Annual Report 2012 - · PDF fileJ. Cyril Lagesse, Robert Lagesse, Jean-Claude ... Raymond...

ALTEO ANNUAL REPORT 2012 1

Annual Report 2012

ALTEO ANNUAL REPORT 20122 ALTEO ANNUAL REPORT 2012 3

Dear Shareholder,

The Board of Directors of Alteo Limited (formerly known as Deep River-Beau Champ Limited) is pleased to present its

Annual Report for the year ended June 30, 2012. This report was approved by the Board of Directors at a meeting held

on September 13, 2012.

On behalf of the Board of Directors of Alteo Limited, we invite you to go through the Annual Report and join us at the

Annual Meeting of the Company which will be held:

Date: Tuesday, December 18, 2012

Time: 10.30 hours

Place: Hennessy Park Hotel

Ebony Conference Room

65 Ebène Cybercity

Ebène

We look forward to seeing you.

Yours sincerely,

Thierry LagesseChairman


Contents

Independent Auditors’Report to

the Members

87Statements of

FinancialPosition

88Income

Statements

89Statements of

Comprehensive Income

90Statements of Changes

in Equity

91

Statements of Cash Flows

93 151Proxy Form

152Postal Vote

94Notes to the

Financial Statements

Corporate Social & Environmental Responsibility

52 56Corporate

Governance

80Statutory

Disclosures

85Statement of

Directors’Reponsibilities

86Company

Secretary’sCertificate

Chairman’s Statement

04Group

Structure(post Amalgamation)

10Corporate

Information

12

Executives’Report

14

06Notice of

Annual Meeting

08Group

Structure (prior Amalgamation)


During the year, the Company changed its accounting policy in respect of its investments in subsidiaries and joint ventures which are now carried at fair value in the separate financial statements, as opposed to cost last year. This has led to a positive fair value movement in the other comprehensive income of Rs. 4,869M for subsidiaries and Rs. 79M for joint ventures.

In April 2012, the Company proceeded with a bonus issue of 177,637,365 ordinary shares in the ratio of 19 ordinary shares for every 1 ordinary share held.

An interim dividend of Rs. 4.00 per share (on 8,826,794 ordinary shares and 533,206 preference shares), and a final dividend, post bonus issue, of Rs. 0.40 per share (on 186,986,700 ordinary shares) were declared during the financial year ended June 30, 2012.

PROSPECTSSugar and EnergyIn Mauritius, following the amalgamation of DRBC and FUEL, the actual combining of the sugar cane growing, sugar milling and energy production operations is being initiated and should show an important increase in turnover for both the Company and the Group. Moreover, we expect that the combined activities will start to yield positive results in the later part of the financial year.

An average 2012 sugar crop is expected over the overall operations as the drought conditions which affected the drier non irrigated regions, proved to be beneficial to the humid and super humid regions. Sugar prices are not expected to show an improvement on those of the 2011 crop as sustained EU prices are negatively impacted by the relative strength of the Mauritian Rupee to the Euro.

On the energy front, assuming coal import prices remain at their present level, the operations of both facilities at Union Flacq and Beau Champ should show improved results.

In Tanzania, the operations are expected to witness an average crop and prices which, together, should ensure a fair profitability level.

Hospitality It is expected that the hospitality activities at Anahita will continue to register an improved performance for the coming year, despite the difficult market environment.

PropertyThe property environment should remain challenging due to the prolonged adverse financial and economic circumstances in our traditional markets. However, the expected launch beginning of 2013, of a new product offering, should ensure renewed dynamism to our operations.

Social ResponsibilityDRBC Group continued to be very active during this financial year on the social and environmental fronts and contributed Rs. 4.97M to a number of socio-economic development, education, and training, childcade and health projects. Going forward, ALTEO will continue to fulfill its various commitments as well as those of FUEL through GML Fondation Joseph Lagesse and CIEL Group Fondation Nouveau Regard as well as contributing directly to a number of other initiatives.

AppreciationI would like to express my gratitude to my colleagues of the Board of Directors for their assistance and guidance throughout the year and the management and staff for their valuable contribution during the year.

A special note of thanks to the Directors of DRBC who resigned following the amalgamation with FUEL, namely Messrs. J. Cyril Lagesse, Robert Lagesse, Jean-Claude Harel, Maurice P. Dalais, and Roger Espitalier Noël. I wish to thank them for their contribution to the affairs of the Company and seize that opportunity to welcome Messrs Amédée Darga, Jean-Claude Béga, Jan Boullé and Patrick de L. d’Arifat who have been appointed on the Board of ALTEO on July 20, 2012.

Thierry LagesseChairman

September 13, 2012

Dear Shareholder,

As you are aware, following the approval by the respective shareholders of DRBC and FUEL in June 2012, the latter company has, on July 20, 2012, been officially amalgamated with and into DRBC which has been renamed Alteo Limited (“ALTEO”).

The ultimate objective of ALTEO is to be a competitive regional reference in the cane industry and its numerous derivatives, in renewable energy production, in sustainable property development and in leisure and hospitality industries.

The Board of ALTEO is confident that this initiative will generate a new dynamism which will boost shareholder value in the years to come, both in terms of share price appreciation and dividend yield.

Considering that the amalgamation of FUEL into ALTEO took place after the financial year end, the financial figures presented in the present report relate only to the operations of DRBC and of its subsidiaries.

FINANCIAL RESULTSFor the year under review, the Deep River-Beau Champ Group registered slightly improved results, mainly led by the sustained performance of the sugar operations in Tanzania which posted yet another record year. Sugar operations in Mauritius were again adversely affected by a reduced crop and by the effect of an uncompetitive Mauritian Rupee on the sugar price. Our hospitality activities registered improved results in the face of a very competitive market environment. The property sector, for its part, continued to suffer from the economic downturn in our traditional markets.

Group turnover for the year stood at Rs. 3,673M, up 13% on the previous year figure of Rs. 3,263M. The greater part of this increase is attributable to TPC Ltd, our sugar operation in Tanzania which posted a record year, reaching 91,000 tons of sugar (2011: 86,000 tons) and sustained prices. On the local front, the increase in sugar prices and energy exports to the grid just helped to mitigate the lower sales value of villas handed over during the year as no new phases of the IRS project were launched due to the slowdown experienced in the property sector. Movements in the standing crop valuations at year end showed an increase from Rs. 186M in 2011 to Rs. 362M in 2012, due to the expected higher sugar prices and production both in Mauritius and Tanzania. Operating profit for the Group reached Rs. 1,401M compared to Rs. 1,060M in 2011, a 32% increase.

Finance costs rose from Rs. 176M in 2011 to Rs. 190M as a result of an exchange loss of Rs. 27M due to the appreciation of the Tanzanian shilling. An improved performance from joint ventures is to be noted due to better results registered in the hospitality sector making up for the continued downturn in the life sciences activities.

Group profit after tax showed an increase of 5.6% over previous year despite the inclusion in the 2011 figures of the profit on sales of a non-core investment and the revaluation of land assets classified as investment property. The 2012 performance is mainly attributable to the higher profitability of our Tanzanian operations which helped to offset the loss registered in the property development sector. However, profit attributable to the shareholders of the Company fell from Rs. 310M in 2011 to Rs. 168M in 2012 owing to the high minority interest in the significantly more profitable Tanzanian operations.

Chairman’s Statement


Notice of Annual Meeting to ShareholdersNotice is hereby given that the Annual Meeting (“the Meeting”) of Shareholders of Alteo Limited (“the Company”)will be held at Hennessy Park Hotel, Ebony Conference Room, 65 Ebène Cybercity, Ebène on Tuesday, December 18, 2012 at 10.30 hours to transact the following business in the manner required for the passing of ORDINARY RESOLUTIONS:

Agenda

1. To consider the Annual Report 2012 of the Company.

2. To receive the report of Messrs. BDO & Co, the auditors of the Company.

3. To consider and adopt the Group’s and Company’s audited financial statements for the year ended June 30, 2012.

4. To re-elect, on the recommendation of the Corporate Governance Committee, as Director of the Company to hold office until the next Annual Meeting, in accordance with Section 138(6) of the Companies Act 2001, Mr. G. Christian Dalais1 who offers himself for re-election.

5-13. To re-elect, on the recommendation of the Corporate Governance Committee, as Directors of the Company to hold office until the next Annual Meeting, the following persons1 who offer themselves for re-election

(as separate resolutions):

5. Mr. Thierry Lagesse 6. Mr. Jean-Claude Béga 7. Mr. Jan Boullé 8. Mr. Patrick de L. d’Arifat 9. Mr. P. Arnaud Dalais 10. Mr. Amédée Darga 11. Mr. Jean de Fondaumière 12. Mr. Louis Guimbeau 13. Mr. Arnaud Lagesse

Notes:

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

(ii). The instrument appointing a proxy or any general power of attorney shall be deposited at the Share Registry and Transfer Office of the Company, MCB Registry & Securities Ltd, Raymond Lamusse Building, 9-11, Sir William Newton Street, Port-Louis, not less than twenty-four (24) hours before the start of the meeting and in default, the instrument of proxy shall not be treated as valid.

(iii). Postal votes shall be deposited at the Share Registry and Transfer Office of the Company, MCB Registry & Securities Ltd, Raymond Lamusse Building, 9-11, Sir William Newton Street, Port-Louis, not less than forty-eight (48) hours before the start of the meeting and in default, the postal vote shall not be treated as valid.

(iv). A proxy form and a postal vote are included in this Annual Report and are also available at the registered office of the Company.(v). 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 November 20, 2012.

(vi). The minutes of the Annual Meeting held on December 20, 2011 are available for consultation by the shareholders during office hours at the registered office of the Company, 13, St Clément Street, Curepipe.

(vii). The minutes of the Annual Meeting to be held on December 18, 2012 will be available for consultation and comments during office hours at the registered office of the Company, 13, St Clément Street, Curepipe from February 4 to 15, 2013.

Footnote 1: The profiles and categories of the Directors proposed for re-election are set out at pages 63 to 66 of the Annual Report 2012.

14. To re-appoint Messrs. BDO & Co as auditors for the ensuing year and to authorise the Board of Directors to fix their remuneration.

15. To ratify the remuneration paid to the auditors for the financial year ended June 30, 2012.

BY ORDER OF THE BOARD

Nathalie Gallet, ACISPer NAVITAS CORPORATE SERVICES LTDCompany Secretary

November 15, 2012


Group Structure37

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39.2

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13.13% Consolidated Energy Co. Ltd

65.19% Usinest Limited

50% CIEL Properties Ltd

60% Sucrière des Mascareignes Limited

50% CIEL et Nature Limitée

100% Anahita Estates Limited

50% Anahita Hotel Limited

61.72% Eastern Energy Company Limited

50.63%

39%

50.01% Noveprim Limited

100% Sukari Investment Company Limited

61% Anahita Golf Ltd

100% Anahita IRS Forty Limited

80% Contance La Gaiété Milling Company Limited

100% Anahita Centre for Excellence Limited

37.5% Bluefrog Limited

93% Noveprim Europe Limited

28.51% Medical & Surgical Centre Limited

80% Deep River-Beau Champ Milling Company Ltd

100% Anahita Residences and Villas Limited

50% Chamouny Farming Ltd

49.9% Les Campêches Ltée

75% TPC Ltd

6.99% Constance La Gaiété Company Limited

99.99% Ferney Aquaculture Limited

50% Novelife Limited

33.3% Fondation Nouveau Regard

100% World Tropicals Ltd

50% Flagstone Property Management Ltd

100% Anahita World Class Sanctuary Ltd

14.38% Sugar World Ltd

33.33% Trois Ilots Limited

67.55% Microlab Ltd 100% Commercial and Industrial Enterprises Ltd

as at June 30, 2012(Prior Amalgamation)

32.5% FUEL Refinery Limited

64.23% Refinest Limited

ALTEO ANNUAL REPORT 201210

Group Structure100% Commercial and Industrial Enterprises Ltd

6.99% Constance La Gaiété Company Limited

99.99% Ferney Aquaculture Limited

50% Novelife Limited

64.23% Refinest Limited

13.13% Consolidated Energy Co. Ltd

65.19% Usinest Limited

50% CIEL Properties Ltd

60% Sucrière des Mascareignes Limited

50% CIEL et Nature Limitée

100% Anahita Estates Limited

50% Anahita Hotel Limited

33.3% Fondation Nouveau Regard

100% 32Cane Planting Societies

85.72% Compagnie de la Vigie Limitée

100% Schoenfeld Co. Ltd

100% Island Fresh Ltd

99.99% West East Limited

57.15% Sena Development Ltd

16.33% Forward Engineering and Development Company Limited

*It is to be noted that at a Special Meeting held on July 17, 2012, the shareholders of The Beau Champ Holding Company Limited have approved the voluntary winding-up of that company and the distribution of the shares held by The Beau Champ Holding Company Limited in ALTEO to its shareholders.

65.10% F.U.E.L. Steam and Power Generation Company Limited

65.10% F.U.E.L. Sugar Milling Company Limited

61.72% Eastern Energy Company Limited

32.5% FUEL Refinery Limited 32.5%

50.63%

39%

100% World Tropicals Ltd

50.01% Noveprim Limited

100% Sukari Investment Company Limited

61% Anahita Golf Ltd

100% Anahita IRS Forty Limited

95.40% Société de Gérance Mon Loisir

99.88% Trianon Estates Limited

50% Compagnie Usinière de Mon Loisir Ltée

100% FSMC Planters Services Co Ltd

91.35% Société Beauregard

100% Société Gonin

100% Société Ducomet

80% Contance La Gaiété Milling Company Limited

100% Anahita Centre for Excellence Limited

37.5% Bluefrog Limited

93% Noveprim Europe Limited

28.51% Medical & Surgical Centre Limited

80% Deep River-Beau Champ Milling Company Ltd

100% Anahita Residences and Villas Limited

50% Flagstone Property Management Ltd

100% Anahita World Class Sanctuary Ltd

14.38% Sugar World Ltd

33.33% Trois Ilots Limited

67.55% Microlab Ltd

50% Chamouny Farming Ltd

75% TPC Ltd

as at August 31, 2012(Post Amalgamation)

20.9

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Corporate Information

Board & CommitteesBOARD OF DIRECTORSThierry Lagesse - ChairmanJean-Claude Béga – as from July 20, 2012Jan Boullé - as from July 20, 2012Patrick de L. d’Arifat – Chief Executive Officer - as from July 20, 2012Bernard P. Dalais – up to August 17, 2011G. Christian DalaisMaurice P. Dalais – up to July 20, 2012P. Arnaud Dalais – Group Chief ExecutiveAmédée Darga – as from July 20, 2012Roger Espitalier Noël – as from September 15, 2011 and up to July 20, 2012Jean-Claude Harel - up to July 20, 2012Jean de FondaumièreLouis GuimbeauArnaud LagesseJ. Cyril Lagesse – up to July 20, 2012Robert Lagesse – up to July 20, 2012Didier Merven – up to September 5, 2011Adolphe Vallet – up to September 15, 2011

REGISTERED OFFICE ALTEO - BEAU CHAMP ALTEO - UNION FLACQ13, St Clément Street Beau Champ Union FlacqCurepipe Grand River South East MauritiusMauritius Mauritius Tel: +230 402 3300BRN: C06000012 Tel: +230 417 6000 Fax: +230 413 2699Tel: +230 670 7277 Fax: +230 417 6481Fax: +230 670 0740Website: www.alteogroup.com

COMPANY SECRETARYNavitas Corporate Services Ltd 13, St Clément StreetCurepipeMauritius

SHARE REGISTRY & TRANSFER OFFICEIf you are a shareholder and have inquiries regarding your account, wish to change your name or address, or have questions about lost share certificates, share transfers or dividends, please contact our Share Registry and Transfer Office:

MCB Registry & Securities LimitedRaymond Lamusse Building9-11, Sir William Newton StreetPort-LouisMauritiusTel: +230 202 5397Fax: +230 208 1167

EXTERNAL AUDITORS INTERNAL AUDITORSBDO & Co Ernst & Young

BANKERSBarclays Bank PLCBank of BarodaBanque des Mascareignes LtéeBank One LimitedState Bank of Mauritius LtdThe Hong Kong and Shanghai Banking Corporation LtdThe Mauritius Commercial Bank Ltd

BOARD COMMITTEESAudit Committee

Jean de Fondaumière - ChairmanJean-Claude BégaAmédée Darga – as from August 6, 2012Louis Guimbeau

Corporate Governance Committee

Jean de Fondaumière - ChairmanLouis Guimbeau – as from August 6, 2012Thierry LagesseP. Arnaud Dalais - up to August 6, 2012

COMPANY SECRETARYNavitas Corporate Services Ltd – as from July 20, 2012CIEL Corporate Services Ltd - up to July 20, 2012

MANAGEMENT TEAMP. Arnaud Dalais – Group Chief ExecutivePatrick de L. d’Arifat – Chief Executive OfficerJérôme De Chasteauneuf – Head of FinanceRobert Baissac – CEO of TPC LtdJean-Luc Harel – COO Sugar Milling & Energy ActivitiesJean-Robert Lincoln – Group Agricultural Development ExecutiveChristian Marot – COO Agricultural Activities


SugarIndustryEXECUTIVES’ REPORT

As mentioned in the Chairman’s Statement, the amalgamation project of FUEL with and into DRBC was successfully negotiated during the year under review and was concluded just after the financial year end. The actual combining of the sugar cane growing, sugar milling and energy production operations is being phased in and will during the year start translating into synergetic gains

The pooling of the resources of DRBC and FUEL into Alteo Limited (“ALTEO”) stems from the declared objective of ensuring the competitiveness of their ongoing operations in an increasingly liberalized environment and of being in a stronger position to take advantage of new development opportunities.

The creation of ALTEO will give a significant added impetus not only to the operations in which the two companies have been traditionally engaged but also to their more recently developed lines of activity, whilst opening the way to a number of new exciting avenues, both locally and in the region.

Amalgamation of FUEL with and into DRBC


During the 2011 crop, a total of 279,310 tons of cane was harvested, 1.6% above the initial estimate of 275,000 tons, but 5.8% below the long term average of 296,400 tons. Cane productivity during the first half of the harvest lagged behind the estimate by 5.5 tons per hectare, representing a shortfall of approximately 8,500 tons. The reduced cane yield occurred mainly in the humid and sub-humid regions and is attributed to the low rainfall registered during the period September to December 2010, which reached no more than 25% of the long term mean. Fortunately, this dry spell did not cause any adverse effects on late maturing varieties under irrigation in these same regions. Moreover, climatic conditions were favourable in the super humid regions and resulted in higher cane yields which compensated for the deficit in the humid and sub-humid regions. Cane ripening, for its part, was adversely affected due to delayed cane growth. As a result, the extraction rate for crop 2011 fell to 10.21% from an initial estimate of 10.70%.

Investment in de-rocking and land preparation programmes, in view of furthering mechanical harvest in the dry rocky regions, continued on some 22 ha to reach a total extent of 430 ha. In the rock free areas, the land preparation has now been completed but minor additional investment is usually required during plantation process to upgrade field layout in order to improve drainage of excess water in the super humid regions. The total area suitable for mechanical harvest has thus now reached 2,615 ha: i.e 67% of the area under cane and representing a cane production potential of 233,000 tons, or 75% of total cane harvested.

Refurbishment of the 18-year old centre pivot No. 3 at Trois Ilots was completed in December 2011. The estate irrigation system consisting of centre pivots, drip, solid set, portable set and drag line now covers an area of 864 ha as follows:

2011 Crop

Cane GrowingREVIEW OF OPERATIONS

Deep River-Beau Champ Limited

Centre PIVOT

Drip

Solid Set

Portable Set

Drag Line

Irrigated Area (Ha)

203

450

33100

78


The selling price of sugar for the 2011 crop year reached Rs. 16,020 per ton as compared to Rs. 13,536 for crop year 2010, an increase of 18%. Table 1 shows the past trend in the selling price of sugar and molasses along with the estimate for crop year 2012. Molasses price continued its downward trend and fell to Rs. 1,982 representing a 26% fall from the previous year’s price of Rs. 2,689 per molasses ton. The sugar tonnage accruing to the company rose slightly whereas that of molasses remained at the same level. The effect on sugar revenue was a rise of Rs. 52M to Rs. 357M, whereas molasses revenue fell by Rs. 5M. This fall was offset by the receipt of a similar amount from the newly introduced ‘Bottlers’ and Distributors’ Contribution on Potable Alcohol’. Turnover, therefore, rose by Rs. 52M in 2012 as compared to 2011. In addition, the Sugar Insurance Fund Board declared an event year on the grounds of drought conditions that prevailed during the latter half of 2010 and the company received Rs. 24M as compensation.

The selling price of sugar and molasses (2007-2012)

Operating income rose by Rs. 44M, after including the non-cash impact of a positive Standing Crop Valuation movement of Rs. 23M.

Operating expenses rose to Rs. 529M increasing by Rs. 74M, of which Rs. 34M were due to expenses of a non-recurring nature as the company had to incur professional fees related to the business combination with FUEL of Rs. 7M; payments on early termination of contract of Rs. 15M and a write-off of an amount receivable from a subsidiary of Rs. 12M. In addition the company’s retirement benefit liability also increased by Rs. 6M when compared to the previous year. The remainder of the increase in operating expenses is explained by the higher cane harvest tonnage, increases in the price of FUEL and fertilisers and a fall in the discount received on the Sugar Insurance Premium. The company incurred an operating loss of Rs. 31M when compared to the previous year’s loss of Rs. 1M.

The company realised a net loss after tax of Rs. 70M as compared to a net profit of Rs. 292M in 2011, mainly as a result of an impairment in Novelife Ltd and World Tropicals Ltd address up to Rs. 221M. Moreover, in 2011 the company had recognised gains in fair value of investment properties for the first time on reclassifying part of its land-based assets and these amounted to Rs. 92M last year, there were no such gains in 2012. Similarly, in 2011, the company had recorded a surplus of Rs. 93M on the disposal of part of its non-core investments in other companies.

Additions to fixed assets amounted to Rs. 55M up from Rs. 44M last year.

2012 CropThe 2012 harvest has been estimated at 280,000 tons from 3,480 ha under cultivation, which in terms of cane productivity is 3 tons per hectare higher than the 2011 harvest. The dry conditions that prevailed during the earlier part of the elongation period were very detrimental to cane growth in the sub-humid regions which will be harvested during the first half of the season. These same weather conditions were however favourable for good re-growth in the super-humid regions. The rainfall recorded as from March 2012 was well distributed and coupled with higher temperatures and good solar radiation regimes have been beneficial to ratoons harvested late in 2011. However, climatic conditions have not been conducive to sucrose accumulation and ripening, and the extraction rate for the coming crop has been estimated at 10.70%.

Total sugar production should reach 29,425 tons of which 22,952 tons would stand for the share to accrue to the Company.

2012/13 Financial ResultsThe major challenge facing the industry remains the performance of the Euro since the sugar price depends on it. The company expects the sugar price for crop year 2012 to remain at Rs. 16,000 per ton of sugar. Despite the dry conditions the company is expected to realise a harvest of 280,000 tons with an accruing sugar share of 23,369 tons. The molasses price is estimated at Rs. 2,600 per ton and the Bottlers’ and Distributors’ Contribution on potable alcohol at Rs. 300 per ton of sugar.

With the change in regulations brought by the amendments to the Sugar Insurance Fund Act, the company is not expected to receive any compensation. Additionally, the 70% discount on the SIFB premium for the crop year 2011 will be reduced to 50% for the subsequent years. Along with other increases in expenses the company is expected to sustain a small operating loss of Rs. 3M.

After accounting for dividend income less finance charges on investments and amortisation of VRS costs, the company is expected to realise Rs. 153M as profits before taxation.

Future ProspectsFurther to the amalgamation of DRBC and FUEL, the agricultural activity of ALTEO, in Mauritius, will comprise some 13,000 hectares of sugar cane cultivation producing some 850,000 tons of cane under one focused management structure.

The combination of the most experienced human and best physical resources of DRBC and FUEL will enable a more rapid implementation of better adapted technology and cultural practices whilst achieving significant efficiency gains through cost streamlining and improved productivity.

In addition to obvious cost reductions in administrative overheads and their amortisation on a much larger production base, the optimisation of agricultural and transport equipment, the extension of mechanisation of agricultural activities and more efficient irrigation methods will, in particular, result in a lower cost of productionof sugar cane.

Moreover, the significant area under production will justify and accelerate the introduction of appropriate technologies on a larger scale. Those technologies include a GPS guidance system combined with a Geographical Information System. Such developments will greatly improve decision making, generate operational efficiencies and optimise the yield potential.

2011/2012 Financial Results

Crop years 2012(est.) 2011 2010 2009 2008 2007

(Rs. per tons)

Sugar 16,000 16,020 13,536 14,612 17,427 18,620

Molasses 2,600 1,982 2,689 3,016 2,181 1,361

Est. 2012 2011 2010

Area Harvested (Hectare) 3,480 3,602 3,506

Cane Yield per Hectare (tons) 80.5 77.5 76.2

Total Canes Harvested (tons) 280,055 279,310 267,262

Sugar Produced per Hectare (tons) 8.61 7.92 8.22

Sugar Produced (tons) 29,966 28,512 28,835

Share of Sugar Produced (tons) 23,369 22,240 22,483

Extraction 10.70 10.22 10.79

CANE GROWING


The crop under review lasted from June 11 to December 3, i.e. 143 crushing days compared to 148 in 2010. Total cane crushed amounted to 678,453 tons of which 279,213 tons came from estate lands. Daily crushing rate stood at 4,744 TD compared to 4,871 TD for the previous crop. Overall Time Efficiency was 88.1 and Mechanical Time Efficiency (M.T.E) averaged 95.9; these figures were slightly better than those attained in 2010. Corrective measures taken during 2011 intercrop have proved their worth in pushing M.T.E above the 95 % mark.

Total sugar production was of the order of 69,533 tons, made up of 43,579 tons of Plantation White Sugar (“PWS”) 15,815 tons of Demerara Sugars, and 10,139 tons of sugars of the Muscovado family. Production of direct consumption sugars thus reached an all-time record of 25,954 tons.

Extraction rate attained 10.25%, this figure is 0,25% lower than rate recorded in 2010.

2011 Crushing Season

Week

Extraction as from crop 2008 to 2011

Crop

11

10.5

10

9.5

9

8.5

8

2008 2009 2010 2011 E

xtra

ctio

n

1 3 5 7 9 11 13 15 17 18 21 23 25 27

SugarManufacturing

Deep River-Beau Champ Milling Limited

REVIEW OF OPERATIONS


Reduced Overall Recovery was 86,70, i.e. 0,10% higher than the industry average of 86,60. The PWS production process was fine-tuned further in 2011 and yielded better results than in the past. Average colour content of sugar delivered to FUEL Refinery was 497 IU and this was very similar to value obtained the previous crop. It appears that a colour of 500 IU is being the best that could be obtained under conditions prevailing at DRBC. It is worth pointing out that DRBC is producing, in the same factory, sugars ranging in colour from 500 IU to 45,000 IU.

During the 2012 intercrop, the factory has consolidated its ongoing programme of improvements in the field of Food Safety. The enclosing of the bagging area for Demerara Sugars was completed. The production capacity of Muscovado Sugars has also been increased, in a first stage, by 50%. This entailed the installation of a second production line since the existing equipment was already operating at its maximum limit (10,000T). The project has been designed so that, in future, a further production capacity increase to 100% can easily be achieved through the addition of a fourth centrifugal only. Moreover the recent investment has been designed in such a way as to facilitate its eventual transfer.

To-date orders for Muscovado Sugars for 2012 have already outreached last year’s production by some 27% thus confirming the validity of the implementation of the said project. The replacement of the ageing tubes on the Evaporator no. 3 was completed during current intercrop; this will reduce steam consumption on the evaporator station and also reduce downtime during maintenance on Sundays.

The replacement of coupling box on mill no.1 has been successfully carried out. The new acquisition which has been in operation elsewhere has given entire satisfaction since its installation at the start of the present crop.

The proposed rehabilitation of the “C” Massecuite Reheater could not be carried out due to poor state of its internals. The complete unit had to be replaced and the new equipment was commissioned at the start of crop 2012.

So as to satisfy ever-increasing environmental norms, existing Waste Water Treatment Plant was upgraded by the installation of a Highly Charged Aerobic Reactor, modification of existing ponds and covering of Heavy Wash Pond to contain odour emissions.

2011/2012 Financial ResultsWith the sugar price for crop 2011 finalised at Rs. 16,020 per ton, sugar proceeds rose by Rs. 17M when compared to the previous year despite a 9% fall in accruing sugar tonnage. The company also received a compensation from the Sugar Insurance Fund Board due to adverse weather conditions. With regards to speciality sugars, the company recorded a 48% rise in income due to increased production from 22,278 tons in 2011 to 25,993 tons in 2012 and to an additional premium on such types of sugar. Operating income therefore rose from Rs. 300M last year to Rs. 345M; a 15% increase.

The rise in operating expenses and finance charges was contained to 5%; from Rs. 279M to Rs. 294M for 2012. The company therefore realised a net profit of Rs. 40M as compared to last year’s results of Rs. 18M.

Crop 2012Initial estimates of cane production for crop 2012 stand at 670,000 tons. When compared to an average harvest of 780,000 tons, this underperformance is explained by adverse conditions affecting cane growth and the gradual abandonment of cane fields by small planters. On the other hand the production of speciality sugars will witness an increase in line with the investment in equipment to 28,000 tons in aggregate. According to estimates the sugar price is expected to be at Rs. 16,000 per ton. No compensation is expected from the Sugar Insurance Fund Board for the coming year.

Future ProspectsThe creation of ALTEO, in the context of the forthcoming closure of the Deep River-Beau Champ sugar factory, will greatly facilitate the smooth transition to the establishment of one major sugar producing operation in the East which is in line with government policy.

FUEL sugar factory is ideally situated to minimise cane transport costs and already has the capacity to process some 1M tons of cane. With the closing down of the DRBC factory, the canes from the combined factory areas will add up to some 1,3M tons. Further to the Amalgamation, it is projected to increase the capacity of FUEL factory to some 350TCH in order to be in a position to crush the greater part of such cane throughput. This should result in the production of some 130,000 tons of sugar.

In the context of this expansion investment plan, emphasis will be put on:- milling technology to achieve higher calorific value bagasse for energy production;- process steam savings resulting in optimum internal thermal consumption;- further process automation with a view to reducing costs and improving sugar recoveries; and- an integrated approach to environmental issues.

Estimated Canes

Year 2012 Year 2011 Year 2010

Estate Canes 280,000 279,213 267,262

Planters & Metayers 390,000 399,240 453,649

Total cane crushed 670,000 678,453 720,911

Extraction rate at 98.5 Pol 10,60 10,25 10,61

Total sugar produced 71,020 69,572 76,499

Special sugar produced 28,000 25,954 22,278

Sugar accruing to Miller 15,624 15,303 16,855

Days operation 138 143 148

Hours operation per day 22 21,13 21.03

Cane manipulated per day 4,855 4,744 4,871

Fibre % Cane 15.50 16,11 16,07

Reduced Overall Recovery 86.50 86,70 86,36

Bagasse % Cane 31,0 31,9 31,8

kWh/T.Cane 27,7 27,62 27,69

SUGAR MANUFACTURING (Cont’d)

Milling Operation Data


As mentioned in the previous report, an additional conditioning unit that would enable the refinery to operate at 100% of its capacity was commissioned at the beginning of the 2011 harvest. This additional investment of some Euros 3.0M has now resolved the sugar caking problem, encountered at delivery.

The table below summarizes the operational and financial results for the year compared to those of the Business Plan. All parameters are on target. However, the Company remains in a difficult cash situation mainly as a result of the additional investment in the second conditioning silo.

For the first time during the year under review, the activity has received, through the Mauritius Sugar Syndicate, 20,650 tons of imported non originating sugars for refining, thus supplementing the availability of 144,000 tons locally produced plantation white sugars.

The production of white sugar resulting from such imported raw material is destined mainly to the domestic market but also to the EU market within the regulatory maximum blend mix.

Future ProspectsIt is expected that FUEL Refinery Limited will receive sufficient domestic Originating Sugars and imported Non Originating Sugars to supplement the 110,000 tons production of Plantation White Sugar of F.U.E.L Sugar Milling Company Limited and Deep River-Beau Champ Milling Ltd, to reach a refined sugar production of 160,000 tons for the next financial year.

A number of options to alleviate the shortage of steam and electrical energy during power plant maintenance are being investigated. At the same time, effluent and sugar losses management are under continuous scrutiny, and an investment towards mitigating peaks and troughs in steam consumption of the refinery is under study.

2011/12 Review

Year 2011-2012

Actuals Business Plan Budget

Production (tons) 151,295 155,680

Sales (euros) 7,388,005 7,466,000

Operating Profit (euros) 3,183,842 2,962,000

Profit before tax (euros) 2,195,098 1,981,000

SugarRefining

FUEL Refinery Limited



Crop season 2011 started on June, 11 and lasted for 143 days ending on December 3. Total cane processed was 678,453 tons against a budget of 680,000 tons Bagasse % Cane averaged 31.9 and compares favorably with an estimate of 30 %. Electricity supplied to the grid was budgeted at 230 kWh per ton bagasse and attained 212 kWh, i.e. a reduction of 7.8 %.This is due to the fact that there was no surplus bagasse available after end of crop 2011. Mill electricity consumption was 28.59 kWh compared to 27.79 the previous crop. In the same vein, a slight increase in steam consumption per ton cane was observed, 450 to 453Kg. This situation may be explained by a lower daily throughput at the mills. During the financial period under review, CEL power plant supplied 42.4 GWh to the grid while burning bagasse, compared to a budget of 46.5 GWh. This shortfall is mainly due to two weeks delay in start of crop 2012.

Electricity generation burning coal during the intercrop, amounted to 81.6 GWh. This figure was 0.5 % lower that budget of 82 GWh. For the year under review, CEL supplied a total of 124 GWh instead of 122.3 GWh as per budget. The ratio of kWh from coal combustion, supplied to the grid reached 1,490 kWh/ton, thus returning to values more in line with those observed in the past.

During crop period 2011, the 3,8 MW alternator rotor was re-insulated on site and that of the 24,6 MW unit had its “block system” replaced during maintenance period 2012. Both interventions were carried out by an outside service provider. Annual Overall Process Efficiency measured by the ratio of unauthorized stoppages to allowable outages stood at 99.4 % compared to 98.7 % the previous year. This figure is the highest attained since 2002.

One noticeable intervention during maintenance period 2012 was the replacement of the lower bank of tubes of the Economizer and the addition of a set of tubes on the superior bank of the equipment. This has resulted into a gain in efficiency of 3% on bagasse combustion and 1% on that of coal.

During the 2013 maintenance shutdown period, the most significant maintenance activity will be carried out on the boiler, namely, the thermal isolation of the grit collector and the replacement of casing and cladding of space above combustion chamber of the boiler.

2011/2012 Financial ResultsEnergy export to the national grid, in 2012, resumed its usual trend as the Company reverted to its normal maintenance shutdown of 45 days as compared to 90 in the previous year. As a result, turnover rose from Rs. 119M to Rs. 352M.

Operating expenses rose to Rs. 364M for 2012. The increase of Rs. 122M was due to the increase in coal consumption costs. With the increase of such costs the company sustained a loss of Rs. 8M as compared to Rs. 12M in 2011. The cost of coal amounted to Rs. 229M for 55,990 tons of coal consumed whereas last year the plant had consumed 24,813 tons of coal for Rs. 105M. The landed coal cost per ton for 2012 was therefore Rs. 4,085. While this cost compares favourably to the previous year’s cost of Rs. 4,240 per ton, it should be noted that, due to the power purchase agreement in place, for every kWh exported from coal the Company receives on average Rs. 2.71 whereas the cost to produce the same amount of electricity from coal is around Rs 2.80. This deficit on the export of energy from coal, despite a significant increase in efficiency for the year under review, explains in large measure the loss making position of the company.

Capital expenditure was contained at Rs. 28M when compared to Rs. 42M in 2011.

2012/2012 Financial ResultsThe Company is expected to realize a meagre profit of Rs. 2M. The cost of coal is expected to decrease to Rs. 3,880 based on an average FOB price of coal of $95 and with the US dollar at Rs. 30. The Company is expected to generate and sell 119 GWh to the national grid of which 73 GWh from coal. It is to be noted that the power purchase agreement requires the Company to provide a minimum of 110GWh.

Future ProspectsFollowing the closure of DRBC milling factory scheduled after the 2013 crop and the ensuing expansion of the sugar factory at Union Flacq, the FUEL Steam and Power Generation Company Limited (FSPG) will benefit from the significant additional availability of bagasse and will thus be in a position to produce a much higher proportion of its production from the renewable source of energy. This development will not only ensure a healthy income stream to the operations in the short to medium term but will place FSPG in an ideal position to envisage in the years to come the setting up of a new higher efficiency power plant.

2011/12 Review

Energy

Consolidated Energy Co. Ltd (“CEL”)



RegionalDevelopmentEXECUTIVES’ REPORT


Cane ProductionDuring the 2011/2012 season a total of 824,162 tons of cane were produced from a harvested area of 7,282 hectares. This was a record cane production for TPC, surpassing the previous season record by 3% and the budget by almost 14%. All the available cane could however not be harvested before the end of the crushing season due to the yields being unexpectedly high. It is estimated that about 37,000 tons of cane have been carried over to the next season. Excellent cane yields of 113.17 tons per hectare for an average cane age at harvest of 12.04 months were achieved. Such an increased cane production resulted from the continued replacement of old varieties as well as the improvements in fertilisation and irrigation. Sucrose content averaged 12.75% which saw a slight decrease compared to the figure reached during the previous season.

The area re-planted during the 2011/2012 season amounted to 1,735 hectares, mainly with varieties from South-Africa and Reunion Island. A total of 568,998 tons of cane and 57,800 tons of sugar were produced from newly introduced varieties.

The program of replacement of the obsolete hop-along irrigation system by the semi-solid system is progressing satisfactorily and the last 2 blocs totalling 104.30 hectares should be completed early in the 2012/2013 financial year. The trial to evaluate the performance of drip irrigation in saline and sodic soils has produced promising results with average yields of 159 tons per hectare achieved. This was about 20 tons per hectare more than the furrow irrigated control portion of the experiment. Extensive canal lining works were carried out during the rainy season, concrete lining was used for the main canals and HDPE for the secondary canals; the objective is to increase the volume of water reaching the fields by reducing seepage in canals. About 45% of main canals have been lined to date and only 7% of secondary canals.

A detailed soil survey was carried out on a portion of about 600ha of less productive land in the southern part of Kahe area to evaluate if there is a potential for expanding cane production.

Sugar ProductionThe amount of cane crushed per hour for the 2011/2012 season, at 158.5 tons, was slightly higher than the previous year (157.8) but slightly lower than budget (160.0) mostly due to poorer cane quality towards the end of the season. Mill extraction at 95.9% was negatively impacted by higher fibre and lower sucrose than past years average while boiling house recovery at 84.5% and total losses at 2.4% cane were better than the previous season but slightly below budget. Factory time efficiency was higher than the previous season but lower than the budget due to mainly mechanical breakdowns, while overall time efficiency was better than budget and the previous season mainly due to less rainy days. Finally, a record sugar production of 86,139 tons was achieved beating the previous record of the previous season and the budget by 8,400 tons mainly due to more cane crushed and better factory recoveries.

Other ActivitiesOver and above the production of electricity for irrigation and other internal requirements, power export to the national grid amounted for 13.4 GWh by the end of June 2012. This achieved export is lower than the budget due to the instability of the national grid which prevented TPC from exporting as much power as it could have had.

Industrial relations continued to be cordial during the course of the year. The annual wage negotiation between the workers’ union, TASIWU and management was successfully conducted and an agreement was signed on May 30, 2012 granting a substantial salary increase of 19% to the employees on the back of an equivalent inflation rate, year on year to March 2012.

2011/2012 Season

TPC Ltd (“TPC”)

TPCREVIEW OF OPERATIONS


Financial ResultsMonthly sales of sugar for the financial year were all above the budget due to strong demand and higher production save for June 2012 - subsequent to the market being under pressure of imported sugar entering Tanzania and TPC sales territory as from April 2012. A total of 89,136 tons of sugar was sold for the financial year against an original budget of 80,892 tons. Prices in local currency were higher than the original budget by 13.2% fuelled by high sugar prices on the world market and strong demand. The molasses sold during the financial year amounted for 36,690 tons, higher than the original budget by over 33% as a result of increased production and strong demand from local players.

Sales in local currency increased by 29% during the year under review; however due to the reduced parity of the Tanzanian shilling to the USD the sales increase in USD was 25% reaching USD 75.1M. Cost of Sales increased by 19% (increase of 23% in local currency) and Other Expenses by 15% (increase of 19% in local currency). Finance Costs increased by 54% or USD 0.5M mainly as a result of exchange losses incurred in relation to foreign currency positions held. These increases in costs coupled with a favourable valuation impact on Consumable Biological Assets of USD 11.8M resulted in net profit Before tax increasing to USD 47.9M, a USD 16.4M or 52% increase on prior year. With the tax charge increasing by USD 5.1M the Net Profit after Tax showed an increase of USD 11.4M or 51% to USD 33.5M for the year. In terms of cash flow generation the company showed a marginal increase in the year end cash position of USD 0.2M which resulted in the closing cash balance of USD 2.3M. This increase in cash came via an increase in Net Cash from Operating Activities of USD 33.1M, of which USD 10.3M was used in Investing Activities, USD 2.5M in loan repayments and a further USD 20.1M in dividends. Total Assets reflected an increase of USD 20.4M largely as a result of increases in the biological assets valuation and investments in fixed assets. On the liability side the Non-Current portion increased by USD 3.2M due to deferred tax increase partly offset by lower loan balance.

2012 OffcropThe lower than average rainfall received during the long-rains season between March and May 2012 which could not be compensated for through irrigation during this particular time due to major lining and maintenance works being undertaken, will certainly have a negative impact on productivity and cane quality.

On the factory side, a second bank of economizer supplied by ISGEC has been installed. The erection of the continuous vacuum pan (CVP) was complete for start-up. Mill No. 1 electrification was completed a few days before the start-up of the crop; the commissioning went smoothly and the power absorbed is better than expected.

Outlook 2012/2013A higher crop, of 852,793 tonnes, compared to last season has been estimated for the 2012/2013 season and sugar production has been budgeted to the level of 90,828 tonnes. The new season started on time on June 12 and is planned to end on March 14. For the first few weeks of the season cane yields and quality have been lower than budget as the effect of poor rain and lack of irrigation between March and May 2012 (during which time the irrigation pumps are maintained and canals lined) had a higher impact on cane productivity and quality than expected. Sugar prices and sales volumes in the first 12 weeks of production have been lower than estimated due to high competition with imports. TPC has lowered its price twice on July 5 and August 6, bringing its actual selling price at 5.7% lower than budgeted. It is expected that once the imported sugar has been absorbed by the local market, which should be the case by end-December 2012, sugar prices and volumes should normalize towards budgeted figures.

TPC Ltd (Cont’d)

Future Prospects

Building upon the success story of TPC and on the improved knowledge of the dynamics of the sugar industry and markets, one of the major objectives of ALTEO will be to pursue the expansion of its sugar operations in the region. The increased sugar consumption in Africa driven by population growth and economic development has led to sustained commodity (including sugar) prices, and in particular in deficient sub-regions. This is coupled with a rising demand for energy which most often cannot be met from traditional sources. Such an environment is highly conducive to the setting up of sugar cum energy operations in the appropriate locations. The proposed merger will greatly facilitate such new ventures in the regions through the availability of the equipment and the human resources of Mon Loisir and DRBC sugar factories after their respective closures. Potential projects have already been identified in the East African region and investigations are underway in parallel with discussions with potential strategic partners.

ALTEO’S REGIONAL DEVELOPMENT


PropertyDevelopment& TourismEXECUTIVES’ REPORT


The Four Seasons Resort Mauritius at Anahita (“Four Seasons Resort”) has maintained a positive growth trend despite unfavourable prevailing conditions for 5-star resorts on the island.

The resort’s average annual occupancy rate showed a 10 point increase to 60%. Moreover, the realisation of positive EBITDA of Rs. 215.8M represents a net improvement of 8.7% for the hotel as compared to the previous year.

Four Seasons is a well established brand with a solid reputation on the international scene and the Four Seasons Resort Mauritius at Anahita is the leading hotel within its local competition set of 5-star hotels.

In the last year, the Resort has been rated No1 by its guests through Trip Advisor from among the top 25 hotels in Africa and the resort’s Italian restaurant, Aquapazza, was recognized by the UK’s Daily Meal as one of the top 100 hotel restaurants in the world.

Looking ahead, Four Seasons Resort is expected to perform well by securing an occupancy level superior to that of the previous year.

Anahita IRS Forty Limited (“IRS FORTY”)IRS Forty is a 100% subsidiary of AHL and is the promoter of the 45 exclusive private residences completed in the summer 2008, located at and managed by Four Seasons Resort Mauritius at Anahita. Homeowners benefit from Four Seasons world-renowned, personalised and attentive service and rental management expertise, and are benefiting from improved yields resulting from year round rental service.

At the financial year’s end, only 4 private residences remained to be sold from the already-constructed inventory, following which renewed interest developed resulting in 1 sale during the month after the end of the financial year. A number of leads are also in the pipeline for the other remaining properties.

The resale market remains strong and improvement in capital gains is being achieved, showing a positive and upbeat trend which is likely to attract increasing investor market interest.

Anahita Hotel Limited (“AHL”)


Anahita Estates Limited (“AEL”)Anahita continues to provide a safe investment case due to its location in Mauritius, which is a popular tourist destination with a secure political and economic profile and good return potential. Moreover, as Anahita Mauritius enters its 5th year of existence it is well placed to take its position at the pinnacle of a new wave of landmark property developments in the Mauritian landscape.

The year ended June 2012 witnessed an uptake in sales momentum with the sale of 5 plots of serviced residential land, 2 Lunea villas out of the remaining 3 which have already been constructed, and 1 off-plan (VEFA) villa at Solaia. Additionally, the secondary market for villas and apartments within the resort has been very active.

In financial year ended June 2012, 3 villas and 5 plots of land were handed over while, in the year 2011, 6 villas of higher value were delivered. This explains the reduction in turnover for the year under review.

The decrease in gross profit for the year ended June 2012 is also the result of a more aggressive amortisation policy of the deferred expenditure. A higher proportion of soft marketing and infrastructure cost incurred in prior years was released to the Income Statements. This prudent approach is dictated by the ongoing difficult market condition.

The product diversification strategy of incorporating serviced residential land for sale triggered signs of positive market absorption. Along with the decision of the Board of Investment (“BOI”) in July 2012 to reduce the price threshold for the sale of land from $500,000 to $350,000, the sale of serviced land offers buyers an optimal forecast of an attractive investment opportunity for development and profitability or a leisure lifestyle purchase within a 5-star residential estate. It also allows the promoter to offer prices which are aligned with current market rates for this type of product.

Secondary market transaction values on resales still enjoy robust growth momentum, particularly for prime ocean front real estate which confirms Anahita’s prime position on the Mauritian market.

Diversification of the product offering remains a priority this year, in order to seize the opportunity of sustained sales and meet buyers’ and investors’ expectations. Whilst single detached homes prevail as the most popular choice, town homes and duplexes are gaining greater traction. Further to positive market feedback in respect to price points, architecture and amenities obtained through a survey carried out in early 2012, the design and development of a more affordable product is well on track for a pre-launch in December 2012.

On the construction front, with the initial stages of development at Anahita having been completed since early 2008, more than one third of its planned properties is now fully operational.

Construction works concluded during financial year end of June 30, 2012 include:- Infrastructure works at The Fairways – Lakeside;- Construction and delivery of a villa at Solaia.

Ongoing works for completion during the next financial year include:- Construction and delivery of a villa at Solaia;- Water feature at The Fairways – Lakeside;- Green recreational landscaped areas forming Solaia Park within Solaia.

Construction activity shall regain momentum in the following financial year with the construction of the new product diversification mentioned above.

Anahita Golf Limited (“AGL”)Four Seasons Golf Club Mauritius at Anahita (“the golf course”) maintained its trend of positive growth for the year ended June 30, 2012.

The 60 Lifetime Golf Memberships were sold out, reaffirming the golf course as a prime golf destination in Mauritius.

The management’s price strategy to slightly reduce its rate per round resulted in an increase in the number of rounds played, as well as in its food and beverage and pro-shop revenues.

Improved operating performance and proactive marketing and management initiatives, combined with increased occupancy levels from both resorts, contributed to the increase in player rounds.

AGL, in which Alteo Limited has an effective holding of 80.5%, is showing a positive outlook with turnover growth of 9% and a loss reduction of Rs. 3M. The overall outlook for the year ahead is positive, resulting primarily from a number of golfing events scheduled during the summer months, which are expected to bring additional international visibility to the golf course.

Indeed, landmark events such as the annual AfrAsia Golf Masters, together with strategic sponsorships of professional golfers Nicolas Colsaerts (European Tour) and Hennie Otto (Sunshine Tour) are strengthening the golf course’s visibility on the international golf scene. Plans are in the making for the development of a second annual international tournament scheduled to be held for the first time during May 2013.


FUTURE PROSPECTS

On top of the significant land holdings which will be destined to remain under sugar cane cultivation for the foreseeable future, ALTEO Limited will hold substantial other property assets with tremendous development synergies and potential in the short, medium and long term.

These include:

- The already developed Anahita World Class Sanctuary and the adjacent Beau Rivage Domain with a combined foot print of some 400 hectares in a unique environment on the East coast;

- Some 250 hectares of prime development land adjoining Anahita on which conversion permits have already been obtained, including the site of the present DRBC sugar factory which will become available in the very near future;

- Substantial holdings with development permits in the second and third phases of the Mont Piton development after the very successful completion of the first phase;

- Ongoing residential and commercial developments around the main existing urban areas at Trou d’Eau Douce, Providence, Bonne Mère and Bel Etang; and

- Additional land conversion rights for the equivalent of no less than 300 hectares.

CIEL Properties Limited (“CPL”)Since 2011, CPL has successfully diversified its revenue stream through a broader client base and wider service offering comprised of development management, asset management, accounting and financial advisory and sales and marketing services. The development of Anahita Mauritius however remains the main revenue stream of CPL.

In response to poor market demand in 2011, a strategy of lowered real estate product pricing was adopted to foster market absorption pace. The company profitability has been affected but remains positive at MUR 2.5M with a robust outlook for the next financial year with synergies involved in the creation of Alteo Limited and further projects in the pipeline.

Mr. Patrice Legris replaced Mr. Timothy J. Redman in March 2012 as CEO of CIEL Properties Limited. Mr. Legris brings with him an acute knowledge of the tourism industry. His strong business and marketing insight will be essential to drive robust performance for the company whilst supporting Anahita’s real estate products.

Anahita Residences and Villas Limited (“ARVL”)Operated by Anahita Residences and Villas Limited (ARVL), Anahita The Resort (ATR) is the administrator of the property rental program at Anahita Mauritius and manages the hotel facilities and amenities at La Place Belgath, the lively waterfront village.

With its revised positioning as a 5-star resort in October 2010, ATR is well integrated within the Mauritian hotel industry and has obtained the esteem and trust of the international travel industry.

Through its focussed marketing strategy and a proven ability to take advantage of key opportunities, ARVL has continued to show resilient performance despite the very unfavourable impact of the current economic climate on the island tourism industry.

Strong occupancy growth of 34% has led to solid turnover growth from Rs. 147M last year to Rs. 186M this year. The strategic decision to reduce the resort’s average room rates yielded good results, leading to a reduction of its previous year’s loss situation from Rs. 52M to Rs. 31M.

Marketing efforts to improve the capture rate of bookings made on the website were important in increasing occupancy rates and shall be strengthened for the next financial year through the resort’s updated website which went on line at the start of July 2012. Its integrated booking engine is anticipated to generate 25% of total bookings by offering optimal visibility of the resort via the web.

Looking ahead, Anahita The Resort is showing promising signs of further establishing its position within the east coast local tourism scenery. Reservation levels for the end of the year are indicating that the peak period occupancy level should bring in additional revenues, thereby contributing to the strengthening of the cash position of the company.

ConclusionIn conclusion, the past year has seen improvement in the occupancy levels at Anahita The Resort and Four Seasons Resort with a knock-on effect for Anahita Golf. Combined with AEL’s strategy to maintain a marketing presence on the local and international scenes and some hopeful signs of an increase in sales levels, homeowners at Anahita Mauritius are beginning to see more activity creation within the estate and to feel a stronger sense of investor confidence. The vision of a sanctuary where a buoyant yet peaceful lifestyle may be enjoyed is coming to life.

Property Development


OtherActivitiesEXECUTIVES’ REPORT


Horticulture

The year under review proved to be a difficult one for this activity. Adverse conditions prevailed both at supply and trade levels on the export market. Poor climatic conditions in the first semester and further withdrawal of out-growers had a negative impact on supply, with the result that the number of units exported for the year dropped by 10% to 3.1M stems. At the same time, the global economic climate did not stimulate much enthusiasm on our diversified markets, Japan, still recovering from the last Tsunami, was affected the most - Revenue fell by Rs. 3.4M (18%), compared to the previous year. Europe, Middle East, Far East, Australia and Oceania were not spared either with exports on these markets dropping down by Rs. 5M (16%) on a year to year. New markets with sales of Rs. 1.7M, were explored in North America, Russia and the Netherlands.

Locally, Mascafleurs on the retail side managed to improve its performance slightly despite declining sales observed in the hotel industry.

Financial PerformanceRevenue for the year amounted to Rs. 53M. The downturn recorded on the international markets and supply lead to a reduced export turnover of Rs. 41M compared to Rs. 47.7M in year 2010/2011.

Local sales went up marginally to Rs. 12M, against Rs. 11.3M the previous year. Total operating costs for the year went down to Rs. 66M from Rs. 68M last year, so that the financial year ended with a net loss of Rs. 12M and a cash deficit of the same level.

Future ProspectsIn view of the anticipated further cessation of business by out-growers in the first semester of the next financial year, the company has initiated an important replantation program, upgrading and diversifying the existing product range and markets. Growing conditions being favourable, improved results are expected as from the second quarter onwards, as enhanced in-house production mitigates reduced outgrower supplies.

Structural reforms have also been implemented at administrative and operational level in order to bring costs downward. Pending no major further deterioration on our export markets, the company is expected to improve its performance significantly in the next financial year.

MicrolabThe continued downsizing of the anthurium cultivation has again had a negative impact on the company.

Turnover for the year fell to Rs. 4.2M against Rs. 4.4M for the previous year. Cost excluding Consumable Biological Assets (CBA) was monitored at Rs. 5.3M compared to Rs. 5.6M in the previous year. Positive movement in CBA of Rs. 531K was recorded for the year compared to a negative Rs. 77K in 2010/11.

In that vein, research is ongoing and the company will soon be launching new propagated vegetative material to stimulate turnover growth. Contact at international and regional levels have also been initiated and should give results in the medium to longer term.

World Tropicals Ltd


It is to be recalled that through Novelife Limited, a joint venture company with CIEL Investment Limited, ALTEO holds an interest in the healthcare and life sciences sector. Novelife holds a 28.5% stake in Medical and Surgical Centre Limited (“MSCL”), the holding company of Fortis Clinique Darné, a 50.01% stake in Noveprim Limited and a 93% stake in Noveprim Europe Limited.

Medical and Surgical Centre LimitedContinued focus to increase medical programs and enhance patient centricity has lead to satisfactory financial results in the financial year ending March 31, 2012.

The Group achieved a 16.2% growth in turnover to Rs. 516.3M, compared to Rs. 444.2M in financial year 2010/2011. At the same time, net profit increased by 10.7% from Rs. 29.9M in financial year 2010/2011 to Rs. 30.9M in financial year 2011/2012. This profit figure excludes the one time exceptional expense of Rs. 7.2M on the demolition of the ex-Mandarin Hotel.

The company has for the first time paid an interim dividend of Rs. 0.01 per share during financial year 2011/2012 and had approved a final dividend of Rs. 0.01 per share.

The results for the first three months of its financial year (June 30, 2012) show that MSCL continues to perform better than budget.

Noveprim Limited (“Noveprim”)As anticipated in last year’s report, Noveprim posted a significant loss as a result of a stock write down in the wake of increasing competition from Asia and the difficult general market environment which have dimmed the prospect of future sales. Noveprim thus recorded for the year to December 2011 a fall in turnover to Rs. 316M and losses amounting to Rs. 257M after a one-off downward adjustment of Rs. 296M to the current (biological) assets held for sales under the IAS 41 valuation method. The impact of this adjustment was already contained in DRBC Group results to June 2011.

The financial results for the year 2012 are also likely to be significantly affected by the continued downward pressure on sales volumes, prices and the very difficult international market environment. Management has, during the year, taken actions to review the costs and organization structure of the company and a recovery is expected as from year 2013.

Noveprim Europe Limited (“NEL”)For year ending December 2011, the turnover was in line with budget figures and with the strict monitoring of costs, the net profit finally reached Rs. 17,9M compared to the budgeted figure of Rs. 15,4M.

NEL is still facing a competitive market situation leading to contraction in prices combined with a persistent low level of activity in the preclinical research sector worldwide. To resist in this thorny environment and ensure future growth, NEL will be shortly offering other primate sources with the aim to gain additional market shares.

Health Care &Life Science

Novelife Limited (“Novelife”)


The slowdown in the tourism industry and lower international and local market spending power have been challenging for CNL in the financial year under review. The decrease in the number of visitors together with a reduced spend per visitor thus resulted in a slight decline in the financial performance of the company.

In the face of such difficult market conditions, it was decided to outsource the operational activities at Domaine de L’Etoile, to TerrOcéan Ltd, a subsidiary of Duprat Ltd. which is an established leader on the French leisure market, which shall be responsible for the management of leisure activities whereas Anahita Residences and Villas Ltd shall take over the Food and Beverages operations as from September 1, 2012. It is believed that this operational shift shall add considerable value to CNL through the expertise and knowhow of renowned and experienced operators.

Value creation with diversified product offering and improved standards of services will constitute the main considerations for an optimal company performance.

Leisure &Entertainment

Ciel et Nature Limited (“CNL”)


CSERCorporate Social &Environmental Responsibility


19%Disability

9%Health

52% 20%EducationFight against

poverty

25%

52%

9%

19%

CSER

ALTEO has been committed to a sustainable development policy for many years, mainly through CIEL Group’s Fondation Nouveau Regard (“FNR”), accredited by the National CSR Committee as a Special Purpose Vehicle (‘SPV’). This year, FNR spent nearly Rs. 15M on various projects, out of which Rs. 4.97 M came from the CSR contribution of ALTEO.

Social empowerment and fight against povertyThe Fondation Nouveau Regard has been empowered to receive the CSR tax contribution of the subsidiary and associate companies of ALTEO since February 2010. It has since spent these funds on projects corresponding to the criteria set by its Board of Directors, while following the legal guidelines of the law governing this tax.

Thus, this year, 80% of the amount received was used to finance projects managed by local NGOs in such areas as the fight against poverty, education, disability and health, as follows :

In line with government policy, the struggle against poverty has been the spearhead of the FNR’s action this year. At the end of 2010, FNR launched a large-scale integrated community development project in partnership with Caritas: La Caze Lespwar.

This project, located at Solitude, assists communities living in poverty and facing difficulties in the regions of Solitude, Triolet, Plaine des Papayes, Pointe aux Piments, and now reaching even as far as Arsenal. It provides services adapted to the needs of these population groups: education and training, community gardening, breakfast for pupils, sports, holiday activities for children, activities for women, and, in the next few months, a solidarity shop and a pre-school centre/creativity centre. An average of 250 persons per week uses the centre.

In addition to this major project, FNR continues to foster the integration of street children by supporting the SAFIRE voluntary association, of which it has been a partner since 2005.

In the field of education, FNR supports alternative education. Thanks to the ANFEN network and to the Zippy programme of ICJM, children with learning difficulties have access to education.

FNR is also strongly committed to providing disabled children with access to education: thus, in January 2010 it opened the first secondary school for deaf children in collaboration with the NGO Society for the Welfare of the Deaf. In 2010, the Form 1 pre-vocational programme was launched with 20 pupils, then From II in 2011 and Form III in 2012. Today, around 50 children benefit from schooling and will be channelled to vocational training courses at the end of it.

Overall, this year Fondation Nouveau Regard has helped 3,500 direct beneficiaries and 60,000 indirect ones thanks, among other activities, to the coming publication of 40,000 information and prevention brochures concerning the most common cancers in Mauritius, in partnership with the NGO Link to Life.In November 2011, FNR also sponsored the film Hope, of the NGO Friends in Hope, which supports persons with mental disorders and their families.


Sport Sport is a unifying factor for gathering young people in pursuit of sound and positive values. That is why this year ALTEO has supported the Curepipe Starlight Sporting Club and the Faucon Flacq Sporting Club (‘FFSC’).

FFSC has benefited from the sponsorship of ALTEO, along with on-going financial contributions from FUEL. What started out as a football team grew into a club offering a variety of sporting activities, including volleyball, athletics and boxing. Children between the ages of 14 and 16 train at the club three days a week – and besides learning to play a sport, they also learn the value and discipline of being part of a team, and develop the skills and attitudes that can help them to succeed.

Environment In 2006, ALTEO became a partner in the opening of the Vallée de Ferney to the public, while saving it from the destruction which had been planned for it

FNR has an ongoing commitment to support the Vallée de Ferney, more particularly for the setting-up of a “field station” with the objective to serve as living and working research quarters for biodiversity conservation at Vallée de Ferney. The field station will also provide study experience opportunities to local nature NGOs, University of Mauritius students and foreign researchers.

For the future ALTEO will continue to fulfil the various commitments of DRBC and FUEL in CSER activities which focus on: Social Housing, Socio-Economic Development, Eradication of Absolute Poverty, Education and Training, Childcare and Health.

Those various CSER commitments will be met through two Special Purpose Vehicles, the CIEL Group’s Fondation Nouveau Regard and GML Fondation Joseph Lagesse.

CSER (Cont’d)

Statement of ComplianCe

The Board and management of ALTEO reiterate their commitment to ensuring and maintaining a high standard of corporate governance within the Company and the Group to ensure transparency and protection of the interests of ALTEO’s shareholders and all stakeholders at large.

They also recognise the need to adapt and improve the principles and practices in light of their experience, regulatory requirements and investor expectations.

This report describes the main corporate governance framework and compliance of the Company with the disclosures required under the Code of Corporate Governance for Mauritius (the “Code”).

Shareholding

At the date of this Annual Report, ALTEO has 318,492,120 ordinary shares of no par value in issue and 2,863 shareholders on its registry.

On July 1, 2011, the stated capital of the Company was Rs. 93,600,000.- represented by 8,826,794 ordinary shares of Rs. 10.00 each and 533,206 preference shares of Rs. 10.00 each.

At a Special Meeting held on February 28, 2012, the shareholders of the Company resolved to convert the 533,206 preference shares of Rs. 10.00 each into ordinary shares in the ratio of 0.98 ordinary share for every 1 preference share held. As a result, each preference share has been cancelled and has been replaced by 0.98 ordinary share of Rs. 10.00 each.

The stated capital of the Company following the above conversion was Rs. 93,493,350.- divided into 9,349,335 ordinary shares of Rs. 10.00 each.

At the same Special Meeting mentioned above, the shareholders approved the capitalisation of a sum of Rs. 1,776,373,650.- by a bonus issue of 177,637,365 ordinary shares in the ratio of 19 ordinary shares for every 1 ordinary share held by all the Ordinary shareholders of the Company.

The stated capital of the Company following the said bonus issue was Rs. 1,869,867,000.- divided into 186,986,700 ordinary shares of Rs. 10.00 each.

Upon the completion of the amalgamation of FUEL with and into ALTEO:- all of the existing 186,986,700 ordinary shares of Rs. 10.00 each of ALTEO were converted into ordinary shares of no par

value; and- 131,505,420 new ordinary shares of no par value were issued and allotted to the former shareholders of FUEL for a

consideration other than cash totalling Rs. 7,121,728,000.-

As a result of the above, the stated capital of ALTEO is currently Rs. 8,991,595,000.- divided into 318,492,120 ordinary shares of no par value.

ALTEO ANNUAL REPORT 2012 57ALTEO ANNUAL REPORT 201256

CorporateGovernance

Alteo Limited (formerly known as Deep River-Beau Champ Limited) (“ALTEO” or “the Company”) is a public company incorporated on April 18, 1913.

ALTEO is listed on the Official Market of the Stock Exchange of Mauritius Ltd (“SEM”) and is registered as a Reporting Issuer with the Financial Services Commission (“FSC”) since the promulgation of the Securities Act 2005.

On July 20, 2012, Flacq United Estates Limited (“FUEL”) was amalgamated with and into Deep River-Beau Champ Limited (“DRBC”), now renamed as Alteo Limited, in accordance with sections 244 to 246 and 248 of the Companies Act 2001 and following the satisfaction of certain conditions precedent.

Upon amalgamation of FUEL with and into DRBC: - DRBC remains as the surviving company;- DRBC was renamed as Alteo Limited;- all property, rights, powers, privileges, liabilities and obligations of FUEL continue to be the property, rights,

powers, privileges, liabilities and obligations of ALTEO;- FUEL has ceased to exist as a separate legal entity and its listing has been cancelled from the Development

& Enterprise Market of the SEM (“DEM”) on July 20, 2012;- dealings in ALTEO shares on the DEM have been suspended between July 17, 2012 and July 30, 2012 inclusively;- shares of ALTEO have migrated from the DEM to the Official Market of the SEM at market close of July 30, 2012

and consequently, the listing of ALTEO on the DEM has been cancelled as from market close of July 30, 2012;- FUEL’s shareholders have received ALTEO shares in the proportion of 0.8965 ordinary share of ALTEO for

every 1 FUEL share, and their FUEL shares have then been cancelled; and- the shares of ALTEO have been listed on the Official Market of the SEM on July 31, 2012 and dealings in the

ALTEO shares resumed as from that date.

The rationale behind the said amalgamation is that the setting up of ALTEO gives a significant added impetus not only to the operations in which FUEL and DRBC have been traditionally engaged but also to their more recently developed lines of activity, whilst opening the way to tremendous opportunities in the very near future for all their stakeholders.

The amalgamation of FUEL with and into ALTEO has generated a new dynamism which will boost shareholder value in the years to come, both in terms of share price appreciation and dividend yield.


Corporate Governance

holding StruCture

The holding structure of ALTEO as at reporting date is as follows:

* It is to be noted that at a Special Meeting held on July 17, 2012, the shareholders of The Beau Champ Holding Company Limited (“BCH”) have approved

the voluntary winding-up of that company and the distribution of the shares held by BCH in ALTEO to its shareholders.

Hence, after the winding-up of BCH, the holding structure of ALTEO will be as follows:

The Group’s shareholding structures prior and post the amalgamation of FUEL with and into ALTEO, are found on pages 8 and 10 of the Annual Report.

Common direCtorS

The names of the common Directors are as follows:

Directors ALTEO DRI GMLI BCHThierry Lagesse •** •** •**

Jan Boullé • • •*

P. Arnaud Dalais • •

G. Christian Dalais • •**

Louis Guimbeau • •

Arnaud Lagesse • •* •

** Chairman* Alternate Director

SuBStantial ShareholderS

The shareholders holding more than 5% of the share capital of ALTEO at August 17, 2012 were as follows:

Shareholders Number of Shares Owned

%Holding

The Beau Champ Holding Company Limited 69,271,380 21.75

Deep River Investment Limited 66,746,340 20.96

GML Investissement Ltée 34,529,177 10.84

ShareholderS’ agreement

To the knowledge of the Company, there has been no such agreement with any of its shareholders for the year under review.

emploYee Share option plan

ALTEO has no employee share option plan.

Share regiStrY and tranSfer offiCe

ALTEO’s Share Registry and Transfer Office is administered by MCB Registry & Securities Limited. If you have any queries regarding your account, wish to change your name or address, or have questions about lost share certificates, share transfers or dividends, you may contact the Share Registry and Transfer Office, details of which are found on page 13 of the Annual Report.

Shareholding profile

The share ownership and categories of shareholders at August 17, 2012 are set out below:

Number of Size of Number of % of Total

Shareholders Shareholding Shares Owned Issued Shares

380 1 - 500 shares 80,403 0.02

273 501 - 1,000 shares 205,288 0.06

737 1,001 - 5,000 shares 1,927,762 0.61

364 5,001 - 10,000 shares 2,634,856 0.83

681 10,001 - 50,000 shares 15,466,305 4.86

161 50,001 - 100,000 shares 11,536,062 3.62

144 100,001 - 250,000 shares 22,708,625 7.13

58 250,001 - 500,000 shares 19,628,062 6.16

21 500,001 – 1,000,000 shares 14,077,695 4.42

29 1,000,001 + shares 230,277,062 72.29

2,848 318,492,120 100.00

20.96% 26.92% 52.12%

Deep River Investment Limited

(DRI)

GML Investissement Ltée

(GMLI)Others

ALTEO LIMITED

20.96% 10.84% 21.75% 46 .45 %

ALTEO LIMITED

Deep RiverInvestment Limited

(DRI)

GMLInvestissement Ltée

(GMLI)

The Beau Champ Holding Company Limited

(BCH)*Others


ShareS in puBliC handS

In accordance with the Listing Rules of the SEM, at least 25% of the shareholding of ALTEO is in the hands of the public.

ShareholderS’ CommuniCation

The Board of Directors of ALTEO places great importance on open and transparent communication with all shareholders. It endeavours to keep them regularly informed on matters affecting the Company by official press announcements, disclosures in the Annual Report and at the Annual Meeting of Shareholders, which all Board members are requested to attend.

ALTEO produces quarterly, half-yearly and annual reports as required and publishes same immediately after their approval by the Directors. These reports are also submitted to the SEM and the FSC. In addition to compliance with periodic reportorial requirements, the Company punctually discloses major and market-sensitive information such as dividend declarations.

The external website www.alteogroup.com is also an important means of effectively communicating with all stakeholders, keeping them abreast of developments within the ALTEO Group and providing essential information relating to the Group and its operations.

The Company’s Annual Meeting provides an opportunity for shareholders to raise and discuss matters with the Board relating to the Company and its performance. The Chairmen of the Audit & Risk Committee and of the Corporate Governance, Nomination and Remuneration Committee are normally available at the meeting to answer any questions relating to the work of these Board committees. The external auditors are also present. Shareholders are encouraged to attend the Annual Meeting to remain informed of the Group’s strategy and goals.

Calendar of forthComing eVentS

November 2012 Publication of first quarter results to September 30, 2012

December 2012 Declaration of an interim dividend*

December 2012 Annual Meeting of Shareholders

January 2013 Payment of interim dividend*

February 2013 Publication of half-year results to December 31, 2012

May 2013 Publication of third quarter results to March 31, 2013

June 2013 Declaration of final dividend*

July 2013 Payment of final dividend*

September 2013 Publication of abridged end-of-year results to June 30, 2013

* Subject to the approval of the Board of Directors.

CompanY’S regiStered offiCe

Since July 20, 2012, the registered office of ALTEO is situated at 13, St Clément Street, Curepipe.

CompanY’S ConStitution

At a Special Meeting held on June 29, 2012, the shareholders of the Company adopted a new Constitution, which is in conformity with the provisions of the Companies Act 2001 and those of the Listing Rules of the SEM.

Its salient features are:- fully paid up shares are freely transferable;- the Company may purchase or otherwise acquire its own shares and may hold the acquired shares;- the Board may authorise a distribution by the Company if it is satisfied on reasonable grounds that the Company will satisfy

the solvency test immediately after the distribution;- the quorum for a shareholders’ meeting is at least 5 members present in person or proxy together holding shares representing

at least 30% of the total voting rights;- the Board shall consist of a minimum of 7 Directors and a maximum of 15 Directors;- the quorum for a meeting of the Board is 5 Directors when the Board consists of 7 or 8 members, 6 Directors when the

Board consists of 9 or 10 members, 7 Directors when the Board consists of 11 or 12 members, 8 Directors when the Board consists of 13 or 14 members and 9 Directors when the Board consists of 15 members;

- the Directors have the power 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 the number fixed in accordance with the Constitution. The Director so appointed shall hold office only until the next following annual meeting of shareholders and shall then be eligible for re-election;

- a Director who has declared his interest shall not vote on any matter relating to the transaction or proposed transaction in which he is interested, and shall not be counted in the quorum present at the meeting;

- in case of equality of votes at either a Board meeting or a shareholders’ meeting, the Chairperson of the meeting shall not be entitled to a casting vote;

- a Director is not required to hold shares in the Company; and- the Company may indemnify and/or insure any Director or employee of the Company or a related company.

A copy of ALTEO’s Constitution is available upon request in writing to the Company Secretary at the registered office of the Company, 13, St Clément Street, Curepipe.

diVidend poliCY

No formal dividend policy has been determined by the Board. Dividend payments are determined by the profitability of the Company, its cash flow, its future investments and growth opportunities.

Dividends are declared and paid twice yearly. Directors ensure that the Company satisfies the solvency test for each declaration of dividend and a certificate of compliance with the solvency test is signed by all Directors when a dividend is declared by the Board.

An interim dividend of Rs. 4.00 per share (on 8,826,794 ordinary shares and 533,206 preference shares), and a final dividend, post bonus issue, of Rs. 0.40 per share (on 186,986,700 ordinary shares) were declared during the financial year ended June 30, 2012. The said dividends were paid on January 24, 2012 and June 8, 2012 respectively.


Number of Category of Number of % of Total

Shareholders Shareholders Shares Owned Issued Shares

2,434 Individuals 82,768,324 25.99

12 Insurance and Assurance Companies 8,190,063 2.57

32 Pensions and Provident Funds 5,216,090 1.64

41 Investment and Trust Companies 194,762,850 61.15

329 Other Corporate Bodies 27,554,793 8.65

2,848 318,492,120 100.00


Notes to the Financial StatementsCorporate Governance

Board of direCtorS

ALTEO is headed by an effective Board which is collectively responsible for promoting the success of the Company and for the overall corporate governance of the Group. The Board of Directors sets the corporate strategies of the Group and sets directions and goals for the management. It supervises the management and monitors performance of these goals to enhance shareholders‘ value.

The Board of ALTEO is aware of its responsibility to ensure that the Company adheres to all relevant legislation, complies with the Listing Rules of the SEM and applies the principles of good governance throughout the Group. The Directors perform their duties, responsibilities and powers to the extent permitted by law.

The key functions of the Board include:- overseeing the conduct of the Company’s business, to evaluate whether the business is being properly managed;- monitoring the effectiveness of the Group’s governance practices and making changes as needed;- reviewing and, where appropriate, approving risk policy, financial statements, annual budgets, business plans and

Committees’ reports;- overseeing major capital expenditure, acquisitions and divestments;- ensuring the integrity of the Company’s accounting and financial reporting systems, including the independent audit,

and that the appropriate systems of control are in place;- selecting, compensating and monitoring key executives and overseeing management succession planning;- ensuring that the Company’s business is conducted with the highest standards of ethical conduct and in conformity with

applicable laws and regulations; and- overseeing the process of disclosure and communication.

The Board does not believe that its members should be prohibited from serving on boards of other organisations and has not adopted any guidelines limiting such activities. Each Director has a duty to act in the best interests of the Company and is expected to ensure that his other responsibilities do not impinge on his responsibilities as a Director of ALTEO.

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.

Board CompoSition

The Company’s Constitution provides that unless otherwise determined by the shareholders in a general meeting, the number of Directors shall not be less than 7 or more than 15.

ALTEO is currently managed by a unitary Board of 10 members of which, 6 members are Non-Executive Directors, 2 are Independent Non-Executive Directors and 2 Executive Directors.

The composition of the Board is reviewed annually by the Corporate Governance Committee, in its capacity as Nomination Committee, to ensure that the Board has the appropriate mix of expertise and experience, and collectively possesses the necessary core competencies for effective functioning and informed decision-making.

On July 20, 2012, which is the effective date of the amalgamation of FUEL with and into ALTEO, a new Board of Directors of ALTEO was constituted.

Messrs. Maurice P. Dalais, Roger Espitalier Noël, Jean-Claude Harel, J. Cyril Lagesse and Robert Lagesse submitted their resignations and Messrs. Jean-Claude Béga, Jan Boullé, Amédée Darga and Patrick de L. d’Arifat were appointed by the Board in replacement.

The Directors extend their thanks to the former Directors of ALTEO for their valuable contribution to the affairs of the Company.

Special thanks also went to the former Directors of FUEL, namely Mrs. Anne Rogers and Messrs. Yusuf Aboobaker, Dayanidhi Gudjadhur, Michel Hardy and Joseph Vaudin for their valuable contribution to the affairs of FUEL and for their involvement during all the amalgamation process with and into ALTEO.

A special tribute was paid to Mr. Joseph Vaudin for his relentless efforts and whose untimely demise is deeply mourned by his fellow Directors and colleagues.

Chairman, group Chief eXeCutiVe and Chief eXeCutiVe offiCer

ALTEO believes that a clear division of responsibilities between the Non-Executive Chairman, the Group Chief Executive and the Chief Executive Officer ensures proper balance of power, increased accountability and greater capacity of the Board for independent decision-making.

The posts of Non-Executive Chairman, Group Chief Executive and Chief Executive Officer are held by Messrs. Thierry Lagesse, P. Arnaud Dalais and Patrick de L. d’Arifat respectively.

neWlY-appointed direCtorS

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.

The Corporate Governance Committee, in its role as Nomination Committee, is responsible for identifying and recommending candidates to the entire Board for Board membership. Thereafter, newly appointed Directors are subject to election by shareholders at the Company’s Annual Meeting in their first year of appointment.

On appointment to the Board and its Committees, Directors receive a complete induction pack from the Company Secretary. In addition, new Directors are invited to meet members of the management team in order to rapidly acquire a comprehensive view of the Company’s operations, risks and strategy.

direCtorS’ profileS

The names of the Directors, their categories, their profiles and the list of their directorships in other listed companies are provided hereafter. There have been changes in the Board’s composition as stated above.

thierry lagessenon-independent Chairman - first appointed to the Board in 1983 and Chairman as from 2010Thierry Lagesse, born in 1953, holds a ‘Maîtrise des Sciences de Gestion’ from the University of Paris Dauphine. He is the Non-Executive Chairman of GML, Ireland Blyth Limited, Phoenix Beverages Limited and The United Basalt Products Ltd 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 PDG of Parabole Réunion SA. Thierry Lagesse is a member of the Company’s Corporate Governance, Nomination and Remuneration Committee of the Company.


Directorships in other companies listed on the Official Market of the SEM: - Ireland Blyth Limited (Non Independent Chairman)- Mauritius Stationery Manufacturers Limited- Phoenix Beverages Limited (Non Independent Chairman)- Sun Resorts Limited- The United Basalt Products Ltd (Non Independent Chairman)

Jean-Claude Béganon-executive director - appointed to the Board on July 20, 2012Jean-Claude Béga, born in 1963, is a Fellow of the Association of Chartered Certified Accountants. He joined GML in 1997 and is the Chief Financial Officer of GML Management Ltée. He is a member of the Mauritius Institute of Professional Accountants and a Fellow of the Mauritius Institute of Directors. Jean-Claude Béga is the Chairman of City Brokers Ltd and Director of a number of companies including AfrAsia Bank Limited, Anahita Estates Limited, Anahita Golf Ltd and Anahita Residences & Villas Limited. He is also a member of the Audit & Risk Committee of the Company.

Directorships in other companies listed on the Official Market of the SEM: - Lux* Island Resorts Ltd- Mauritius Stationery Manufacturers Limited- Phoenix Beverages Limited

Jan Boullénon-executive director - appointed to the Board on July 20, 2012Jan Boullé, born in 1957, is an ‘Ingénieur Statisticien Economiste (France)’ and holds a diploma of ‘3ème cycle de Sciences Economiques, Université Laval, Quebec (Canada)’. He joined the Constance Group in 1984 and is currently Head of Development and Project. Jan Boullé is a member of the Board of Directors of several of the country’s major companies.

Directorships in other companies listed on the Official Market of the SEM: - Belle Mare Holding Limited- Phoenix Beverages Limited

patrick de l. d’arifatexecutive director - appointed to the Board on July 20, 2012Patrick de L. d’Arifat, born in 1958, holds a BSC degree in Economics and Accountancy from City University, London. He started his career with the Mauritius Chamber of Agriculture in 1982 and in 1991 he was appointed Director of the Mauritius Sugar Producers Association. He has chaired that same association for three years and that of the Mauritius Sugar Syndicate for two years. He joined CIEL Agro-industry as Chief Executive Officer in July 2001. Patrick de L. d’Arifat has throughout those years, been closely associated with the policy formulation and implementation of the modernization process of the sugar industry in Mauritius and in the region. Patrick de L. d’Arifat is the Chief Executive Officer of Alteo Limited.

Directorship in other companies listed on the Official Market of the SEM: none.

Corporate Governancep. arnaud dalaisexecutive director - first appointed to the Board in 1984P. Arnaud Dalais, born in 1955, joined the CIEL Group in August 1977. He was nominated Group Chief Executive of DRBC (now Alteo Limited) and of the CIEL Group in November 1991. Under his leadership, the Company and the CIEL Group at large, has gone through an important growth both locally and internationally. He is the Chairman of CIEL Textile Limited, Sun Resorts Limited and CIEL Investment Limited. He also plays an active role at the level of the Mauritian private sector and has assumed the Chairmanship of a number of organizations including the Joint Economic Council from 1999 to 2001.

Directorships in other companies listed on the Official Market of the SEM: - Caudan Development Limited- Promotion and Development Limited- Sun Resorts Limited (Non Independent Chairman)

g. Christian dalaisnon-executive director - first appointed to the Board in 1967 and Chairman from 2002 to 2010G. Christian Dalais, born in 1936, assumed the Chairmanship of DRBC (now Alteo Limited) for several years when he retired from that position in 2010. He has also been the Chairman of Sun Resorts Limited and Chief Executive Officer of Ireland Blyth Limited for numerous years. He however still sits on the Board of Sun Resorts Limited.

Directorships in other companies listed on the Official Market of the SEM: - IPRO Growth Fund Limited- Sun Resorts Limited

amédée dargaindependent non-executive director - appointed to the Board on July 20, 2012Amédée Darga, born in 1951, is a Fellow of the Institution of Engineers of Mauritius. He is the Chairman of Enterprise Mauritius, Managing Partner of Straconsult, a Social Science Researcher, a Trustee of SEATINI (Southern & Eastern Africa Trade Information Network Initiative) since 2003 and Chairman of the Managing Committee of the University of Mauritius Trust. Amédée Darga has served as Minister of Housing, Lands, Town and Country Planning for two years and previously occupied numerous positions such as Mayor of Curepipe. He was a Member of Parliament since the age of 26 and from 1976, Trade Union Negotiator and Adviser. He is a regular resource person to the United Nations on matters of governance. Amédée Darga is a member of the Company’s Audit & Risk Committee of the Company.

Directorship in other companies listed on the Official Market of the SEM: none.

Jean de fondaumièreindependent non-executive director - first appointed to the Board in 1996Jean de Fondaumière, born in 1953, is a Chartered Accountant of Scotland. He worked in Australia for eleven years and he retired as the CEO of the Swan Group at the end of 2006 after fifteen years. He is a past Chairman of The Stock Exchange of Mauritius and his former directorships include companies operating in the African, Indian Ocean and Asia Pacific regions. Jean de Fondaumière holds a portfolio of directorships in Mauritius for companies operating in commerce, finance, power generation, sugar and tourism. He is the current Chairman of the Audit & Risk Committee and of the Corporate Governance, Nomination and Remuneration Committee of the Company.

Directorships in other companies listed on the Official Market of the SEM: - Lux* Island Resorts Ltd- Terra Mauricia Ltd


louis guimbeaunon-executive director - first appointed to the Board in 1991Louis Guimbeau, born in 1950, is a Fellow of the Institute of Financial Accountants (UK), a Member of the Chartered Management Institute (UK) and Fellow of the Mauritius Institute of Directors. He has worked in the Export Processing Zone, in the diamond cutting industry and in various companies of the Rogers Group. He actively participated in the setting-up of a Freeport Developer and a third party service provider company. He recently retired as Finance and Administrative Manager of Saint Aubin Group. Louis Guimbeau is a member of the Company’s Corporate Governance, Nomination and Remuneration Committee and Audit & Risk Committee of the Company.

Directorship in other companies listed on the Official Market of the SEM: - Sun Resorts Limited

arnaud lagessenon-executive director - first appointed to the Board in 1995Arnaud Lagesse, born in 1968, holds a “Maitrise de Gestion” from the University of Aix-Marseille III, France and is a graduate of “Institut Supérieur de Gestion”, France. He also completed an Executive Education Program at INSEAD, Fontainebleau, France, and an Advanced Management Program (AMP180) at Harvard Business School, Boston, USA. He joined GML in 1995 as Finance and Administrative Director before becoming in August 2005 its Chief Executive Officer. He also participated in the National Corporate Governance Committee as a member of the Board. He is a member of the Board of Directors of several of the country’s major companies and is the Chairman of Lux* Island Resorts Ltd, Mauritius Stationery Manufacturers Limited, AfrAsia Bank Limited, Robert Le Maire Limited and various other companies. Arnaud Lagesse is an ex-president of the Mauritius Chamber of Agriculture, the Mauritius Sugar Producers Association and the Sugar Industry Pension Fund.

Directorships in other companies listed on the Official Market of the SEM: - Ireland Blyth Limited - Lux* Island Resorts Ltd (Non Independent Chairman)- Mauritius Stationery Manufacturers Limited (Non Independent Chairman)- Phoenix Beverages Limited- The United Basalt Products Ltd

profileS of the Senior management team

p. arnaud dalais – group Chief executive

Please refer to page 65 of the Annual Report.

patrick de l. d’arifat – Chief executive officer

Please refer to page 64 of the Annual Report.

Jérôme de Chasteauneuf – head of finance

Jérôme De Chasteauneuf, born in 1966, is qualified as Chartered Accountant of England and Wales. He also holds a BSc honours in Economics from the London School of Economics and Political Science (1989). He joined the CIEL Group in 1993 as Corporate Finance Adviser and became Head of Finance of DRBC (now Alteo Limited) and of the CIEL Group in 2000. Jérôme De Chasteauneuf was also appointed Managing Director of CIEL Corporate Services Ltd in 2010.

robert Baissac – Ceo of tpC ltd

Robert Baissac, born in 1960, holds a BSc honours in Agriculture from the University of Natal, Pietermaritzburg. He joined the Company in 1984 as Assistant Agronomist and was then appointed Agronomist in charge of diversification in 1985. In 1987, he joined Mon Trésor Mon Désert S.E as Sugar Cane Agronomist and was also in charge of Agricultural diversification and in 1991, he was appointed Field Manager of Cie de Beau Vallon Ltée and was responsible for all aspects of sugar cane production and diversification. Since 2000, Robert Baissac is the CEO of TPC Ltd and he is responsible of the overall operations of the said company as well as the rehabilitation and expansion programmes.

Jean-luc harel – Coo Sugar milling & energy activities

Jean-Luc Harel, born in 1952, holds a National Diploma in Sugar Technology from the University of Natal, South Africa. He started his career at the Mon Désert Alma Sugar Factory as Assistant Chemist. In 1975, he joined Médine Sugar Estate Ltd as Assistant Factory Manager, then moved to Reufac Sugar Estate as Factory Manager and subsequently to Boboulo Ltd as Manager before returning to FUEL Group in 1982 to erect the first Coal/Bagasse Cogeneration power plant at FUEL. In 1986, he was promoted to the position of Assistant Estate Manager before taking over as Estate Manager from 1993 to 1999 when he was seconded to be the General Manager of Companhia de Sena, SARL in Mozambique to take charge of the Marromeu Estate and factory rehabilitation. He returned to Mauritius in July 2005 to resume his position as Manager of FUEL and of its sugar industry subsidiaries. Jean-Luc Harel is currently the Chief Operations Officer of the sugar milling & energy activities of Alteo Limited.

Jean-robert lincoln – group agricultural development executive

Jean-Robert Lincoln, born in 1959, started his career at Belle Vue Sugar Estate as assistant Agronomist, before joining the Company in 1985. Initially involved with sugarcane operations in Mauritius, he occupied various responsibilities within Agronomy and R&D. He has, over the last fifteen years, been playing a more active role in seeking and developing agricultural opportunities abroad and is currently Group Agricultural Development Executive. He holds a BSc in Crop Science from Natal University, South Africa (1983), a Certificate in Sugar Agriculture from the South African Sugar Association (1984), a Certificate in Agricultural Water Management from Cranfield University, UK (1990), and an MBA from the University of Surrey, UK (1997).

Christian marot – Coo agricultural activities

Christian Marot, born in 1958, holds a Diploma in Management Studies from the University of Mauritius (1985) and Master in Business Administration from the University of Surrey, England (1997). He joined the company in 1983 as Section Manager and occupied successively the post of Assistant Field Manager (1987) and Field Manager (1991) until his nomination as General Manager in 2002. Christian Marot is currently the Chief Operations Officer of the agricultural activities of Alteo Limited.



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 and of the Chief Executive Officer. 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. To address specific urgent business needs, meetings are at times called at shorter notice.The Directors may ask for any explanations or the production of additional information and, more generally, submit to the Chairman any request for information or access to information which might appear to be appropriate to him. The Board is also regularly informed of the state of business in the sector and its developments and competition.

A quorum of 6 Directors is currently required for a Board meeting and in case of equality of votes; the Chairman does not have a casting vote. In addition to Directors, key management personnel and outside consultants are invited to attend Board meetings when deemed necessary.

During the year under review, the Board met 4 times with an attendance rate of 91%. Decisions were also taken by way of resolutions in writing, agreed and signed by all the Directors then entitled to receive notice of the meeting.

During its meetings, the Board considered, approved and recommended to the shareholders of the Company, amongst other items:- the resignations of Messrs. Bernard P. Dalais, Didier Merven and Adolphe Vallet as Board members and the appointment

of Mr. Roger Espitalier Noël as Director of the Company;- the review of the Company’s and the Group’s operations;- the annual financial statements at June 30, 2011 and the relevant abridged audited consolidated results for publication;- the annual report 2011;- the convening of the Shareholders’ Annual Meeting 2011;- the review of the operating budget for 2011/2012;- the proposed amalgamation of FUEL with and into DRBC;- the declaration of an interim dividend for the year ended June 30, 2012;- the unaudited quarterly & three months consolidated results at September 30, 2011 for publication;- the declaration of an interim dividend for the year ended June 30, 2012- the unaudited quarterly & half-yearly consolidated results at December 31, 2011 for publication;- the revised forecasts;- the reports and the recommendations of the Audit & Risk Committee and of the Corporate Governance, Nomination and

Remuneration Committee;- the conversion of the 533,206 preference shares of Rs. 10.00 into ordinary shares of Rs. 10.00 each in the ratio 0.98

ordinary share for every 1 preference share held. The conversion was effective on March 20, 2012 and as a result, each preference share was cancelled and replaced by 0.98 ordinary share of Rs. 10.00 each;

- the issue of 177,637,365 new ordinary shares following the decision to capitalise a sum of Rs. 1,776,373,650.- by a bonus issue of 177,637,365 ordinary shares in the ratio of 19 ordinary shares for every 1 ordinary share held by all the ordinary shareholders of the Company registered at the close of business on April 9, 2012;

- the unaudited quarterly & nine months consolidated results at March 31, 2012 for publication;- the declaration of a final dividend for the year ended June 30, 2012;

- the amalgamation proposal with respect to the proposed amalgamation of FUEL with and into the Company, subject to the satisfaction or waiver of certain conditions precedent;

- the change of name of the Company from ‘Deep River-Beau Champ Limited’ to ‘Alteo Limited’ upon the completion of the amalgamation;

- the conversion of all the existing ordinary shares of par value Rs. 10.00 of the Company into ordinary shares of no par value, upon the of the amalgamation;

- the revocation of the existing Articles of Association of the Company and the adoption of a new Constitution, such revocation and adoption to be effective upon the completion of the amalgamation;

- upon completion of the amalgamation, the issue and allotment of up to a maximum of 131,505,420 ordinary shares of no par value to the former shareholders of FUEL for a consideration other than cash of Rs. 7,121,728,000.-;

- upon completion of the amalgamation, the listing of the shares of the Company on the Official Market of the SEM and the approval of the relevant admission document; and

- not to complete the proposed amalgamation of FUEL with and into DRBC if the aggregate amount payable to the shareholders of FUEL and DRBC voting against the resolution approving the proposed amalgamation and exercising their rights to require that DRBC and FUEL to acquire their shares under section 108 of the Companies Act 2001 exceeded Rs. 500 million in the aggregate, unless the Board of Directors of both DRBC and FUEL in their absolute discretion, determined otherwise and advised their respective shareholders accordingly.

The minutes of the proceedings of each Board meeting are recorded by the Company Secretary and are entered in the Minutes Book. The minutes of each Board Meeting are submitted for confirmation at its next meeting and these are then signed by the Chairman and the Company Secretary.

direCtorS’ and offiCerS’ intereSt in ShareS of alteo limited

In accordance with the Companies Act 2001, written records of the interests of the Directors and their closely related parties in shares of ALTEO are kept in a Register of Directors’ Interests. Consequently, as soon as a Director becomes aware that he is interested in a transaction, or that his holdings or his associates’ holdings have changed, the interest should be reported to the Company in writing. The Register of Interests is updated with any subsequent transactions entered into by the Directors and persons closely associated with them.

All new Directors are required to notify in writing to the Company Secretary their direct and indirect holdings in shares of ALTEO. According to the Company’s Constitution, a Director is not required to hold shares in the Company.

Moreover, pursuant to the Securities Act 2005, ALTEO registered itself as a Reporting Issuer with the FSC and makes every effort to follow the relevant disclosure requirements. The Company keeps a Register of its Insiders and the said register is updated with the notification of interest in securities submitted by the Directors, the officers and the other insiders of ALTEO.



The Directors and officers of ALTEO having direct and/or indirect interests in the ordinary shares of the Company at August 17, 2012 were as follows:

Direct Interest Indirect Interest

Directors No. of shares % %

Thierry Lagesse 33,577 0.0105 0.9228

Jean-Claude Béga - - -

Jan Boullé - - -

Patrick de L. d’Arifat - - 0.0032

P. Arnaud Dalais 631,160 0.1982 0.0721

G. Christian Dalais - - -

Amédée Darga 1,075 0.0003 -

Jean de Fondaumière - - -

Louis Guimbeau 11,940 0.0037 -

Arnaud Lagesse - - 0.7693

Officers

Jérôme De Chasteauneuf - - -

Jean-Luc Harel - - 0.0003

Christian Marot - - -

None of the Directors and officers had any interest in the equity of subsidiaries of ALTEO.

direCtorS’ and offiCerS’ dealingS in ShareS of alteo limited

The Directors of ALTEO use their best endeavours to abide by the absolute prohibition principles and notification requirements of the Model Code on Securities Transactions by Directors as stipulated in Appendix 6 of the Listing Rules of the SEM.

ALTEO has set up a procedure whereby any Director wishing to deal in the shares of the Company should first notify the Chairman of the Company and receive a dated written acknowledgement. In his own case, the Chairman of the Company should first notify the Board at a Board meeting and receive a dated written acknowledgement.

The Directors and officers of the Company are prohibited from dealing in the shares of ALTEO at any time when in possession of unpublished price-sensitive information, or for the period of one month prior to the publication of the Company’s quarterly and yearly results and to the announcement of dividends and distributions to be paid or passed, as the case may be, and ending on the date of such publications/announcements.

Moreover, Directors and officers of ALTEO are also required to observe the insider trading laws at all times even when dealing in securities within permitted trading periods.

During the year under review, Messrs. Thierry Lagesse, P. Arnaud Dalais, Louis Guimbeau and Arnaud Lagesse received shares of the Company, either directly or indirectly, following the bonus issue mentioned earlier in the Report, in the ratio of 19 ordinary shares for every 1 ordinary share held. The other Directors and officers of ALTEO did not deal with the shares of the Company either directly or indirectly.

The Directors and officers of ALTEO have been made aware of their responsibilities in disclosing to the Company any acquisition or disposal in the Company’s securities, as per the Securities Act 2005 and the Listing Rules of the SEM.

Board CommitteeS

To facilitate effective management, the Board delegates clearly defined responsibilities to its specialised committees for the preparation of specific topics submitted for its approval.

In line with the Code, the Board has set a Corporate Governance, Nomination and Remuneration Committee and an Audit & Risk Committee. These two Board Committees function within clearly defined terms of reference and operating procedures, report regularly to the Board and make recommendations to the Board for approval.

The Company Secretary acts as secretary to the Board Committees. The minutes of each Board Committee meeting are submitted for confirmation at the following meeting and then signed by the Chairman of the Board Committee and the Company Secretary.

The Board Committees are authorised to obtain, at the Company’s expense, professional advice both within and outside the Company in order for them to perform their duties.

Corporate goVernanCe, nomination and remuneration Committee

Following the amalgamation of FUEL with and into ALTEO, it was decided that Mr. P. Arnaud Dalais be replaced by Mr. Louis Guimbeau. The roles of the other members of the Committee remained unchanged.

Members Category

Jean de Fondaumière - Chairman Independent Non-Executive Director

Louis Guimbeau Non-Executive Director

Thierry Lagesse Non-Executive Director

In attendance (when deemed appropriate)

P. Arnaud Dalais Group Chief Executive – Executive Director

Patrick de L. d’Arifat Chief Executive Officer - Executive Director

Jérôme De Chasteauneuf Head of Finance

The Corporate Governance, Nomination and Remuneration Committee operates under the terms of reference approved by the Board of Directors.

The terms of reference provide that the Corporate Governance Committee shall, inter alia:- make recommendations to the Board on all corporate governance provisions to be adopted so that the Board remains

effective and follows prevailing corporate governance principles.- In its role as Nomination Committee, review the structure, size and composition of the Board, identify and recommend

to the Board of possible appointees as Directors of the Board, make recommendations to the Board on matters relating to appointment or re-appointment of Directors and succession planning for Directors and assess the independence of the Independent Non-Executive Directors.

- In its role as Remuneration Committee, determine, agree and develop the Company’s and Group’s general policy on Executive and Senior Management remuneration and make recommendations to the Board on all the essential components of remuneration and determine the adequate remuneration to be paid to Directors and Senior Management.



In line with the Code, the Committee considers an “Independent” Director as one who:- is not a representative or member of the immediate family of a shareholder who has the ability to control or significantly

influence the Board or management;- has not been employed by ALTEO or the group of which ALTEO currently forms part, in any executive capacity for the

preceding three financial years;- is not a professional advisor to ALTEO or the Group of which ALTEO currently forms part other than in a Director

capacity;- is not a significant supplier to, debtor or creditor of, or customer of ALTEO or the Group of which ALTEO currently forms

part, or does not have a significant influence in a group related company in any one of the above roles; - has no significant contractual relationship with ALTEO or the Group of which ALTEO currently forms part; and- is free from any business or other relationship which could be seen to materially impede the individual’s capacity to act

in an independent manner.

During the year under review, the Committee met on two occasions with an attendance rate of 100%. A quorum of two members is currently required for a meeting of the Corporate Governance, Nomination and Remuneration Committee.

The particulars of attendance at the Committee meetings are given on page 77 of the Annual Report.

During the meeting, the Corporate Governance Committee has:- examined corporate governance issues;- approved the corporate governance section of the annual report 2011;- recommended to the Board the re-election of 3 Board members in accordance with Section 138(6) of the Companies Act

2001, namely Messrs. G. Christian Dalais, J. Cyril Lagesse and Robert Lagesse;- made recommendations to the Board on the composition of the Board of the Company following the amalgamation of

FUEL with and into ALTEO; and- reviewed the remuneration and benefits of the Executive Directors and of the key management personnel, after taking

into consideration the market norms and practices, the Company’s results and their better performance and additional responsibilities.

The Corporate Governance Committee confirms that it has met its responsibilities for the year under review, in compliance with its terms of reference.

On September 11, 2012, the Committee reviewed and approved the present corporate governance section.

audit & riSK Committee

In line with the Code, the Board has nominated an Independent Non-Executive Director to chair the Audit & Risk Committee and the said Committee comprises 4 members, 2 Non-Executive Directors and 2 Independent Non-Executive Directors.

The Board of Directors is of the view that the members of the Audit & Risk Committee have sufficient financial management expertise and experience to discharge its responsibilities properly.

Following the amalgamation of FUEL with and into ALTEO, it was decided that Mr. Amédée Darga would be nominated on the Audit & Risk Committee. The roles of the other members of the Committee remained unchanged.

Members Category

Jean de Fondaumière - Chairman Independent Non-Executive Director

Jean-Claude Béga Non-Executive Director

Amédée Darga Independent Non-Executive Director

Louis Guimbeau Non-Executive Director

In attendance (when deemed appropriate)

P. Arnaud Dalais Group Chief Executive – Executive Director

Patrick de L. d’Arifat Chief Executive Officer - Executive Director

Jérôme De Chasteauneuf Head of Finance

Ernst & Young Internal Auditors - Independent Service Provider

BDO & Co External Auditors - Independent Service Provider

The Audit & Risk Committee operates under the terms of reference approved by the Board. The Committee meets at least once each quarter and reports on its activities to the Board.

The Committee is aware of its responsibilities, the main ones being described below:- monitor the integrity of the financial statements of the Company and the Group and any formal announcements relating

to the Company’s financial performance, before submission to the Board;- recommend to Board the approval of the condensed unaudited quarterly financial statements;- review the effectiveness of the Company’s internal control and risk management systems;- monitor and review the effectiveness of the Company’s internal audit function; approve the appointment or termination

of the internal auditor;- make recommendation to the Board on the appointment, re-appointment, removal of the external auditors and approve

their audit fees.- review the external auditors’ management letter; and- monitor and supervise the effective function of the internal audit.

One of the functions of the Audit & Risk Committee is also to assess and review on a regular basis the independence of the external auditor. As part of its determination, the Audit & Risk Committee ensures that the external auditors’ objectivity and independence is safeguarded in order to carry out their professional duties and responsibilities as auditors.

The Audit & Risk Committee also has the authority to conduct or authorise investigations into any matters within its scope of responsibilities. It has full access to all management personnel and can call upon any member of management and staff or any member of the Board to attend its meetings.

The Committee met five times during the year under review with an attendance rate of 100%. A quorum of 2 members is currently required for an Audit & Risk Committee meeting.

The particulars of attendance at the Committee meetings are given on page 77 of the Annual Report.



During the financial year ended June 30, 2012, the Audit & Risk Committee has, amongst other things:- reviewed the management letter submitted by the external auditors and followed up on their recommendations;- reviewed and recommended to the Board for approval, the annual financial statements at June 30, 2011 and the

relevant abridged audited consolidated results for publication;- reviewed the increase in the fees to be paid to the external auditors for the period up to June 2012;- reviewed and recommended to the Board for approval, the unaudited quarterly & three months consolidated results at

September 30, 2011 for publication;- examined the report of the internal auditors on internal control systems arising from the fieldwork performed by them

and ensured that their recommendations be implemented;- examined and recommended to the Board the conversion of all the preference shares of the Company into ordinary

shares, as well as the capitalisation of a sum of money by a bonus issue;- reviewed and recommended to the Board for approval, the unaudited quarterly & half-yearly consolidated results at

December 31, 2011 for publication;- reviewed and recommended to the Board for approval, the unaudited quarterly & nine months consolidated results at

March 31, 2012 for publication; and- examined the estimated results for the year ended June 30, 2012.

The Committee met on September 11, 2012 to recommend the approval of the audited accounts by the Board.

The Audit & Risk Committee confirms that it has fulfilled its responsibilities for the year under review, in accordance with its terms of reference.

Messrs. BDO & Co were last re-appointed as external auditors at the Company’s Annual Meeting on December 20, 2011. Upon the recommendation of the Audit & Risk Committee, shareholders will be asked at the forthcoming Annual Meeting to approve the re-appointment of Messrs. BDO & Co as external auditors and to authorise the Board of Directors to fix the remuneration of the auditors for the ensuing year.

For the year ended June 30, 2012, non-audit services consisted of transaction advisory services provided in respect of the amalgamation of FUEL with and into the Company.

In 2012/2013, the Audit & Risk Committee will maintain its focus on the continued examination and review of the internal control environment and risk management system within the Group.

internal audit funCtion

purposeThe internal audit function consists of an independent appraisal of the Company’s operations and is designed to add value by assessing the internal controls. The objective is to assist the Board members, Audit & Risk Committee members and management in the effective discharge of their responsibilities to maintain and improve processes by which risks are identified and managed to promote effective controls.

The internal audit function is performed by Messrs. Ernst & Young.

reportingThe internal auditors have unrestricted access to information and records of the entities in the Group. They report to the Audit & Risk Committee and, in this way, remain independent whilst maintaining an open and constructive communication line with management.

audit CoverageAuditable areas are determined with management so as to align coverage and effort with the level of risk attributable to each process and related control procedures. These areas are written in an audit plan which is approved by the Audit & Risk Committee. The internal auditors perform their planned fieldwork, which include follow-up visits, rate these areas in terms of risk levels, and discuss their findings so as to propose recommendations to management with a view to reducing the level of risks in these areas. The final audit reports are then presented to the Audit & Risk Committee.

audit fieldworkThe fieldwork performed during the financial year 2011/2012 comprises:- IT General Controls;- Procurement, Payment & Stock Management;- TPC Ltd – Review of processes of Payroll and HR Management and of Accounts Receivable;- TPC Ltd – IT General Controls; and- Anahita Hotel Ltd – Review of IT General Controls.

internal Control

The Board is satisfied that a continual process for identifying, evaluating and managing significant risks has been in place for the financial year and up to the date of this Annual Report. The effectiveness of the internal control systems is reviewed by the Audit & Risk Committee and the Board receives assurance from the Audit & Risk Committee, which derives its information from regular internal and external audit reports.

riSK management

At ALTEO, Risk Management is a part of doing business – it is a key responsibility of the Chief Executive Officer and his team, and an activity which is overlooked by the Audit & Risk Committee and through this the Board of Directors of ALTEO.

The Board maintains full control and direction over appropriate strategic, financial, operational and compliance issues and has put in place an organisational structure with formally defined lines of responsibility, delegated authorities and clear operating processes. The systems that the Board has established are designed to safeguard both the shareholders’ investment and the assets of the Group.

The Chief Executive Officer works with his team to identify potential risks to the Company’s business, rating identified risks by both probability and severity of impact. This team then develops strategies and action plans to offset or mitigate those risks.

Some of the prominent risks to which the Company is exposed are:

- financial – The Company is exposed to a wide range of financial risks, market risks (including currency risks and price risks), credit risks and liquidity risks as reported on page 106 – Note 3 to the Financial Statements.

- operational risk defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.

- Compliance risk defined as the risk of not complying with laws, regulations and policies.- reputational risk defined as the risk of losses due to unintentional or negligent failure to meet a professional obligation

to stakeholders.



The Audit & Risk Committee assesses the risk philosophy, strategy and policies. Its members have a solid understanding of the Company and consider the likelihood of occurrence and potential impact of inherent and other risks on the achievement of its business objectives. The Audit Committee also monitors the maintenance and improvement of the risk control systems implemented.

In discharging its responsibility towards the Board members, the Audit & Risk Committee relies upon the reports of the internal auditors and of the management to provide assurance on the Company’s system controls.

CompanY SeCretarY

All Directors have access to the advice and services of the newly appointed Company Secretary, Navitas Corporate Services Ltd, represented by Mrs. Nathalie Gallet, who is responsible for providing guidance to the Directors as to their duties, responsibilities and powers.

The Company Secretary administers, attends and prepares minutes of all Board meetings, specialised Committee meetings and Shareholders’ meetings. She assists the Chairman in ensuring that Board procedures are followed and that the Company’s Constitution and relevant rules and regulations are complied with. The Company Secretary also assists the Chairman and the Board in implementing and strengthening good governance practices and processes with a view to enhance long-term shareholders’ value.

Moreover, the Company Secretary is the primary channel of communication between the Company and the SEM.

attendanCe and remuneration

Board and Board Committee attendance

It is the responsibility of the Directors to attend Board meetings and Committee meetings. A Director of ALTEO is expected to spend the time and effort necessary to properly discharge his responsibilities.

Accordingly, he is expected to regularly prepare for and attend meetings of the Board and all Committees on which he sits, with the understanding that, on occasion, he may be unable to attend a meeting.

A Director who is unable to attend a meeting is expected to notify either the Company Secretary or the Chairman of the Board or the Chairman of the appropriate Committee, in advance of such meeting.

The attendance record of the Directors for the year ended June 30, 2012, is set out below:

Directors Category Board of Directors

Audit & Risk Committee

Corporate Governance,

Nomination & Remuneration

Committee

Annual Meeting of Shareholders

(held on December 20, 2011)

Thierry Lagesse NICB 4 out of 4 2 out of 2 yes

P. Arnaud Dalais ED 4 out of 4 2 out of 2 yes

Bernard P. Dalais(1) NED 0 out of 0 N/A

G. Christian Dalais NED 4 out of 4 yes

Maurice P. Dalais(2) NED 4 out of 4 yes

Jean de Fondaumière INED 3 out of 4 5 out of 5 2 out of 2 yes

Louis Guimbeau NED 4 out of 4 5 out of 5 yes

Jean-Claude Harel(3) NED 4 out of 4 yes

Arnaud Lagesse NED 3 out of 4 yes

J. Cyril Lagesse(4) NED 2 out of 4 no

Robert Lagesse(5) NED 4 out of 4 yes

Didier Merven(6) NED 0 out of 0 N/A

Roger Espitalier Noel(7) NED 4 out of 4 yes

Adolphe Vallet(8) NED 0 out of 0 N/A

In attendance

Jean-Claude Béga* 5 out of 5 no

Patrick de L. d’Arifat 4 out of 4 5 out of 5 yes

Jérôme De Chasteauneuf 4 out of 4 5 out of 5 2 out of 2 yes

Christian Marot yes

Internal Auditors 1 out of 1 no

External Auditors 4 out of 4 yes

* Member of the Audit & Risk CommitteeED = Executive DirectorINED = Independent Non-Executive Director NED = Non-Executive DirectorNICB = Non-Independent Chairman of the Board

(1) Mr. Bernard P. Dalais resigned on August 17, 2011(2) Mr. Maurice P. Dalais resigned on July 20, 2012(3) Mr. Jean-Claude Harel resigned on July 20, 2012(4) Mr. J. Cyril Lagesse resigned on July 20, 2012(5) Mr. Robert Lagesse resigned on July 20, 2012(6) Mr. Didier Merven resigned on September 5, 2011(7) Mr. Roger Espitalier Noël resigned on July 20, 2012(8) Mr. Adolphe Vallet resigned on September 15, 2011

On the effective date of the amalgamation of FUEL with and into DRBC (now ALTEO), i.e on July 20, 2012, Messrs. Jean-Claude Béga, Jan Boullé, Patrick de L. d’Arifat and Amédée Darga were appointed Directors of ALTEO, in replacement of the above mentioned Directors who resigned on that same date.



Statement of remuneration philoSophY

The Board has delegated to the Corporate Governance, Nomination and Remuneration Committee, the responsibility of determining the adequate remuneration to be paid to the Chairman of the Board, the Independent Non-Executive Directors, the Non-Executive Directors, the Executive Directors and the Senior Management.

The Group’s underlying philosophy is to set remuneration as appropriate level to attract, retain and motivate high calibre personnel and Directors and to reward them in accordance with their individual as well as collective contribution towards the achievement of the Group’s objectives and performance, whilst taking into account current market conditions. The Directors are remunerated for their knowledge, experience and insight given to the Board and its committees.

Board and Board CommitteeS feeS

The Directors, save for the Executive Directors, receive a Board remuneration consisting of a fixed fee and an additional attendance fee for each Board meeting.

In addition, the Directors who are Board Committee members receive a further fixed fee, with Chairmen of Board Committees being remunerated at a higher rate. All Board Committees fees are approved by the Board of Directors.

The Board and Board Committees’ fees at June 30, 2012 were as follows:

Board Service Meeting Fees

Annual Chairman’s fixed fee Rs. 300,000

Annual Independent and Non-Executive Director’s fixed fee Rs. 75,000

Chairman, Independent and Non-Executive Director’s attendance fee Rs. 15,000

Corporate Governance, Nomination & Remuneration Committee Service

Chairman’s fee Rs. 75,000

Member’s fee (except if the member is an Executive Director) Rs. 60,000

Audit & Risk Committee Service

Chairman’s fee Rs. 100,000

Member’s fee (except if the member is an Executive Director) Rs. 75,000

direCtorS’ remuneration and BenefitS

For the remuneration and benefits received, or due and receivable, by the Directors from the Company and its subsidiaries as at June 30, 2012, please refer to page 81 of the Annual Report.

management agreement

The service agreement with CIEL Corporate Services Ltd, for the provision of legal, financial and administrative support, was terminated on July 20, 2012, being the effective date of the amalgamation of FUEL with and into the Company.

ALTEO has recently entered a service agreement with Navitas Corporate Services Ltd for the provision of company secretarial services.

Moreover, no major agreements, other than those in the ordinary course of business, were contracted by the Company during the year under review.

Share priCe information

The 318,492,120 ordinary shares of no par value of ALTEO were listed on the Official Market of the SEM on July 31, 2012 and dealings in the ALTEO shares resumed as from that date.

To celebrate its entry on the Official Market, 10,000 ALTEO shares have been offered for sale on July 31, 2012 at a market introductory price of Rs. 30.40.

At the date of this Annual Report, the share of ALTEO is quoted at Rs. 28.60 on the Official Market of the SEM.

Code of ethiCS and Code of BuSineSS ConduCt

The ALTEO Group together with its employees is committed to the highest standards of ethical and professional integrity. This commitment, which is actively endorsed by the Board and the Executives, is based on a fundamental belief that business should be conducted honestly, fairly and legally.

enVironment, health and SafetY poliCY

ALTEO takes environmental responsibility at heart and recognises the importance of preserving the integrity of our natural heritage. In its concern for the environment it continuously aims at improving processes in its various operations.

The ALTEO Group of companies believes in providing and maintaining a safe and healthy work environment for all its employees. The objective being the optimisation of work efficiency and the prevention of accidents at work, through the implementation of safety standards in all its operations across the Group.

SoCial ContriBution

Upon the amalgamation of FUEL with and into ALTEO, the Company will continue to fulfil its various commitments as well as those of FUEL in Corporate Social and Environmental Responsibility (“CSER”) activities. The various CSER commitments such as socio-economic development, education and training, childcare and health, will be met through the Fondation Nouveau Regard of CIEL Group and GML Fondation Joseph Lagesse. Some NGOs and organisations already taken care of by ALTEO in the eastern region are Faucon Flacq Sporting Club, and the Eastern Welfare Association of Disabled amongst others.

Please refer to pages 52 to 54 for more information on the Group’s CSER. CharitaBle donationS and politiCal ContriButionS

Please refer to pages 84 of the Annual Report.

retirement Benefit oBligation

The details of the total amount of provisions booked or otherwise recognised by the Company for payment of pensions are provided on page 135 - Notes to the Financial Statements.

related partY tranSaCtionS

For details on related party transactions, please refer to page144 - Notes to the Financial Statements.

nathalie gallet, aCiSper naVitaS Corporate SerViCeS ltdCompany Secretary

September 13, 2012



The following changes occurred during the year under review: Bernard P. Dalais resigned as Director on August 17, 2011 Didier Merven resigned as Director on September 5, 2011 Adolphe Vallet resigned as Director on September 15, 2011 Roger Espitalier Noël was appointed Director on September 15, 2011

On July 20, 2012, which is the effective date of the amalgamation of Flacq United Estates Limited with and into the Company, a new Board of Directors of ALTEO was constituted.

Messrs. Maurice P. Dalais, Roger Espitalier Noël, Jean-Claude Harel, J. Cyril Lagesse and Robert Lagesse submitted their resignations and Messrs. Jean-Claude Béga, Jan Boullé, Amédée Darga and Patrick de L. d’Arifat were appointed by the Board in replacement.

The other Directors of the Company, namely Messrs. Thierry Lagesse, P. Arnaud Dalais, G. Christian Dalais, Jean de Fondaumière, Louis Guimbeau and Arnaud Lagesse remained in service.

The Directors of the subsidiaries are disclosed on pages 82 and 83.

auditorS’ report and aCCountS

The auditors’ report is set out on page 87 and the income statements are set out on page 89.

direCtorS’ SerViCe ContraCtS

There was no service contract between the Company and its subsidiaries and any of its Directors during the year.

remuneration and BenefitS

Remuneration and benefits received from the company and its subsidiaries were as follows:

COMPANY SUBSIDIARIES

2012 2011 2012 2011

Directors of the Company Rs’000 Rs’000 Rs’000 Rs’000

Executive Director* - - - -

Non-Executive Directors 1,605 875 14 17

Independent 295 250 2 2

Directors of the Subsidiary companies

Executive Directors 12,922 10,491 - -

Non-Executive Directors - - 175 167

The emoluments of Directors have not been disclosed on an individual basis due to the commercial sensitivity of such information.

*The Group Chief Executive, Mr. P. Arnaud Dalais has been remunerated by CIEL Corporate Services Ltd, which held a service contact with the Company.

The Directors are pleased to present the Annual Report of Deep River-Beau Champ Limited (the “Company’’) (renamed as Alteo Limited) for the year ended June 30, 2012.

nature of BuSineSSThe main activities of the Company consist of sugar cane growing and milling and other agricultural activities.The main activities of the Group consist principally of:- Sugar cane growing and milling and other agricultural activities;- Sugar refining activities;- Operating a bagasse and coal based power generation plant for the supply of electricity to the National

Grid of the Central Electricity Board;- Regional development; and- Property development, hospitality and leisure.

direCtorSThe persons who held office as Directors of the Company as at June 30, 2012 are: Thierry Lagesse (Chairman) G. Christian Dalais P. Arnaud Dalais Maurice P. Dalais Jean de Fondaumière Louis Guimbeau Jean-Claude Harel J. Cyril Lagesse Arnaud Lagesse Robert Lagesse Roger Espitalier Noël

Statutory Disclosures

(Pursuant to Section 221 of the Companies Act 2001 and Section 88 of the Securities Act 2005)


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William AH SUE •Jean Claude BÉGA •Premsagar BHOLAH •P. Arnaud DALAIS • • • • • • • • • • • • • • • •G. Christian DALAIS • • •Jean-Pierre DALAIS • • • • • •Maurice P. DALAIS •Roger ESPITALIER NOËL •Patrick DE L. D’ARIFAT • • • • • • • • • • • •Jérôme DE CHASTEAUNEUF • • • • •Alexis DUVAL •Philippe DUVAL • • •Jean DE FONDAUMIERE •Louis GUIMBEAU •Jean-Claude HAREL • • •Philippe LABRO • • •Arnaud LAGESSE •J. Cyril LAGESSE •Robert LAGESSE •Thierry LAGESSE • • •Gilbert B. LEGRAND • •Jean-Robert LINCOLN • •Joseph Claude MAMET* •Gérard MARTIN •Elipina MLAKI •Shyamduthsingh RAMDHARY • •Clément REY • • • •Jean RIBET • • • • • •Henry SEMWAZA •Xavier THIEBLIN • •

* Alternate Director

Statutory Disclosures


The following changes occurred during the year under review:

Commercial and Industrial Enterprises LimitedMr. Bernard P. Dalais resigned as Director on November 15, 2011.Mr. Didier Merven resigned as Director on November 29, 2011.Mr. Adolphe Vallet resigned as Directors on November 29, 2011.Mr. Roger Espitalier Noël was appointed Director on December 23, 2011.

Consolidated Energy Co. LtdMr. J. Cyril Lagesse resigned as Director on September 15, 2011.

Deep River-Beau Champ Milling Company LimitedMr. J. Cyril Lagesse resigned as Director on September 15, 2011.

Constance La Gaiété Milling Company LimitedMr. J. Cyril Lagesse resigned as Director on November 30, 2011.

Eastern Energy Company LtdMr. J. Cyril Lagesse resigned as Director on September 15, 2011.

Ferney Aquaculture LimitedMr. J. Cyril Lagesse resigned as Director on November 30, 2011.

Refinest LimitedMr. J. Cyril Lagesse resigned as Director on September 15, 2011.

Sucrière des Mascareignes LtdMr. J. Cyril Lagesse resigned as Director on September 15, 2011.Mr. Thierry Lagesse was appointed Director on September 15, 2011.

Sukari Investment Company LimitedMr. J. Cyril Lagesse resigned as Director on September 15, 2011.Mr. Thierry Lagesse was appointed Director on September 15, 2011.

TPC LtdMr. J. Cyril Lagesse resigned as Director on September 15, 2011.

Usinest LimitedMr. J. Cyril Lagesse resigned as Director on September 15, 2011.

directionship of Subsidiary companies as at June 30, 2012

(Pursuant to Section 221 of the Companies Act 2001 and Section 88 of the Securities Act 2005)


donationS

group CompanY

2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000

Donations made during the year:

- Political 22,7 - - -

- Charitable 1,171 3,022 2,556 722

The Company is one of the promoters of Fondation Nouveau Regard, the vehicle formed by the CIEL Group to achieve its social objectives. The Fondation provides financial assistance to a number of Non Governmental Organisations involved in education and health projects, relief of poverty and actions towards the most vulnerable components of Mauritian Society.

auditorS’ feeS

group CompanY

2012 2011 2012 2011

Rs’000 Rs’000 rs’000 Rs’000

Audit fees paid to:

BDO & Co 3,401 2,993 555 525

Fees paid for other services provided by:

BDO & Co 2,640 387 2,390 136

The Board expresses its appreciation and thanks to all those involved for their contribution during the year.

Approved by the Board of Directors on September 13, 2012 and signed on its behalf by:

Thierry Lagesse P. Arnaud DalaisChairman Director

Statement of direCtorS’ reSponSiBilitieS in reSpeCt of the preparation of finanCial StatementS

Directors acknowledge their responsibilities for:

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

(ii) the preparation of financial statements which fairly present the state of affairs of the Company as at the end of the financial year and the results of its operations and cash flows for that period and which comply with International Financial Reporting Standards (IFRS);

(iii) the selection of appropriate accounting policies supported by reasonable and prudent judgements.

(iv) the external auditors are responsible for reporting on whether the financial statements are fairly presented.

The Directors report that:

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

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

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

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

ON BEHALF OF THE BOARD


September 13, 2012

Statutory Disclosures(Pursuant to Section 221 of the Companies Act 2001 and Section 88 of the Securities Act 2005)


Certificate of Company Secretary

In our capacity as Company Secretary, we hereby confirm that, to the best of our knowledge and belief, the Company has lodged with the Registrar of Companies, as at June 30, 2012, all such returns as are required for a company in terms of the Companies Act 2001, and that all such returns are true, correct and up to date.

nathalie gallet, aCiSper naVitaS Corporate SerViCeS ltdCompany Secretary

September 13, 2012

Independent Auditors’ Report to the Members

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

Report on the Financial StatementsWe have audited the group financial statements of Alteo Limited and its subsidiaries (the “Group”) and the Company’s separate financial statements on pages 88 to 149 which comprise the statements of financial position at June 30, 2012, the income statements, statements of comprehensive income, statements of changes in equity and statements of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

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

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

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. In our opinion, the financial statements on pages 88 to 149 give a true and fair view of the financial position of the Group and of the Company at June 30, 2012 and their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with the Companies Act 2001.

Report on Other Legal and Regulatory Requirements

Companies Act 2001We have no relationship with, or interests in, the Company or any of its subsidiaries, other than in our capacity as auditors, tax and business advisers and dealings in the ordinary course of business. We have obtained all information and explanations we have required. In our opinion, proper accounting records have been kept by the Company as far as it appears from our examination of those records.

Financial Reporting Act 2004The Directors are responsible for preparing the Corporate Governance Report and making the disclosures required by Section 8.4 of the Code of Corporate Governance of Mauritius (“Code”). Our responsibility is to report on these disclosures.

In our opinion, the disclosures in the Corporate Governance Report are consistent with the requirements of the Code, except that individual Directors’ remuneration has not been disclosed for reasons given in the Corporate Governance Report.

BDO & Co,Chartered Accountants

Port Louis, Mauritius.

September 13, 2012

Shabnam Peerbocus, FCA,Licensed by FRC


Income Statements


Statements of Financial Position the group the CompanY

Notes 2012 2011 2012 2011 Rs’000 Rs’000 Rs’000 Rs’000

ASSETS EMPLOYEDNon-current assetsProperty, plant and equipment 5 7,113,194 6,885,176 4,459,566 4,440,654 Land-projects 6 6,961 6,961 - - Investment properties 7 758,038 758,038 756,833 756,833 Intangible assets 8 20,000 44,382 33,400 33,400 Non-current assets held for sale 9 - - 39,000 39,000 Investment in subsidiary companies 10 - - 6,129,341 459,631 Investment in joint ventures 11 663,469 640,513 1,021,999 1,113,745 Investment in associated companies 12 126,954 115,161 - - Investment in available-for-sale financial assets 13 52,931 59,679 36,977 42,453 Deposit on investments 14 - 15,500 - 15,500 Bearer biological assets 15 328,006 257,680 117,054 106,724 Non-current receivables 16 6,619 2,869 495,819 1,317,754 Deferred expenditure 17 776,435 744,859 52,829 10,281 Retirement benefit asset 28 2,922 2,167 - - Deferred tax assets 18 15,472 12,317 3,952 -

9,871,001 9,545,302 13,146,770 8,335,975 Current assetsDeferred expenditure 17 128,122 136,145 16,211 20,883 Inventories 19 342,617 383,564 10,263 11,255 Work in progress 20 67,720 105,218 - - Consumable biological assets 21 1,621,602 1,144,741 352,546 329,998 Trade and other receivables 22 286,681 264,569 100,766 117,254 Current tax assets 23 47,158 32,846 - - Short term deposits 38(b) 20,937 5,494 219 32,513 Cash in hand and at bank 38(b) 105,152 268,643 2,584 80,201

2,619,989 2,341,220 482,589 592,104 TOTAL ASSETS 12,490,990 11,886,522 13,629,359 8,928,079

EQUITY AND LIABILITIESCapital and reservesShare capital 24 1,869,867 93,600 1,869,867 93,600 Revaluation and other reserves 25 3,699,569 3,783,329 8,880,835 4,125,900 Retained earnings 1,644,224 2,485,461 1,700,573 2,770,812 Owners’ interests 7,213,660 6,362,390 12,451,275 6,990,312 Loans 26 44,488 44,637 - - Non-Controlling interests 1,488,796 1,162,021 - -

8,746,944 7,569,048 12,451,275 6,990,312

Non-current liabilitiesBorrowings 27 1,265,504 1,736,553 637,573 708,633 Deferred tax liabilities 18 702,406 1,227,935 - 699,653 Retirement benefit obligations 28 200,512 158,590 103,821 91,000

2,168,422 3,123,078 741,394 1,499,286 Current liabilitiesTrade and other payables 29 734,259 634,893 165,121 150,369 Current tax liabilities 23 4,535 - - - Borrowings 27 836,830 502,407 271,569 231,016 Proposed dividend 30 - 57,096 - 57,096

1,575,624 1,194,396 436,690 438,481 TOTAL EQUITY AND LIABILITIES 12,490,990 11,886,522 13,629,359 8,928,079

The financial statements have been approved for issue by the Board of Directors on September 13, 2012.


The notes on pages 94 to 149 form an integral part of these financial statements. Auditors’ report on page 87.

the group the CompanY Notes 2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000

Turnover 31 3,673,435 3,263,127 377,937 326,067 SIFB Compensation 37,491 565 24,392 319 Gains arising from changesin fair value of biological assets 21 362,555 186,658 22,548 49,482 Other operating income 32 89,501 97,505 73,556 78,231

4,162,982 3,547,855 498,433 454,099 Operating expenses 33 (2,761,519) (2,486,923) (529,010) (454,821)

Operating profit/(loss) 34 1,401,463 1,060,932 (30,577) (722)Amortisation of VRS and centralisation costs (21,471) (9,610) (21,471) (8,667)Investment and other income 35 21,283 8,513 262,521 189,252 Finance costs 36 (190,546) (176,281) (62,235) (59,247)Gain on fair value of investment property 7 - 92,104 - 92,104

1,210,729 975,658 148,238 212,720 Impairment of investment in joint ventures 11 - - (195,276) - Impairment of investment in subsidiary 10 - - (25,850) - Impairment of goodwill on acquisition of subsidiary 8 (24,382) - - - Share of results of joint ventures 11 (12,806) (79,743) - - Share of results of associates 12 15,220 6,557 - - Profit on disposal of available-for-salefinancial assets - 96,279 - 93,152

Profit/(loss) before taxation 1,188,761 998,751 (72,888) 305,872 Income tax charge/(credit) 23 (488,400) (335,106) 3,071 (13,067)Profit/(loss) for the year 700,361 663,645 (69,817) 292,805

Attributable to:- Owners of the parent 168,535 309,684 (69,817) 292,805 - Non-Controlling interests 531,826 353,961 - -

700,361 663,645 (69,817) 292,805

Earnings per share 37 Rs. 0.89 34.57 (0.39) 32.66 Adjusted earnings per share 37 Rs. 1.64 1.55

The notes on pages 94 to 149 form an integral part of these financial statements. Auditors’ report on page 87.

JUNE 30, 2012 YEAR ENDED, JUNE 30, 2012


Statements of Comprehensive Income Statements of Changes in Equity the group the CompanY

Notes 2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000

Profit/(loss) for the year 700,361 663,645 (69,817) 292,805

Other comprehensive income

Deferred tax on revaluation of land 18 687,938 (687,938) 687,938 (687,938)

Fair value on transfer of property,

plant and equipment 12,596 71,377 12,596 71,377

Fair value on investment in subsidiaries 10 - - 4,869,462 -

Fair value on investment in joint venture 11 - - 78,730 -

Fair value on available-for-sale

financial assets 13 (6,983) (13,776) (5,711) (12,429)

Fair value release on disposal of

available-for-sale financial assets 13 - (3,935) - (2,686)

Currency translation differences 208,886 (388,714) - -

Movement in reserves of associates 18,317 (23,244) - -

and joint ventures

Other comprehensive income for the year,

net of tax 920,754 (1,046,230) 5,643,015 (631,676)

Total comprehensive income for the year 1,621,115 (382,585) 5,573,198 (338,871)

Attributable to:

- Owners of the parent 972,855 (529,164) 5,573,198 (338,871)

- Non-Controlling interests 648,260 146,579 - -

1,621,115 (382,585) 5,573,198 (338,871)

Attributable to owners of the parent

Revaluation Non-

Share and other Retained Controlling Total

Notes Capital reserves Earnings Total Loans interests equity

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

the group

Balance at July 1, 2011 93,600 3,783,329 2,485,461 6,362,390 44,637 1,162,021 7,569,048

Received during the year - - - - 7,118 - 7,118

Repaid during the year - - - - (7,267) - (7,267)

Total comprehensive income

for the year - 804,320 168,535 972,855 - 648,260 1,621,115

Movement in reserves - - (9,350) (9,350) - - (9,350)

Dividends 30 - - (112,235) (112,235) - (321,485) (433,720)

Conversion premium (107) 107 - - - - -

Bonus issue 24 1,776,374 (888,187) (888,187) - - - -

Balance at June 30, 2012 1,869,867 3,699,569 1,644,224 7,213,660 44,488 1,488,796 8,746,944

Balance at July 1, 2010 93,600 4,621,261 2,255,856 6,970,717 47,319 1,234,696 8,252,732

Received during the year - - - - 11,623 - 11,623

Repaid during the year - - - - (13,388) - (13,388)

Total comprehensive income

for the year - (837,932) 309,684 (528,248) (917) 146,579 (382,586)

Movement in reserves - - (519) (519) - (19,327) (19,846)

Dividends 30 - - (79,560) (79,560) - (199,927) (279,487)

Balance at June 30, 2011 93,600 3,783,329 2,485,461 6,362,390 44,637 1,162,021 7,569,048

The notes on pages 94 to 149 form an integral part of these financial statements. Auditors’ report on page 87.The notes on pages 94 to 149 form an integral part of these financial statements. Auditors’ report on page 87.

YEAR ENDED, JUNE 30, 2012YEAR ENDED, JUNE 30, 2012


Statements of Changes in Equity (Cont’d)

Revaluation

Share and other Retained

Note Capital reserves Earnings Total

Rs’000 Rs’000 Rs’000 Rs’000

THE COMPANY

Balance at July 1, 2011 93,600 4,125,900 2,770,812 6,990,312

Total comprehensive income for the year - 5,643,015 (69,817) 5,573,198

Dividends 30 - (112,235) (112,235)

Conversion premium (107) 107 - -

Bonus issue 1,776,374 (888,187) (888,187) -

Balance at June 30, 2012 1,869,867 8,880,835 1,700,573 12,451,275

Balance at July 1, 2010 93,600 4,757,576 2,557,567 7,408,743

Total comprehensive income for the year - (631,676) 292,805 (338,871)

Dividends 30 - - (79,560) (79,560)

Balance at June 30, 2011 93,600 4,125,900 2,770,812 6,990,312


Statements of Cash Flows the group the CompanY

Notes 2012 2011 2012 2011 Rs’000 Rs’000 Rs’000 Rs’000

Operating activitiesCash generated from operations 38(a) 1,646,340 1,018,718 64,534 16,575 Interest received 18,583 5,622 2,833 5,357 Interest paid (176,801) (183,651) (71,213) (67,756)Tax paid (389,983) (256,214) - (719)Net cash from/(used in) operating activities 1,098,139 584,475 (3,846) (46,543)

Investing activitiesPurchase of property, plant and equipment (315,677) (302,051) (42,364) (40,748)Investment in joint ventures (9,300) (4,000) (9,300) (4,000)Investment in associates - (8,559) - - Investment in securities (235) (235) (235) (235)Disposal of investment in available-for-salefinancial assets - 102,049 - 97,039 Proceeds from sale of land 38,504 6,101 - - Investment in cane replantation (131,178) (104,331) (34,460) (26,345)Additions to deferred expenditure (209,751) (111,786) (64,019) - Deposit on investments - (15,500) - (15,500)Loans (granted)/recovered (3,750) - (4,163) 11,546 Disposal of property, plant and equipment 3,049 9,856 1,511 3,384 Dividends received from subsidiaries - - 259,343 177,619 Dividends received from available-for-sale financial assets 2,700 2,891 345 1,776 Dividends received from joint ventures - 5,039 - 4,500 Dividends received from associated companies 1,700 4,000 - - Net cash (used in)/from investing activities (623,938) (416,526) 106,658 209,036

Financing activitiesProceeds from long-term borrowings 37,999 11,623 - - Proceeds from short-term borrowings - 2,000 - - Payments of borrowings (113,584) (242,639) (46,071) (46,836)Other loans repaid - (14,305) - - Finance lease principal payments (4,494) (3,636) (2,294) (1,092)Dividends paid to minority shareholders (302,177) (199,927) - - Dividends paid to company’s shareholders (169,331) (65,520) (169,331) (65,520)Net cash used in financing activities (551,587) (512,404) (217,696) (113,448)(Decrease)/increase in cash and cash equivalents (77,386) (344,455) (114,884) 49,045

Movement in cash and cash equivalentsAt July 1, (85,676) 258,779 (67,300) (116,345)(Decrease)/increase (77,386) (344,455) (114,884) 49,045 Effect of non cash transaction 38(c) (100,632) - - - At June 30, 38(b) (263,694) (85,676) (182,184) (67,300)

The notes on pages 94 to 149 form an integral part of these financial statements. Auditors’ report on page 87.The notes on pages 94 to 149 form an integral part of these financial statements. Auditors’ report on page 87.

YEAR ENDED, JUNE 30, 2012 YEAR ENDED, JUNE 30, 2012


improvements to ifrSs (issued may 6, 2010)

IAS 1 (Amendment), ‘Presentation of Financial Statements’, clarifies that an entity may present the analysis of the components of other comprehensive income by item either in the statement of changes in equity or in the notes to the financial statements. This amendment is not expected to have any impact on the Group’s financial statements.

IAS 34 (Amendment), ‘Interim Financial Reporting’, emphasises the principle in IAS 34 that the disclosure about significant events and transactions in interim periods should update the relevant information presented in the most recent annual financial report. The amendment clarifies how to apply this principle in respect of financial instruments and their fair values. This amendment is not expected to have any impact on the Group’s financial statements.

IFRS 1 (Amendment), ‘First-time Adoption of International Financial Reporting Standards’, clarifies that if a first-time adopter changes its accounting policies or its use of IFRS 1 exemptions after publishing a set of IAS 34 interim financial information, it should explain those changes and include the effects of such changes in its opening reconciliations within the first annual IFRS reporting. The amendment also clarifies that the exemption to use a ‘deemed cost’ arising from a revaluation triggered by an event that occurred at or before the date of transition to IFRS is extended to revaluations that occur during the period covered by the first IFRS financial statements. The amendment specifies that entities subject to rate regulation are allowed to use previous GAAP carrying amounts of property, plant and equipment or intangible assets as deemed cost on an item-by-item basis. Entities that use thisexemption are required to test each item for impairment under IAS 36 at the date of transition. This amendment is not expected to have any impact on the Group’s financial statements.

IFRS 7 (Amendment), Financial Instruments: Disclosures’, encourages qualitative disclosures in the context of the quantitative disclosure required to help users to form an overall picture of the nature and extent of risks arising from financial instruments. The amendment also clarifies the required level of disclosure around credit risk and collateral held and provides relief from disclosure of renegotiated loans. This amendment is unlikely to have an impact on the Group’s financial statements.

IFRIC 13 (Amendment), ‘Customer Loyalty Programmes’ clarifies that the ‘fair value’ of award credits should take into account the amount of discounts or incentives that would otherwise be offered to customers who have not earned award credits from an initial sale and any expected forfeitures. This amendment is unlikely to have an impact on the Group’s financial statements.

Standards, amendments to published Standards and interpretations issued but not yet effectiveCertain standards, amendments to published standards and interpretations have been issued that are mandatory for accounting periods beginning on or after January 1, 2012 or later periods, but which the Group has not early adopted.

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

Deferred Tax: Recovery of Underlying Assets (Amendments to IAS 12)Amendments to IAS 1 Presentation of Items of Other Comprehensive IncomeIFRS 9 Financial InstrumentsIAS 27 Separate Financial StatementsIAS 28 Investments in Associates and Joint VenturesIFRS 10 Consolidated Financial StatementsIFRS 11 Joint ArrangementsIFRS 12 Disclosure of Interests in Other EntitiesIFRS 13 Fair Value Measurement


Notes to the Financial Statements

1. General InformationAlteo Limited is a limited liability company incorporated and domiciled in Mauritius. The address of its registered office is 13, St Clément Street, Curepipe. These financial statements will be submitted for consideration and approvalat the forthcoming Annual Meeting of Shareholders of the Company.

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

(a) Basis of preparation

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

Where necessary, comparative figures have been amended to conform with change in presentation in the current year. The financial statements are prepared under the historical cost convention, except that:(i) Land is carried at revalued amount,(ii) Available-for-sale securities are stated at their fair value,(iii) Consumable biological assets are stated at fair value,(iv) Relevant financial assets and financial liabilities are carried at amortised cost.(v) Investment property is stated at their fair value.

Standards, amendments to published Standards and interpretations effective in the reporting periodIAS 24, ‘Related Party Disclosures’ (Revised 2009), clarifies and simplifies the definition of a related party and removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities. This revised standard is not expected to have any impact on the Group’s financial statements.

Amendments to IFRIC 14, ‘Prepayments of a Minimum Funding Requirement’ correct an unintended consequence of IFRIC 14, ‘IAS 19 - The limit on a defined benefit asset, minimum funding requirements and their interaction’.Without the amendments, entities are not permitted to recognise as an asset some voluntary prepayments for minimum funding contributions. This was not intended when IFRIC 14 was issued, and the amendments correct this. This amendment is not expected to have any impact on the Group’s financial statements.

Disclosures - Transfers of Financial Assets (Amendments to IFRS 7). These amendments improve the disclosure requirements in relation to transferred financial assets. The amendments are not expected to have any impact on the Group’s financial statements.

Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters (Amendments to IFRS1). These amendments replace references to a fixed transition date with ‘the date of transition to IFRSs’ and set out the requirements for how an entity resumes presenting financial statements in accordance with IFRSs after a period when the entity was unable to comply with IFRSs because its functional currency was subject to severe hyperinflation. The amendments are not expected to have any impact on the Group’s financial statements.

YEAR ENDED, JUNE 30, 2012


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

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

(c) Land projects

Land-projects represent the portion of land relating to the northern part of the IRS project of Anahita Estate Ltd which is yet to be developed as far as general infrastructure is concerned. It will be sold in the medium to long term once the southern portion are fully developed and sold. Land projects are initially recorded at cost. Gains on disposal are credited to the income statement.

(d) Investment properties

Investment properties, which are properties held to earn rentals, are stated at fair value. Changes in fair values are included in the income statement.

(e) Intangible assets

Intangible assets consist of land development rights and goodwill.

(i) land development rights

Land development rights are shown at cost and tested annually for impairment.

(ii) goodwill

Goodwill on consolidation represents the excess of the cost of acquisition over the fair value of the Group’s share of net assets of the acquired entity at the date of acquisition. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. On disposal of a subsidiary or associate, the attributable amount of goodwill is included in the determination of the gains and losses on disposal. Any net excess of the Group’s interest in the net fair value of acquiree’s net identifiable assets over cost is recognised in the income statement.

(f) Non-current assets held for sale

the Company

Non-current assets classified as held for sale represent lifetime golf memberships. They are measured at the lower of carrying value amount and fair value less costs to sell if their carrying amount is recovered principally through a sale transaction rather than through a continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition.

2. Significant Accounting Policies (Cont’d)

(a) Basis of preparation (cont’d)

IAS 19 Employee Benefits (Revised 2011)IFRIC 20 Stripping Costs in the Production Phase of a Surface MineDisclosures - Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7)IAS 32 Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)Amendment to IFRS 1 (Government Loans)Annual Improvements 2009 - 2011 CycleConsolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance

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

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

(b) Property, plant and equipment

All property, plant and equipment are initially recorded at cost. Land, buildings and plant and machinery are subsequently revalued. Freehold land has been revalued by Société D’hotman De Spéville in October 2008 based on open market value. The directors have valued the freehold land at 67% of the revalued amount. Factory building and plant and machinery have been revalued by directors in 1995, based on the recommendations of the Mauritius Sugar Authority. This has been treated as deemed cost. All other property, plant and equipment are subsequently stated at historical cost less depreciation, except for golf course which is not depreciated.

Subsequent costs are included in the assets. Increases in the carrying amount arising on revaluation are credited to other comprehensive income and shown as revaluation surplus in shareholders’ equity. Decreases that offset previous increases of the same asset are charged against the revaluation surplus; all other decreases are charged to the income statement.

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

The annual rates used for the purpose are:Buildings 2 - 5 %Agricultural equipment 5 - 20 %Motor Vehicles 10 - 25 %Plant & Machinery 5 - 20 %Power generation plant 4 - 10 %Furniture and Equipment 4 - 20 %Computer equipment 25 %Land derocking project and land improvement 4 %Others 2 - 20 %Freehold land is not depreciated.





(g) Investment in subsidiaries

the CompanyDuring the year, the Company changed its accounting policy in respect of its investment in subsidiaries. Investment in subsidiaries is now carried at fair value in the separate financial statements as opposed to cost in the preceding year. The carrying amount is reduced to recognise any impairment in the value of individual investments. The change in accounting policy has been applied prospectively as it is impracticable to recreate the information to determine the periodic-specific effects of the change in accounting policy on comparative information for the prior periods presented. The Company has therefore applied the new accounting policy to the carrying amount of assets as at the beginning of the current period.

the groupThe consolidated financial statements incorporate the financial statements of the Company and enterprises controlled by the Company (its subsidiaries) made up to the financial period. Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the income statement.

Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

(h) Investments in associates

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

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

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

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

Unrealised profits and losses are eliminated to the extent of the Group’s interests in the associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the assets transferred.

Where necessary, appropriate adjustments are made to the financial statements of associates to bring the accounting policies used in line with those adopted by the group.

(i) Investments in joint ventures

the CompanyDuring the year, the Company changed its accounting policy in respect of its investment in joint ventures.Investment in joint ventures is now carried at fair value in the separate financial statements as opposed to cost in the preceding year. The carrying amount is reduced to recognise any impairment in the value of individual investments. The change in accounting policy has been applied prospectively as it is impracticable to recreate the information to determine the periodic-specific effects of the change in accounting policy on comparative information for the prior periods presented. The Company has therefore applied the new accounting policy to the carrying amount of assets as at the beginning of the current period.

the groupInvestments in joint ventures are accounted for by the equity method.

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

Unrealised profits and losses are eliminated to the extent of the Group’s interests in the associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the assets transferred.

Where necessary, appropriate adjustments are made to the financial statements of joint ventures to bring the accounting policies used in line with those adopted by the group.





(j) Financial instruments

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

(i) investment in available-for-sale financial assets

initial recognitionInvestments are recognised on a trade-date basis and are initially measured at fair value plus transaction costs.

Subsequent recognitionAvailable-for-sale securities

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

Fair value

The fair value of publicly traded available-for-sale securities is based on their market value which is calculated by reference to the Stock Exchange and the DEM-listed prices at the close of business on reporting date.

If the market for a financial asset is not active, the group establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other investments that are substantially the same and discounted cash flows analysis.

(ii) loans and receivables

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

(iii) trade receivables

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

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

(iv) Borrowings

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

Interest free loans from holding company are recorded at the proceeds received, net of direct costs. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period.

(v) trade payables

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

(vi) Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and related parties, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement offinancial position.

(vii) Share capital

Ordinary share capital are recorded at the proceeds received, net of direct issue costs. Preference share capital is classified as equity if it is non-redeemable, or redeemable only at the Company’s option, and any dividends are discretionary.

(viii) non current receivable

Non current receivable, without fixed repayment terms, is carried at cost.

(k) Deposit on investments

Deposit on investments is shown at cost.

(l) Bearer biological assets

Cane replantation costs are deferred at cost and amortised over 4 to 7 years.Flower replantation costs are deferred at cost and amortised over 7 years.

(m) Consumable biological assets

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





(n) Deferred Expenditure

land development

Land development costs incurred are in respect of land to be sold. This expenditure is released to the income statement in proportion to the subsequent land disposal.

Current milling and crop expenses

Expenditure incurred in respect of direct factory repairs, maintenance works and operating expenses, the benefit of which will be derived in the subsequent crop season, has been accounted as deferred milling expenses.

Sugar industry Voluntary retirement Scheme (VrS)

VRS (net of refunds under the Multi Annual Adaptation Scheme and pension obligations previously provided for) are carried forward and are amortised over a period of 6 years. The amortisation is reviewed and reassessed yearly to ascertain the adequacy of the yearly charge taking into account the right exercised.

milling centralisation costs

Closure of Constance la gaiété Sugar factoryThe compensation payments for centralisation in accordance with the provisions of the Blue Print relating to the closure of Constance La Gaiété Sugar Factory are recoverable from the sale proceeds of freehold land. Land development costs are capitalised and released against proceeds from the subsequent land disposal.

Closure of mon désert alma Sugar factoryClosure costs (net of refunds under the Multi Annual Adaptation Scheme and pension obligations previously provided for) are carried forward and are amortised over a period of 6 years. The amortisation is reviewed and reassessed yearly to ascertain the adequacy of the yearly charge taking into account the right exercised.

(o) Inventories

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

(p) Leases

Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.

finance leases-Where the Company is the lessee.Finance leases are capitalised at the estimated present value of the underlying lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in other long-term payables.The interest element of the finance charge is charged to the income statement over the lease period. The property, plant and equipment acquired under finance leasing contracts is depreciated over the useful life of the asset.

(q) Deferred income tax

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

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

(r) Foreign currencies

(i) 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 consolidated financial statements are presented in Mauritian Rupees, which is the Company’s functional and presentation currency.

(ii) transactions and balances

Foreign currency transactions are accounted for at the exchange rates prevailing at the date of the transactions. Gains and losses resulting from settlement of such transactions and from the translation of monetary assets and liabilities are recognised in the income statement. Such balances are translated at year-end exchange rates.

(iii) group companies

The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:(a) assets and liabilities are translated at the closing rate at the reporting date;(b) income and expenses are translated at average exchange rates; (c) all resulting exchange differences are recognised in other comprehensive income.

(s) Retirement benefit obligations

defined benefit plans A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.





(s) Retirement benefit obligations (Cont’d)

The Company and its subsidiaries contribute to a defined benefit plan for certain employees (and their dependants). The cost of providing benefits is determined using the Projected Unit Credit Method, so as to spread the regular cost over the service lives of employees in accordance with the advice of actuaries who carry out a full valuation of plans regularly. Cumulative actuarial gains and losses arising from experience adjustments, changes in actuarial assumptions and amendments to pension plans in excess of the greater of 10% of the value of the plan assets or 10% of the defined benefit obligation are spread to income over the average remaining working lives of the related employees.

All acturial gains and losses are recognised in the income statement.

Past-service costs are recognised immediately in income unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past-service costs are amortised on a straight-line basis over the vesting period.

defined contribution plansThe contributions to the Group’s other schemes, which are treated as defined contribution schemes, are charged to the income statement for the period in which they are incurred.

gratuity on retirementFor employees who are not covered (or who are insufficiently covered by the above pension plans) the net present value of gratuity on retirement payable under the Employment Rights Act 2008 is calculated by qualified actuaries and provided for. The obligations arising under this item are not funded.

(t) Provisions

Provisions are recognised when the Group has 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.

(u) Dividend distribution

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

(v) Related parties

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

(w) Segment reporting

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

(x) Real Estate contracts

Contract costs are recognised when incurred.Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the cost of sales. They are presented as deferred expenditure.

When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that are likely to be recoverable.

The Group recognises revenue from real estate contracts on delivery when: significant risks and rewards of ownership of the real estate contracts have been transferred to the buyer; the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the real estate contracts; the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the Group; and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

The Group presents as an asset the gross amount due from customers for contract work for all contracts in progress for which costs incurred plus recognised profits (less recognised losses) exceeds progress billings. Billings not yet paid by customers and retention are included within ‘trade and other receivables’.

(y) Impairment of assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).

(z) Turnover

Turnover represents the gross proceeds of sugar, molasses, bagasse, sale of ‘IRS’ residences, golf revenue, deer farming and other agricultural products and income receivable for the supply of electricity to the National Grid of the Central Electricity Board.

Turnover is net of value added tax less discounts, allowances and returns after eliminating sales within the group companies. Sale of goods and services are recognised when goods are delivered and title has passed. Sale of services are recognised in the accounting year in which the services are rendered.

Sugar and molasses proceeds are recognised on total production of the crop year. Bagasse proceeds are accounted on a cash basis. Sugar and molasses prices are based on prices recommended by the Mauritius Chamber of Agriculture for the crop year.

Other revenues earned by the Group are recognised on the following basis:Dividend income - when the shareholders’ right to receive payment is established.SIFB compensation - on a cash basis.





(z) Turnover (Cont’d)

Interest income - on a time-proportion basis using the effective interest method. When a receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at original effective interest rate, and continues unwinding the discount as interest income. Interest income on impaired loans is recognised either as cash is collected or on a cost-recovery basis as conditions warrant.

(aa) Merger of entities under common control

Merger with wholly-owned subsidiary is accounted on the effective date of amalgamation.The assets and liabilities amalgamated are recognised at the carrying amounts at the date of amalgamation. The difference between the assets and, liabilities and reserves, of the subsidiary is recorded in equity.

3. Financial Risk Management

3.1 Financial Risk Factors

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

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

(a) Market risk

(i) Currency risk

The Company exports its entire production through the Mauritius Sugar Syndicate and is exposed to currency risk due to fluctuations in the price of sugar and the incidence of the exchange rate, as sugar is initially paid in foreign currency to the Mauritius Sugar Syndicate. This will affect the sugar proceeds. Other group companies operate internationally and are exposed to foreign exchange risk arising from primarily the Euro, the US Dollar and the Tanzanian Shilling.

At June 30, 2012, if the Rupee had weakened/strenghthened by 5% against the US Dollar and the Euro with all other variable held constant, post tax profit and equity would have been Rs. 120,000 (2011: Rs. 3,347,000) higher/lower for the Company and Rs. 15,346,000 (2011: Rs. 4,253,000) lower/higher for the Group following changes in foreign exchange gains/losses on translation of US Dollar and Euro denominated trade receivables, trade payables and borrowings.

(ii) price risk

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

The Group is also exposed to price risk with the incidence of the price of sugar on the European Union market.

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

Sensitivity analysis

The table below summarises the impact of increases/decreases in the fair value of the investments on the Group’s equity. The analysis is based on the assumption that the fair value had increased/decreased by 5%.

Impact on equity

the group the CompanY

2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000

Categories of investments:

Available-for-sale 2,647 2,984 1,849 2,123

(iii) Cash flow and fair value interest rate risk

As the Group has no significant interest-bearing assets, its income and operating cash flows are substantially independent of changes in market interest rates. The Group’s interest rate risk arises from borrowings. Borrowings issued at variable rates expose the Group to cash flow interest-rate risk. At June 30, 2012, if interest rates on borrowings had been 50 basis points higher/lower with all other variables held constant, post-tax profit for the year would have been Rs. 3,510,000 (2011: Rs. 3,388,000) lower/higher for the Company and Rs. 8,784,000 (2011: Rs. 9,183,000) lower/higher for the Group, mainly as a result of higher/lower interest expense on floating rate borrowings.

(b) Credit risk

The Group’s credit risk is mainly attributable to its trade receivables. For the Company, trade receivables are due by the Mauritius Sugar Syndicate and the Company does not expect any losses from non-performance of the latter. Other group companies have no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history and to limit the amount of credit exposure to any one financial institution.

(c) Liquidity risk

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

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




3. Financial Risk Management (Cont’d)

(c) Liquidity risk (Cont’d)

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

Less than Between 1 Between 2 OverTHE GROUP 1 year and 2 years and 5 years 5 years

Rs’000 Rs’000 Rs’000 Rs’000At June 30, 2012Loan at call 92,419 - - - Trade and other payables 734,259 - - - Bank borrowings 740,229 273,410 697,752 281,121 Finance leases 4,182 4,279 8,943 -

At June 30, 2011Loan at call 83,130 - - - Trade and other payables 634,893 - - - Bank borrowings 416,670 999,540 366,448 365,240 Finance leases 2,607 1,751 3,574 -

Less than Between 1 Between 2 OverTHE COMPANY 1 year and 2 years and 5 years 5 years

Rs’000 Rs’000 Rs’000 Rs’000At June 30, 2012Loan at call 92,530 - - - Trade and other payables 165,121 - - - Bank borrowings 176,169 121,572 272,680 232,857 Finance lease liabilities 2,870 3,149 7,315

At June 30, 2011Loan at call 86,454 - - - Trade and other payables 150,369 - - - Bank borrowings 143,980 82,810 303,662 320,000 Finance lease liabilities 582 642 1,519 -

3.2 Capital risk management

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

The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders or sell assets to reduce debt.

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

The debt-to-adjusted capital ratios at June 30, 2012 and at June 30, 2011 were as follows:


2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000

Total debt 2,102,334 2,238,960 909,142 939,649

Less: cash in hand and at bank and short term deposits (126,089) (274,137) (2,803) (112,714)

Net debt 1,976,245 1,964,823 906,339 826,935

Shareholders interests 7,213,660 6,362,390 12,451,275 6,990,312

Debt to adjusted capital ratio 0.27 0.31 0.07 0.12

3.3 Fair value estimation

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

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

Specific valuation techniques used to value financial instruments include:Quoted market prices or dealer quotes for similar instruments.Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments.

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

3.4 Biological assets

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




4. Critical Accounting Estimates and Judgements

Estimates and judgements are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions

The Group make estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates 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 are discussed below.

4.1 Impairment of available-for-sale financial assets

The Group follow the guidance of IAS 39 on determining when an investment is other-than-temporarily impaired. This determination requires significant judgement. In making this judgement, they evaluate, among other factors, the duration and extent to which the fair value of an investment is less than its cost, and the financial health of and near-term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow.

4.2 Estimated impairment of intangible assets

The Group tests annually whether intangible assets have suffered any impairment, in accordance with the accounting policy stated in note 2(e). These calculations require the use of estimates.

4.3 Biological assets

Bearer biological assets

Bearer biological assets have been estimated based on the cost of land preparation and planting of bearer canes and flower seeds.

Consumable biological assets - Standing Canes and flower plants

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

The expected cash flows from standing canes have been computed by estimating the expected crop and the sugar extraction rate and the forecasts of sugar prices which will prevail in the coming year for standing canes. For flower plants, palm hearts and pineapples, the expected cash flows have been computed by estimating the sales proceeds from the number of saleable flower plants, palm trees and pineapples currently in cultivation. The harvesting costs and other direct expenses are based on the yearly budgets of the Group.

4.4 Other investments - Available for sale

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

4.5 Depreciation policies

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

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

4.6 Investment in growing and milling entities

IAS 36 requires the Group to assess whether there is any indication that its assets may be impaired. An asset is impaired if its carrying amount exceeds its recoverable amount, measured as the higher of the asset’s fair value less cost to sell and its value in use.

The value in use of milling assets is the present value of future cash flows/future economic benefits expected to be derived from the assets.

Accompanying measures have been provided by the European Union (EU) to ACP countries. The specific projects, in line with the Multi Annual Strategy Plan, presented by sugar entities to reduce costs and increase efficiency have been accepted by the EU. The Company, in line with the industry, started implementing such projects and in view of these plans for the future, there exists no evidence that milling assets are impaired.

4.7 Pension benefits

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

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





5. Property, Plant and Equipment

THE GROUPFreehold

Land

LeaseholdLand &

BuildingsAgricultural

Equipment

Motor vehicles Plant and

Machinery

PowerGeneration

Plant

Furnitureand

EquipmentComputer

Equipment

Land Improve- ment and

DerockingProject

Golfcourse

Expansion Project

andWork in

Progress TotalOwned Leased

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

(a) COST AND VALUATION

At July 1, 2011

Cost/Deemed cost 60,724 741,540 362,308 292,582 66,734 1,492,218 680,150 435,507 31,189 297,422 376,324 55,305 4,892,003

Valuation 4,036,527 4,250 - - - - - - - - - - 4,040,777

4,097,251 745,790 362,308 292,582 66,734 1,492,218 680,150 435,507 31,189 297,422 376,324 55,305 8,932,780

Additions - 22,016 38,500 1,389 18,233 825 27,722 3,397 899 13,072 - 203,590 329,643

Disposals (93) - (702) (6,840) (635) - - (32) - - - - (8,302)

Transfers - 92,523 - 60,192 - - - 33,374 5,261 - - (191,350) -

Exchange differences - 33,982 - 33,770 - 102,160 - 43,067 3,271 - - 7,400 223,650

At June 30, 2012

Cost/Deemed cost 60,724 890,061 400,106 381,093 84,332 1,595,203 707,872 515,313 40,620 310,494 376,324 74,945 5,437,087

Valuation 4,036,434 4,250 - - - - - - - - - - 4,040,684

4,097,158 894,311 400,106 381,093 84,332 1,595,203 707,872 515,313 40,620 310,494 376,324 74,945 9,477,771

DEPRECIATION

At July 1, 2011 - 201,251 315,097 206,869 24,284 608,880 383,704 179,302 18,460 109,757 - - 2,047,604

Charge for the year - 23,697 37,043 38,997 9,766 46,416 38,649 32,960 5,923 11,860 - - 245,311

Disposal adjustments - - (702) (6,836) (635) - - (32) - - - - (8,205)

Exchange differences - 9,401 - 22,634 - 28,664 - 15,961 3,207 - - - 79,867

At June 30, 2012 - 234,349 351,438 261,664 33,415 683,960 422,353 228,191 27,590 121,617 - - 2,364,577

NET BOOK VALUES

At June 30, 2012 4,097,158 659,962 48,668 119,429 50,917 911,243 285,519 287,122 13,030 188,877 376,324 74,945 7,113,194

(i) Freehold land has been revalued by Société D’Hotman De Spéville in October 2008 based on open market value. The directors have valued the freehold land at 67% of the revalued amount. The revaluation surplus was credited to revaluation surplus.

(ii) Factory building and plant and machinery have been revalued by directors in 1995, based on the recommendations of the Mauritius Sugar Authority. The revaluation was done for the purpose of transferring assets to milling companies. This has been treated as deemed cost.

(iii) Borrowings are secured by floating charges on the asset of the Group, including property, plant and equipment (note 27).

(iv) The depreciation charge for the year has been charged to operating expenses.

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

2012 2011 Rs’000 Rs’000

Cost 60,724 60,724

THE GROUPFreehold

Land

LeaseholdLand &

BuildingsAgricultural

Equipment

Motor vehicles Plant and

Machinery

PowerGeneration

Plant

Furnitureand

EquipmentComputer

Equipment

Land Improve- ment and

DerockingProject

Golfcourse

Expansion Project

andWork in

Progress TotalOwned Leased

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

(b) COST AND VALUATION

At July 1, 2010

Cost/Deemed cost 67,120 750,818 341,142 298,709 61,999 1,678,231 641,041 468,305 35,718 270,841 376,324 74,492 5,064,740

Valuation 4,610,887 4,250 - - - - - - - - - - 4,615,137

4,678,007 755,068 341,142 298,709 61,999 1,678,231 641,041 468,305 35,718 270,841 376,324 74,492 9,679,877

Additions - 5,978 13,279 11,865 6,731 - 41,114 5,035 637 26,581 - 197,562 308,782

Disposals - - (225) (18,924) (1,996) - - (363) - - - (21,508)

Assets written off - - - - - - (2,005) (430) - - (256) (2,691)

Transfer to investment

properties (580,756) - - - - - - - - - - - (580,756)

Transfers - 50,171 8,112 62,729 - 30,335 - 48,696 1,296 - - (201,339) -

Exchange differences - (65,427) - (61,797) - (216,348) - (85,736) (6,462) - - (15,154) (450,924)

At June 30, 2011

Cost/Deemed cost 60,724 741,540 362,308 292,582 66,734 1,492,218 680,150 435,507 31,189 297,422 376,324 55,305 4,892,003

Valuation 4,036,527 4,250 - - - - - - - - - - 4,040,777

4,097,251 745,790 362,308 292,582 66,734 1,492,218 680,150 435,507 31,189 297,422 376,324 55,305 8,932,780

DEPRECIATION

At July 1, 2010 - 197,236 279,869 227,051 23,254 614,894 346,082 175,270 19,305 98,614 - - 1,981,575

Charge for the year - 22,204 35,453 40,558 3,026 46,349 38,417 35,436 5,291 11,143 - - 237,877

Disposal adjustments - - (225) (17,393) (1,996) - - (363) - - - - (19,977)

Assets written off - - - - - - (795) (430) - - - - (1,225)

Exchange differences - (18,189) - (43,347) - (52,363) - (30,611) (6,136) - - - (150,646)

At June 30, 2011 - 201,251 315,097 206,869 24,284 608,880 383,704 179,302 18,460 109,757 - - 2,047,604

NET BOOK VALUES

At June 30, 2011 4,097,251 544,539 47,211 85,713 42,450 883,338 296,446 256,205 12,729 187,665 376,324 55,305 6,885,176




5. Property, Plant and Equipment (Cont’d)Land

THE COMPANYFurniture

andFittings

Improve-

Freehold Agricultural Motor vehicles ment and

Land Buildings Equipment Owned Leased Derocking Total

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

(c) COST AND VALUATION

At July 1, 2011

Cost/Deemed cost 44,926 84,272 153,159 135,473 3,835 23,082 330,621 775,368

Valuation 4,034,123 - - - - - - 4,034,123

4,079,049 84,272 153,159 135,473 3,835 23,082 330,621 4,809,491

Additions - 18,739 4,580 - 18,233 625 13,072 55,249

Disposals (93) - (702) (3,511) - (32) - (4,338)

At June 30, 2012

Cost/Deemed cost 44,926 103,011 157,037 131,962 22,068 23,675 343,693 826,372

Valuation 4,034,030 - - - - - - 4,034,030

4,078,956 103,011 157,037 131,962 22,068 23,675 343,693 4,860,402

DEPRECIATION

At July 1, 2011 - 27,313 131,799 80,773 767 18,843 109,342 368,837

Charge for the year - 1,775 13,355 - 8,018 1,305 11,791 36,244

Disposal adjustments - - (702) (3,511) - (32) - (4,245)

at June 30, 2012 - 29,088 144,452 77,262 8,785 20,116 121,133 400,836

NET BOOK VALUES

At June 30, 2012 4,078,956 73,923 12,585 54,700 13,283 3,559 222,560 4,459,566

(i) Freehold land has been revalued by Société D’Hotman De Spéville in October 2008 based on open market value. The directors have valued the freehold land at 67% of the revalued amount. The revaluation surplus was credited to revaluation surplus.

(ii) Factory building and plant and machinery have been revalued by directors in 1995, based on the recommendations of the Mauritius Sugar Authority. The revaluation was done for the purpose of transferring assets to milling companies. This has been treated as deemed cost.

(iii) Borrowings are secured by floating charges on the asset of the Group, including property, plant and equipment (note 27).

(iv) The depreciation charge for the year has been charged to operating expenses.

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

2012 2011

Rs’000 Rs’000

Cost 44,926 44,926

Land

THE COMPANYFurniture

andFittings

Improve-

Freehold Agricultural Motor vehicles ment and

Land Buildings Equipment Owned Leased Derocking Total

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

(d) COST AND VALUATION

At July 1, 2010

Cost/Deemed cost 51,322 83,257 150,187 134,077 - 22,192 304,040 745,075

Valuation 4,608,483 - - - - - - 4,608,483

4,659,805 83,257 150,187 134,077 - 22,192 304,040 5,353,558

Additions - 1,015 3,197 8,702 3,835 1,253 26,581 44,583

Transfer to investment

property (580,756) - - - - - - (580,756)

Disposals - - (225) (7,306) - (363) - (7,894)

At June 30, 2011

Cost/Deemed cost 44,926 84,272 153,159 135,473 3,835 23,082 330,621 775,368

Valuation 4,034,123 - - - - - - 4,034,123

4,079,049 84,272 153,159 135,473 3,835 23,082 330,621 4,809,491

DEPRECIATION

At July 1, 2010 - 25,585 120,047 81,350 - 17,539 98,268 342,789

Charge for the year - 1,728 11,977 5,982 767 1,667 11,074 33,195

Disposal adjustments - - (225) (6,559) - (363) - (7,147)

at June 30, 2011 - 27,313 131,799 80,773 767 18,843 109,342 368,837

NET BOOK VALUES

At June 30, 2011 4,079,049 56,959 21,360 54,700 3,068 4,239 221,279 4,440,654

6. Land-Projects2012 & 2011

Rs'000

THE GROUP

At July 1, and at June 30, 6,961

Land-projects represent the portion of land relating to the northern part of the IRS project of Anahita Estate Ltd which is yet to be developed as far as general infrastructure is concerned.It will be sold in the medium to long term once the southern portion is fully developed and sold.

Borrowings are secured by floating charges on the assets of the Group, including land-projects (note 27).




7. Investment Properties land and Buildings

2012 2011

(a) THE GROUP Rs’000 Rs’000

FAIR VALUE

At July 1, 758,038 1,205

Transfer from property, plant and equipment - 580,756

Fair value gain on transfer of property, plant and equipment - 83,973

Revaluation gain - 92,104

At June 30, 758,038 758,038

(i) Rental income from investment property amounted to Rs. 1,128,093 (2011: Rs. 1,105,000). No direct operating expenses were incurred on the investment property during the year (2011: Rs.Nil).

(ii) Investment properties have been revalued by Société D’Hotman De Spéville in June 2011 based on open market value. The Directors have valued the freehold land at 67% of the revalued amount.

(iii) Borrowings are secured by floating charges on the asset of the Group, including investment properties (note 27).

land and Buildings

2012 2011

(b) THE COMPANY Rs’000 Rs’000

FAIR VALUE

At July 1, 756,833 -

Transfer from property, plant and equipment - 580,756

Fair value gain on transfer of property, plant and equipment - 83,973

Revaluation gain - 92,104

At June 30, 756,833 756,833

(i) Rental income from investment property amounted to Rs. Nil (2011: Rs. Nil). No direct operating expenses were incurred on the investment property during the year (2011: Rs. Nil).

(ii) Investment properties have been revalued by Société D’Hotman De Spéville in June 2011 based on open market value. The Directors have valued the freehold land at 67% of the revalued amount. The Directors consider that the fair value of the investment properties in 2012 is not materially different from that of 2011.

(iii) Borrowings are secured by floating charges on the asset of the Group, including investment properties (note 27).

8. Intangible Assets2012 2011

THE GROUP Rs’000 Rs’000

Goodwill on acquisition of subsidiaries

At July 1, 44,382 44,382

Impairment (8(a)) (24,382) -

At June 30, 20,000 44,382

(a) The impairment is as a result of the reduction of investment in World Tropicals Limited to its expected recoverable amounts.

2012 & 2011

Rs'000

THE COMPANY

Acquisition of land development rights 33,400

In 2005, the company purchased land development rights on 15 hectares from its subsidiary company, Deep River-Beau Champ Milling Company Limited. There is no time limit to utilise those land development rights.

9. Non-Current Assets Held for Sale Lifetime golf memberships

2012 & 2011

Rs'000

THE COMPANY

At July 1, and at June 30, 39,000

The Company has purchased lifetime golf memberships and intends to sell these to villa owners as part of land projects.




10. Investment in Subsidiary Companies2012 2011

THE COMPANY Rs’000 Rs’000

FAIR VALUE

At July 1, 459,631 475,079

Capital reduction - (15,448)

Additions 826,098 -

Impairment ((10(a)) (25,850) -

Fair value movement (10(b)) 4,869,462

At June 30, 6,129,341 459,631

(a) The impairment relates to he investment in World Tropicals, which has been reduced to its expected recoverable amount.

(b) During the year, the Company changed its accounting policy in respect of its investment in subsidiaries. Investment in subsidiaries is now carried at fair value in the separate financial statements as opposed to cost in the

preceding year. The change in accounting policy has been applied prospectively as it is impracticable to recreate the information to determine the periodic-specific effects of the change in accounting policy on comparative information for the prior periods presented. The Company has therefore applied the new accounting policy to the carrying amount of assets as at the begin current period.

(a) The following companies are subsidiaries of Alteo Limited:

2012 & 2011Effective percentage

holdingCompanyType of Stated held held

shares held capital Activity Directly Indirectly

Anahita Estates Limited Ordinary Rs’000 826,123 Real Estates 100.00 - Development

Anahita Golf Ltd Ordinary Rs’000 528,584 Golf - 80.50 Anahita World Class Ordinary Rs’000 10 Trademark - 100.00 Sanctuary Ltd OwnerCommercial and Industrial Ordinary Rs’000 48,400 Investment 100.00 - Entreprises LimitedConsolidated Energy Co Ltd Ordinary Rs’000 200,000 Energy 13.13 31.25 Constance La Gaiété Ordinary Rs’000 7,438 Dormant - 52.15 Milling Company LimitedDeep River-Beau Champ Ordinary Rs’000 208,552 Sugar Milling - 52.15 Milling Company LimitedEastern Energy CompanyLimited Ordinary Rs’000 101,250 Investment 61.72 - Microlab Limitée Ordinary Rs’000 2,000 Vitropropagation

of flower plants - 67.55 Ferney Aquaculture Limited Ordinary and Rs’000 31,283 Sugar 99.99 -

PreferenceRefinest Limited Ordinary Rs’000 46,000 Investment 64.23 - Sucrière des Mascareignes Ltd Ordinary USD’000 7,000 Investment 60.00 - Sukari Investment Company Ltd Ordinary USD’000 9,936 Investment - 60.00 TPC Ltd Ordinary TShs’000 3,326,897 Sugar - 45.00 Usinest Limited Ordinary Rs’000 46 Investment 65.19 - World Tropicals Ltd Ordinary Rs’000 1,000 Flower Export - 100.00

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

(c) Although the Group holds less than 51% in Consolidated Energy Co Ltd and TPC Ltd, the Group has the power to govern the financial and operating policies of the entities so as to obtain benefits from their activities.




11. Investment in Joint Ventures 2012 2011

Rs’000 Rs’000

(a) THE GROUP

At July 1, 640,513 715,590

Additions 9,300 14,000

Transfer from deposit on investments (note 14) 15,500 12,000

Share of result for the year (12,806) (79,743)

Dividends - (5,039)

Share of movement in hedge reserve 4,579 (16,295)

Share of movement in other reserves 6,383 -

At June 30, 663,469 640,513

(b) THE COMPANY

FAIR VALUE

At July 1, 1,113,745 1,087,745

Additions 9,300 14,000

Transfer from deposit on investments (note 14) 15,500 12,000

Fair value movement (11(c)) 78,730 -

Impairment (11(e)) (195,276) -

At June 30, 1,021,999 1,113,745

(c) During the year, the Company changed its accounting policy in respect of its investment in joint ventures. Investment in joint ventures is now carried at fair value in the separate financial statements as opposed to cost in the preceding year. The change in accounting policy has been applied prospectively as it is impracticable to recreate the information to determine the periodic-specific effects of the change in accounting policy on comparative information for the prior periods presented. The Company has therefore applied the new accounting policy to the carrying amount of assets as at the beginning of the current period.

(d) The Company has effective interest in the following joint ventures. The financial statements used for all joint ventures are in respect of the year ended June 30, 2012.

(e) The impairment relates to the investment in Novelife group, which has been reduced to its expected recoverable amount.

2012 2011 Activity Name Direct Indirect Direct Indirect

% % % % Anahita Hotel Limited 50.00 - 50.00 - Hotel OperationCIEL Properties Limited 50.00 - 50.00 - Real Estate developmentFlagstone Property Management Limited - 50.00 - 50.00 Property managementCIEL et Nature Limitée 50.00 - 50.00 - HospitalityAnahita Centre for Excellence Training, social Limited (note 11(b)(i)) - 50.00 - 50.00 responsibility &

empowerment programmeAnahita Residences & Villas Rental managementLimited (note 11(b)(i)) - 50.00 - 50.00 Anahita IRS Forty Ltd (note 11(b)(ii)) 50.00 50.00 IRS developmentNovelife Limited 50.00 - 50.00 - Investment in healthcare

& life sciencesNoveprim Limited (note 11(b)(iii)) - 25.00 - 25.00 Life sciencesNoveprim Europe Ltd (note 11(b)(iii)) - 46.50 - 46.50 Life sciences

(i) Wholly owned subsidiaries of CIEL Properties Ltd.

(ii) Wholly owned subsidiary of Anahita Hotel Limited.

(iii) Subsidiaries of Novelife Limited.

(iii) The following amounts represent the assets, liabilities, revenue and results of the joint ventures:

Flagstone Property Anahita CIEL CIEL et

Mangement Hotel Properties Nature Novelife Limited Limited* Limited* Limitée Limited* Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

2012Assets 6,630 3,342,402 418,004 5,726 934,394 Liabilities 4,296 2,020,280 364,747 12,012 241,877 Revenues 10,318 905,389 242,978 20,359 463,247 Profit/(Loss) 371 57,463 (28,927) (2,751) (104,416)

Share of profit/(loss) 186 28,731 (14,464) (1,375) (25,884)

2011Assets 9,139 3,401,208 415,090 7,309 1,460,056 Liabilities 7,176 2,131,477 396,534 13,344 320,292 Revenues 9,348 783,244 209,978 23,463 614,594 Profit/(Loss) 489 (8,917) (39,676) (861) (237,449)

Share of profit/(loss) 245 (4,459) (19,838) (430) (55,261)

* Group figures are presented for these companies.




12. Investment In Associated Companies

2012 2011

Rs’000 Rs’000

(a) THE GROUP

(i) Group’s share of net assets 126,954 115,161

(ii) At July 1, 115,161 110,994

Addition - 8,559

Share of profit after taxation 15,220 6,557

Dividends (1,700) (4,000)

Movement in reserves (1,727) (6,949)

At June 30, 126,954 115,161

(b) The following amounts represent the assets, liabilities, revenue and results of the associated companies:

Proportion

of effective

Year Country of ownership Share of

Name end incorporation Indirect Assets Liabilities Revenues Profit profit

% Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

2012

Trois Ilots Limited June 30, Mauritius 33.33 52,744 8,432 18,966 3,891 1,297

Fuel Refinery Limited June 30, Mauritius 20.87 1,262,720 725,307 287,235 66,696 13,923

1,315,464 733,739 306,201 70,587 15,220

2011

Trois Ilots Limited June 30, Mauritius 33.33 42,070 10,924 26,205 5,968 1,989

Fuel Refinery Limited June 30, Mauritius 20.87 1,296,218 794,278 256,277 21,886 4,568

1,338,288 805,202 282,482 27,854 6,557

(i) All of the above associated companies are incorporated in the Republic of Mauritius.

13. Investment in Available-for-Sale Financial Assets


2012 2011 2012 2011

Level 1 Level 3 Level 1 Level 3

LISTEDDEM

MARKETUNQUOTED TOTAL TOTAL LISTED

DEM MARKET

UNQUOTED TOTAL TOTAL

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

AVAILABLE-FOR-SALE

At July 1, - 49,433 10,246 59,679 82,925 - 40,982 1,471 42,453 61,220

Additions - - 235 235 235 - - 235 235 235

Disposals - - - - (5,770) - - - - (3,887)

Decrease in fair value - (6,983) - (6,983) (13,776) - (5,711) - (5,711) (12,429)

Release to statement of

comprehensive income - - - - (3,935) - - - - (2,686)

At June 30, - 42,450 10,481 52,931 59,679 - 35,271 1,706 36,977 42,453

All the investments are denominated in the Mauritian Rupee. None of the financial assets are either past due or impaired.

14. Deposit on Investments


2012 2011 2012 2011

Joint ventures Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 15,500 12,000 15,500 12,000

Additions - 15,500 - 15,500

Transfer (note 11) (15,500) (12,000) (15,500) (12,000)

At June 30, - 15,500 - 15,500




15. Bearer Biological Assets

the group the CompanY 2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000 COST At July 1, 390,918 366,758 168,907 155,568 Additions during the year 131,178 104,331 34,460 26,345 Less: Fully amortised assets (49,973) (29,846) (16,847) (13,006)Exchange difference 26,235 (50,325) - - At June 30, 498,358 390,918 186,520 168,907

AMORTISATION At July 1, 133,238 113,152 62,183 52,965 Amortisation charge for the year 79,534 68,222 24,130 22,224 Less: Fully amortised assets (49,973) (29,846) (16,847) (13,006)Exchange difference 7,553 (18,290) - - At June 30, 170,352 133,238 69,465 62,183

NET BOOK VALUES 328,006 257,680 117,054 106,724

Bearer biological assets represent cane replantation expenditure for canes that have an expected life cycle of 4 years and 7 years for TPC Ltd and Alteo Limited respectively, as they would normally generate 4 - 7 years of crop harvest.

There exists a market for cane tops, when sold in limited quantities. Such biological assets on a large scale do not have a market value and alternative estimates of fair value would be unreliable, hence these biological assets are measured at cost (direct costs incurred including cost of purchase if any) less any accumulated depreciation and any accumulated impairment losses.

Bearer biological assets also include flower replantation expenditure that have an expected life cycle of 7 years for World Tropical Ltd, as they would normally generate 7 years of crop harvest.

In line with IAS 41 - Agriculture, the replantation costs are deferred and amortised over 4 - 7 years.

16. Non-Current Receivables


Rs’000 Rs’000 Rs’000 Rs’000 Loans to subsidiary companies (note 16(a)) - - 494,719 1,316,654 Loans to joint ventures (note 16(a)) 1,100 1,100 1,100 1,100 Other non-current receivables 5,519 1,769 - -

6,619 2,869 495,819 1,317,754

(a) Loans to subsidiary companies and joint ventures are interest free and have no fixed repayment terms.

17. Deferred Expenditure

the groupCompensation payments

Closure of Closure of Constance La Mon DesertGaiete Sugar Alma Sugar

Non-current Factory Factory VRS 2 Land(note 17(a)) (note 17(b)) (note 17(c)) Development 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000At July 1, 103,977 2,594 10,281 628,007 744,859 797,087 Expenditure incurred during the year 1,751 - 64,019 143,981 209,751 113,800

Transfer to income statement 15,140 589 - (133,929) (118,200) (150,061)Amortisation charge for the year - - (21,471) - (21,471) (9,610)Proceeds/Deposits on sale of land (35,321) (3,183) - - (38,504) (6,357)

At June 30 85,547 - 52,829 638,059 776,435 744,859 (a) The compensation payments for centralisation, in accordance with the provisions of the Blue Print relating to the

closure of Constance La Gaiété Sugar Factory are recoverable from the sale proceeds of freehold land.

(b) Net expenditure incurred, following closure of Mon Désert Alma Sugar Factory in financial year 2007/08, comprises compensation payments and provision for land development costs less refunds received from the Mauritius Sugar Reform Trust. This expenditure is amortised over a period of 6 years. The Company has the right to sell freehold land to recoup the compensation payments.

(c) The Voluntary Retirement Scheme costs comprise of compensation payments, provision for land infrastructure and other costs less refunds received from the Mauritius Sugar Reform Trust. The net expenses are amortised over a period of 6 years.

the group 2012 2011

Current Rs’000 Rs’000

Expenses incurred during the year 128,122 136,145

Expenditure incurred during the year, the benefit of which will be derived in the subsequent crop season, has been accounted as deferred expenses.

the CompanYVoluntary Retirement

Scheme CostsNon-current 2012 2011

Rs’000 Rs’000At July 1, 10,281 18,948 Additions 64,019 - Amortisation (21,471) (8,667)at June 30, 52,829 10,281



Notes to the Financial StatementsDeferred tax assets and liabilities and deferred tax charge in the income statement are attributable to the following items:

Charge to At

At July 1, exchange Revaluation the Income June 30,

2011 difference Reserve Statement 2012

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

deferred income tax liabilities

Biological assets 284,298 39,897 - 114,157 438,352

Accumulated tax depreciation 324,914 27,527 - 14,312 366,753

Capital gains - land 687,938 - (687,938) - -

Fair value gains - Investment property 26,412 - (12,596) (13,816) -

1,323,562 67,424 (700,534) 114,653 805,105

deferred income tax assets

Tax losses carried forward (76,214) - - (989) (77,203)

Retirement benefit obligations (28,441) (1,581) - 6,848 (23,174)

Interest deferred (3,289) (1,139) - (13,366) (17,794)

(107,944) (2,721) - (7,507) (118,171)

net deferred income tax liabilities 1,215,618 64,703 (700,534) 107,147 686,934

At the end of the reporting period, the Group had unused tax losses of Rs. 784,299,000 (2011: Rs. 818,828,000) available for offset against future profits. A deferred tax asset has been recognised in respect of Rs.514,686,000 (2011: Rs. 508,093,000) of such losses. No deferred tax asset has been recognised in respect of the remaining Rs. 269,613,000 (2011: Rs. 310,735,000) due to unpredictability of future profit streams.

(b) the CompanY

2012 2011

Rs’000 Rs’000

At July 1, 699,653 (13,948)

Movement in income statement (note 23(b)) (3,071) 13,067

Deferred tax on revaluation of land (note 18 (c)) (687,938) 687,938

Deferred tax relating to fair value of the investment property (note 18(c)) (12,596) 12,596

At June 30, (3,952) 699,653

17. Deferred Expenditure (Cont’d)

The Voluntary Retirement Scheme costs comprise of compensation payments, provision for land infrastructure and other costs less refunds received from the Mauritius Sugar Reform trust. The net expenses are amortised over a period of 6 years.

the CompanY

2012 2011

Current Rs’000 Rs’000

Expenses incurred during the year 16,211 20,883

Expenditure incurred during the year, the benefit of which will be derived in the subsequent crop season, has been accounted as deferred expenses.

18. Deferred Income Taxes

Deferred income taxes are calculated on all temporary differences under the liability methods at 15%/30% for the Group (2011:15%/30%), and 15% for the Company (2011: 15%). Deferred income tax assets and liabilities are offset when the income taxes relate to the same fiscal authority.

(a) the group

The following amounts are shown net in the statement of financial position:

2012 2011

Rs’000 Rs’000

Deferred tax liabilities 702,406 1,227,935

Deferred tax assets (15,472) (12,317)

686,934 1,215,618

2012 2011

Movement in deferred income tax Rs’000 Rs’000

At July 1, 1,215,618 551,854

Movement in income statement (note 23(b)) 107,147 85,249

Deferred tax on revaluation of land (note 18(c)) (687,938) 687,938

Deferred tax relating to fair value of the investment property (note 18(c)) (12,596) 12,596

Exchange difference 64,703 (122,019)

At June 30, 686,934 1,215,618




20. Work In Progress

the group 2012 2011

Rs’000 Rs’000

IRS residences 67,720 105,218

Borrowings are secured by floating charges on the assets of the Group, including work in progress (note 27).

21. Consumable Biological Assets


Rs’000 Rs’000 Rs’000 Rs’000 At July 1, 1,144,741 1,153,267 329,998 280,516 Gain in fair value 362,555 186,658 22,548 49,482 Exchange difference 114,306 (195,184) - - At June 30, 1,621,602 1,144,741 352,546 329,998

22. Trade And Other Receivables the group the CompanY

2012 2011 2012 2011 Rs’000 Rs’000 Rs’000 Rs’000

Trade receivables 62,934 44,129 - - Due from customers for construction contracts - 558 - - Prepayments and other receivables 215,070 212,228 41,860 59,757 Receivable on reduction of share capital - - - 15,448 Receivable from related companies- subsidiary companies - - 50,229 34,323 - joint ventures 8,677 7,654 8,677 7,726

286,681 264,569 100,766 117,254

The carrying amounts of trade and other receivables approximate their fair values. At June 30, 2012, no trade receivables were past due or impaired (2011: Rs. Nil). The carrying amounts of the Group’s and Company’s trade and other receivables are denominated in the following currencies.


Rs’000 Rs’000 Rs’000 Rs’000 Mauritian Rupee 211,597 211,412 100,766 117,254 Tanzanian Shilling 66,884 51,195 - - US Dollar 8,200 1,962 - -

286,681 264,569 100,766 117,254

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above. The Group does not hold any collateral as security.

18. Deferred Income Taxes (Cont’d)

(b) the CompanY (Cont’d)

Deferred tax assets and liabilities, deferred tax charge in the income statements and deferred tax charge in equity are attributable to the following items:

Charge to At July 1, Revaluation the Income At June 30,

2011 Reserve Statement 2012 Rs’000 Rs’000 Rs’000 Rs’000

Deferred income tax liabilitiesAccelerated tax depreciation 27,120 (971) 26,149 Capital gains - land 687,938 (687,938) - - Fair value gains - Investment property 26,412 (12,596) (13,816) -

741,470 (700,534) (14,787) 26,149 Deferred income tax assetsTax losses carried forward (28,166) - 13,640 (14,526)Retirement benefit obligations (13,651) - (1,924) (15,575)

(41,817) - 11,716 (30,101)

Net deferred income tax (assets)/liabilities 699,653 (700,534) (3,071) (3,952)

At the end of the reporting period, the Company had unused tax losses of Rs. 96,840,000 (2011: Rs. 187,776,000) available for offset against future profits for which a deferred tax asset has been recognised.

(c) deferred tax liability on land

In the budget speech on November 4, 2011, the Minister of Finance announced the abolition of capital gains tax on immovable property. Consequently deferred tax liability with regards to deferred tax on land provided for has been transferred back to revaluation and other reserves.

19. Inventories the group the CompanY

2012 2011 2012 2011 Rs’000 Rs’000 Rs’000 Rs’000

Raw materials and spare parts 263,394 224,103 10,263 11,255 Raw sugar 16,928 2,832 - - Coal 11,776 14,886 - - IRS residences 50,519 141,743 Total 342,617 383,564 10,263 11,255

(i) The cost of inventories recognised as expense and included in operating expenses amounted to Rs. 1,209,172,000 (2011: Rs. 994,595,000) for the Group and Rs. 113,480,000 (2011: Rs. 103,844,000) for the Company.

(ii) Borrowings are secured by floating charges on the assets of the Group and the Company, including inventories (note 27).




23. Income Tax


2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000

(a) Statement of financial position

At July 1, (32,846) (34,070) - 719

Movement during the year:

Current tax on the adjusted profit for the year

(15%/30% for the Group and 15% for the Company) 315,316 214,051 - -

Withholding tax 66,196 38,878 - -

381,512 252,929 - -

Less:

Tax paid (389,983) (256,214) - (719)

Over provision transferred (259) (3,072) - -

Exchange difference (1,047) 7,581 - -

(391,289) (251,705) - (719)

At June 30, (42,623) (32,846) - -

Disclosed as follows:

Current tax assets (47,158) (32,846) - -

Current tax liabilities 4,535 - - -

(42,623) (32,846) - -

(b) Income statement

Current tax on the adjusted profit for the year

(15%/30% for the Group and 15% for the Company) 315,316 214,051 - -

National Residential Property tax - - -

Withholding tax 66,196 38,878 - -

Deferred tax (note 17) 107,147 85,249 (3,071) 13,067

Over provision in previous year (259) (3,072) - -

Tax charge/(credit) for the year 488,400 335,106 (3,071) 13,067

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


Rs’000 Rs’000 Rs’000 Rs’000 Profit before share of results of associatesand joint ventures and taxation: 1,210,729 1,071,937 (72,888) 305,872

Tax at 15%/30% for the Group and 15% for the Company 387,686 395,958 (10,933) 44,856 Withholding tax 66,196 38,878 - Income not subject to tax - (46,440) (42,265) (44,669)Expenses not deductible for tax purposes 84,276 18,213 50,127 12,880 Net tax losses utilised (56) (4,872) - - Tax losses for which no deferred tax was recognised 25,930 12,260 - - Over provision in previous year (259) (3,072) - - Foreign tax credit (74,388) (75,819) - - Others (985) - - - Tax charge/(credit) for the year 488,400 335,106 (3,071) 13,067

24. Share Capital

the group and the CompanY

Number Rs’000 Note of shares

Ordinary SharesAt July 01, 2011 8,826,794 88,268 Preference shares converted into ordinary shares(0.98 shares for every 1 share) (note 23(a)) 522,541 5,225 Bonus issue (19 shares for every 1 share in issue) (note 23(b)) 177,637,365 1,776,374 At June 30, 2012 186,986,700 1,869,867

Preference SharesAt July 01,2011 533,206 5,332 Preference shares converted into ordinary shares (533,206) (5,332)At June 30, 2012 - -

(a) At a Special Meeting held on February 28, 2012, the shareholders of the Company resolved to convert the 533,206 preference shares of Rs. 10.00 each into ordinary shares in the ratio of 0.98 ordinary share for every 1 preference share held. As a result, each preference share has been cancelled and has been replaced by 0.98 ordinary share of Rs. 10.00 each.

(b) At the same Special Meeting mentioned above, the shareholders approved the capitalisation of a sum of Rs. 1,776,373,650 by a bonus issue of 177,637,365 ordinary shares in the ratio of 19 ordinary shares for every 1 ordinary share held by all the Ordinary shareholders of the Company.




25. Revaluation and Other Reserves


Rs’000 Rs’000 Rs’000 Rs’000 Revaluation and other reserves may be analysed as follows:Profit on disposal of property, plant and equipment reserveAt July 1, and at June 30, - - 213,079 213,079 Reserve on consolidation At July 1, and at June 30, 4,684 4,684 - - Associates and joint ventures reservesAt July 1, (86,397) (63,153) - - Movement during the year 9,235 (23,244) - - At June 30, (77,162) (86,397) - - Revaluation surplusAt July 1, 4,097,828 4,714,389 3,879,001 4,495,562 Movement during the year (187,546) (616,561) (187,546) (616,561)At June 30, 3,910,282 4,097,828 3,691,455 3,879,001 Fair value reserveAt July 1, 43,085 60,796 33,820 48,935 Movement during the year (6,983) (17,711) 4,942,481 (15,115)At June 30, 36,102 43,085 4,976,301 33,820 Translation reserveAt July 1, (279,671) (99,255) - - Movement during the year 101,535 (180,416) - - At June 30, (178,136) (279,671) - - Amalgamation reserveAt July 1, 3,800 3,800 - - Movement during the year - - - - At June 30, 3,800 3,800 - -

At June 30, 3,699,570 3,783,329 8,880,835 4,125,900

profit on disposal of property, plant and equipment reserve

The profit on disposal of property, plant and equipment reserve arose prior to the year 2000 upon disposal of property, plant and equipment.

reserve on consolidation

Reserve on consolidation represents reserve that arises on consolidation of subsidiaries.

associates and joint ventures reserves

The associates and joint ventures reserve relates to the Group’s share of associates and joint ventures reserves.

revaluation surplus

The revaluation surplus relates to the revaluation of property, plant and equipment.

fair value reserve

Fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets that has been recognised in other comprehensive income until the investments are derecognised.

translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

amalgamation reserve

Amalgamation reserve represents the excess of assets over liabilities and reserves of subsidiaries following amalgamation of entities under common control.

26. LoansLoans are from other related shareholders in subsidiaries of the Group. The loans are interest free and have no fixed repayment terms.

27. Borrowings


Rs’000 Rs’000 Rs’000 Rs’000 CurrentBank overdrafts (note 27(a)) 297,364 276,683 92,457 93,560 Loans at call (note 27(b)) 92,419 83,130 92,530 86,454 Bank loans (note 27(c)) 442,865 139,987 83,712 50,420 Finance leases (note 27(d)) 4,182 2,607 2,870 582

836,830 502,407 271,569 231,016 Non-currentBank loans (note 27(c)) 1,252,282 1,731,228 627,109 706,472 Finance leases (note 27(d)) 13,222 5,325 10,464 2,161

1,265,504 1,736,553 637,573 708,633 Total Borrowings 2,102,334 2,238,960 909,142 939,649

(a) The bank overdrafts are secured by floating charges on the Group’s assets and bear interest at rates between 7.65% and 13% per annum.




27. Borrowings (Cont’d)

(b) Loans at call are from related parties and bear interest at 7.04% per annum.

(c) Bank loans The bank loans are secured by floating charges on the Group’s assets and bear interest at rates between 6.50%

and 11.25% per annum.


Rs’000 Rs’000 Rs’000 Rs’000 The maturity of non-current bank loans are as follows:- After one year and before two years 273,410 999,540 121,572 82,810 - After two years and before five years 697,752 366,448 272,680 303,662 - After five years 281,120 365,240 232,857 320,000

1,252,282 1,731,228 627,109 706,472


(d) Finance leases Rs’000 Rs’000 Rs’000 Rs’000 Minimum lease paymentsNot later than one year 5,665 3,292 4,029 824 Later than 1 year and not later than 2 years 5,360 2,186 4,033 824 Later than 2 years and not later than 5 years 9,952 3,969 8,187 1,682 Future finance charges on finance leases (3,573) (1,515) (2,915) (587)Present value of finance lease liabilities 17,404 7,932 13,334 2,743

The present value of finance lease liabilities may be analysed as follows:


Rs’000 Rs’000 Rs’000 Rs’000 Not later than one year 4,182 2,607 2,870 582 Later than 1 year and not later than 2 years 4,279 1,751 3,149 642 Later than 2 years and not later than 5 years 8,943 3,574 7,315 1,519

17,404 7,932 13,334 2,743

The finance leases bear interest rates between 8.50% to 13% per annum.Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.

(e) The carrying amounts of the Group’s borrowings are denominated in the following currencies:


Rs’000 Rs’000 Rs’000 Rs’000 Mauritian Rupee (Rs) 1,869,442 1,821,651 909,142 939,649 Euro 20,326 194,616 - - US Dollar (USD) 131,405 67,538 - - Tanzanian Shilling (TSH) 81,161 155,155 - -

2,102,334 2,238,960 909,142 939,649

(f) The effective interest rates at the reporting date were as follows:

2012 2011

THE GROUP rS uSd tSh RS USD TSH

% % % % % %

Bank overdrafts 7.65%-8.375% 8% 13% 8.125% - 8.375% 8% 13%

Bank borrowings 6.5%-11.25% n/a 11% 6.5%-11.25% N/A 11%

Loans at call 6.28%-6.88% n/a n/a 6.88% N/A N/A

Finance lease liabilities 8.50% - 13% n/a n/a 8.50% - 13% N/A N/A

2012 2011

THE COMPANY RS RS

% %

Bank overdrafts 7.65%-8.25% 8%-8.25%

Bank borrowings 6.5%-9.15% 6.5%-9.75%

Loans at call 6.28%-6.88% 6.88%

Finance lease liabilities 8.85%-9.75% 9.75%

28. Retirement Benefit ObligationsRetirement benefit obligations comprise mainly the Group’s pension scheme and other post retirement benefits. The Company’s pension scheme is a defined benefit plan and the assets of the plan are invested in unitised funds with the Anglo Mauritius Assurance Society Limited and the Sugar Insurance Pension Fund. Other post retirement benefits relate to gratuities on death and retirement that are based on length of service and salaries at the date of death or retirement.

pension benefits

(i) The assets of the fund are held independently and administered by an insurance company.

(ii) The amounts recognised in the statement of financial position are as follows:


2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000

Present value of funded obligations 328,069 309,785 243,072 229,580

Fair value of plan assets (186,243) (186,243) (122,661) (122,627)

141,826 123,542 120,411 106,953

Present value of unfunded obligations 192,059 150,325 62,348 54,114

Unrecognised actuarial losses (136,295) (117,444) (78,938) (70,067)

Liability in the statement of financial position 197,590 156,423 103,821 91,000




28. Retirement Benefit Obligations (Cont’d)

Disclosed as follows:


Rs’000 Rs’000 Rs’000 Rs’000 Current assets (2,922) (2,167) - - Current liabilities 200,512 158,590 103,821 91,000

197,590 156,423 103,821 91,000

(iii) The movement in the present value of obligations for the year is as follows:


Rs’000 Rs’000 Rs’000 Rs’000 At July 1, 460,110 454,709 283,694 270,882 Current service cost 13,953 11,192 5,926 4,248 Employee contribution 1,855 2,487 1,459 1,479 Interest cost 59,087 45,543 27,652 24,990 Benefits paid (20,825) (27,189) (9,929) (10,936)Exchange difference (10,149) (22,309) - - Actuarial (gains)/losses 16,097 (4,323) (3,382) (6,969)

At June 30, 520,128 460,110 305,420 283,694

Disclosed as follows:Funded obligations 328,069 309,785 243,072 229,580 Unfunded obligations 192,059 150,325 62,348 54,114

520,128 460,110 305,420 283,694

(iv) The movement in the fair value of plan assets for the year is as follows:


Rs’000 Rs’000 Rs’000 Rs’000 At July 1, 186,243 166,596 122,627 108,644 Contribution by employee 1,460 2,523 1,459 1,479 Scheme expenses (496) (653) (352) (469)Cost of insuring risk benefits (2,169) (3,699) (1,565) (2,708)Expected return on plan assets 18,886 17,151 12,454 11,061 Actuarial gains on plan assets (23,971) (3,162) (16,241) (1,020)Contribution by employer 21,873 24,447 14,208 16,576 Benefits paid (15,583) (16,960) (9,929) (10,936)

At June 30, 186,243 186,243 122,661 122,627

(v) The amounts recognised in income statement are as follows:


2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000

Current service cost 13,953 11,192 5,926 4,248

Interest cost 59,087 45,543 27,652 24,990

Expected return on plan assets (18,886) (17,151) (12,454) (11,061)

Scheme expenses 496 653 352 469

Cost of insuring risk benefits 2,169 3,699 1,565 2,708

Net actuarial losses recognised during the year 6,792 3,751 3,987 2,526

Total, included in employee benefit expense 63,611 47,687 27,028 23,880

Actual return on plan assets 5,085 (13,989) 3,787 (10,041)

(vi) Major asset categories as percentage of plan assets:


2012 2011 2012 2011

% % % %

Local equities 12.50 12.50 12.50 12.50

Overseas equities 12.50 12.50 12.50 12.50

Fixed interest 9.50 9.50 9.50 9.50

Properties 7.00 7.00 7.00 7.00

(vii) The assets of the plan are invested in funds. The expected return on plan assets was determined by considering the expected returns available on the assets underlying the current investment policy. Expected yields on fixed interest investments are based on gross redemption yields as at the balance sheet date. Expected returns on equity and property investments reflect long-term real rates of return experienced in the respective markets.

(viii) Expected contributions to post-employment benefit plans for the year ending June 30, 2013 are Rs. 15,595,276 for the company and Rs. 21,578,165 for the Group.

(ix) Amounts for the current year and previous three years are as follows:

At June 30, At June 30, At June 30, At June 30,

THE GROUP 2012 2011 2010 2009

Rs’000 Rs’000 Rs’000 Rs’000

Present value of defined benefit obligation (328,069) (309,785) (312,137) (353,012)

Fair value of plan assets 186,243 186,243 166,596 141,772

Deficit (141,826) (123,542) (145,541) (211,240)

Experience adjustments on:

-Plan liabilities 16,097 (4,323) 21,730 13,291

-Plan assets (23,971) 3,162 (174) 16,989




28. Retirement Benefit Obligations (Cont’d)

At June 30, At June 30, At June 30, At June 30,

THE COMPANY 2012 2011 2010 2009

Rs’000 Rs’000 Rs’000 Rs’000

Present value of defined benefit obligation (243,072) (229,580) (230,001) (216,438)

Fair value of plan assets 122,661 122,627 108,644 90,844

Deficit (120,411) (106,953) (121,357) (125,594)

Experience adjustments on:

-Plan liabilities (3,382) 6,969 1,414 9,969

-Plan assets (16,241) (1,020) - 28,383

(x) The principal actuarial assumptions used for accounting purposes were:


2012 2011

% %

Discount rate 9.50 9.50

Expected return on plan assets 10.00 10.00

Future salary increases 7.50 7.50

Future pension increases 2.00 2.00

29. Trade and Other Payables the group the CompanY

2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000

Trade payables 163,097 208,972 45,405 24,525

Amounts due to subsidiary companies - - 18,101 6,749

Other payables and accrued expenses 479,701 319,239 16,673 19,920

Accruals for centralisation and VRS costs 91,461 106,682 84,942 99,175

734,259 634,893 165,121 150,369

The carrying amounts of trade and other payables approximate their fair values.

30. Dividends


2012 2011 Rs’000 Rs’000

Pre bonus issue & conversion of preference sharesInterim of Rs. 4.00 per share paid (2011: Rs. 2.40)- ordinary dividend 35,307 21,184 - preference dividend 2,133 1,280

37,440 22,464 Final dividend of Rs.Nil per share (2011: Rs. 6.10) per share paid- ordinary dividend - 53,843 - preference dividend - 3,253

- 57,096 Post bonus issue and conversion of preference sharesFinal dividend of Rs. 0.40 per share (2011: Rs. Nil) per share paid- ordinary dividend 74,795 - - preference dividend - - 74,795 -

Total dividend declared 112,235 79,560

Dividend payableAt July 01, 57,096 43,056 Dividend declared during the year, 112,235 79,560 Dividend paid during the year, (169,331) (65,520)At June 30, - 57,096

31. Turnover


Rs’000 Rs’000 Rs’000 Rs’000 Sugar 2,708,969 2,270,516 355,736 303,722 Special sugars premium 81,494 55,196 - - Molasses 58,473 56,269 15,346 20,855 Distillers contribution 5,505 - 5,475 - Bagasse 1,394 1,497 1,380 1,490

2,855,835 2,383,478 377,937 326,067 Electricity generation 352,524 233,710 - - Proceeds from sale of real estates(recognised on completion) 317,538 508,033 - - Golf revenue 90,211 80,671 - - Flower production and export 57,327 57,235 - -

3,673,435 3,263,127 377,937 326,067




32. Other Operating Income


2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000

Management fees - - 19,279 17,829

Rent and transport 16,245 15,992 29,081 25,967

Profit on sale of property, plant and equipment 1,418 8,325 1,418 2,637

Agricultural diversification 16,651 22,308 16,651 23,327

Profit on sale of land 35,682 16,825 - -

Others 19,505 34,055 7,127 8,471

89,501 97,505 73,556 78,231

33. Expenses by Nature


2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000

Depreciation on property, plant and equipment on:

- owned assets 235,545 234,851 28,226 32,428

- leased assets 9,766 3,026 8,018 767

Amortisation of bearer biological assets 79,534 68,222 24,130 22,224

Staff costs 791,199 716,880 204,802 191,254

Cost of inventories recognised as expense 1,209,172 994,595 113,480 103,844

Management fees 26,511 38,907 23,541 19,718

SIFB premium 16,850 14,802 9,460 8,115

Cultivation and irrigation 160,537 172,302 105,583 76,471

Construction costs 200,130 189,600 - -

Others 32,275 53,738 11,770 -

2,761,519 2,486,923 529,010 454,821

34. Operating Profit the group the CompanY

2012 2011 2012 2011 Rs’000 Rs’000 Rs’000 Rs’000

Operating profit is arrived at after:creditingProfit on disposal of property, plant and equipment 2,952 8,325 1,418 2,637 Profit on sale of land 35,682 16,825 - - Profit on sale of investment - 96,279 - 93,152 and chargingDepreciation on property, plant and equipment on:- owned assets 235,545 234,851 28,226 32,428 - leased assets 9,766 3,026 8,018 767 Amortisation of bearer biological assets 79,534 68,222 24,130 22,224 Lease rentals - motor vehicles - - Cost of inventories recognised as expense 1,209,172 994,595 113,480 103,844 Staff costs (note 34(a)) 791,199 716,880 204,802 191,254

(a) Staff costsWages and salaries 618,150 555,755 176,709 169,157 Pension costs 173,049 161,125 28,093 22,097

791,199 716,880 204,802 191,254

35. Investment and Other Income the group the CompanY

2012 2011 2012 2011 Rs’000 Rs’000 Rs’000 Rs’000

Interest income 18,583 5,622 2,833 5,357 Dividend income 2,700 2,891 259,688 183,895

21,283 8,513 262,521 189,252

36. Finance Costs the group the CompanY

2012 2011 2012 2011 Rs’000 Rs’000 Rs’000 Rs’000

Foreign exchange transaction losses/(gains) 13,745 (7,370) (8,978) (8,509)Interest expense:- Bank and other loans 167,503 84,475 69,231 67,181 - Bank overdrafts 7,770 98,294 977 306 - Finance leases 1,528 882 1,005 269

176,801 183,651 71,213 67,756 190,546 176,281 62,235 59,247




37. Earnings Per Share


Basic earnings per share Rs. 0.89 34.57 (0.39) 32.66 Adjusted earnings per share* Rs. 1.64 1.55

Based on:Profit after tax, minority interest and after preference dividends (Rs’000) 166,402 305,151 (71,950) 288,272 Weighted average number of ordinary shares in issue 186,611,616 8,826,794 186,611,616 8,826,794

*Adjusted for bonus issue of 177,637,365 shares issued during the year.

38. Notes to Statement of Cashthe group the CompanY

FLOWS Notes 2012 2011 2012 2011 Rs’000 Rs’000 Rs’000 Rs’000

(a) Cash generated from operationsProfit before tax 1,188,761 998,751 (72,888) 305,872 Adjustments for:Impairment of investment in joint ventures - - 221,126 - and investment in subsidiaryImpairment of goodwill on acquisition of subsidiaries 24,382 Depreciation of property, plant and equipment 245,311 237,877 36,244 33,195 Amortisation of bearer biological assets 79,534 68,222 24,130 22,224 Amortisation of deferred expenditure 21,471 9,610 21,471 8,667 Profit on sale of land (35,682) (16,825) - - Profit on disposal of available-for-sale financial assets - (96,279) - (93,152)Profit on sale of property, plant and equipment (2,952) (8,325) (1,418) (2,637)Assets written off on property, plant and equipment - 1,466 - - Adjustment for capital reduction - - - 15,448 Increase in fair value of investment property - (92,104) - (92,104)Investment income (21,283) (8,513) (262,521) (189,252)Interest expense 176,801 183,651 71,213 67,756 Exchange difference 109,809 (247,265) - - Retirement benefit obligations 41,167 4,170 12,821 7,304 Share of results of associates (15,220) (6,557) - - Share of results of joint ventures 12,806 79,743 - - Changes in working capital: - fair value of consumable biological assets (476,861) 8,526 (22,548) (49,482)- trade and other receivables (22,112) 9,338 16,488 10,503 - inventories 40,947 2,722 992 (2,072)- trade and other payables 80,058 (418,488) 14,752 (26,191)- deferred expenditure 161,905 118,938 4,672 496 - work in progress 37,498 190,060 - - Cash generated from operations 1,646,340 1,018,718 64,534 16,575 (b) Cash and cash equivalents


2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000

Short term deposits 20,937 5,494 219 32,513

Cash in hand and at bank 105,152 268,643 2,584 80,201

Bank overdrafts (297,364) (276,683) (92,457) (93,560)

Loans at call (92,419) (83,130) (92,530) (86,454)

At June 30, (263,694) (85,676) (182,184) (67,300)

(c) Non cash transaction

The non cash transaction relates to the conversion of long term loan into bank overdrafts during the year.

39. Operating Lease Commitments

The group leases vehicles under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights.

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

the group

2012 2011

Rs’000 Rs’000

Not later than one year 10,565 8,309

Later than one year and not later than five years - 10,565

10,565 18,874

40. Capital Commitments


2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000

Capital expenditure approved by the Board :

- not contracted 495,510 455,926 68,132 72,594




41. Contingencies

(a) An assessment has been raised by the Tanzania Revenue Authority (TRA) in connection with the corporation tax filed and paid by one of the subsidiary, TPC Ltd, for the financial years ended June 30, 2004, 2005 and 2006.

In the assessment, some expenses incurred in the production of income have been disallowed for tax purposes by the TRA, resulting into a significant potential liability for the Group. TPC has submitted a notice of objection to the TRA assessment of Tshs. 3.34 billion (Rs. 63,300,952).

TPC is confident that the tax liability will not crystallise in the foreseeable future due to strong support based on legal and tax advice.

(b) The Company has received an assessment of Rs. 11,647,026 in respect of the year of assessment 2007/2008 and will file an objection to the assessment in accordance with the provisions of the Income Tax Act.

The Company is of the opinion that the tax liability will not crystallise in the foreseeable future since it has strong support based on legal and tax advice.

42. Related Party Transactions

(a) THE GROUP

Sale/(Purchase) of goods

and services

Investment income/

(expense)

Management feesreceivable /(payable)

Loans at call(from)/to

Amount owed to

Amount due from

2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Associates - - 1,700 4,000 - - - - - - - - Joint Ventures (139,999) (105,974) 58,113 45,736 - - (3,204) (83,121) 6,556 44,890 14,880 20,915 Companies with common Directors (27,663) (38,663) (355) 2,234 57,038 30,295 (89,215) (9) 12,007 8,611 2,661 8,463 Major Shareholders - - - - - - - - - 44,809 - - Total (167,662) (144,637) 59,458 51,970 57,038 30,295 (92,419) (83,130) 18,563 98,310 17,541 29,378

The above transactions have been made at arms’ length, on normal commercial terms and in the normal course of business.

(b) THE COMPANY

Sale/(Purchase) of goods

and services

Investment income/

(expense)

Management feesreceivable /(payable)

Loans at call(from)/to

Amount owed to

Amount due from

2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Subsidiaries 13,637 12,253 4,686 5,802 19,192 17,234 109 29,189 15,141 6,749 541,199 1,379,018Related company - (316) - - - - - - - Joint ventures - - (3,851) (1,765) - (3,203) (83,121) 2,962 - 13,527 17,826 Companies with common Directors (9,391) (9,633) - 1,120 (43,607) (19,718) (89,216) (9) - 2,661 8,463 Major Shareholders - - - - 44,809 - Total 4,246 2,304 835 5,157 (24,415) (2,484) (92,310) (53,941) 18,103 51,558 557,387 1,405,307

The above transactions have been made at arms’ length, on normal commercial terms and in the normal course of business.

(c) Key management personnel compensation


2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000

Salaries and short-term employee benefits 12,922 10,492 9,045 7,344

Post-employment benefits 1,017 1,394 712 976

43. Segment Information The accounting policies of the operating segments are same as those described in the summary of significant accounting policies. Consolidation adjustments represent elimination of intra-group transactions which are entered into under the normal commercial terms and conditions that would be available to unrelated parties.

Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, cash and cash equivalents and receivables and exclude investments in associates, investments in joint ventures and investment in other financial assets.

The Group is organised into the following main business segments :-

Sugarcane Growing and Sugar Milling

Power Generation

Property Development Others Total

Mauritius Tanzania Mauritius Mauritius Mauritius2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011

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

Segment revenue 704,661 609,404 2,151,174 1,765,944 352,524 233,710 317,538 508,033 147,538 146,036 3,673,435 3,263,127

Segment profit/(loss) 26,881 14,135 1,459,504 997,083 (4,524) 657 (49,362) 85,056 (31,036) (35,999) 1,401,463 1,060,932 Share of results of associates net of tax 13,923 4,568 - - - - - - 1,297 1,989 15,220 6,557 Share of results of joint ventures - - - - - - (14,453) (4,889) 1,647 (74,854) (12,806) (79,743)Investment and other income - net - 7,032 18,912 - 325 - 132 - 1,914 1,481 21,283 8,513 VRS and centralisation amortisation (21,471) (9,610) - - - - - - - - (21,471) (9,610)Gain on fair value ofinvestment property - - - - - - - 92,104 - - - 92,104 Impairment of goodwill on acquisition of subsidiary (24,382) - - - - - - - - - (24,382) - Exceptional items - - - - - - - - - 96,279 - 96,279 Finance costs - net (11,785) (7,853) (40,306) (28,174) (1,402) (2,361) (120,819) (122,176) (16,234) (15,717) (190,546) (176,281)(Loss)/Profit before tax (16,834) 8,272 1,438,110 968,909 (5,601) (1,704) (184,502) 50,095 (42,412) (26,821) 1,188,761 998,751 Tax (7,848) (15,691) (480,022) (315,297) 772 (6,014) - - (1,302) 1,896 (488,400) (335,106)Group profit/(loss) (24,682) (7,419) 958,088 653,612 (4,829) (7,718) (184,502) 50,095 (43,714) (24,925) 700,361 663,645 Minority interest (19,586) (8,743) (526,168) (362,270) 4,667 6,632 - - 9,261 10,420 (531,826) (353,961)Profit/(loss) for the year (44,268) (16,162) 431,920 291,342 (162) (1,086) (184,502) 50,095 (34,453) (14,505) 168,535 309,684




43. Segment Information (Cont’d)

Sugarcane Growing and Sugar Milling

Power Generation

Property Development Others Total

Mauritius Tanzania Mauritius Mauritius Mauritius

2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011

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

Segment assets 6,331,457 9,196,656 3,328,367 4,917,201 435,702 447,045 838,290 2,297,062 766,751 1,657,500 11,700,567 18,515,464

Associates 112,183 - - - - - - - 14,771 - 126,954 115,161

Joint ventures - - - - - - 477,532 185,937 663,469

12,490,990 18,630,625

Segment liabilities 1,351,548 2,087,463 1,092,210 868,004 128,719 133,403 906,559 968,427 265,010 260,177 3,744,046 4,317,474

Eliminations - -

3,744,046 4,317,474

Capital expenditure 90,558 64,771 203,590 191,696 28,501 42,414 - - 6,994 9,901 329,643 308,782

Depreciation 63,940 59,847 119,470 113,738 40,845 40,719 - - 21,056 23,573 245,311 237,877

geographical information

The Group’s three business segments are managed locally and operate in the following main geographical areas:

Sales Total assets Capital expenditure

2012 2011 2012 2011 2012 2011

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

Mauritius 1,522,261 1,497,183 9,162,623 6,969,321 126,053 228,872

Tanzania 2,151,174 1,765,944 3,328,367 4,917,201 203,590 191,696

3,673,435 3,263,127 12,490,990 11,886,522 329,643 420,568

Sales revenue is based on the country in which the customer is located. Total assets and capital expenditure are shown by the geographical area in which assets are located.

Analysis of sales 2012 2011

Rs’000 Rs’000

Sale of sugar, molasses and bagasse 2,855,835 2,383,478

Sale of electricity 352,524 233,710

Tourism 317,538 508,033

Golf revenue 90,211 80,671

Sales of goods 57,327 57,235

3,673,435 3,263,127

44. Business Combinations

flacq united estates limited (fuel)

Following the Special Meeting of Shareholders of Deep River-Beau Champ Limited (DRBC) on June 29, 2012, the shareholders have approved the amalgamation of Flacq United Estates Limited (‘FUEL’) with and into DRBC in accordance with and pursuant to the provisions of the Companies Act 2001.

The terms of the amalgamation are as follows:

(i) The effective date of the amalgamation is July 20, 2012.

(ii) The surviving company is Deep River-Beau Champ Limited (renamed as Alteo Limited);

(iii) The share exchange ratio is zero decimal eight night six five (0.8965) new DRBC share for every one (1) FUEL share;

(iv) 131,505,240 ordinary shares of Alteo Limited have been issued to the shareholders of FUEL;

(v) These new shares carry the same rights as the existing shares of Alteo Limited;

The shares of Alteo Limited are listed on the Official Market of the SEM as from July 31, 2012.

The assets and liabilities of FUEL will be accounted in the books of Alteo Limited at fair value in accordance with IFRS 3 Business Combinations in the next financial year.

Had the amalgamation taken place on June 30, 2012:

(i) The statement of financial position of Alteo Limited (amalgamated company) would have been as follows:

2012Statement of financial position Rs’000 ASSETSNon-current assets 22,063,614 Current assets 1,127,986 Total assets 23,191,600

EQUITY AND LIABILITIESCapital and reserves 20,298,702

LIABILITIESNon-current liabilities 1,378,852 Current liabilities 1,514,046 Total liabilities 2,892,898

Total equity and liabilities 23,191,600

(ii) The NAV/share would have been Rs. 61.46.




45. Bank Guarantees


2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000

Bank guarantees given to third parties 57,360 60,288 3,130 3,948

46. Three Year Financial Summary

2012 2011 2010

Rs’000 Rs’000 Rs’000

THE GROUP

(a) Results

Turnover 3,673,435 3,263,127 4,608,838

Share of results of joint ventures (12,806) (79,743) 92,977

Share of results of associates 15,220 6,557 2,495

Profit before taxation 1,188,761 998,751 793,427

Income tax expense (488,400) (335,106) (189,518)

Profit for the year 700,361 663,645 603,909

Other comprehensive income for the year, net of tax 920,754 (1,046,230) (237,453)

Total comprehensive income for the year 1,621,115 (382,585) 366,456

Profit attributable to:

- Owners of the parent 168,535 309,684 321,114

- Non-Controlling interests 531,826 353,961 282,795

700,361 663,645 603,909

Total comprehensive income attributable to:

- Owners of the parent 972,855 (529,164) 211,283

- Non-Controlling interests 648,260 146,579 155,173

1,621,115 (382,585) 366,456

Earnings per share (Rs.) 0.89 34.57 35.96

Adjusted earnings per share (Rs.)* 1.64 1.70

*Adjusted for bonus issue of 177,637,365 shares issued during the year.

(a) Statement of financial position

2012 2011 2010

Rs’000 Rs’000 Rs’000

ASSETS

Non-current assets 9,871,001 9,545,302 9,761,076

Current assets 2,619,989 2,341,220 2,649,298

Total assets 12,490,990 11,886,522 12,410,374

EQUITY AND LIABILITIES

Capital and reserves 7,213,660 6,362,390 6,970,717

Loans 44,488 44,637 47,319

Non-Controlling interests 1,488,796 1,162,021 1,234,696

Total equity 8,746,944 7,569,048 8,252,732

LIABILITIES

Non-current liabilities 2,168,422 3,123,078 1,918,635

Current liabilities 1,575,624 1,194,396 2,239,007

Total liabilities 3,744,046 4,317,474 4,157,642

Total equity and liabilities 12,490,990 11,886,522 12,410,374



ALTEO LIMITEDproXY form

I/We, ...........................................................................................................................................................................................of .................................................................................................................................................. , being a member/membersof Alteo Limited (“the Company”), do hereby appoint:.....................................................................................................................................................................................................of ................................................................................................................................................................................................or failing him/her, ...................................................................................................................................................................... of ............................................................................................................................................................ or failing him/her the Chairman of the Meeting, as my/our proxy to represent me/us and vote for me/us and on my/our behalf at the Annual Meeting of the Company to be held at hennessy park hotel, ebony Conference room, 65 ebène Cybercity, ebène on Tuesday, December 18, 2012 at 10.30 hours and at any adjournment thereof.

I/We direct my/our proxy to vote in the following manner (please vote with a tick):

Signed this .….............. day of ………………… 2012.

…………………………….. Signature(s)

Notes:1. Any member of the Company entitled to attend and vote at this meeting may appoint a proxy of his/her own choice to attend and vote on his/her

behalf. A proxy need not be a member of the Company.

2. If the instrument appointing the proxy is returned without an indication as to how the proxy shall vote on any particular resolution, the proxy will exercise his/her discretion as to whether, and if so, how he/she votes.

3. The instrument appointing a proxy or any general power of attorney, duly signed, shall be deposited at the Share Registry and Transfer Office of the Company, MCB Registry & Securities Ltd, Raymond Lamusse Building, 9-11, Sir William Newton Street, Port-Louis by Monday, December 17, 2012 at 10.30 hours and in default, the instrument of proxy shall not be treated as valid.

RESOLUTIONS FOR AGAINST ABSTAIN




4. To re-elect, on the recommendation of the Corporate Governance Committee, as Director to hold office until the next Annual Meeting, in accordance with Section 138(6) of the Companies Act 2001, Mr. G. Christian Dalais, who offers himself for re-election.

5-13. To re-elect, on the recommendation of the Corporate Governance Committee, as Directors of the Company to hold office until the next Annual Meeting, the following persons who offer themselves for re-election (as separate resolutions):

5. Mr. Thierry Lagesse

6. Mr. Jean-Claude Béga

7. Mr. Jan Boullé

8. Mr. Patrick de L. d’Arifat

9. Mr. P. Arnaud Dalais

10. Mr. Amédée Darga

11. Mr. Jean de Fondaumière

12. Mr. Louis Guimbeau

13. Mr. Arnaud Lagesse

14. To re-appoint Messrs BDO & Co as auditors for the ensuing year and to authorise the Board of Directors to fix their remuneration.



ALTEO LIMITEDpoStal Vote

I/We, ...........................................................................................................................................................................................

of .................................................................................................................................................. , being a member/members

of Alteo Limited (“the Company), do hereby cast my/our vote, by virtue of Clause 18.10 of the Constitution of the Company,

for the Annual Meeting of the Company to be held at hennessy park hotel, ebony Conference room, 65 ebène Cybercity,

ebène on Tuesday, December 18, 2012 at 10.30 hours and at any adjournment thereof.

I/We direct my/our vote to be cast on the Resolutions in the following manner (please vote with a tick):

Signed this .…................day of ………………… 2012.

…………………………….. Signature(s) Notes:The duly signed postal vote should reach the Share Registry and Transfer Office of the Company, MCB Registry & Securities Ltd, Raymond Lamusse Building, 9-11, Sir William Newton Street, Port-Louis forty-eight (48) hours before the start of the meeting and in default, the postal vote shall not be treated as valid.

RESOLUTIONS FOR AGAINST ABSTAIN




4. To re-elect, on the recommendation of the Corporate Governance Committee, as Director to hold office until the next Annual Meeting, in accordance with Section 138(6) of the Companies Act 2001, Mr. G. Christian Dalais, who offers himself for re-election.

5-13. To re-elect, on the recommendation of the Corporate Governance Committee, as Directors of the Company to hold office until the next Annual Meeting, the following persons who offer themselves for re-election (as separate resolutions):

5. Mr. Thierry Lagesse

6. Mr. Jean-Claude Béga

7. Mr. Jan Boullé

8. Mr. Patrick de L. d’Arifat

9. Mr. P. Arnaud Dalais

10. Mr. Amédée Darga

11. Mr. Jean de Fondaumière

12. Mr. Louis Guimbeau

13. Mr. Arnaud Lagesse

14. To re-appoint Messrs BDO & Co as auditors for the ensuing year and to authorise the Board of Directors to fix their remuneration.



Alteo Limited

Registered office:13, St Clément Street, CurepipeTel: 670 72 77 Fax: 670 07 40 www.alteogroup.com

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