered office of the Company notice in writing, signed by a member duly qualified to attend and vote at the meeting for which such notice is given, of his intention to propose for consideration by the Board such person for election and also notice in writing signed by that person of his willingness to be elected.

The decision of the Board shall be final.»

By order of the Board

Doris DardannePer IBL Management Ltd Company Secretary

1 September 2017

NOTES:

1. A shareholder of the Company entitled to attend and vote at this meeting may appoint a proxy of his/her own choice (whether a shareholder or not) to attend and vote on his/her behalf. The instrument appointing a proxy or any general power of attorney shall be deposited at the Share Registry and Transfer Office, Abax Corporate Administrators Ltd, 6th Floor, Tower A, 1 CyberCity, Ebène not less than twenty four hours before the time appointed for the holding of the meeting or adjourned meeting at which the person named on such instrument proposes to vote, and in default, the instrument of proxy shall not be treated as valid.

2. A proxy form is included in this Annual Report and is also available at the Share Registry and Transfer Office of the Company.

3. For the purpose of this Annual Meeting, the Directors have resolved, in compliance with Section 120(3) of the Companies Act 2001, that the shareholders who are entitled to receive notice of the meeting shall be those shareholders whose names are registered in the share register of the Company as at 13 November 2017.

4. The minutes of the Annual Meeting to be held on 8 December 2017 will be available for consultation and comments during office hours at the registered office of the Company, 4th Floor, IBL House, Caudan Waterfront, Port-Louis from 2 February to 12 February 2018.

Footnote 1 : The Directors’ profiles are set out on pages 7 to 9


ANNUAL REPORT 2017

DIRECTORS

Jean-Claude Béga - Chairman - Appointed Director on 16 January 2017 and Chairman on 13 February 2017

Jan Boullé

Yann Duchesne - Appointed Director on 16 January 2017

Olivier Fayolle

Dayanidhi Gujadhur

Thierry Lagesse

ALTERNATE DIRECTORS

Jean-Claude Béga - Appointed Alternate Director to Thierry Lagesse on 7 July 2017

Madhukar Gujadhur - Appointed Alternate Director to Dayanidhi Gujadhur on 13 July 2017

COMPANY SECRETARY

IBL Management Ltd

SHARE REGISTRY AND TRANSFER OFFICE

Abax Corporate Administrators Ltd 6th Floor, Tower A, 1 CyberCity Ebène

REGISTERED OFFICE

4th Floor, IBL House Caudan Waterfront Port Louis

AUDITORS

Deloitte

BANKERS

The Mauritius Commercial Bank LimitedAfrAsia Bank Limited

DIRECTORATE AND ADMINISTRATION


OVERVIEW

ABOUT US

Founded in 1974, The Bee Equity Partners Ltd (“The Bee”) is an investment holding company specializing in providing alternative forms of financing to Mauritian entrepreneurs. Listed on the Development and Enterprise Market of the Stock Exchange of Mauritius, The Bee is a subsidiary of IBL Ltd, the leading conglomerate in Mauritius.

Our strategy is to gradually redeploy our current investment portfolio into new attractive investment projects based on the private equity investment philosophy. Our mission is not only to achieve superior and consistent risk-adjusted returns but also to invest with impact through fostering entrepreneurship in the local economy. We strive to differentiate ourselves through the support, guidance and access to network we extend to our investee companies. Our ambition is to become a partner of choice for bold entrepreneurs aspiring to establish, scale up or revamp their enterprises.

FINANCIAL HIGHLIGHTS

GROUP COMPANY

Amounts in Rs ‘000 2017 2016* 2017 2016*

Revenue 97,783 111,466 27,285 20,695

Profit attributable to the parent 44,469 400,305 46,825 399,835

Total comprehensive income/(loss) 3,663 (63,671) 8,064 (78,790)

Total assets 550,453 548,461 541,093 532,308

Total equity 523,598 523,853 536,990 528,926

Dividends 2,190 889,463 - 887,273

* In the year ended 30 June 2016, the Company distributed part of its portfolio of investments to its shareholders by way of a dividend in specie. The fair value of the shares distributed was Rs. 887 million on the date of distribution. As a result, the profit for the year was impacted positively by a Rs. 450 million gain on disposal - dividend in specie.

KEY FINANCIAL INDICATORSCOMPANY

2017 2016

NAV per share (Rs) 60.88 59.96

NAV total return* (%) +1.5% -5.3%

Share price at year end (Rs) 24.00 15.65

* Change in NAV plus dividends declared in rupee terms, as a percentage of the NAV at the beginning of the financial year.

Securities Portfolio - Sector mix

46%

33%

1%

6%5%

3%

7% Property Development

Financial Services

Hotel & Leisure

Industry

Others

Conglomerates

Commerce2017

Total assets - Company

58%9%

7%

26%

Investment property

Securities portfolio

Cash & Cash equivalents

Receivables & Other

2017

Securities Portfolio - Asset mix

49%

41%

10%

Local unlisted shares

Local listed shares

Bonds & Notes

2017


ANNUAL REPORT 2017

LEADERSHIP

JEAN-CLAUDE BÉGA (Mr)Non-Executive Chairman

First appointed to the Board on 16 January 2017 and as Chairman on 13 February 2017Also appointed Member of the Investment Committee of the Company on 10 February 2017 and as Alternate Director to Mr. Thierry Lagesse on 7 July 2017

EDUCATIONBorn in 1963, Jean-Claude Béga is a Fellow of the Association of Chartered Certified Accountants.

EMPLOYMENT HISTORYHe started his career in 1980 by spending 7 years as external auditor and then moved to a sugar group to perform various functions within accounting and finance before joining GML in 1997. He has been nominated as Group Head of Financial Services and Business Development of IBL Ltd on 1 July 2016 following the amalgamation between Ireland Blyth Limited and GML Investissement Ltée. He currently heads IBL Group’s financial services and business development including M&A, Strategic Initiatives and integration. In this context, he has been nominated as Chairman of The Bee Equity Partners Ltd, Mauritian Eagle Insurance Co. Ltd and DTOS Ltd. He is also Chairman of Anahita Estates Limited and Anglo African Investments Ltd and Director of Alteo Limited, Phoenix Beverages Limited, Lux Island Resorts Ltd, Afrasia Bank Limited and some other companies within the IBL Group.

BOARD MEMBERSHIPS AND AFFILIATIONS- Alteo Limited- Phoenix Beverages Limited- Phoenix Investment Company Limited- Lux Island Resorts Ltd- The Bee Equity Partners Ltd- Mauritian Eagle Insurance Co Ltd

JAN BOULLÉ (Mr)Non-Executive Director

Appointed in 2001

EDUCATIONJan Boullé is qualified as an « Ingénieur Statisticien Economiste » (France) and holds a « Diplôme de 3ème Cycle en Sciences Economiques » from Université Laval (Canada).

EMPLOYMENT HISTORYHe has been employed by the Constance Group from 1984 to 2016 and occupied various executive positions and directorships. His latest position at Constance being Group Head of Projects and Development. He has been appointed as the Non-Executive Chairman of IBL Ltd on the 1 July 2016, the ultimate holding company of The Bee Equity Partners Ltd.

BOARD MEMBERSHIPS AND AFFILIATIONS- Alteo Limited- IBL Ltd- Phoenix Beverages Limited- Phoenix Investment Company Limited- The Bee Equity Partners Ltd

1 2

1

2

DIRECTORS’ PROFILES


ANNUAL REPORT 2017

3

4

5

3 4 5YANN DUCHESNE (Mr)Non-Executive Director

Appointed on 16 January 2017

EDUCATIONBorn in 1956, Yann Duchesne is graduated from Ecole Polytechnique, Ecole des Mines de Paris and Institut d’Etudes Politiques de Paris.

EMPLOYMENT HISTORYHe has spent 12 years as Senior Partner at Private Equity firm Doughty Hanson in London. Prior to that, he has worked for 20 years at McKinsey where he was the Managing partner for France – he has also extensively worked in the US, Japan and various European countries. He has wide experience in the Financial Institutions sector, Pharmaceuticals, Industrial sectors, and Luxury.Yann Duchesne is also the author of a socio-economic book (France S.A.) and is a Knight in the French national order of the Légion d’Honneur.

BOARD MEMBERSHIPS AND AFFILIATIONS- IBL Ltd- The Bee Equity Partners Ltd

OLIVIER FAYOLLE (Mr)Executive Director

Appointed on 9 May 2016

EDUCATIONBorn in 1979, he holds a MSc in International Financial Analysis from the University of Lille II, France.

EMPLOYMENT HISTORYBefore joining The Bee Equity Partners Ltd in April 2016, he worked as a Senior Financial Analyst at Octo Finances, a fixed-income securities brokerage firm based in Paris, France.

BOARD MEMBERSHIPS AND AFFILIATIONSIs a member of the Board of Directors of Flacq Associated Stonemasters Ltd, Haute Rive Azuri Hotel Ltd, PL Resort Ltd, Mechanization Investment Ltd and The Ground Collaborative Space Ltd.

DAYANIDHI GUJADHUR (Mr)Independent Non-Executive Director

Appointed in 2001

EDUCATIONBorn in 1937 obtained a distinction in Accounting at the higher stage of London Chamber of Commerce.

EMPLOYMENT HISTORYJoined Roger Fayd’herbe Co Ltd as Clerk in July 1957. After gaining extensive experience in the key departments of the company, he was promoted to the post of Accountant in 1978 and subsequently as Finance and Administrative Manager.

BOARD MEMBERSHIPS AND AFFILIATIONSWas invited to join the Board of Directors of Roger Fayd’herbe Co Ltd In 1988 until his retirement from the company in December 1997.

DIRECTORS’ PROFILES


THIERRY LAGESSE (Mr) Non-Executive Director

Appointed in 1992 and Chairman up to 12 August 2013

EDUCATIONBorn in 1953, he holds a “Maîtrise des Sciences de Gestion” from the University of Paris Dauphine.

EMPLOYMENT HISTORY He was the Non-Executive Chairman of IBL Ltd (previously known as GML Investissement Ltée), Alteo Limited, Phoenix Beverages Limited and The United Basalt Products Ltd up to 13 August 2013 and a Director of several other companies quoted on the Stock Exchange of Mauritius Ltd. He is also the Executive Chairman and founder of Palmar Group of Companies and Executive Chairman of Parabole Réunion SA.

BOARD MEMBERSHIPS AND AFFILIATIONS- Alteo Limited - IBL Ltd- Lux Island Resorts Limited- Phoenix Beverages Limited - Phoenix Investment Company Limited- The United Basalt Products Ltd

MADHUKAR GUJADHUR (Mr)Alternate Director to Mr. Dayanidhi Gujadhur

Appointed on 13 July 2017

EDUCATIONBorn in March 1954, Mr. Gujadhur was admitted as Member of ACCA in 1982.

EMPLOYMENT HISTORY From September 1988 to March 2006 Mr. Madhukar Gujadhur was the Financial Controller of Sun Resorts Ltd. From April 2006 to March 2014 he was the Director of Finance - O&O Royal Mirage Hotel (Dubai) owned by Ruler of Dubai.Since April 2014 to now, Mr. Gujadhur is the Financial Controller of CH Management Ltd (Currimjee Group).

BOARD MEMBERSHIPS AND AFFILIATIONSNone

6

6

7

7 ALTERNATE DIRECTOR


ANNUAL REPORT 2017

INVESTMENT COMMITTEE MEMBERS’ PROFILES

1 2MUSHTAQ OOSMAN (Mr)Member of the Investment Committee

Appointed as Member on 15 April 2017 and as Chairman on 9 May 2017

EDUCATIONBorn in Mauritius, Mr Oosman is a fellow of the Institute of Chartered Accountants in England and Wales.

EMPLOYMENT HISTORY After completing his studies in the UK, Mr. Oosman joined De Chazal Du Mee in 1983. In 1985 he joined Roger de Chazal and Partners now PwC. Over the years together with other Partners PwC grew to become one of the largest firm on the island.

JEAN-CLAU DE BÉGA (Mr)Member of the Investment Committee

Appointed as Member of the Investment Committee of the Company on 10 February 2017

First appointed to the Board of Directors of the Company on 16 January 2017 and as Non-Executive Chairman on 13 February 2017.Also appointed as Alternate Director to Mr. Thierry Lagesse on 7 July 2017.

EDUCATIONBorn in 1963, Jean-Claude Béga is a Fellow of the Association of Chartered Certified Accountants.

EMPLOYMENT HISTORYHe started his career in 1980 by spending 7 years as external auditor and then moved to a sugar group to perform various functions within accounting and finance before joining GML in 1997. He has been nominated as Group Head of Financial Services and Business Development of IBL Ltd on 1 July 2016 following the amalgamation between Ireland Blyth Limited and GML Investissement Ltée. He currently heads IBL Group’s financial services and business development including M&A, Strategic Initiatives and integration. In this context, he has been nominated as Chairman of The Bee Equity Partners Ltd, Mauritian Eagle Insurance Co. Ltd and DTOS Ltd. He is also Chairman of Anahita Estates Limited and Anglo African Investments Ltd and Director of Alteo Limited, Phoenix Beverages Limited, Lux Island Resorts Ltd, Afrasia Bank Limited and some other companies within the IBL Group.


CATHERINE GRIS (Mrs)Member of the Investment Committee

Appointed on 15 April 2017

EDUCATIONBorn in Mauritius in 1958, Mrs. Catherine Gris obtained her Baccalaureat in 1976 and is since 1980 a Graduate of the Institute of Political Studies (Paris). In 2004 she completed a Cycle of Higher Studies of Economic Development Ministry of Finance & Economy ( Bercy) Paris.

EMPLOYMENT HISTORY Between Reunion Island and Mauritius since 2009, Mrs. Gris is the CEO of Association of Mauritian Manufacturers. She was involved in the creation in 2013 of the Mauritian Umbrella Brand of local products « Made in Moris ». Mrs. Gris is Member of the Mauritius section of the French CCEF- The French Foreign Trade Advisors (CCEF) since 2007 and between 1998 and 2006 she acted as Secretary General ADIR (Association pour le développement industriel de la Réunion).

NICOLAS WEISS (Mr)Member of the Investment Committee

Appointed on 15 April 2017

EDUCATIONIngenieur des Télécoms – ESSEC Business School - MBA Degree, Cranfield University (UK)

EMPLOYMENT HISTORY Nicolas Weiss is a Telecommunications engineer. He started his career in 1988 at Deltabanque, where he developed an interest rate risk management system. He later developed portfolio insurance and market arbitrage models. In 1991, he joined Mr. Philippe Oddo and helped raise the clientele of Institutional Investors for mutual funds actions, bonds and derivatives. In 1993, he joined Mr. Le Baron Edmond de Rothschild and was General Manager and Shareholder to the creation of AssMgt subsidiaries of the Rothschild Group in Europe Rothschild Asset Management (EUR20bn), E.de AssMgt Rothschild Investment Services (USD4bn), and Rothschild Multi Management (EUR5bn). Nicolas Weiss was also director and treasurer for ‘Rothschild Fundations’ since 1997. He left the Rothschild Group in 2010 to settle in Mauritius. Nicolas Weiss has been teaching finance at ESSEC, at Paris Dauphine and at Arts et Métiers. He is a jury member at ESSEC since 1987.

3 4


ANNUAL REPORT 2017

« Our ultimate goal is not only to achieve superior and consistent risk-adjusted returns but also to invest with impact »

CHAIRMAN’S MESSAGE

JEAN-CLAUDE BÉGA CHAIRMAN

Dear Shareholders,It is my honour and privilege to address you for the very first time as Chairman of the Board of Directors of The Bee Equity Partners Ltd.

At this turning point in the life of our Company, it is the Board’s utmost priority to ensure that we successfully implement our revamped strategy based on the private equity investment philosophy. Our ultimate goal is not only to achieve superior and consistent risk-adjusted returns but also to invest with impact. By committing our capital and trust to Mauritian entrepreneurs, we will actively participate in fostering entrepreneurship in the local economy.


We are determined to accomplish our strategy smartly and in a systematic yet disciplined manner. We shall be committing our resources only in projects which we deem to show above average potential. We believe that, by being selective, we will optimise our chances of generating competitive risk adjusted returns whilst promoting the sound functioning of capital markets and the economy at large. One of the cornerstone of our investment methodology is our Investment Committee (“IC”). The IC is fully operational since April 2017 and comprises of carefully selected members with outstanding professional track records. Those individuals whilst operating as a unit, possess a wealth of experience and the complementary skills required to critically evaluate and assess projects brought forward by the Management. The Board of Directors will remain the final decision-making body and will use the IC’s views and recommendations in that context.

Whilst consolidating our deals pipeline and executing on our strategy, it is of crucial importance to ensure that the productivity of our capital remains constantly optimized. In that respect, our 2017 performance was below expectations with a minimal progression of 1.5% on our 2016 NAV. This subdued performance was mostly due to the poor performance of our hospitality holdings which have been counter balanced by our other portfolio holdings which recorded honourable performances. An important item on the agenda of the Board during the year was related to the voluntary Offer made by Equity Spectrum Ltd to acquire all the shares of the Company. In that matter, the Board advised on declining the offer in light of the recommendations of the independent valuer and the offer lapsed given that the condition set out in the offer had not been met.

In the forthcoming financial year, we shall strive to rebalance our investment portfolio into a more diversified structure. In doing so, we aim to optimize our desired returns on our portfolio holdings whilst enabling us to realise the liquidity required for our private equity investment activities.

« Whilst consolidating our deals pipeline

and executing on our strategy, it is of crucial importance to ensure

that the productivity of our capital remains

constantly optimized. »

Our roadmap is clear and the Board undertakes to oversee that the Management executes those strategic objectives efficiently. I would like to express my gratitude towards my fellow Directors for entrusting me with the role of Chairman of the Board and welcome our IC members who accepted to share their wisdom on the new journey of the Company. My thanks also go to our former Chairman, Mr. Arnaud Lagesse, who instilled a bold new vision and impetus to the Company that we shall endeavour to sustain for the benefit of all our stakeholders.

Yours sincerely,

Jean-Claude Béga Chairman


ANNUAL REPORT 2017

Although most of our investments fared well during the year under review, our overall financial performance was hampered by sizeable impairment losses incurred on our two hospitality holdings. The Company NAV increased marginally to Rs 60.88 per share, thereby generating a disappointing total return of 1.5% for our shareholders.

Nonetheless, notable strategic realisations were achieved during the year. Through various transactions, we generated proceeds in excess of Rs 100 million from the disposal of mostly mature, illiquid investments. A significant transaction to the tune of Rs 80 million involving a pool of low-yielding, unlisted minority investments, was executed. Through those realisations, we crystallized capital gains totalling Rs 78.3 million while strengthening our capacity to participate in attractive new investment projects. We laid down the foundations of our revamped private equity-based investment strategy and devised our objectives accordingly. Human capital investments were effected and appropriate framework and processes were put in place to help mitigate risks associated with the new strategy. Our network and ecosystem of partners was reinforced. We are positioning The Bee as a credible and robust player on the Mauritian financial market landscape providing alternative forms of financing to entrepreneurs.

We are confident that we are now properly geared to live up to the expectations of our stakeholders.

I am pleased to report on the performance and progress of the Company for the year ended 30 June 2017.

CEO’S REPORT

OLIVIER FAYOLLE CEO


14

NAV PROGRESSION HAMPERED BY IM-PAIRMENT LOSSES

The Net Asset Value of the Company increased by a minimal 1.5% over the year to Rs 60.88 per share as at 30 June 2017. This subdued performance was essentially attributable to sizeable impairment losses incurred on our two hospitality associates. The operating and financial performance of the hotels materially improved as the year went through. Nonetheless, in accordance with prudential accounting practices, we had to impair our investments following years of recurring losses and debt accumulations. A provision was also booked on a proportion of the loans advanced to the entities. Those losses and provisions amounted to Rs 49.2 million in total, translating into a 9% unfavourable impact on our NAV.

Change in Company NAVRs million

537.0

NA

V (

30 J

une

2017

)

528.9

NA

V (

30 J

une

2016

)

43.2

Fair

valu

e ga

ins

27.3

Reve

nue

7.4

Inte

rest

inco

me

(11.1)

Adm

inist

rativ

e ex

pens

es

(46.3)

Impa

irmen

ts

(11.8)

Prov

ision

s

(0.6)

Oth

ers

REBALANCING OF THE INVESTMENT PORT-FOLIO

The investment portfolio, constituting of listed and unlisted securities, delivered a total return of 4.9% over the year. Excluding the above mentioned underperforming assets, the portfolio generated a total return of 15% mainly on the back of the overall appreciation of our listed securities.

The portfolio was valued at Rs 315.1 million as at 30 June 2017 compared to Rs 422.3 million as at 30 June 2016 with the decrease primarily attributable to disposals. The proceeds have been re-invested in short term money-market instruments pending subsequent re-deployment into our private equity activity.

NAV per share as at 30.06.17Rs60.88

Investment portfolio valuationRs million

315.1

As

at 3

0 Ju

ne 2

017

422.3

As

at 3

0 Ju

ne 2

016

39.1

Incr

ease

in fa

ir va

lue

(46.3)

Impa

irmen

ts

(100.0)

Disp

osal

s

Following the disposal transactions executed during the year, the relative proportion of listed shares and bonds in the portfolio increased from 34% as at 30 June 2016 to 55% as at 30 June 2017, thereby improving the overall liquidity of our portfolio holdings. At year end, local unlisted shares accounted for 41% of the total portfolio, out of which 28% attributable to FAST.

Investment Portfolio - Asset mix

49%

41%

10%

30%

62%

7%

Local listed shares

Local unlisted shares

Bonds & Notes

0

20

40

60

80

100

2017 2016


ANNUAL REPORT 2017

CEO’ S REPORT

The portfolio’s sector allocation was inclined towards financial services with a 46% weighting as at 30 June 2017. Our subsidiary FAST was the main constituent of the Industry sector allocation.

Investment Portfolio - Sector mix

46%

33%

1%

6%5%

3%

7% Property Development

Financial Services

Hotel & Leisure

Industry

Others

Conglomerates

Commerce2017

PROFITS DRIVEN BY GAINS ON DISPOSALS

At Company level, revenue increased by 32% to Rs 27.3 million due to a special dividend of Rs 8.5 million received from an investee company currently in the process of a voluntary winding up. The investment, carried at Rs 8.0 million in our books as at 30 June 2016, was consequently written off as at 30 June 2017.

Top 10 holdings

Asset class Market

Valuation

At 30 June 2017

Rs '000 Weighting

MCB Group Limited Ordinary shares SEM - Official 108,800 35%

Flacq Associated Stonemasters Ltd Ordinary shares Unlisted 88,181 28%

United Investments Ltd Bonds DEM 20,006 6%

BlueLife Limited Ordinary shares SEM - Official 16,439 5%

SBM Holdings Ltd Ordinary shares SEM - Official 12,851 4%

Structured note - Capital protected (USD) Notes Unlisted 12,743 4%

ACM High Yield Fund CIS* Unlisted 12,343 4%

The Stock Exchange of Mauritius Ltd Ordinary shares Unlisted 9,470 3%

Mauritius Oil Refineries Limited Ordinary shares SEM - Official 6,506 2%

Vivo Energy Mauritius Limited Ordinary shares SEM - Official 5,171 2%

* Collective Investment Scheme

Company revenueRs’000

12,675 Total: 20,695

Total: 27,285

640

8,467 1,278 5,019 12,521

7,380

Dividends - Unlisted shares

Interests - Listed bonds One-off dividend

Dividends - Listed shares

2016

2017

Other operating income totalled Rs 89.8 million for the year, including interest income of Rs 7.4 million (2016: Rs 5.1 million) and gains on disposals of Rs 78.3 million (2016: Rs 450 million), of which Rs 77.9 million (2016: Rs 450 million) were recycled from fair value reserves. The increase in interest income resulted from higher cash & cash equivalents holdings in 2017 as compared to the previous year. In 2016, other operating income included Rs 450 million of gains reclassified from equity following the distribution of a substantial part of the investment portfolio to the shareholders of the Company by way of a dividend in specie.

Total comprehensive income/(loss) amounted to Rs 8.1 million for the year compared to Rs (78.8) million in 2016. An appreciation of Rs 39.1 million in fair value of securities compensated impairment losses incurred during the year.


Simplified Statement of Profit or Loss & Other Comprehensive Income

The Company

Amounts in Rs '000 2017 2016

Revenue 27,285 20,695

Other operating income 89,846 455,074

Impairment losses (46,252) (58,042)

Provisions (11,810) -

Administrative expenses (11,133) (18,429)

Tax expense (1,111) 537

Profit for the year 46,825 399,835

Other comprehensive loss (38,761) (478,625)

Total comprehensive income / (loss) 8,064 (78,790)

On a consolidated basis, the results of the Group also fell short of expectations. Revenues dropped by 12% to Rs 97.8 million due to challenging operating environment for FAST whose turnover dropped by 20% to Rs 79.6 million. Our subsidiary’s volume of activity was dragged down by the downward trend in construction projects in the eastern region. Group profit amounted Rs 45.9 million for the year.

IMPROVED LIQUIDITY OF THE ASSET BASE

Although the Company’s total assets quantum remained stable over the year, the asset mix incurred a major overhaul with cash & cash equivalents representing 26% of the total assets as at 30 June 2017 as compared to 6% as at 30 June 2016. The Company received in excess of Rs 100 million from disposal proceeds during the year.

% of total assets

The investment property consists in a plot of freehold land situated at Queen Victoria in the district of Flacq.

REVISITING THE INVESTMENT STRATEGY

During the last financial year, our primary focus was on conceiving, structuring and implementing the Company’s new strategy and business model. The Board approved a five-year investment plan whereby a minimum of Rs 200 million shall be allocated to private equity and venture capital transactions. Our aim is to stimulate our investment portfolio returns over the long run whilst at the same time participating actively in fostering entrepreneurship in Mauritius. Our ambitions are to execute an average of 2 private equity transactions per financial year in the coming five years at an average ticket size ranging from Rs 10 million to Rs 40 million in significant yet non-controlling stakes. We target high potential projects/enterprises capable of generating remarkable returns over our holding period of around 5-7 years.

For the forthcoming year, our focus will essentially be two-fold:

- Rebalance our investment portfolio and re-deploy our cash holdings into liquid investments pending our progressive endeavours into the private equity landscape; and

- Securing recurring quality deal flow and reinforcing our network of partners to accelerate the implementation of our private equity strategy.

ACKNOWLEDGEMENTS

I would like to seize the opportunity to express my thanks to my fellow directors for their support and trust, and in particular to Mr. Jean-Claude Béga who took over the chairmanship of the Board as from 13 February 2017. It is also my great privilege to express my appreciation to the former directors who ceased to hold office during the year, especially our former Chairman, Mr. Arnaud Lagesse who inspired and drove the new strategy of the Company. My thanks finally go to Ms. Catherine Gris, Mr. Nicolas Weiss and Mr. Mushtaq Oosman for their invaluable counsel on The Bee’s Investment Committee.

Olivier Fayolle CEO

58%9%

26%

7%

Receivables & Other

Investment portfolio

Cash & Cash Equivalents

Investment property

201779%

8%

6%7%

2016


ANNUAL REPORT 2017

* Note 9 of the Financial Statements

CORPORATE GOVERNANCE REPORTThe Bee Equity Partners Ltd (“The Bee” or the ‘‘Company’’) is a public company incorporated on 9 October 1974 and is listed on the Development & Enterprise Market (“DEM”) of the Stock Exchange of Mauritius Ltd.

COMPLIANCE

In view of constantly ensuring the protection of shareholders’ interests and enhancing ethical business conduct in the decision-making processes, the Board and the management of The Bee reiterate their commitment to maintaining high standards of corporate governance. The representatives of The Bee on the boards of the investee companies also ensure that sound governance practices are applied on these boards.

In the light of its experience, of regulatory requirements and of shareholders’ expectations, the Board recognises the need to adapt and constantly improve the good governance principles and practices. As such, the Board and management of the Company expressed their willingness to take the necessary measures to adopt, as requested, by end of year 2018, the provisions of the new Code of Corporate Governance for Mauritius (2016), which is based on an “apply and explain basis”.

Meanwhile, The Bee which is a Public Interest Entity applies the Code of Corporate Governance for Mauritius 2003 (the ‘‘Code’’) which is based on a “comply or explain basis” and presents its Corporate Governance Report 2017 in this section.

GROUP SHAREHOLDING STRUCTURE

THE BEE EQUITY

PARTNERS LTD

34.95%IBL LTD

65.05%

OTHER SHAREHOLDERS

80.53%

FLACQ ASSOCIATED STONEMASTERS LIMITED (FAST)

20.97%HAUTE RIVE

AZURI HOTEL LTD

40%PL RESORT LTD

OTHER

INVESTMENTS*


COMMON DIRECTORS

The Directors of The Bee who also sit on the Board of its holding company at 30 June 2017 are as follows:

THE BEE IBL LTD

Jean-Claude Béga √*

Jan Boullé √ √*

Yann Duchesne √ √

Olivier Fayolle √

Dayanidhi Gujadhur √

Thierry Lagesse √ √

* Chairman

MAIN SHAREHOLDERS

The 10 largest shareholders of The Bee as at 30 June 2017 are set out below:

Type of SharesNumber of Shares

Owned% of Total

Issued Shares

IBL Ltd Ordinary 3,083,292 34.95

The MCB Ltd (A/C The MDIT Co Ltd) Ordinary 341,387 3.87

The MCB Ltd (A/C Ste de Courcelles) Ordinary 314,504 3.57

P.O.L.I.C.Y LTD Ordinary 172,999 1.96

Mr. Robert John & Mrs J.M. Jacqueline Russel Ordinary 172,388 1.95

M. I. Kathrada & Sons Ltd Ordinary 118,505 1.34

Mr. Marie Joseph Robert Lagesse Ordinary 112,787 1.28

Sugar Insurance Fund Board Ordinary 84,408 0.96

The MCB Ltd (A/C Rogers Money Purchas Retir Fund) Ordinary 71,800 0.81

Mr. M J Alfred Lincoln Ordinary 66,805 0.76


ANNUAL REPORT 2017

SHAREHOLDING PROFILE

The share ownership and categories of shareholders at 30 June 2017 are set out below:

Number of Shareholders

Size of Shareholding

Number of Shares Owned

% of Total Issued Shares

1,387 1 - 500 shares 165,999 1.88

258 501 - 1,000 shares 184,276 2.09

400 1,001 - 5,000 shares 923,712 10.47

76 5,001 - 10,000 shares 538,969 6.11

105 10,001 - 50,000 shares 2,169,008 24.59

8 50,001 - 100,000 shares 523,121 5.93

4 100,001 - 250,000 shares 576,679 6.54

2 250,001 - 500,000 shares 655,891 7.44

1 Over 500,000 shares 3,083,292 34.95

2,241 8,820,947 100.00


Category of Shareholders



2,081 Individuals 3,879,382 43.98

4 Insurance and Assurance Companies 134,817 1.53

40 Pension and Provident Funds 433,568 4.92

22 Investment and Trust Companies 54,228 0.61

94 Other Corporate Bodies 4,318,952 48.96

2,241 8,820,947 100.00


Category of Shareholders



2,206 Local 8,679,247 98.39

35 Foreign 141,700 1.61

2,241 8,820,947 100.00

CORPORATE GOVERNANCE REPORT


SHARE REGISTRY AND TRANSFER OFFICE

Abax Corporate Administrators Ltd is the Share Registry and Transfer Office of The Bee and as such, is responsible for maintaining the Company’s register of shareholders. For any enquiries on shareholding, such as updating personal details, checking the shareholding and dividend payments, they can be contacted by telephone on (230) 403 6000 or in writing at Abax Corporate Administrators, 6th Floor, Tower A, 1 CyberCity, Ebène.

COMMUNICATION WITH SHAREHOLDERS

By regularly disseminating information to the market concerning the Company’s performance and financial position throughout the year, the Board of The Bee ensures that a high degree of transparency is preserved. The calendar hereunder illustrates the important shareholders’ events:

Financial Year End June

Last Annual Meeting of Shareholders November 2016

Publication of half year results to 31 December 2016

February 2017

Publication of third quarter results to 31 March 2017

May 2017

Publication of full year results to 30 June 2017

September 2017

Publication of first quarter results to 30 September 2017

November 2017

Annual Report November 2017

Next Annual Meeting December 2017

As required by Law, The Bee produces and publishes quarterly, half-yearly and annual reports which are also submitted to the Stock Exchange of Mauritius Ltd and the Financial Services Commission. In addition to compliance with periodic reportorial requirements, the Board places great importance on an open and transparent communication with all the stakeholders of the Company and as such ensures that the Company promptly

discloses to its stakeholders and the public at large, any market sensitive information.

One of the most important shareholders’ related events is the Annual Meeting of the Company. This meeting, which is the principle forum for dialogue with shareholders, aims at providing to all shareholders up-to-date and comprehensive information in an efficient manner. The shareholders of the Company are encouraged to attend the Annual Meeting to discuss with the Directors and Chairman of the Company about various issues. The External Auditors of the Company namely Messrs. Deloitte are invited to attend the Annual Meeting and are available to shareholders to answer questions relevant to their scope of work.

THE BEE’S CONSTITUTION

The Constitution of the Company which has been adopted on 19 December 2003, is in conformity with the provisions of the Companies Act 2001 and of the Development & Enterprise Market Rules. The main clauses of this Constitution are set hereunder:

• The Board shall consist of not less than 5 and not more than 8 Directors.

• The Board is actually composed of 6 Directors and the quorum is 4 Directors.

• The Directors shall have power at any time and from time to time, to appoint any person to be a Director, either to fill a casual vacancy or as an addition to the existing Directors but so that the total number of Directors shall not at any time exceed 8.

• The Company is authorized to purchase or otherwise acquire its shares in accordance with, and subject to, sections 68 to 74, 106 and 108 to 110 of the Act, and may hold the acquired shares in accordance with section 74 of the Act.

• There shall be a quorum for holding a General Meeting if 3 Shareholders are present or represented.

A copy of the Constitution is available upon request in writing to the Company Secretary at the Registered Office of the Company, 4th Floor, IBL House, Caudan Waterfront, Port Louis.


ANNUAL REPORT 2017

SHARE PRICE INFORMATION

At the date of the approval of this Corporate Governance Report by the Board (on 1 September 2017), the share of The Bee is quoted at Rs 25.00 on the Development & Enterprise Market of the Stock Exchange of Mauritius.

Date Price (Rs)

30 June 2013 92.00

30 June 2014 87.00

30 June 2015 72.00

30 June 2016 15.65*

30 June 2017 24.00**

* In the year ended 30 June 2016, the Company transferred part of its investment portfolio to its shareholders by way of a dividend in specie valued at Rs 100.59 per share at time of distribution.** On 25 May 2017, the Company announced that it had received a letter from Equity Spectrum Ltd specifying the latter’s firm intention to offer to acquire 100% of the shares of The Bee at a price of Rs 24.90 per share, payable in cash.

DIVIDEND POLICY

The Company has no formal dividend policy. The dividend payout is subject to the performance of the Company and to the forthcoming funding needs. As required by the Companies Act 2001, for each declaration of dividend, the Directors ensure that the Company satisfies the solvency test and accordingly, sign a certificate confirming that the Company is solvent.

A shareholder having dividend paid by cheque may request Abax Corporate Administrators Ltd to be paid directly into a bank account on the same day that the dividend is paid. This might be more convenient to reduce the risk of cheques being lost or delayed by the post. Upon payment of dividend directly into a bank account, the shareholder will receive the associated credit advice at his registered address.

No dividend was declared by the Company for the year ended 30 June 2017.

For the year ended 30 June 2016, the Company made a distribution to its shareholders, as a dividend in specie, of all the shares it held in AfrAsia Bank Limited, Alteo Limited, Ireland Blyth Limited, Lux Island Resorts Ltd and The United Basalt Products Ltd, representing the equivalent of a distribution of Rs 100.59 per share on the date of distribution.

The shareholders of the Company registered at close of business on 21 January 2016 was entitled, for each share held in the stated capital of the Company, to:

0.2192 shares of AfrAsia Bank Limited0.7431 shares of Alteo Limited0.0950 shares of Ireland Blyth Limited0.4683 shares of Lux Island Resorts Ltd0.3309 shares of The United Basalt Products Ltd

BOARD OF DIRECTORS

Role and responsibilities of the Board

The Board of Directors, under the chairmanship of Mr. Jean-Claude Béga, is committed to the highest standard of business integrity, transparency and professionalism in all its activities, so as to achieve continuing prosperity for the Company. It also ensures that the activities within the Company are managed ethically and responsibly in line with the relevant laws and regulations so as to protect and enhance shareholder value.

The Board is not only responsible for the setting up of the Company’s strategic objectives, values and standards but is equally liable for the performance and affairs of the Company. Since the Board of The Bee is accordingly accountable to shareholders for the proper management of the Company’s affairs, the Directors are committed to achieving and building a sustainable business so as to generate shareholder value.



Composition of the Board

The Bee is managed by a unitary Board of 6 members, 1 of whom is an Executive Director, four of whom are Non-Executive Directors and 1 of whom is an Independent Non-Executive Director. The Board recognises that one of the provisions of the Code is to have two Independent Non-Executive Directors on the Board. However, on 31 March 2017, one of the Independent Non-Executive Directors, namely Mr. Cédric Doger de Spéville resigned as Director of the Company and has not yet been replaced. With regard to the requirement of the Code of having at least two Executive Directors on the Board, the Directors are of opinion that given the size and the structure of the Company, no additional benefits would be derived for the time being in appointing another Executive Director.

Since the publication of the last Annual Report of The Bee, the following changes occurred in the composition of the Board:

• Mr. Laurent de la Hogue resigned as Director of the Company on 16 January 2017.

• Messrs. Jean-Claude Béga and Yann Duchesne were appointed as Directors of the Company on 16 January 2017.

• Mr. Arnaud Lagesse resigned as Chairman and Director of the Company on 13 February 2017.

• Mr. Jean-Claude Béga was appointed Chairman of the Board on 13 February 2017.

• Mr. Cédric Doger de Spéville resigned as Director of the Company on 31 March 2017.

• Mr. Jean-Claude Béga was appointed Alternate Director of the Company to Mr. Thierry Lagesse on 7 July 2017.

• Mr. Madhulkar Gujadhur was appointed as Alternate Director of the Company to Mr. Dayanidhi Gujadhur on 13 July 2017.

The members of the Board are of appropriate calibre and have a range of skills and experience that allow them to exercise an independent judgement in managing and monitoring the affairs of the Company.

The Board has unrestricted access to the records of the Company and also has the right to seek independent professional advice at the expense of the Company, to enable it to discharge its responsibilities effectively.

Chairman of the Board

Mr. Jean-Claude Béga who took over the chairmanship of the Board from Mr. Arnaud Lagesse since February 2017 is responsible for interaction with shareholders and stakeholders of the Company. As Chairman of the Board, Mr. Jean-Claude Béga has the primary function to preside over the meetings of Directors and ensure smooth functioning of the Board in the best interests of good governance. Mr. Jean-Claude Béga provides overall leadership to the Board and ensures its effectiveness by encouraging the active participation of each Director in board discussions and board decisions.

Role and Function of the Chief Executive Officer

Mr. Olivier Fayolle, the Chief Executive Officer of The Bee, is responsible for the day-to-day running of the Company’s business activities. His role and functions are separate from that of the Chairman and as Chief Executive Officer, he is responsible amongst others for:

• Developing and recommending to the Board annual business plans and budgets that support the Company’s long-term vision and strategy;

• Ensuring that the Company’s strategy and policies are implemented;

• Ensuring that the Company’s financial and operating objectives are achieved; and

• Maintaining a close working relationship with the Chairman.


ANNUAL REPORT 2017

DIRECTORS’ APPOINTMENT

In accordance with the Company’s Constitution, the Board may fill vacancies or newly-created directorships on the Board that may occur between annual meetings of shareholders, but so that the total number of Directors shall not at any time exceed the number fixed in accordance with the Constitution.

Newly appointed Directors are subject to election by shareholders at the Company’s Annual Meeting in their first year of appointment. Directors of 70 years old or more are also re-elected each year at the Annual Meeting of Shareholders in accordance with Section 138(6) of the Companies Act 2001.

However, despite the Code’s recommendation for the re-election of all Directors each year, at Company’s level it has not been current practice to re-elect all the Directors, since the Constitution of the Company does not provide for such re-election at the Company’s Annual Meeting. The Board will however consider reviewing the Constitution of the Company to enable such re-election.

Training and Development

Upon appointment to the Board, Directors receive a complete induction pack from the Company Secretary, as well as a leaflet on his duties and responsibilities as Director. Moreover, the Board encourages all its members to keep on enhancing their knowledge and competencies through development programmes offered by various institutions such as the Mauritius Institute of Directors.

BOARD MEETINGS

The Board has 4 scheduled meetings each year. In addition, special meetings may be called from time to time as determined by the needs of the business. It is the responsibility of the Directors to attend meetings.

Board meetings are convened by giving appropriate notice after obtaining approval of the Chairman. As a general rule, detailed agenda, management reports and other explanatory statements are circulated in advance amongst the Directors to facilitate meaningful, informed and focused decisions at the meetings.

A quorum of 4 Directors is currently required for a Board meeting and in case of equality of votes, the Chairman has a casting vote.

Even though it is the general policy of the Company to hold a Board Meeting in each quarter, for the year under review, the Directors met only on 3 occasions since the quorum requirements for the meeting scheduled in September 2016 was not met. Therefore, decisions were taken by way of a circularised written resolution signed by all Directors.

There were 3 Board Meetings during the year under review whereby the Directors considered and adopted amongst others:

• The ratification of the appointment of Mr. Olivier Fayolle as Director representing The Bee on the Boards of Flacq Associated Stonemasters Ltd, Haute Rive Azuri Hotel Ltd and PL Resort Ltd;

• The transfer of 5,130 shares representing 51.3% of the share capital of The Ground Collaborative Space Ltd to IBL Ltd;

• The disposal of minority investments in 5 unlisted companies for a total consideration of Rs 80 million;

• The guidelines and objectives of the new strategy brought forward by the Chief Executive Officer including the setting-up of a portfolio of unquoted investments to be managed in accordance with the private equity investment approach;

• The setting-up of an Investment Committee for the Company;

• The Terms of reference of the Investment Committee defining the mandate, the responsibilities and the functioning of the latter;

• The condensed unaudited financial statements for the quarter and half-year at 31 December 2016;

• The appointment of Mr. Jean-Claude Béga as Chairman of the Board in replacement of Mr. Arnaud Lagesse;

• The appointment of Mr. Jean-Claude Béga as member of the Board sitting on the Investment Committee;

• The adherence of the Board and the Management of The Bee to the ‘Mission, Vision and Values’ of the IBL Group.



The Directors also adopted amongst others by way of written resolutions during the year under review:

• The Company’s and the Group’s audited financial statements at 30 June 2016 and the relevant abridged audited annual financial statements;

• The Corporate Governance Report 2016;

• The convening of the Annual Meeting 2016;

• The appointments of Messrs. Jean-Claude Béga and Yann Duchesne as Directors of the Company;

• The condensed unaudited financial statements for the quarter and nine months ended 31 March 2017;

• The appointment of Messrs. Mushtaq Oosman, Nicolas Weiss and Mrs. Catherine Gris as members of the Investment Comittee

• The appointment of Mr. Mushtaq Oosman as Chairman of the Investment Committee of The Bee;

• The publication of a Public Announcement following the receipt of a Firm Intention from Equity Spectrum Ltd to acquire the total shareholding of The Bee pursuant to provisions of the Securities (Takeover) Rules 2010;

• That Abax Corporate Administrators Ltd, the registry of The Bee be allowed to communicate to Equity Spectrum Ltd the detailed list of shareholders of The Bee and in general provide information in the context of the firm intention of Equity Spectrum Ltd to acquire the total shareholding of The Bee.

After the closing of the financial year ending 30 June 2017, the Directors also adopted amongst others by way of written resolutions:

• The appointment of Mr. Jean-Claude Béga as Alternate Director of the Company to Mr. Thierry Lagesse;

• The appointment of Mr. Madhukar Gujadhur as Alternate Director of the Company to Mr. Dayanidhi Gujadhur;

• The appointment of Messrs. Ernst & Young Ltd as Independent Adviser to the Board of The Bee pursuant to Rule 21 of the Securities (Takeover) Rules 2010, following the Offer Document sent by Equity Spectrum Ltd to the shareholders of The Bee;

• The approval of the Reply Document to be sent to shareholders of The Bee pursuant to Rule 18 of the Securities (Takeover) Rules 2010.

At a Board Meeting held in July 2017, the Directors also adopted amongst others:

• The recommendation of the Board to the shareholders of The Bee not to sell their shares as per the Offer made to them by Equity Spectrum Ltd;

• The approval of a draft version of the Reply Document to be sent to shareholders of The Bee.

The representative of IBL Management Ltd, Company Secretary is responsible for taking accurate and precise board minutes which are then submitted for approval at the following meeting and signed by the Chairman and acting Secretary to the Board.


ANNUAL REPORT 2017

The attendance report of the Directors at the Board Meetings for the year ended 30 June 2017, as well as their remuneration for the year are shown hereunder:

Directors Attendance at the Board Meetings of the Company

Remuneration at 30 June 2017

Jean-Claude Béga*** 1 out of 2 Rs34,109.59*

Jan Boullé 3 out of 3 Rs75,000*

Yann Duchesne*** 0 out of 2 Rs34,109.59*

Olivier Fayolle 3 out of 3 Rs3,313,978.07 **

Dayanidhi Gujadhur 1 out of 3 Rs75,000

Thierry Lagesse 2 out of 3 Rs75,000

Laurent de la Hogue*** 1 out of 1 Rs41,095.89*

Cédric Doger de Spéville**** 2 out of 2 Rs56,301.37

Arnaud Lagesse***** 2 out of 2 Rs46,849.32*

Non-Executive Directors and Independent Non-Executive Directors are paid a flat fee of Rs75,000 per annum.

* The emoluments of Messrs. Jean-Claude Béga, Jan Boullé, Yann Duchesne, Arnaud Lagesse and Laurent de la Hogue have been paid to IBL Ltd.

** This figure relates to the remuneration package of the Executive Director. No Director’s fees were paid to the Executive Director.*** Messrs. Jean-Claude Béga and Yann Duchesne were appointed as Directors of the Company on 16 January 2017 while Mr. Laurent de la

Hogue resigned as Director of the company on the same date.**** Mr. Cédric Doger de Spéville resigned as Director of the Company on 31 March 2017.***** Mr. Arnaud Lagesse resigned as Director of the Company on 13 February 2017.

Statement of Remuneration Philosophy

The Bee has no pre-determined remuneration policy. However, the remuneration paid as Directors Fees to Non-Executive Directors and Independent Non-Executive Directors are submitted to the approval of shareholders at the Company’s Annual Meeting. Consequently, in December 2014, the shareholders of The Bee approved an increase in Directors’ remuneration from Rs50,000 to Rs75,000 per annum payable to Non-Executive Directors and Independent Non-Executive Directors.

It is the responsibility of the Board of determining the remuneration of Executive Directors whilst taking into consideration the prevailing market conditions, benchmarking within the industry, the Company’s results, the skills, knowledge, competencies and qualifications of the Directors.

No pre-determined criteria have been set up for remunerating Executive Directors approaching retirement. This will be determined by the Board as and when required.

The directorships of the Directors of the Company in companies listed on the Stock Exchange of Mauritius Ltd as at 30 June 2017 are shown in the table below:

ALTEO IBL LUX MEI PBL PICL UBP

Jean-Claude Béga √ √ √ √ √

Jan Boullé √ √* √ √

Yann Duchesne √

Thierry Lagesse √ √ √ √ √

* Chairman



The other Directors do not have any directorship in the Companies listed on the Stock Exchange of Mauritius Ltd

ALTEO Alteo LimitedIBL IBL LtdMEI Mauritian Eagle Insurance Company LimitedLUX Lux Island Resorts LtdPBL Phoenix Beverages LimitedPICL Phoenix Investment Company LimitedUBP The United Basalt Products Ltd

The Directors’ brief profiles as well as their respective list of directorships are set out on pages 7, 8 and 9.

BOARD AND DIRECTORS’ APPRAISAL

The appraisal carried out in year 2014/2015 enabled the Board to take appropriate actions to improve its effectiveness and functioning.

The Board recognises that another board and directors’ appraisal exercise would be valuable to the Company and should be conducted. However, since there had been major changes in the strategy of the Company and the Board composition of The Bee during the year under review, the Board believes that it was not suitable to conduct another appraisal exercise for the time being.

DEALING IN SHARES

The Directors of The Bee use their best endeavours to follow the Rules of the Development & Enterprise Market of the Stock Exchange of Mauritius Ltd.

During the year under review, the Directors and Officers of the Company did not deal in the shares of The Bee whether directly or indirectly.

A table showing the direct and indirect interests of the Directors in the securities of the Company is set out in the statutory disclosures on page 37 of this report.

The Directors are fully aware of the requirements set out in Rule 20 of the Development & Enterprise Market Rules which provides for restrictions on deals during the close periods as well as Sections 156 and 157 of the Mauritius Companies Act 2001, which requires appropriate disclosure and restrictions on share

dealing by Directors. Furthermore, one month prior to the Board Meetings scheduled for the approval of abridged accounts, a correspondence is sent by the Company Secretary to the Directors of the Company reminding them of the commencement date of the close period and drawing their attention to the fact that they should not deal in the shares of the Company during this period of time.

All the disclosures made by the Directors under the requirements of Rule 20 of the Development & Enterprise Market Rules and under Sections 156 and 157 of the Companies Act 2001 are entered in an interest register by the Company Secretary.

There is no conflict of interest between the Directors and the Company and shall such conflicts happen, the Directors have an obligation to disclose their interests in the Company’s register of interests so that this conflict can be managed accordingly.

Moreover, as The Bee is registered as a Reporting Issuer with the Financial Services Commission, its Directors and their associates are also required to give proper notification of interests when dealing in the securities of the Company. A register of insiders is kept by the Company and is available for consultation, free of charge, during usual office hours at the Registered Office of the Company situated at 4th Floor, IBL House, Caudan Waterfront, Port Louis.

COMPANY SECRETARY

The Company Secretary, IBL Management Ltd, is available to provide assistance and information on governance and corporate administration issues. It has the primary responsibility for guiding the Board as to its duties and responsibilities. The Company Secretary also ensures that all Board procedures are followed.

MANAGEMENT AGREEMENT

Further to the appointment of Mr. Olivier Fayolle as Chief Executive Officer of the Company in April 2016, the Management Agreement that the Company had with IBL Management Ltd for provision of administrative, financial, legal and company secretarial services was terminated. No other management agreement with IBL Management Ltd or any other third party was made during the year under review.


ANNUAL REPORT 2017

BOARD COMMITTEES

Although the Code stipulates that a Company should set Board Committees, the Directors have opted to treat matters relating to the Company at Board level, considering the structure and the activities of the Company.

Nonetheless, as part of the new strategy of The Bee and in view of mitigating investment risk, the Board decided to set up an Investment Committee to advise and assist the Directors in evaluating and authorizing investment and disposals transactions. This Investment Committee which is composed of a majority of Non-Board Members has no decision-making power. This Committee only acts as a consultative cell making recommendations to the Board concerning investment projects. It is to be noted that the Board has the duty to monitor the exercise of the tasks handled by the Investment Committee and remains ultimately accountable and responsible for the decisions, performance and affairs of the Company.

Details of the Investment Committee is set out in the section ‘Risk Management’ - sub-section ‘Investment Risk’ of this Corporate Governance Report.

RISK MANAGEMENT

For The Bee, risk management involves identifying the prominent risks faced by the Company, defining the appetite for risk in light of the rewards associated with them and setting up appropriate risk mitigation and monitoring measures.

The Board is responsible for ensuring that the system of controls of the Company is sufficient and appropriate in order to mitigate the risks which may impact its objectives. The Board confirms that there is an ongoing process for identifying, evaluating and managing the various risks faced by the Company.

Some of the prominent risks to which the Company is exposed and the correlated mitigation measures are detailed below.

Investment Risk

Investment risk is viewed as the probability of a particular investment causing losses or generating returns not commensurate with the risks associated with it.

The Board considers that the investment risk of Company has increased during the year under review following the adoption of a reshuffled investment strategy based on the ‘private equity’ investment approach. Such investment strategy is considered riskier than the one based on more traditional listed instruments that prevailed in the past.

The Board is implementing the new strategy in light of the expected higher returns and considering the greater shareholder value that is expected to be derived therefrom for the benefit of the shareholders of the Company.

The Board manages the investment risk by setting up appropriate risk mitigation measures such as portfolio concentration limits, portfolio diversification, performance monitoring and benchmarking.

Investment Committee

Duties of the Investment Committee

On 10 November 2016, the Board approved the creation of an Investment Committee so as to cater for the increase in investment risk associated with the re-designed investment strategy. The Investment Committee has the duty to assist the Board in evaluating investment-related projects so as to ensure that investment decisions are aligned with the Company’s strategy and produces the desired returns on investment. This Committee will hold office for a period of one (1) year and its term can be renewed after one (1) year at the sole discretion of the Board.

The Investment Committee shall advise and assist the Board of Directors on matters relating to the investment activities of the Company. It has the main duty of reviewing and evaluating the investment strategy and to issue recommendations to the Board on the major investment and disposal projects of the Company.

Composition of the Investment Committee

The Investment Committee is composed of 4 members of whom 3 are Non-Board Members namely Messrs. Mushtaq Oosman, Nicolas Weiss and Mrs. Catherine Gris and 1 is a Non-Executive Board Member, namely Mr. Jean-Claude Béga.

The Members of this Committee are of suitable calibre and have a range of specialized skills and experience to discharge their duties.



The prevalence of Non-Board Members in the Committee is in line with the desire of the Board that the Investment Committee provide an external and objective opinion to the Board.

The Members of the Investment Committee may obtain such outside or other independent professional advice as it considers necessary to carry out their duties.

Brief profiles of the Members of the Investment Committee are set out on pages 10 & 11.

Chairman of the Investment Committee

Pursuant to provisions of the Terms of Reference of the Investment Committee, the Chairman of this Committee should compulsorily be a Non-Board Member. As such on 9 May 2017, Mr. Mushtaq Oosman was appointed Chairman of the investment Committee.

As Chairman of the Investment Committee, Mr. Oosman has the duty of preparing reports on the activities and the recommendations of the Committee to be submitted to the Board for consideration and ultimate approval.

Meetings of the Investment Committee

The Investment Committee shall meet at least 4 times in a year and preferably on a quarterly basis before the meeting of the Board of Directors. Since the Terms of Reference of the Investment Committee was only finalised in February 2017 and the composition of this Committee was only finalised in April 2017, for the year under review, the Investment Committee met only once.

The quorum for a meeting of the Investment Committee is 3 Members including compulsorily the Non-Executive Board Member. Recommendation decisions of the Investment Committee to the Board also requires the approval of 3 Members including the Non-Executive Board Member.

The secretary of the Board of Directors will also act as the secretary of the Investment Committee.

An item relating to the proceedings of the Investment Committee is included at the agenda of each Board Meeting of the Company so that the Non-Executive Member of the Board sitting on this Investment Committee namely Mr. Jean-Claude Béga can report to the Board about discussions, which occurred

during the Committee meetings. Moreover, Mr. Olivier Fayolle, who is the Executive Director of The Bee is also in attendance of all Investment Committee Meetings and is therefore present at Board Meetings of the Company to report to the Board on deliberations of the Investment Committee.

Remuneration of the Investment Committee

Non-Board Members of the Investment Committee receives annual remuneration, which is commensurate with their scope of work and responsibilities.

Other Members of the Investment Committee will not receive any remuneration.

Country risk

The Bee’s asset base is almost entirely composed of Mauritian securities and as such, the Company is strongly exposed to the performance of the local economy. The Board is of the opinion that, considering the scale and the resources available to the Company, the risks associated with investments in foreign geographies outweighs the benefits of such geographical diversification for the Company.

Market Risk

As an investment holding company, The Bee is exposed to fluctuations in the market value of the investment portfolio. This is not only the case for listed investments but also for unlisted investments due to the valuation correlation between the two asset classes.

The stock market is strongly dependent upon the ongoing changes in the macroeconomic environment which ultimately affect the market capitalisation of listed companies. Despite these market forces being outside management ability to control, the Board monitors the macroeconomic changes and takes investment decisions to ensure that the value of the investment portfolio is preserved.

The Board considers that the Market risk to which the Company is exposed has generally decreased in the year under review due to the higher amount of cash & cash equivalents held as a percentage of the total assets of the Company.


ANNUAL REPORT 2017

Operational Risk

Operational risks are those risks resulting from the internal inadequacies of a company or a breakdown in its controls, operations or procedures, which result into losses being suffered. Operational risks arise as a result of the group companies being involved in operational and administrative procedures.

Following the termination of IBL Management Ltd’s contract on 30 June 2016, the Chief Executive Officer is directly accountable to the Board for the maintenance of a robust operational risk management framework. In this view, the Company has signed a number of service agreements with IBL Group entities and other third parties for the provision of critical accounting and cash management services. The Directors have ensured that the service providers have the adequate experience, processes, technical capabilities and reporting procedures to carry out its contractual obligations vis-à-vis the Company.

Compliance Risk

Losses may arise as a result of non-compliance with laws, regulations and policies. The Company Secretary is responsible for ensuring that the Company adheres to company law and to the rules of the Stock Exchange of Mauritius Ltd. Furthermore, The Bee has in place a legal advisory service agreement covering, amongst others, the monitoring of changes in legislation and regulations, which allows the Company to take corrective actions when needed.

Human Resource Risk

Sourcing and recruiting key specialists and talents and retaining them are priorities for the Company. As an investment company, The Bee requirements in terms of human capital is limited to a small number of qualified professionals. The Board is of the opinion that the likelihood of a serious human resources risk occurring is low.

Financial Risk Factors

These risks comprise of market risks (including currency risk, interest rate risks and price risks), credit risks and liquidity risks as reported in note 27 of the Notes to the Financial Statements.

INTERNAL CONTROL AND INTERNAL AUDIT

The Board is responsible for the Company’s system of internal control, which is designed to provide reasonable assurance against material misstatement and loss. The Bee’s internal control system consists of resources, behaviours, procedures and initiatives tailored to the specifics of the Company. The Company maintains a system of financial control designed to provide assurance regarding the keeping of proper accounting records and the reliability of financial information used within the business and for publication.

Internal Audit

The Company has not set up an internal audit function so far as the Board has been of the opinion that the cost of setting up such a permanent function would outweigh the benefits derived therefrom. However, the Board intends to reassess the cost to benefit balance of such internal audit function in the forthcoming financial year.

However, considering the materiality of the subsidiary Flacq Associated Stonemasters Ltd to the Group’s revenue, results and assets, UHY & Co has been appointed as internal auditor of FAST since July 2015. Even if the works of UHY have demonstrated the general adequacy of the internal control system, corrective actions have been implemented where needed.

Accounting

Directors are responsible for ensuring that:

• Adequate accounting records are kept and effective internal control system are maintained.

• Accounts are prepared in order to fairly present the state of affairs of the Company and the results of its Operations and that those accounts comply with International Financial Reporting Standards (IFRS).

• Appropriate accounting policies are applied and are supported by reasonable and prudent judgements.



Audit

The Board is responsible for the appointment and if necessary, the removal of the external auditors. Audit fees are set in a manner that enables an effective external audit on behalf of shareholders. Auditors should observe the highest standards of business and professional ethics and in particular their independence should not be impaired in any way.

Non-Audit Services

Non-audit services are provided by the external auditors. The nature of the service provided relates to provision of tax services to one of its subsidiary. The amount paid has been disclosed in the ‘Auditors Remuneration’ section on page 38.

In conducting its annual review of the effectiveness of risk management, the Board considers the key findings from the ongoing monitoring and reporting processes, management assertions and independent assurance reports. The Board also takes into account of material changes and trends in the risk profile and considers whether the control system, including reporting, adequately supports the Board in achieving its risk management objectives.

During the course of the year the Board considered the Company’s responsiveness to changes within its business environment. The Board is satisfied that there is an ongoing process, which has been operational during the year.

SAFETY, HEALTH AND ENVIRONMENTThe Bee, being an investment company, has a limited number of employees, therefore the Board does not consider it of relevance to implement safety, health and environmental measures in the Company itself. Nevertheless, The Bee and its subsidiary companies form part of the IBL Group of Companies which believes in providing and maintaining a safe and healthy work environment for all its employees. The IBL Group through its established policies encourages the enhancement of safety and health standards in the workplace.

POLITICAL DONATIONSThe Company did not make any political donation during the year under review (2016: Nil).

CHARITABLE DONATIONSDuring the year under review, the Company has donated Rs100,000 to Fondation Joseph Lagesse (which includes the 2% Corporate Social Responsibility contribution amounting to Rs53,785). Please refer to note 18 in the Notes to the Financial Statements.

CODE OF ETHICSThe Bee has no specific Code of Ethics in place but the Board is committed to the highest standards of integrity and ethical conduct in dealing with all its stakeholders.

Moreover, The Bee forming part of IBL Group has adhered to the ethics charter of the group.

DIRECTORS’ AND OFFICERS’ INSURANCE AND INDEMNIFICATIONThe Directors and Officers of the Company are covered by a Directors’ and Officers’ indemnity insurance cover.

EMPLOYEE SHARE OPTION PLANThe Company does not have a Share Option Plan.

RELATED PARTY TRANSACTIONSPlease refer to note 25 in the Notes to the Financial Statements.

SHAREHOLDERS’ AGREEMENTThe Company has not entered into any such agreement with any of its shareholders for the year under review.

Jean-Claude Béga Oliver Fayolle Chairman Director

1 September 2017


ANNUAL REPORT 2017

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

NAME OF PIE: THE BEE EQUITY PARTNERS LTD (‘THE BEE’ OR ‘THE COMPANY’)

REPORTING PERIOD: 30 JUNE 2017

We the Directors of The Bee, confirm that to the best of our knowledge, the Company has complied with most of its obligations and requirements under the Code of Corporate Governance except for the following sections of the Code of Corporate Governance:

• Section 2.2.2 Composition of the Board: Please refer to Corporate Governance Report Section ‘Composition of the Board’ paragraph 1 – page 23

• Section 2.2.3 Composition of the Board: Please refer to Corporate Governance Report Section ‘Composition of the Board’ paragraph 1 – page 23

• Section 2.2.6 Board and Directors: Please refer to Corporate Governance Report Section ‘Directors’ Appointment’ paragraph 3 – Page 24

• Section 2.3.2 (j) Board and Directors: Please refer to Corporate Governance Report Section ‘Board Meetings’ paragraph 4 – Page 24

• Section 2.10 Board and Director Appraisal: Please refer to Corporate Governance Report Section ‘Board and Directors’ Appraisal’ – page 27.

• Section 3 (Section 3.1 to Section 3.9.5) Board Committees: Please refer to Corporate Governance Report Section ‘Board Committees’ – page 28.

• Section 5.3 Internal Audit: Please refer to Corporate Governance Report Section ‘Internal Audit’ – page 30

• Section 5.4.3 (c) Reporting and Disclosure: Please refer to Corporate Governance Report Section ‘Internal Audit’ – page 30

• Section 7 (Section 7.1 to Section 7.6) Integrated Sustainability Reporting: Please refer to Corporate Governance Report Section ‘Safety, Health and Environment’ and section ‘Code of Ethics’ – page 31

Jean-Claude Béga Oliver Fayolle Chairman Director

1 Setember 2017

STATEMENT OF COMPLIANCE


FINANCIALSTATEMENTS

STATEMENT OF DIRECTORS’ RESPONSIBILITIESin respect of the preparation of financial statements

Directors acknowledge their responsibilities for:

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

(ii) The preparation of financial statements which fairly present the financial position of the Company as at the end of the financial year and the financial performance and cash flows for that period and which comply with International Financial Reporting Standards (IFRS);

(iii) The use of appropriate accounting policies supported by reasonable and prudent judgements and estimates.

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

The Directors report that:

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

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

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

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

ON BEHALF OF THE BOARD

Jean-Claude Béga Oliver Fayolle

Chairman Director

1 September 2017


STATUTORY DISCLOSURES(Pursuant to Section 221 of The Companies Act 2001 and Section 88 of The Securities Act 2005)

The Directors have pleasure in presenting the Annual Report of The Bee Equity Partners Ltd and its subsidiary company, Flacq Associated Stonemasters Limited (“FAST”) together with the audited financial statements for the year ended 30 June 2017. Part of the company’s shares in The Ground Collaborative Space Ltd has been sold on 29 November 2016 and following this transaction, The Ground Collaborative Space Ltd is now considered as a simple investment for the Company.

State of affairs and review of activities

The main activity of the Company is the holding of investments.

Its subsidiary, FAST, is involved in the production and sale of aggregates and bricks.

The Statements of profit or loss and other comprehensive income for the year is set out on page 47.

Dividend

The Company has not declared any dividend for the year ended 30 June 2017.

For year ended 30 June 2016:

A dividend in specie was declared on 21 December 2015 as follows:

For each share held in the stated capital of The Bee Equity Partners Ltd, the shareholders of the Company registered at close of business on 21 January 2016 received:

0.2192 shares of AfrAsia Bank Limited

0.7431 shares of Alteo Limited

0.0950 shares of Ireland Blyth Limited

0.4683 shares of Lux Island Resorts Ltd

0.3309 shares of The United Basalt Products Ltd


ANNUAL REPORT 2017

Directors

The name of the Directors of the Company and its subsidiary as at 30 June 2017 were as follows:

Directors of the CompanyJean-Claude Béga (Chairman) – appointed as Director on 16 January 2017 and as Chairman on 13 February 2017Jan BoulléYann Duchesne – appointed as Director on 16 January 2017Olivier Fayolle Dayanidhi Gujadhur Thierry Lagesse

Directors of the Company who ceased to hold office:

Laurent de la Hogue – resigned as Director on 16 January 2017Arnaud Lagesse – resigned as Director and Chairman on 13 February 2017Cédric Doger de Spéville – resigned as Director on 31 March 2017

Directors of the Subsidiary FASTThierry Lagesse (Chairman)Olivier Fayolle – appointed as Director on 19 August 2016 Christophe QuevauvilliersJean RibetStéphane Ulcoq

Directors of the Subsidiary FAST who ceased to hold office:Arnaud Lagesse – resigned as Director on 19 August 2016Cédric Doger de Spéville – resigned as Director on 3 April 2017



Directors’ and Senior Officers’ share interest

The direct and indirect interests of the Directors and the Senior Officers in the securities of the Company as at 30 June 2017 were as follows:

Direct Interests Indirect Interests

Directors Shares % %

Jean-Claude Béga - - 0.014

Jan Boullé - - 0.003

Yann Duchesne - - -

Olivier Fayolle - - -

Dayanidhi Gujadhur 12,736 0.144 -

Thierry Lagesse 2,944 0.033 0.016

Senior Officers

IBL Management Ltd - - -

Mon Loisir Services & Conseils Ltée - - -

Avnish Dassyne - - -

Catherine Gris - - -

Mushtaq Oosman 123 0.001 -

Nicolas Weiss - - -

The Directors and the Senior Officers did not hold any shares in its subsidiary whether directly or indirectly.

Directors’ remuneration and benefits

Remuneration and benefits received, or due and receivable, by the Directors from the Company and its subsidiary were as follows:

30 June 2017 30 June 2016

Executive Directors

Non-Executive Directors

Executive Directors

Non-Executive Directors

Rs Rs Rs Rs

The Company

The Bee Equity Partners Ltd 3,313,978 437,466 458,209 450,000

The Subsidiary

Flacq Associated Stonemasters Limited - 138,000 - 144,000



ANNUAL REPORT 2017

Directors’ service contracts

Mr. Olivier Fayolle the Executive Director of the Company has a service contract with no expiry term with The Bee Equity Partners Ltd.

Contract of significance

There was no contract of significance between the Company or its subsidiary and any of their Directors during the year under review.

Donations (Political and Charitable)

The Company has made only charitable donations of Rs100,000 during the year (2016: Charitable donations Rs500,000 and political donations: Nil) whereas its subsidiary FAST has made donations of Rs277,403 during the year (2016: Rs516,491) and these include the 2% Corporate Social Responsibility contribution.

Auditors’ remuneration

The fees payable to the Auditors, for audit and other services were:

2017 2016

Audit Others* Audit Others*

Rs Rs Rs Rs

Deloitte

The Company

The Bee Equity Partners Ltd 373,750 Nil 486,000 Nil

The Subsidiary

Flacq Associated Stonemasters Limited 150,000 10,000 86,000 26,000

Ernst & Young

The Company

The Bee Equity Partners Ltd Nil 36,225 Nil 34,500

*Please refer to the section relating to ‘Non-Audit Services’ in the Corporate Governance Report.

The Auditors, Deloitte, have expressed their willingness to continue in office and a resolution proposing their reappointment will be submitted to the Annual Meeting.



Acknowledgements

The Directors wish to place on record their sincere appreciation and gratitude to management and personnel for the work done during the year.

By order of the Board

Jean-Claude Béga Oliver Fayolle

Chairman Director

1 September 2017



ANNUAL REPORT 2017

COMPANY SECRETARY’S CERTIFICATEFor the year ended 30 June 2017

We certify that, to the best of our knowledge and belief, the Company has filed with the Registrar of Companies all such returns as are required of the Company under the Companies Act 2001.

Doris Dardanne

Per IBL Management Ltd

Company Secretary

1 September 2017


Report on the audit of the consolidated and separate financial statements

Opinion

We have audited the consolidated and separate financial statements of The Bee Equity Partners Ltd (the “Company”) and its subsidiary (the “Group”) set out on pages 46 to 82, which comprise the consolidated and separate statements of financial position as at 30 June 2017, and the consolidated and separate statements of profit or loss and other comprehensive income, the consolidated and separate statements of changes in equity and the consolidated and separate statements of cash flows for the year then ended, and the notes to the consolidated and separate financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated and separate financial statements give a true and fair view of the financial position of the Group and the Company as at 30 June 2017, and their consolidated and separate financial performance and their consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) and comply with the requirements of the Mauritius Companies Act 2001 and the Financial Reporting Act 2004.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for Audit of the Consolidated and Separate Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements of the International Ethics Standards Board for Accountants (IESBA) Code of Ethics for Professional Accountants. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated and separate financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF THE BEE EQUITY PARTNERS LTD

Key audit matter How our audit addressed the key audit matter

Valuation of investment property

The carrying value of the investment property amounted to Rs46,150,000 and the fair value adjustments in respect of the investment property recorded in profit for the year was Rs4,086,000.

The valuation, based on sales comparison method and residual method, disclosed in Note 6, was arrived at by reference to market evidence of recent transaction prices for similar properties. In estimating the fair value of the property, the highest and best use of the property is its current use.

Significant judgement is required by management in determining the fair value of the investment property.

We assessed the competence, capabilities and objectivity of management’s independent valuer, and verified the qualifications of the valuer. We also discussed the scope of work with management and reviewed the terms of engagement to determine that there were no matters that could affect objectivity or impose scope limitations. We confirmed that the approaches used are consistent with IFRS and industry norms.

We have evaluated management’s judgements, in particular:

• The models used by management; and

• The significant assumptions including discount rates, financing costs and development costs.


ANNUAL REPORT 2017

Key audit matter How our audit addressed the key audit matter

Valuation of investment property (cont’d)

Accordingly the valuation of investment property is considered to be a key audit matter due to the significance of the balance to the financial statements as a whole, combined with the judgement associated with determining the fair value.

The directors have engaged an independent valuer to determine the fair value of the investment property.

We compared these inputs to market data and entity-specific historical information to confirm the appropriateness of these judgements.

We performed a sensitivity analysis on the significant assumptions to evaluate the extent of impact on the fair values.

The carrying value and disclosures pertaining to the fair valuation of the investment property were found to be appropriate.

Determination of fair values and impairment of unquoted investments

Fair values of unquoted investments are determined by using valuation techniques including third party transactions values, earnings, net asset value or discounted cash flow, whichever is considered to be appropriate. The disclosures of fair values of unquoted investments have been provided in Notes 9 and 27 to the financial statements.

Such valuation exercise, as applied in the current year, requires that management makes estimates of discount factors and price earnings ratio as applicable to the relevant market.

Changes in assumptions about these factors could affect the reported fair values of the unquoted investments.

Determining whether the unquoted investments (available-for-sale investments and associates) held at cost are impaired requires an estimation of the value in use of the unquoted investments. In considering the value in use, the directors have taken into consideration the management accounts, approved budgets and comparable transactions. The actual results could however differ from the estimates. The disclosures of impairment of unquoted investments have been provided in Notes 8 and 9 to the financial statements.

Management has disclosed the accounting judgements and estimates used for fair valuation and impairment of investments in Note 4 to the financial statements.

Accordingly the valuation of unquoted investments is considered to be a key audit matter.

In evaluating the fair values and impairment of unquoted investments, we reviewed the valuation calculations prepared by management. We performed various procedures, including the following:

• Evaluated the appropriateness of the valuation methodology and models used

• Assessed the reasonableness of the valuation assumptions and tested the underlying source information of the significant valuation assumptions

• Reviewing appropriateness of discount factors used, including any illiquidity, size and lack of control factors

• ested the mathematical accuracy of the valuation

• Performed analytical review of management accounts and approved budgets used for determination of value in use of unquoted investments

• Recomputing the value for unquoted investments held at cost less impairment.

We considered management’s assumptions and the disclosures relating to the fair values and impairment of unquoted investments to be appropriate.



Report on Other Legal and Regulatory Requirements

Mauritius Companies Act 2001

In accordance with the requirements of the Mauritius Companies Act 2001, we report as follows:

• we have no relationship with, or interest in, the Company and its subsidiary other than in our capacity as auditor;

• we have obtained all information and explanations that we have required; and

• in our opinion, proper accounting records have been kept by the Company as far as appears from our examination of those records

The Financial Reporting Act 2004

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

In our opinion, the disclosure in the Corporate Governance Report is consistent with the requirements of the Code.

Other Information

The directors are responsible for the other information. The other information comprises the Statement of Directors’ Responsibilities in respect of the Preparation of Financial Statements, Statutory Disclosures and the Secretary’s Certificate, which we obtained prior to the date of this auditor’s report, and other reports to be included in the Annual Report, which are expected to be made available to us after that date. The other information does not include the consolidated and separate financial statements, the Corporate Governance Report and our auditor’s report thereon.

Our opinion on the consolidated and separate financial statements and on the Corporate Governance Report does not cover the other information and we do not express any form of assurance or conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

When we read the other reports which are expected to be made available to us after the date of this auditor’s report, if we conclude that there is material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of the Directors for the Consolidated and Separate Financial Statements

The directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with International Financial Reporting Standards and in compliance with the requirements of the Mauritius Companies Act 2001 and the Financial Reporting Act 2004 and they are also responsible for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and separate financial statements, the directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group and/or the Company or to cease operations, or have no realistic alternative but to do so.

The directors are responsible for overseeing the Group’s and the Company’s financial reporting process.



ANNUAL REPORT 2017

Report on Other Legal and Regulatory Requirements (Cont’d)

Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit 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 Group’s and the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group and/or the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.



Report on Other Legal and Regulatory Requirements (Cont’d)

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated and separate financial statements of the current year and are therefore the key audit matters. We describe those matters in our auditor’s report unless laws or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

This report is made solely to the Company’s shareholders, as a body, in accordance with section 205 of the Mauritius Companies Act 2001. Our audit work has been undertaken so that we might state to the Company’s shareholders those matters we are required to state to them in an auditor’s 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 shareholders as a body, for our audit work, for this report, or for the opinions we have formed.

Deloitte Jacques de C. Du Mée, ACA

Chartered Accountants Licensed by FRC

01 September 2017



ANNUAL REPORT 2017

THE BEE EQUITY PARTNERS LTDANNUAL REPORT 2017

46

STATEMENTS OF FINANCIAL POSITION AT 30 JUNE 2017

THE GROUP THE COMPANY

Notes 2017 2016 2017 2016Rs’000 Rs’000 Rs’000 Rs’000

ASSETSNon-current assetsProperty, plant and equipment 5 (a) 68,953 70,126 522 - Intangible assets 5 (b) 76 140 - - Investment property 6 46,150 42,064 46,150 42,064 Investments in subsidiaries 7 - - 88,181 90,437 Investments in associates 8 - 37,388 - 37,388 Investments in securities 9 226,905 294,475 226,905 294,475

342,084 444,193 361,758 464,364 Current assetsInventories 10 12,859 12,750 - - Trade and other receivables 11 51,647 52,847 37,485 37,341 Current tax asset 18 78 825 - - Cash and cash equivalents 143,785 37,846 141,850 30,603

208,369 104,268 179,335 67,944

Total assets 550,453 548,461 541,093 532,308

EQUITY AND LIABILITIESCapital and reservesStated capital 12 8,821 8,821 8,821 8,821 Revaluation and other reserves 113,723 155,228 159,943 198,704 Retained earnings 386,489 342,581 368,226 321,401 Equity attributable to owners of the Company 509,033 506,630 536,990 528,926 Non-controlling interests 14,565 17,223 - - Total equity 523,598 523,853 536,990 528,926

Non-current liabilitiesRetirement benefit obligations 13 6,844 5,783 - - Obligation under finance lease 14 3,848 4,933 - - Deferred tax liabilities 15 4,840 3,857 - -

15,532 14,573 - - Current liabilitiesTrade and other payables 16 9,181 7,784 3,046 2,979 Obligation under finance lease 14 1,085 1,007 - - Bank overdraft 17 - 841 - - Current tax liabilities 18 1,057 403 1,057 403

11,323 10,035 4,103 3,382

Total equity and liabilities 550,453 548,461 541,093 532,308

Approved by the Board of Directors and authorised for issue on 1 September 2017.

Jean-Claude Béga Oliver Fayolle Chairman DirectorThe notes on pages 50 to 82 form an integral part of these financial statements.

Auditor’s report on pages 41-45.


ANNUAL REPORT 2017

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE YEAR ENDED 30 JUNE 2017


Notes 2017 2016 2017 2016Rs’000 Rs’000 Rs’000 Rs’000

Revenue 20 97,783 111,466 27,285 20,695 Operating expenses (64,347) (79,028) - - Operating profit 33,436 32,438 27,285 20,695 Other operating income 21 91,740 455,975 89,846 455,074 Impairment losses on investments in associates 8 (6,780) - (37,388) (54,490)Impairment losses on available-for-sale investments 9 (8,864) (3,552) (8,864) (3,552)Distribution costs (1,280) (923) - - Administrative expenses (16,193) (24,278) (11,133) (18,429)Finance costs 22 (415) (2) - - Share of loss of associates 8 (30,608) (54,490) - - Provision for impairment of loans to associates 11 (11,810) - (11,810) - Profit before tax 49,226 405,168 47,936 399,298 Tax expense 18 (3,361) (2,425) (1,111) 537 Profit for the year 23 45,865 402,743 46,825 399,835

Other comprehensive income, net of income tax:Items that may be reclassified subsequently to profit or loss:Increase/(decrease) in fair value of securities 7, 9 36,367 (17,189) 39,111 (28,652)Cumulative gain reclassified from equity on disposal of available-for-sale securities 21 (77,872) (449,973) (77,872) (449,973)Items that will not be reclassified subsequently to profit or loss:Remeasurement of defined benefit obligations 13 (839) 880 - - Deferred tax on remeasurement of retirement benefit obligations 15 142 (132) - - Other comprehensive loss for the year (42,202) (466,414) (38,761) (478,625)

Total comprehensive income/(loss) for the year 3,663 (63,671) 8,064 (78,790)

Profit for the year attributable to:Owners of the company 44,469 400,305 46,825 399,835 Non-controlling interests 1,396 2,438 - -

45,865 402,743 46,825 399,835 Total comprehensive income/(loss) attributable to:Owners of the company 2,403 (66,255) 8,064 (78,790)Non-controlling interests 1,260 2,584 - -

3,663 (63,671) 8,064 (78,790)

Earnings per share (in Rs) 24 5.04 45.38

The notes on pages 50 to 82 form an integral part of these financial statements.



48

STATEMENTS OF CHANGES IN EQUITYFOR THE YEAR ENDED 30 JUNE 2017

THE GROUP Attributable to owners of the Company

NotesStated capital

Fair value reserves

Retained earnings Total

Non- controlling interests Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000At 1 July 2015 8,821 622,390 828,947 1,460,158 15,009 1,475,167 Profit for the year - - 400,305 400,305 2,438 402,743 Other comprehensive (loss)/income for the year - (467,162) 602 (466,560) 146 (466,414)Total comprehensive (loss)/income for the year - (467,162) 400,907 (66,255) 2,584 (63,671)Acquisition of subsidiary - - - - 1,820 1,820 Dividends 19 - - (887,273) (887,273) (2,190) (889,463)At 30 June 2016 8,821 155,228 342,581 506,630 17,223 523,853 At 1 July 2016 8,821 155,228 342,581 506,630 17,223 523,853 Profit for the year - - 44,469 44,469 1,396 45,865 Other comprehensive (loss)/income for the year - (41,505) (561) (42,066) (136) (42,202)Total comprehensive (loss)/income for the year - (41,505) 43,908 2,403 1,260 3,663 Disposal of subsidiary - - - - (1,728) (1,728)Dividends 19 - - - - (2,190) (2,190)At 30 June 2017 8,821 113,723 386,489 509,033 14,565 523,598



THE COMPANY NotesStated capital

Fair value reserves

Retained earnings Total

Rs’000 Rs’000 Rs’000 Rs’000At 1 July 2015 8,821 677,329 808,839 1,494,989 Profit for the year - - 399,835 399,835 Other comprehensive loss for the year - (478,625) - (478,625)Total comprehensive (loss)/income for the year - (478,625) 399,835 (78,790)Dividends 19 - - (887,273) (887,273)At 30 June 2016 8,821 198,704 321,401 528,926 At 1 July 2016 8,821 198,704 321,401 528,926 Profit for the year - - 46,825 46,825 Other comprehensive loss for the year - (38,761) - (38,761)Total comprehensive (loss)/income for the year - (38,761) 46,825 8,064 Dividends 19 - - - - At 30 June 2017 8,821 159,943 368,226 536,990


ANNUAL REPORT 2017

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2017


2017 2016 2017 2016Rs’000 Rs’000 Rs’000 Rs’000

CASH FLOWS FROM OPERATING ACTIVITIESProfit before tax 49,226 405,168 47,936 399,298 Adjustments for:Profit on disposal of available-for-sale investments (219) - (219) - Cumulative gain reclassified from equity on disposal of available-for-sale securities (77,872) (449,973) (77,872) (449,973)Profit on disposal of property, plant and equipment (305) - - - Profit on disposal of subsidiary (1,009) - (169) - Fair value gain on revaluation of investment property (4,086) - (4,086) - Share of loss in associates 30,608 54,490 - - Impairment losses on investments in associates 6,780 - 37,388 54,490 Impairment losses on available-for-sale investments 8,864 3,552 8,864 3,552 Interest income (8,012) (5,598) (7,429) (5,100)Interest expense 415 2 - - Depreciation on property, plant and equipment 7,891 7,045 15 - Amortisation of intangible asset 64 62 - - Movement in retirement benefit obligation 644 671 - - Provision for doubtful debt 976 608 - - Provision for impairment of loans to associates 11,810 - 11,810 -

25,775 16,027 16,238 2,267 Working capital changes:(Increase)/decrease in inventories (109) 7,888 - - (Increase)/decrease in trade and other receivables (8,638) 6,894 (8,658) 5,761 Increase/(decrease) in trade and other payables 2,292 (3,584) 67 349 Cash generated from operations 19,320 27,225 7,647 8,377 Retirement benefit paid (422) - - - Interest paid (415) (2) - - Tax paid (835) (6,529) (457) (764)Net cash generated from operating activities 17,648 20,694 7,190 7,613

CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sale of investments 96,663 - 96,663 - Proceeds from disposal of property, plant and equipment 305 - - - Disposal of subsidiary (413) - 3,800 - Interest received 4,714 4,920 4,131 4,421 Purchase of property plant and equipment (8,939) (8,799) (537) - Purchase of intangibles - (168) - - Acquisition of available-for-sale investments - (18,000) - (18,000)Acquisition of investments in subsidiary - - - (5,000)Acquisition of investments in associates - (900) - (900)Loans granted to associated companies - (33,440) - (33,440)Net cash generated from/(used in) investing activities 92,330 (56,387) 104,057 (52,919)

CASH FLOWS FROM FINANCING ACTIVITIESDividend paid to non-controlling interests (2,191) (2,190) - - Finance lease (1,007) - - - Issue of share capital to non-controlling interest - 1,820 - - Net cash used in financing activities (3,198) (370) - -

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 106,780 (36,063) 111,247 (45,306)

Cash and cash equivalents as at 1 july 37,005 73,068 30,603 75,909 Cash and cash equivalents as at 30 june 143,785 37,005 141,850 30,603

Represented by :Cash in hand and at bank 143,785 37,846 141,850 30,603 Bank overdraft - (841) - -

143,785 37,005 141,850 30,603



NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2017


50

1. INCORPORATION AND ACTIVITIES

The Bee Equity Partners Ltd (the “Company”) is a public company incorporated in Mauritius and listed on the Development Enterprises Market (DEM) of the Stock Exchange of Mauritius.

The registered office and the place of business of the Company are situated at 4th Floor, IBL House, Caudan Waterfront, Port Louis.

The main activities of the Company is the holding of investments. Its subsidiary, Flacq Associated Stonemasters Limited (‘’FAST’’) is involved in the production and sale of aggregates and bricks.

2. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs)

In the current year, the Group and the Company have applied all new and revised IFRSs issued by the International Accounting Standards Board (“IASB”) and the International Financial Reporting Interpretations Committee (“IFRIC”) of the IASB that are relevant to Company and the Group’s operations and effective for the accounting period beginning on or after 1 July 2016.

New and revised IFRSs applied with no material effect on the financial statements

The following new and revised Standards and Interpretations have been adopted in these financial statements. Their adoption has not had any significant impacts on the amounts reported in these financial statements but may affect the accounting for future transactions or arrangements.

IAS 1 Presentation of Financial Statements - Amendments resulting from disclosure initiative

IAS 16 Property, plant and equipment - Amendments regarding the clarification of acceptable methods of depreciation and amortisation

IAS 16 Property, Plant and Equipment - Amendments bringing bearer plants into the scope of IAS 16

IAS 19 Employee Benefits - Amendments resulting from September 2014 Annual Improvements to IFRS

IAS 27 Consolidated and Separate Financial Statements - Reissued as Separate Financial Statements (as amended in 2011) - Amendments reinstating the equity method as an accounting option for investments in subsidiaries, joint ventures and associates in an entity’s separate financial statements

IAS 28 Investments in Associates and Joint Ventures - Amendments regarding the application of the consolidation exception

IAS 38 Intangible Assets - Amendments regarding the clarification of acceptable methods of depreciation and amortisation

IFRS 7 Financial Instruments: Disclosures - Amendments resulting from September 2014 Annual Improvements to IFRSs

IFRS 10 Consolidated Financial Statements - Amendments regarding the application of the consolidation exception

IFRS 12 Disclosure of Interests in Other Entities - Amendments regarding the application of the consolidation exception



ANNUAL REPORT 2017

2. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs) (CONT’D)

Relevant new and revised Standards in issue not yet effective

At the date of authorisation of these financial statements, the following relevant new and revised Standards were in issue but effective on annual periods beginning on or after the respective dates as indicated:

IAS 7 Statement of Cash Flows - Amendments as result of the Disclosure initiative (effective 1 January 2017)

IAS 12 Income taxes - Amendments regarding the recognition of deferred tax assets for unrealised losses (effective 1 January 2017)

IAS 28 Investments in Associates and Joint Ventures - Amendments regarding the sale or contribution of assets between an investor and its associate or joint venture (deferred indefinitely)

IAS 28 Investments in Associates and Joint Ventures - Amendments resulting from Annual Improvements 2014-2016 Cycle (clarifying certain fair value measurements) (effective 1 January 2018)

IAS 39 Financial Instruments: Recognition and Measurement - Amendments to permit an entity to elect to continue to apply the hedge accounting requirements in IAS 39 for a fair value hedge of the interest rate exposure of a portion of a portfolio of financial assets or financial liabilities when IFRS 9 is applied, and to extend the fair value option to certain contracts that meet the ‘own use’ scope exception (effective 1 January 2018)

IFRS 7 Financial Instruments: Disclosures - Deferral of mandatory effective date of IFRS 9 and amendments to transition disclosures (effective 1 January 2018)

IFRS 7 Financial Instruments: Disclosures - Additional hedge accounting disclosures (and consequential amendments) resulting from the introduction of the hedge accounting chapter in IFRS 9 (effective 1 January 2018)

IFRS 9 Financial Instruments: Finalised version, incorporating requirements for classification and measurement, impairment, general hedge accounting and derecognition of financial assets and financial liabilities (effective 1 January 2018)

IFRS 9 Financial Instruments: Amendments regarding the interaction of IFRS 4 and IFRS 9 (effective 1 January 2018)

IFRS 10 Consolidated Financial Statements - Amendments regarding the sale or contribution of assets between an investor and its associate or joint venture (deferred indefinitely)

IFRS 12 Disclosure of Interests in Other Entities - Amendments resulting from Annual Improvements 2014-2016 Cycle (Clarifying scope) (effective 1 January 2017)

IFRS 15 Revenue from Contracts with Customers - Original issue (effective 1 January 2018)

IFRS 15 Revenue from Contracts with Customers - Clarifications to IFRS 15 (effective 1 January 2018)

IFRS 16 Leases - Original issue (effective 1 January 2019)

IFRIC 22 Foreign Currency Transactions and Advance Consideration (effective 1 January 2018)

IFRIC 23 Uncertainty over Income Tax Treatments (effective 1 January 2019)

The directors anticipate that these Standards and Interpretations will be applied on their effective dates in the Group’s and the Company’s financial statements in future periods. The directors have not yet assessed the potential impact of the application of these amendments.



52

3. ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of these financial statements are set out below:

(a) Basis of preparation

The financial statements are prepared in accordance with the International Financial Reporting Standards (IFRSs) and under the historical cost convention except for:

(i) the revaluation of certain non-current assets and financial instruments

(ii) investment properties which are stated at fair value

(iii) available-for-sale securities which are stated at fair value

Fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset of liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

(b) Investment in subsidiary

Separate financial statements

Investment in subsidiary is recognised at fair value. Unrealised gains and losses on such security is recognised directly in other comprehensive income and accumulated in 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 reclassified to profit or loss. On disposal, the profit or loss recognised in the profit or loss is the difference between the proceeds and the carrying amount of the asset.

Basis of consolidation

Consolidated financial statements

The consolidated financial statements comprise the financial statements of the Company and its subsidiary (the “Group”) as at 30 June each year. Control is achieved where the company has power over the investee, is exposed or has rights to variable returns from its involvement with the investee and has the ability to use its power to affect its returns.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.



ANNUAL REPORT 2017

3. ACCOUNTING POLICIES (CONT’D)

(b) Investment in subsidiary (Cont’d)

Basis of consolidation (Cont’d)

Consolidated financial statements (Cont’d)

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.

Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. The interest of non-controlling shareholders may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if the results in the non-controlling interests have a deficit balance.

Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the company.

When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity.

(c) Investment in associates

Associated companies are entities in which the Company or the Group has significant influence but which are neither a subsidiary nor a joint venture of the Company or the Group. Significant influence is the power to participate in the financial and operating policy decisions of the investee but there is no control or joint control over those policies.

Separate financial statements

Investments in associates are carried at cost. The carrying amount is reduced to recognise any impairment in the value of individual investments. The impairment loss is taken to profit or loss.



54


(c) Investment in associates (Cont’d)

Consolidated financial statements

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost as adjusted for post-acquisition changes in the Group’s share of the net assets of the associate, less any impairment in the value of individual investments. Losses of an associate in excess of the Group’s interest in that associate are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that investment. Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in profit or loss.

Where a group entity transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group’s interest in the relevant associate.

The accounting policies of the associates are in line with those used by the Group.

(d) Financial instruments

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

Financial assets

Financial assets are classified into the following specified categories: ‘available-for-sale’ (AFS) financial assets and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

(i) Available-for-sale (AFS) financial assets

Unlisted shares and listed securities held by the Group that are traded in an active market are classified as being AFS and are stated at fair value. Fair value is determined as described in note 27.

Gains and losses arising from changes in fair value are recognised directly in other comprehensive income and accumulated in fair value reserve with the exception of impairment losses, interest calculated using the effective interest method and foreign exchange gains and losses on monetary assets, which are recognised directly in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in the investments revaluation reserve is reclassified to profit or loss.

Dividends on AFS equity instruments are recognised in profit or loss when the Group’s right to receive the dividends is established.



ANNUAL REPORT 2017


(d) Financial instruments (Cont’d)

Financial assets (Cont’d)

(i) Available-for-sale (AFS) financial assets (Cont’d)

The fair value of AFS monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the reporting date. The change in fair value attributable to translation differences that result from a change in amortised cost of the asset is recognised in profit or loss, and other changes are recognised in equity.

Available-for-sale investments whose fair value cannot be reliably measured are carried at cost less impairment loss.

(ii) Loans and receivables

Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

(iii) Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

(iv) Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

Financial liabilities

(i) Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

(ii) Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.



56


(d) Financial instruments (Cont’d)

Financial liabilities (Cont’d)

(iii) Other financial liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.

Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

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

(iv) Derecognition of financial liabilities

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

(e) Impairment of assets

At each reporting date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. Assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.

If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount which is the higher of an asset’s net selling price and value in use. For the purposes of assessing impairment assets are grouped at the lowest level, for which there are separately identifiable cash flows.

For unlisted shares classified as AFS, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment.

For all other assets, including redeemable notes classified as AFS and finance lease receivables, objective evidence of impairment could include:

• significant financial difficulty of the issuer or counterparty; or

• default or delinquency in interest or principal payments; or

• it becoming probable that the borrower will enter bankruptcy or financial re-organisation.

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset’s carrying amount and the present value of the estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows, discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.



ANNUAL REPORT 2017


(e) Impairment of assets (Cont’d)

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

With the exception of AFS equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

In respect of AFS equity securities, impairment losses previously recognised through profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised directly in other comprehensive income.

(f) Taxation

The income tax expense represents the current tax provision and the movement in deferred tax.

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Deferred income tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

The principal temporary differences arise from depreciation on property, plant and equipment, revaluations of certain non-current assets, tax losses carried forward and on retirement benefit obligations.

Deferred tax

Deferred income tax liabilities are recognised for all taxable temporary differences and deferred income tax assets are recognised for all deductible temporary differences, to the extent that it is probable that taxable profit will be available. Such assets and liabilities are not recorded if the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.



58


(g) Property, plant and equipment

All property, plant and equipment are initially recorded at cost. Certain plant and equipment are subsequently shown at fair value, based on valuation made by external independent valuers, less subsequent depreciation for plant and equipment. All other property, plant and equipment are stated at historical cost less depreciation and impairment losses.

Depreciation is calculated on the straight line method to write off the cost of each asset, or the revalued amount, to its residual value over its estimated useful life as follows:

Buildings on freehold land 5% - 10% p.a.

Crusher plant 10% p.a.

Block making plant 10% p.a.

Other plant and equipment 10% - 20% p.a.

Motor vehicles 20%

Computer hardware 25% - 50% p.a.

Borehold and site preparation 10% - 12% p.a

Land is not depreciated.

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

The gain or loss arising on disposal or retirement of an item or property, plant and equipment is determined as a difference between the sales proceeds and the carrying amounts of the assets and is recognised in profit or loss.

(h) Investment properties

Investment properties, which are properties held to earn rentals and/or for capital appreciation, are stated at their fair value at the reporting date. Gains and losses arising from changes in the fair value on investment property are included in profit or loss for the period in which they arise.

(i) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.



ANNUAL REPORT 2017


(j) Retirement and other benefit obligations

The present value of retirement gratuity as provided under The Employment Rights Act 2008 is recognised in the statement of financial position as a non-current liability.

Re-measurement, comprising actuarial gains and losses, is reflected immediately in the statement of financial position with a charge or credit recognised in other comprehensive income in the period in which they occur. Re-measurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.

Defined benefit costs are categorised as follows:

• Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements)

• Net interest expense or income

• Remeasurement

The Group presents the first two components of defined benefit costs in profit or loss in the line item administrative expenses as part of staff costs. Curtailment gains and losses are accounted for as past service costs.

State plan

Contributions to the National Pension Scheme are charged to the profit or loss in the period in which they fall due.

(k) Revenue recognition

Sales are recognised upon delivery of products and customer acceptance, if any, or performance of services, net of Value Added Tax and discounts, and after eliminating sales within the Group.

Other revenues earned by the Group and Company are recognised on the following bases:

• Interest income - as it accrues (taking into account the effective yield on the asset) unless collectibility is in doubt.

• Dividend income - when the shareholder’s right to receive payment is established.

• Rental income - on an accrual basis.

(l) Provisions

Provisions are recognised when the Group and Company have a present or constructive obligation as a result of past events which it is probable will result in an outflow of economic benefits that can be reasonably estimated.

(m) Related parties

Related parties include 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. Affiliates are related parties of the company which cannot be considered as parent or subsidiary as defined by IAS 27, as associate and joint venture as defined by IAS 28, or as key management personnel as defined by IAS 24.



60


(n) Intangible assets

Computer software is capitalised on the basis of the costs incurred to acquire and bring into use the specific software. Amortisation is provided at 17% on reducing balance method.

(o) Cash and cash equivalents

Cash and cash equivalents include cash in hand, cash at bank and bank overdrafts. Cash equivalents are short term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

(p) Foreign currencies

Functional and presentation currency

Items included in the financial statements are measured using Mauritian Rupees, the currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements of The Group and Company are presented in Mauritian Rupees, which is the Group’s and the Company’s functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing on the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date the fair value was determined.

(q) Leases

Where assets are assigned by finance lease agreements that give right to ownership when the last lease payment is made, the assets are treated as if they have been purchased outright at values which include lease payments, residual value and sundry lease charges. The cost of assets held under finance lease is capitalise within the appropriate property and equipment and depreciation is provided in accordance with the company’s accounting policy for the category of assets concerned.

The interest cost is charged over the term of the lease to the statement of profit or loss and other comprehensive and the capital element of the future lease payments is shown as short term and long term obligations under the finance lease.



ANNUAL REPORT 2017

4. ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The preparation of financial statements in accordance with IFRS requires the directors and management to exercise judgement in the process of applying the accounting policies. It also requires the use of accounting estimates and assumptions that may affect the reported amounts and disclosures in the financial statements. Judgements and estimates are continuously evaluated and are based on historical experience and other factors, including expectations and assumptions concerning future events that are believed to be reasonable under the circumstances. The actual results could, by definition therefore, often differ from the related accounting estimates.

Where applicable, the notes to the financial statements set out areas where management has applied a higher degree of judgement that have a significant effect on the amounts recognised in the financial statements, or estimations and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Valuation of investment property

The Company measures its investment property at fair value based on periodic valuations by an external independent valuer and as estimated by the directors based on reference to their knowledge on the current market evidence of transaction prices for similar properties. In arriving at the valuation, assumptions and economic estimates have to be made. The actual results could differ from their estimates and the directors consider they have used their best estimates to arrive at fair value of the investment property.

Determination of fair value

Fair values of unquoted financial instruments are determined by using valuation techniques including third party transactions values, earnings, net asset value or discounted cash flow, whichever is considered to be appropriate. Such valuation exercise requires that the Company makes estimates of future cash flows, discount rates and price earnings ratio as applicable to the relevant market. Changes in assumptions about these factors could affect the reported fair values of the financial instruments. The directors believe that the carrying values reflect the fair values as at 30 June 2017.

Impairment of unquoted investments

Determining whether the investment in unquoted securities is impaired requires an estimation of the value in use of the investment. In considering the value in use, the directors have taken into consideration the management accounts, approved budgets and comparable transactions. The actual results could however, differ from the estimates.


62


5.(a) PROPERTY, PLANT AND EQUIPMENT

THE GROUP Land

Borehold and site

preparation

Buildings on freehold

land

Block making plant

Crusher plant

Other plant and equipment

Motor vehicles

Computer hardware Total

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

COST AND VALUATIONAt 1 July 2015 25,055 4,256 10,254 10,337 56,765 12,981 833 592 121,073 Additions - - - 2,042 6,282 6,066 - - 14,390 At 30 June 2016 25,055 4,256 10,254 12,379 63,047 19,047 833 592 135,463 Additions - - 2,230 - 3,864 2,632 - 213 8,939 Disposal of subsidiary - - - - - (2,221) - - (2,221)At 30 June 2017 25,055 4,256 12,484 12,379 66,911 19,458 833 805 142,181

DEPRECIATIONAt 1 July 2015 - 4,256 7,900 7,306 30,123 7,816 417 474 58,292 Charge for the year - - 179 643 4,898 1,117 167 41 7,045 At 30 June 2016 - 4,256 8,079 7,949 35,021 8,933 584 515 65,337 Charge for the year - - 207 757 5,237 1,473 167 50 7,891 At 30 June 2017 - 4,256 8,286 8,706 40,258 10,406 751 565 73,228 NET BOOK VALUEAt 30 June 2017 25,055 - 4,198 3,673 26,653 9,052 82 240 68,953 At 30 June 2016 25,055 - 2,175 4,430 28,026 10,114 249 77 70,126

The property, plant and equipment of the subsidiary have been pledged to secure banking facilities.

The subsidiary’s obligation under finance lease is secured by the lessor’s title to the leased asset.

The carrying value of plant and equipment held under finance lease at 30 June 2017 amounts to Rs 4,985,580 (2016: Rs 5,544,711).

Other plant and equipment includes asset in progress of Rs Nil (2016: Rs180,345) on which no depreciation has been provided.

Non cash-transactions

Additions for the year are financed as follows:2017 2016

Rs’000 Rs’000Cash disbursement 8,939 8,799 Finance lease - 5,591

8,939 14,390

THE COMPANY

Other plant and equipment

Computer hardware Total

Rs’000 Rs’000 Rs’000COST

Additions and at 30 June 2017 347 190 537

DEPRECIATIONCharge for the year and at 30 June 2017 6 9 15

NET BOOK VALUEAt 30 June 2017 341 181 522


ANNUAL REPORT 2017


5. (b) INTANGIBLE ASSETSTHE GROUP 2017 2016Computer software Rs’000 Rs’000

COSTAt 1 July 818 650 Additions - 168 At 30 June 818 818

AMORTISATIONAt 1 July 678 616 Charge for the year 64 62 At 30 June 742 678

NET BOOK VALUEAt 30 June 76 140

6. INVESTMENT PROPERTYTHE GROUP AND THE COMPANY 2017 2016At fair value Rs’000 Rs’000

At 1 July 42,064 42,064 Gain on fair value of investment property 4,086 - At 30 June 46,150 42,064

(a) The investment property was revalued at 30 June 2017 by Broll Indian Ocean Limited, an independent professional qualified valuer, not related to the Group. The valuer is also a member of Royal Institution of Chartered Surveyors, and has appropriate qualifications and recent experience in valuation of similar properties. The fair value was determined using the sales comparison approach and residual method of valuation. The valuation was arrived at by reference to market evidence of transaction prices for similar properties. In estimating the fair value of the property, the highest and best use of the property is its current use.

The fair value is categorised as Level 3 in the fair value hierarchy.

The significant assumptions used for the valuation are a discount rate of 8.5%, development costs per arpent ranging between Rs 3M and Rs 4.5M. A lower/higher discount rate will result in a higher/lower fair value of the investment property. A lower/higher development cost per arpent will result in a higher/lower fair value of the investment property.

(b) There was no rental income from investment properties for the Company in 2017 and 2016. There was no direct operating expenses attributable to the development of the investment property for the year ended 30 June 2017 (2016: Nil).

7. INVESTMENTS IN SUBSIDIARIESTHE COMPANY 2017 2016Unquoted investment at fair value Rs’000 Rs’000

At 1 July 90,437 96,900 (Disposal)/Acquisition during the year (3,631) 5,000 Transfer to investment in securities (Note 9) (1,369) -Increase/(decrease) in fair value 2,744 (11,463)At 30 June 88,181 90,437

(i) In assessing the fair value of the investment in subsidiary, Flacq Associated Stonemasters Limited at 30 June 2017, the Company has used the earnings method of valuation (2016: earnings method of valuation). The directors consider that the carrying value at 30 June 2017 approximates the fair value.


64


7. INVESTMENT IN SUBSIDIARIES (CONT’D)

(ii) In 2016 a new subsidiary has been incorporated. During the year 2017, part of this investment has been sold and the retained interest in the investment has been transferred to investments in securities (Note 9).

Name ActivityCountry of

incorporation Holding2017 2016

The Ground Collaborative Space Ltd Coworking space Mauritius 5.81% 71%

(iii) Details of the subsidiary:



Flacq Associated Stonemasters LimitedProduction and sale of aggregates and bricks Mauritius 81% 81%

(iv) Summarised financial information in respect of each of the Group’s subsidiaries that have material non-controlling interests (amounts below are before intragroup eliminations):

Flacq Associated Stonemasters Limited2017 2016

Rs’000 Rs’000Non-current assets 68,508 70,085 Current assets 29,038 29,642 Non current liabilities 15,533 14,575 Current liabilities 7,218 5,844 Equity attributable to owners of the company 60,229 63,864 Non-controlling interest 14,565 15,444 Revenue 80,572 100,732 Expenses (73,139) (88,006)Profit for the year attributable to owners of the company 5,986 10,248 Profit for the year attributable to non-controlling interest 1,448 2,478 Profit for the year 7,434 12,726 Other comprehensive (loss)/income attributable to owners of the company (561) 602 Other comprehensive (loss)/income attributable to non-controlling interest (136) 146 Other comprehensive (loss)/income (697) 748 Total comprehensive income attributable to owners of the company 5,425 10,850 Total comprehensive income attributable to non-controlling interest 1,312 2,624 Total comprehensive income for the year 6,737 13,474 Net cash inflow from operating activities 19,954 22,131 Net cash outflow from investing activities (5,513) (8,289)Net cash outflow from financing activities (12,257) (11,250)Net cash inflow 2,184 2,592


ANNUAL REPORT 2017


7. INVESTMENT IN SUBSIDIARIES (CONT’D)

(iv) Summarised financial information in respect of each of the Group’s subsidiaries that have material non-controlling interests (amounts below are before intragroup eliminations) (cont’d):

The Ground Collaborative Space Ltd 2016Rs’000

Non-current assets 180 Current assets 6,687 Current liabilities 805 Equity attributable to owners of the company 4,284 Non-controlling interest 1,779 Revenue 1 Expenses (138)Loss for the year attributable to owners of the company (97)Loss for the year attributable to non-controlling interest (40)Loss for the year (137)Total comprehensive loss attributable to owners of the company (97)Total comprehensive loss attributable to non-controlling interest (40)Total comprehensive loss for the year (137)Net cash outflow from operating activities (170)Net cash outflow from investing activities (179)Net cash inflow from financing activities 7,000 Net cash inflow 6,651

(v) Analysis of assets and liabilities over which control was lost:2017

Rs’000

AssetsOther plant and equipment 2,222 Trade and other receivables 349 Cash at Bank 4,213

6,784

LiabilitiesPayables (896)Net assets disposed of 5,888

Share of net asset disposed 4,160

Profit on disposal of a subsidiaryConsideration paid in cash 3,800 Held as available-for-sale investment 1,369 Share of net assets disposed (4,160)Profit on disposal 1,009

Net cash outflow on disposal of the subsidiaryConsideration paid in cash 3,800 Less: cash and cash equivalent balances disposed of (4,213)

(413)


66


8. INVESTMENTS IN ASSOCIATES2017 2016

THE GROUP Rs’000 Rs’000At 1 July 37,388 90,978 Addition - 900 Share of loss (30,608) (54,490)Impairment losses (6,780) - At 30 June - 37,388

2017 2016

THE COMPANY Rs’000 Rs’000At 1 July 37,388 90,978 Addition - 900 Impairment losses (37,388) (54,490)At 30 June - 37,388

(i) Details of each of the Group’s and the Company’s associates at the end of the reporting period, are as follows:



PL Resorts Ltd Hotel Operator Mauritius 40% 40%Haute Rive Azuri Hotel Ltd Hotel Operator Mauritius 21% 21%

All of the above associates are accounted for using the equity method.

The financial year-end date of both associates is 31 December. For the purpose of applying the equity method accounting, the financial statements of these associates for the year ended 30 June 2017 and 2016 have been used.

The investment in PL Resorts Ltd and Haute Rive Azuri Hotel Ltd have been impaired following recurring losses incurred by them.

The Company has pledged its shares in the associated companies to secure the banking facilities of these associated companies.


ANNUAL REPORT 2017


8. INVESTMENTS IN ASSOCIATES (CONT’D)

(ii) Summarised financial information in respect of the associates are as follows:-

Current assets

Non-current assets

Current liabilities

Non-current liabilities Revenue

Loss for the year

Total comprehensive

loss for the year

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’0002017PL Resorts Ltd 42,261 443,022 167,380 320,981 153,911 (31,112) (31,958) Haute Rive Azuri Hotel Ltd 54,367 782,533 380,804 423,761 217,534 (89,617) (90,875)

2016PL Resorts Ltd 23,737 454,666 147,924 301,598 109,219 (51,382) (51,382) Haute Rive Azuri Hotel Ltd 42,258 808,328 329,366 398,005 173,823 (153,146) (161,852)

(iii) Reconciliation of the above summarised financial information to the carrying amount of the interest in associates recognised in the consolidated financial statements:

Net assetsOwnership

interest ImpairmentInterest in associates

Unrecognised share of loss

Rs’000 % Rs’000 Rs’000 Rs’0002017PL Resorts Ltd - 40.00% - - (1,231)Haute Rive Azuri Hotel Ltd 32,336 20.97% (6,780) - -

32,336 (6,780) - (1,231)

2016PL Resorts Ltd 28,881 40.00% - 11,552 - Haute Rive Azuri Hotel Ltd 123,216 20.97% - 25,836 -

152,097 - 37,388 -


68


9. INVESTMENTS IN SECURITIES

Available-for-sale investments at fair valueOfficial market

Second market Unquoted Total

THE GROUP Rs’000 Rs’000 Rs’000 Rs’000At 1 July 2015 948,065 8,857 227,567 1,184,489 Additions - 18,000 - 18,000 (Decrease)/increase in fair value (51,469) (439) 34,719 (17,189)Disposal - Dividend in specie (Note 19) (775,139) - (112,134) (887,273)Impairment (804) - (2,748) (3,552)At 30 June 2016 120,653 26,418 147,404 294,475 Disposals - (3,990) (92,453) (96,443)Increase in fair value 29,118 1,326 5,924 36,368 Transfer from investment in subsidiary (Note 7) - - 1,369 1,369 Impairment - - (8,864) (8,864)At 30 June 2017 149,771 23,754 53,380 226,905

Official market

Second market Unquoted Total

THE COMPANY Rs’000 Rs’000 Rs’000 Rs’000 At 1 July 2015 948,065 8,857 227,567 1,184,489 Additions - 18,000 - 18,000 (Decrease)/increase in fair value (51,469) (439) 34,719 (17,189)Disposal - Dividend in specie (Note 19) (775,139) - (112,134) (887,273)Impairment (804) - (2,748) (3,552)At 30 June 2016 120,653 26,418 147,404 294,475 Disposals - (3,990) (92,453) (96,443)Increase in fair value 29,118 1,326 5,924 36,368 Transfer from investment in subsidiary (Note 7) - - 1,369 1,369 Impairment - - (8,864) (8,864)At 30 June 2017 149,771 23,754 53,380 226,905

Available-for-sale investments comprise principally of listed and unquoted securities. The fair value of listed SEM and DEM quoted available-for-sale securities is based on the Stock Exchange prices at the close of business on reporting date. In assessing the fair value of unquoted available-for-sale securities and securities having an illiquid market, the Group uses multiple valuation methodologies depending on the characteristics of each investment including earnings method of valuation, rental yield, recent transaction price between unrelated parties. Some investments have been valued based on valuation reports from professional asset managers. All the valuation methodologies have been consistent with prior year except for one investment which the directors consider rental yield as more relevant. The Group makes assumptions that are based on market conditions existing at each reporting date.

In the absence of an active market, some investments have been measured at cost less impairment. One of the investee companies has been fully impaired during the year, for an amount of Rs8M, due to the fact that it is in process of voluntary winding up.

10. INVENTORIES, AT COST 2017 2016

THE GROUP Rs’000 Rs’000Raw materials 328 342 Finished goods 12,531 12,408

12,859 12,750


ANNUAL REPORT 2017


11.TRADE AND OTHER RECEIVABLESTHE GROUP THE COMPANY

2017 2016 2017 2016Rs’000 Rs’000 Rs’000 Rs’000

Trade receivables 9,792 18,219 - - Allowance for doubtful debts (5,790) (4,989) - - Other receivables 22,785 6,177 12,625 3,901 Loan to associated companies 24,860 33,440 24,860 33,440

51,647 52,847 37,485 37,341

Trade and other receivables include amounts due by:THE GROUP THE COMPANY

2017 2016 2017 2016Rs’000 Rs’000 Rs’000 Rs’000

Fellow subsidiary 10,260 2,999 - 670 Related companies 512 363 - - Associated companies 24,860 34,119 24,860 34,119

35,632 37,481 24,860 34,789

Loans to associated companies of Rs24,860,338 (2016: Rs33,440,089) for the Company are unsecured, bear interest at MCB PLR + (2.5% - 5%) and are repayable on or before 31 March 2018. The loans to associates are net of provision for impairment of Rs 11,810,290 (2016: NIL).

The amount due from the fellow subsidiary includes an amount of Rs 374,034 (2016: Rs 1,841,880) for the Group which is unsecured, bears interest at 5.2% - 5.6% p.a. (2016: 5.6% - 5.85% p.a.) and is repayable on demand. The remaining amounts due from related companies are unsecured, interest free and does not have any fixed terms of repayment.

The average credit period on sales of goods is 2 months. Allowance for doubtful debts is normally determined by the subsidiary as a specific provision made on a case to case basis. No interest is charged on the trade receivables.

Before accepting any new customer, the subsidiary’s Credit Control Department assesses the credit quality of the customer and defines the terms and credit limits accordingly.

Ageing of past due but not impaired THE GROUP THE COMPANY2017 2016 2017 2016

Rs’000 Rs’000 Rs’000 Rs’00060 - 90 days 141 1,602 - - 90-120 days 1,321 7,115 - - Total 1,462 8,717 - -

Movement in the allowance for doubtful debts THE GROUP THE COMPANY2017 2016 2017 2016

Rs’000 Rs’000 Rs’000 Rs’000At 1 July 4,989 4,381 - - Provision for doubtful debts for the year 976 608 - - Receivables written off during the year as uncollectible (175) - - - At 30 June 5,790 4,989 - -


70


12.STATED CAPITAL

THE GROUP AND THE COMPANY 2017 2016Rs’000 Rs’000

Issued and fully paid8,820,947 ordinary shares of Rs1 each 8,821 8,821

Fully paid ordinary shares carry one vote per share and carry the rights to dividends.

13.RETIREMENT BENEFIT OBLIGATIONS

THE GROUP

(a) Retirement gratuities - Under the Employment Rights Act 2008

The amounts recognised in the statement of financial position are as follows:2017 2016

Rs’000 Rs’000Retirement gratuities 6,844 5,783

Movement in the liability recognised in the statement of financial position:2017 2016

Rs’000 Rs’000At 1 July 5,783 5,992 Amount recognised in profit or loss 644 671 Amount recognised in other comprehensive income 839 (880)Retirement benefits paid (422) - At 30 June 6,844 5,783

Movement in the present value of the retirement gratuities in the current year were as follows:2017 2016

Rs’000 Rs’000At 1 July 5,783 5,992 Current service cost 264 264 Interest cost 380 407 Retirement benefits paid (422) - Actuarial (gain)/loss on obligation 839 (880)At 30 June 6,844 5,783

11.TRADE AND OTHER RECEIVABLES (CONT’D)

The age of impaired receivables is more than 1 year.

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date the credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.


ANNUAL REPORT 2017


13.RETIREMENT BENEFIT OBLIGATIONS (CONT’D)

(a) Retirement gratuities - Under the Employment Rights Act 2008 (Cont’d)

The amounts recognised in the statement of profit or loss and other comprehensive income are as follows:2017 2016

Rs’000 Rs’000Current service cost 264 264 Interest cost 380 407 Amount recognised in profit or loss 644 671 Amount recognised in other comprehensive income:Actuarial loss/(gain) recognised 685 (880)Changes in assumptions underlying the present value of the scheme 154 - Amount recognised in total comprehensive income 1,483 (209)

The principal actuarial assumptions used for accounting purposes were:2017 2016

% %Discount rate 6.0 6.5 Future salary increases 3.5 3.5

The above figures are based on computation made by Swan Life Ltd (Actuarial Consultants) at 30 June 2017.The expected employer contributions for the year ending 30 June 2018 is nil.

Sensitivity analysis 2017 2016Rs’000 Rs’000

Decrease in retirement gratuities due to 1% increase in discount rate 302 269 Increase in retirement gratuities due to 1% increase in future long-term salary 336 302

The sensitivity analysis above has been determined based on possible changes of the discount rate and future salary increase occurring at the end of the reporting period if all other assumptions remained unchanged.

(b) State pension plan

2017 2016Rs’000 Rs’000

National pension scheme contributions expensed 359 345


72


14.OBLIGATION UNDER FINANCE LEASE

Finance lease relate to Loader Caterpillar with lease terms of 5 years. The Group has options to purchase the asset for a nominal amount at the conclusion of the lease agreement. The Group’s obligations under finance lease are secured by the lessor’s title to the leased asset.

Finance lease liabilities Minimum lease paymentsPresent value of minimum

lease payments

2017 2016 2017 2016Rs’000 Rs’000 Rs’000 Rs’000

Not later than 1 year 1,418 1,418 1,085 1,007

In the second year 1,418 1,418 1,170 1,085 In the third year 1,418 1,418 1,260 1,170 In the fourth to the fifth years inclusive 1,479 2,898 1,418 2,678 Later than 1 year and not later than 5 years 4,315 5,734 3,848 4,933

5,733 7,152 4,933 5,940

Less: Future finance charges (800) (1,212) - - Present value of minimum lease payments 4,933 5,940 4,933 5,940

Included in the financial statements as: 2017 2016Rs’000 Rs’000

Current liabilities 1,085 1,007 Non-current liabilities 3,848 4,933

4,933 5,940

Obligations under finance lease bear interest at a rate 7.5% (2016: 7.5%)

Fair value

The fair value of the finance lease liabilities is approximately equal to their carrying amount.

15.DEFERRED TAX LIABILITIES

Deferred taxes are calculated on all temporary differences under the liability method at 17% (2016: 17%).

The movement on the deferred tax is as follows:THE GROUP THE COMPANY

2017 2016 2017 2016Rs’000 Rs’000 Rs’000 Rs’000

At 1 July 3,857 3,360 - - Deferred tax expense (Note 18) 611 365 - - Underprovision in deferred tax in previous year (Note 18) 514 - - - (Credited)/Charged to other comprehensive income (142) 132 - - At 30 June 4,840 3,857 - -


ANNUAL REPORT 2017


15.DEFERRED TAX LIABILITIES (CONT’D)

The deferred tax is attributable to the following items:

At 1 July 2015

Charge/ (credit) to

profit or loss

Charge to other

comprehensive income

At 30 June 2016

Charge/ (credit) to

profit or loss

Credit to other comprehensive

incomeAt 30 June

2017Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Deferred tax assetRetirement benefit obligations (901) (100) 132 (869) (154) (142) (1,165)Deferred tax liabilitiesAccelerated tax depreciation 4,261 465 - 4,726 1,279 - 6,005

3,360 365 132 3,857 1,125 (142) 4,840

16. TRADE AND OTHER PAYABLESTHE GROUP THE COMPANY

2017 2016 2017 2016Rs’000 Rs’000 Rs’000 Rs’000

Trade payables 2,543 3,581 - - Other payables and accruals 6,638 3,403 3,046 2,979 Current account with related company - 800 - -

9,181 7,784 3,046 2,979

Trade and other payables include amount due to:THE GROUP THE COMPANY

2017 2016 2017 2016Rs’000 Rs’000 Rs’000 Rs’000

Holding company 13 - 13 - Fellow subsidiaries 3,104 2,766 51 5 Related companies 90 61 90 61

3,207 2,827 154 66

The average credit period on purchases is one month. The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe.

The amounts due to related parties are unsecured, interest free and repayable on demand.

17.BANK OVERDRAFT

The bank overdraft at floating interest rate was secured by a floating charge on the Group’s movable and immovable assets.

18.CURRENT TAX LIABILITIES

Income tax is calculated at the rate of 17% (2016: 17%) on the profit for the year as adjusted for income tax purposes.

Corporate Social Responsibility

The Company is required to set up a Corporate Social Responsibility (“CSR”) fund equivalent to 2% of its chargeable income of the preceding year to implement a CSR programme in accordance with its own CSR framework. Where the amount paid out of the CSR fund is less than the amount provided under the fund, the difference shall be remitted to the Director-General at the time of submission of the income tax return of the year under review.


74


18.CURRENT TAX LIABILITIES (CONT’D)

Statements of financial position THE GROUP THE COMPANY2017 2016 2017 2016

Rs’000 Rs’000 Rs’000 Rs’000At 1 July (422) 4,048 403 1,704 Overprovision in income tax in previous year 19 (1,081) - (1,081)Income tax paid during the year 402 (2,968) (403) (623)Provision for the year 2,163 2,484 1,057 403 Tax paid under APS (1,183) (2,905) - - At 30 June 979 (422) 1,057 403 Analysed as follows:Tax refundable (78) (825) - - Tax payable 1,057 403 1,057 403

979 (422) 1,057 403

Statements of profit or loss THE GROUP THE COMPANY2017 2016 2017 2016

Rs’000 Rs’000 Rs’000 Rs’000Provision for the year 2,163 2,484 1,057 403 Overprovision in income tax in previous year 19 (1,081) - (1,081)Underprovision in deferred tax in previous year (Note 15) 514 - - - CSR contribution 54 657 54 141 Deferred tax movement (Note 15) 611 365 - - Tax expense 3,361 2,425 1,111 (537)

Tax reconciliation THE GROUP THE COMPANY2017 2016 2017 2016

Rs’000 Rs’000 Rs’000 Rs’000Profit before tax 49,226 405,168 47,936 399,298 Tax calculated at a rate of 17% (2016: 17%) 8,368 68,879 8,149 67,881 Income not subject to tax (23,162) (89,372) (18,334) (79,806)Expenses not deductible for tax purposes 12,654 14,521 11,383 12,382 Underprovision in deferred tax in previous year 514 - - - Underprovision/(overprovision) in income tax in previous year 19 (1,081) - (1,081)CSR adjustment (235) 215 (87) 87 Share of loss of associates 5,203 9,263 - -

3,361 2,425 1,111 (537)

19.DIVIDENDSNo dividend was declared for the year ended 30 June 2017 at Company level. Dividend of Rs 2.19M (2016: Rs 2.19M), representing non-controlling interest share, was paid at Group level.On the 21 December 2015, the Board of Directors of the Company approved the distribution of a dividend in specie of part of its portfolio of investments. The distribution was effected in February, June and August and the fair value of the shares distributed was Rs887,273,422, representing the equivalent of a distribution of Rs100.59 per share on the date of distribution. The shareholders of the Company registered at close of business on 21 January 2016 received for each share held in the stated capital of the Company:0.2192 shares of AfrAsia Bank Limited0.7431 shares of Alteo Limited0.0950 shares of Ireland Blyth Limited0.4683 shares of Lux Island Resorts Ltd0.3309 shares of The United Basalt Products Ltd


ANNUAL REPORT 2017


20.REVENUETHE GROUP THE COMPANY

2017 2016 2017 2016Rs’000 Rs’000 Rs’000 Rs’000

Dividend income 16,948 10,995 26,007 20,055 Interest on bonds 1,278 640 1,278 640 Sale of aggregates and blocks 79,557 99,831 - -

97,783 111,466 27,285 20,695

21.OTHER OPERATING INCOME THE GROUP THE COMPANY

2017 2016 2017 2016Rs’000 Rs’000 Rs’000 Rs’000

Profit on disposal of available-for-sale investments 219 - 219 - Cumulative gain reclassified from equity on disposal of available-for-sale investments 77,872 449,973 77,872 449,973 Profit on disposal of subsidiary 1,009 - 169 - Profit on disposal of property, plant and equipment 305 - - - Interest income 8,012 5,598 7,429 5,100 Transport income 107 210 - - Gain on fair value of investment property 4,086 - 4,086 - Exchange gain 71 1 71 1 Sundry income 59 193 - -

91,740 455,975 89,846 455,074

22.FINANCE COSTSTHE GROUP THE COMPANY

2017 2016 2017 2016Rs’000 Rs’000 Rs’000 Rs’000

Interest on finance lease 411 - - - Interest on overdrafts 4 2 - -

415 2 - -

23.PROFIT FOR THE YEARTHE GROUP THE COMPANY

2017 2016 2017 2016Rs’000 Rs’000 Rs’000 Rs’000

Profit for the year is arrived at after charging:Impairment losses recognised on trade receivables 976 608 - - Provision for impairment of loans to associates 11,810 - 11,810 - Depreciation on property, plant and equipment 7,891 7,045 15 - Amortisation of intangible assets 64 62 - - Impairment on available-for-sale investments 8,864 3,552 8,864 3,552 Impairment losses of associates 6,780 - 37,388 54,490 Cost of inventories recognised as expense 27,163 40,082 - - Pension costs 868 712 224 41 Staff costs (excluding pension cost) 11,167 11,205 3,590 458

24.EARNINGS PER SHARETHE GROUP

2017 2016Profit after tax attributable to owners of the Company (in Rs’000) 44,469 400,305 Number of equity shares in issue - ordinary shares (in thousands of units) 8,821 8,821 Earnings per share (in Rs) 5.04 45.38


76


25.RELATED PARTY TRANSACTIONS

THE GROUP Holding Company

Fellow subsidiaries

Related companies

Associated companies

2017 2016 2017 2016 2017 2016 2017 2016Balances Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000Bank balance with related party - - - - 18,107 29,560 - - Amount due from - - 10,260 2,999 512 363 24,860 34,119Amount due to 13 - 3,104 2,766 90 61 - -

TransactionsPurchase of goods and services 41 - 20,866 29,054 751 68 - - Management fees - - 2,421 15,098 - - - - Sale of goods and services - - 583 824 1,782 933 - - Legal and secretarial fees 272 - 640 - - - - - Interest income 3,072 38 596 1,853 18 141 3,230 2,424 Dividend income - - - 545 - 2,819 - -

THE COMPANY Holding Company Subsidiaries

Fellow subsidiaries

Related companies

Associated companies

2017 2016 2017 2016 2017 2016 2017 2016 2017 2016Balances Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000Bank balance with related party - - - - - - 18,107 29,560 - - Amount due from - - - - - 670 - - 24,860 34,119Amount due to 13 - - - 51 5 90 61 - -

TransactionsPurchase of goods and services 41 - - - 108 130 751 61 - - Management fees - - - - - 11,199 - - - - Legal and secretarial fees 272 - - - 544 - - - - - Interest income 3,072 38 - - 596 1,853 18 141 3,230 2,424 Dividend income - - 9,059 9,059 - 545 - 2,819 - -

The terms and conditions of related party transactions have been disclosed in notes 11 and 16.

Compensation of key management personnel

The remuneration of Directors and other members of key management during the year are as follows:

THE GROUP THE COMPANY2017 2016 2017 2016

Rs’000 Rs’000 Rs’000 Rs’000Short term benefits 3,481 1,052 3,544 908 Post employment benefit 207 41 207 41

3,688 1,093 3,751 949


ANNUAL REPORT 2017


26.SEGMENT INFORMATION

IFRS 8 - Operating Segments, requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operation decision maker in order to allocate resources to the segments and to assess their performance.

Products and services from which reportable segments derive their revenues

- Information reported to the Group’s chief operating decision maker is more specifically focused on these business segments.

- No secondary reporting format by geographical segments is presented as all the activities of the Group are based in Mauritius.

- The Group does not have major customers.

The Group’s reportable segments under IFRS 8 are as follows:

Segment revenue and segment results

Building and Engineering Properties

Financial Services Total

2017 2016 2017 2016 2017 2016 2017 2016Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Segment resultsRevenue 79,557 99,830 - - 18,226 11,636 97,783 111,466 Operating expenses (64,347) (79,028) - - - - (64,347) (79,028)Operating profit 15,210 20,802 - - 18,226 11,636 33,436 32,438 Other operating income 1,015 900 879 1 89,846 455,074 91,740 455,975 Distribution costs (1,280) (923) - - - - (1,280) (923)Impairment losses on investments - - - - (15,644) (3,552) (15,644) (3,552)Administrative expenses (4,846) (5,711) (214) (138) (11,133) (18,429) (16,193) (24,278)Profit/(loss) before finance costs 10,099 15,068 665 (137) 81,295 444,729 92,059 459,660 Finance costs (415) (2) - - - - (415) (2)Share of loss of associates - - - - (30,608) (54,490) (30,608) (54,490)Provision for impairment of loans to associates - - - - (11,810) - (11,810) - Profit/(loss) before tax 9,684 15,066 665 (137) 38,877 390,239 49,226 405,168

Revenue reported above represents revenue generated from external customers. Inter-segment revenue amounted to Rs 9,059,200 for the year ended 30 June 2017 (2016: Rs 9,059,200).

The accounting policies of the reportable segments are the same as the Group’s accounting policies described in note 3. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.


78


26. SEGMENT INFORMATION (CONT’D)

Segment assets and liabilities

Building and Engineering Properties

Financial Services Total

2017 2016 2017 2016 2017 2016 2017 2016Segment assets Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000Non-current assets 68,508 70,086 - 180 273,576 373,927 342,085 444,193 Current assets 29,034 29,637 - 6,687 179,335 67,944 208,369 104,268

97,542 99,723 - 6,867 452,911 441,871 550,454 548,461

Segment liabilitiesNon-current liabilities 15,532 14,573 - - - - 15,532 14,573 Current liabilities 7,220 5,848 - 805 4,103 3,382 11,323 10,035

22,752 20,421 - 805 4,103 3,382 26,855 24,608

Additions to non-current assets 6,361 14,378 - 180 537 18,900 6,898 33,458 Depreciation and amortisation 7,940 7,106 - - 15 - 7,955 7,107

27. FINANCIAL INSTRUMENTS

Capital risk management

The Group and the Company manage their capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group’s and the Company’s overall strategy remains unchanged for 2017.

The capital structure of the Group and the Company consist of debt net of cash and cash equivalents and equity attributable to owners of the Company, comprising issued capital, reserves and retained earnings.

Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 3 to the financial statements.


ANNUAL REPORT 2017


27. FINANCIAL INSTRUMENTS (CONT’D)

Categories of financial instrumentsTHE GROUP THE COMPANY

2017 2016 2017 2016Rs’000 Rs’000 Rs’000 Rs’000

Financial assetsCash and cash equivalents 143,785 37,846 141,850 30,603 Loans and receivables 51,651 52,470 37,485 36,996 Available-for-sale financial assets 226,905 294,475 226,905 294,475 Investment in subsidiary - - 88,181 90,437

422,341 384,791 494,421 452,511 Financial liabilities at amortised costTrade and other payables 8,442 7,641 3,036 2,979 Obligation under finance lease 4,933 5,940 - - Bank overdraft - 841 - -

13,375 14,422 3,036 2,979

Financial risk managementThe Group operates a Corporate Treasury function which provides services to the sectors of activity within the Group. It also manages the Group’s exposure to market risk (including currency risk, equity price risk and interest rate risk), credit risk and liquidity risk.The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.Market riskThe Group’s activities expose itself primarily to the financial risks of changes in foreign currency exchange rates, interest rates and equity price. The Group manages its exposure to interest rate and foreign currency risk by use of a proper mix in fixed and floating rate borrowings and use of natural hedging.Foreign currency risk managementThe Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. The currency profile of the financial assets and financial liabilities is summarised as follows:


Financial assets


Financial assets


2017 Rs’000 Rs’000 Rs’000 Rs’000CurrencyMauritian rupee 408,027 13,375 480,107 3,036 United States dollar 14,299 - 14,299 - Euro 15 - 15 - Australian dollar - - - -

422,341 13,375 494,421 3,036

2016CurrencyMauritian rupee 339,242 14,422 406,962 2,979 United States dollar 27,028 - 27,028 - Euro 18,485 - 18,485 - Australian dollar 36 - 36 -

384,791 14,422 452,511 2,979


80



Foreign currency risk management (Cont’d)

The following table details the Group’s sensitivity to a 10% increase and decrease in the Mauritian rupee against the relevant foreign currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. A negative number below indicates an decrease in profit and other equity where the Mauritian rupee strengthens 10% against the relevant currency. For a 10% weakening of the Mauritian rupee against the relevant currency there would be an equal and opposite impact on the profit and other equity, and the balances below would be positive.


Impact of a 10% appreciation of the Mauritian Rupee 2017 2016 2017 2016Rs’000 Rs’000 Rs’000 Rs’000

US Dollar impactTotal comprehensive income (1,430) (2,703) (1,430) (2,703)Euro impactTotal comprehensive income (2) (1,849) (2) (1,849)Australian Dollar impactProfit or loss - (4) - (4)

The above is mainly attributable to the exposure in relation to the net working capital and investment in foreign currencies.

Interest rate risk management

The Group is exposed to interest rate risk as entities in the Group borrow funds at both fixed and floating interest rates.

The interest rate profile of the Group at 30 June 2017 and 30 June 2016 was:

Currency Floating Interest rate

Financial assets 2017 2016

Loan to associated companies MURMCB PLR +

(2.5% - 5%) MCB PLR + (2.5% - 5%)

Amounts due from related parties MUR 5.2% - 5.6% 5.6%-5.85%

Financial liabilities Floating Interest rate2017 2016

Bank overdrafts MUR PLR + 1.00% PLR + 1.00%Obligation under finance lease MUR 7.50% 7.50%

Interest rate sensitivity analysis

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

If interest rates had been 100 basis points higher or lower, the Group’s profit for the year ended 30 June 2017 would decrease/increase by Rs 288,813 (2016: decrease/increase by Rs 285,006). This is mainly attributable to the Group’s exposure to interest rates on its variable rate borrowings. The impact on the Company’s profit for the year would be insignificant.

Other price risks

The Group and the Company are exposed to equity price risks arising from equity investments which are traded on the stock markets. The Directors monitor the portfolio mix on a regular basis to mitigate the risks arising on these investments.


ANNUAL REPORT 2017



Other price risks (Cont’d)

The sensitivity analysis below has been determined based on the exposure to equity price risks at the reporting date.

If equity prices had been 10% higher/lower:· net profit for the year ended 30 June 2017 would have been unaffected as the equity investments are classified as available-for-sale ;

and· other comprehensive income and fair value reserves would increase/decrease by Rs 17,352,500 for the Group and the Company

(2016: increase/decrease by Rs 14,706,864 for the Group and the Company) as a result of the changes in fair value of available-for-sale investments.

Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group uses publicly available financial information and its own trading records to rate its major customers. The Group’s exposure and the credit ratings of its counterparties are continuously monitored.

Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.

The Group does not have any significant concentration of risks.

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.

Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of directors, who monitors the Group’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The following tables detail the Group’s and the Company’s remaining contractual maturity for its non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and the Company can be required to pay. The table includes both interest and principal cash flows.

Less than 1 year2017 2016

THE GROUP Rs’000 Rs’000Non-interest bearing 8,442 7,641 Variable interest rate instruments 4,933 6,781

13,375 14,422

THE COMPANYNon-interest bearing 3,046 2,979 Variable interest rate instruments - -

3,046 2,979

Fair value of financial instruments

Except where stated elsewhere, the carrying amounts of the Group’s and the Company’s financial assets and financial liabilities approximate their fair values due to the short-term nature of the balances involved.


82



Fair value of financial instruments (Cont’d)

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value on a recurring basis. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques.

THE GROUP

2017 Level 1 Level 3 Total

Rs’000 Rs’000 Rs’000Available for sale investments 173,525 51,860 225,385

THE COMPANYLevel 1 Level 3 Total

Rs’000 Rs’000 Rs’000Investment in subsidiaries - 88,181 88,181 Available for sale investment 173,525 51,860 225,385

173,525 140,041 313,566

2016 THE GROUP

Level 1 Level 3 Total

Rs’000 Rs’000 Rs’000Available for sale investment 147,071 138,388 285,459

THE COMPANY

Level 1 Level 3 Total

Rs’000 Rs’000 Rs’000Investment in subsidiary - 90,437 90,437 Available for sale investment 147,071 138,388 285,459

147,071 228,825 375,896

The reconciliation of Level 3 and the transfer between Level 1 and Level 3 have been disclosed in notes 7 and 9.

The unobservable inputs involved in the determination of fair value for Level 3 investments include discount factors in respect of lack of marketability, lack of control and size, by reference to the share price of listed entities in similar industries. Each discount factor applied ranged between 10% and 30%. A higher/lower in the discount factor will result in a lower/higher fair value.

Unquoted investments valued at cost amounting to Rs1,520,039 (2016: Rs 9,015,476) have been excluded from Level 3.

28. SUBSEQUENT EVENTFirm intention to acquire the total shareholding in The Bee Equity Partners Ltd by Equity Spectrum Ltd

On 25 May 2017, the Company announced that it had received a letter from Equity Spectrum Ltd specifying the latter’s firm intention to offer to acquire 100% of the shares of The Bee at a price of Rs 24.90 per share, payable in cash.

At a Board Meeting held in July 2017, the Directors adopted that the recommendation of the Board to the shareholders of The Bee not to sell their shares as per the offer made to them by Equity Spectrum Ltd.

29. HOLDING COMPANYThe immediate and ultimate holding company is IBL Ltd, incorporated in Mauritius.

I/We,

of

being a shareholder/shareholders of THE BEE EQUITY PARTNERS LTD, do hereby appoint

of

failing him/her,

of

failing him/her, the Chairman of the Company, as my/our proxy to vote for me/us and on my/our behalf at the Annual Meeting of the Company to be held on Friday, 8 December 2017 at 14.30 hours and at any adjournment thereof.

I/We direct my/our proxy to vote in the following manner:

ORDINARY RESOLUTIONS:

FOR AGAINST ABSTAIN

1. To consider the Annual Report.

2. To receive the report of the Auditors.

3. To consider and adopt the Group’s and Company’s audited financial statements for the year ended 30 June 2017.

4. To elect, as Director of the Company, Mr. Jean-Claude Béga who has been nominated by the Board and who offers himself for election.

5. To elect, as Director of the Company, Mr. Yann Duchesne who has been nominated by the Board and who offers himself for election.

6. To re-elect as Director of the Company until the next Annual Meeting, in accordance with Section 138(6) of the Companies Act 2001, Mr. Dayanidhi Gujadhur who offers himself for re-election.

7. To fix the remuneration of the Directors for the financial year ending 30 June 2018 and to ratify the emoluments paid to the Directors for the financial year ended 30 June 2017.

8. To reappoint Messrs. Deloitte as Auditors for the ensuing year and to authorise the Board of Directors to fix their remuneration.

9. To ratify the emoluments paid to Messrs. Deloitte for the financial year ended 30 June 2017.

Proxy Form

FOR AGAINST ABSTAINSPECIAL RESOLUTION:

1. That Clause 23 of the Constitution of the Company under the heading “APPOINTMENT AND REMOVAL OF DIRECTORS” be amended by the addition thereto of the following New Sub Paragraph 23.7 and that the actual Sub Paragraphs 23.7 and 23.8 be renumbered accordingly.

«23.7 Retirement of Directors by rotation.At the next Annual General Meeting of the Company and at each subsequent Annual General Meeting, two (2) Directors for the time being appointed by the General Meeting, shall retire from office but shall be re-eligible.

23.7.1 Any retiring Director shall retain office until the dissolution or adjournment of the meeting at which he is due to retire.

23.7.2 The Directors to retire in every year shall be those who have been longest in office since their last election, but as between persons who became Directors on the same day, those to retire shall, unless they otherwise agree among themselves, be determined by lot.

23.7.3 The Company at the Annual General Meeting at which a Director so retires may fill the vacated office by electing a person thereto but no person other than a retiring Director shall unless recommended by the Directors be eligible for election to the office of Director unless not less than twenty eight days before the last day on which notice of the Annual General Meeting of the Company is required to be given by the Board, there shall have been left at the registered office of the Company notice in writing, signed by a member duly qualified to attend and vote at the meeting for which such notice is given, of his intention to propose for consideration by the Board such person for election and also notice in writing signed by that person of his willingness to be elected.

The decision of the Board shall be final.»

Signed this day of 2017.

Signature(s)

Notes:

1. A shareholder of the Company entitled to attend and vote at this meeting may appoint a proxy of his/her own choice (whether a shareholder or not) to attend and vote on his /her behalf.

2. Please mark in the appropriate box how you wish to vote. If no specific direction as to voting is given, the proxy will exercise his/her discretion as to how he/she votes.

3. The instrument appointing a proxy or any general power of attorney shall be deposited at the Share Registry and Transfer Office, Abax Corporate Administrators Ltd, 6th Floor, Tower A, 1 CyberCity, Ebène, not less than twenty four hours before the time for the holding of the meeting or else the instrument of proxy shall not be treated as valid.

numbers.mu

As part of its ongoing programme to help protect the environment, The Bee Equity Partners Ltd has chosen to use Cocoon® paper for its 2017 Annual Report.

Cocoon® paper is made from 100% recycled pulp, certified FSC® (Forest Stewardship Council).

FSC® is an international, non-governmental, non-profit organisation created in 1993.

It encourages socially, ecologically and economically responsible forestry management initiatives.

THE B

EE EQU

ITY PA

RTN

ERS LTD

AN

NU

AL REPO

RT 2017

4TH FLOOR, IBL HOUSE CAUDAN WATERFRONT PORT-LOUIS

. (230) 460 0009

. [email protected]

THE BEE EQUITY PARTNERS LTD ANNUAL REPORT Bee - Annual Report 2017.compressed.pdfLtd, 6th Floor,...

Documents

Transcript of THE BEE EQUITY PARTNERS LTD ANNUAL REPORT Bee - Annual Report 2017.compressed.pdfLtd, 6th Floor,...