THE MAURITIUS DEVELOPMENT INVESTMENT TRUST COMPANY LIMITEDANNUAL REPORT: 2012-06-30

Report of the DirectorsThe directors have pleasure in submitting the Annual Report and the audited financial statements for the year ended 30 June 2012.

Market Review

Stock Exchange of Mauritius (SEM)

Official Market (OM)

The SEMDEX of 2,098 at 30 June 2011 fell sharply to a low of 1,883 on 31 October 2011 and then fluctuated within a narrow range to 1,890 on 6 January 2012. It then went down to 1,756 on 19 March 2012 and was 1,776 at 30 June 2012, a drop of 15.3% for the year.

The share prices fell by 10.1% and 14.6% for The Mauritius Commercial Bank Ltd and State Bank of Mauritius Ltd, the two leading constituents of the SEM-7, and by 12.9% for Mauritius Union Assurance Co Ltd and 12.5% for Mauritian Eagle Insurance Co Ltd. Swan Insurance Co Ltd share price rose by 9.7%, due to the amalgamation of the insurance and investment businesses of Rogers, while for Bramer Banking Corporation Ltd shares, its equivalent unit price of Rs 3.85 at 30 June 2011 after exchange from Mauritius Leasing Co Ltd shares, went up 122% to reach Rs 8.55 at 30 June 2012.

All industrial sector share prices decreased, by 36.8% for Mauritius Chemical and Fertilizer Industry Ltd, due to its profit being significantly affected by the setting up of a complex fertiliser plant, 23.8% for Gamma Civic Ltd, 20.0% for United Basalt Products Ltd, 15.0% for Mauritius Stationery Manufacturers Ltd, 9.4% for Plastic Industry (Mauritius) Ltd, 6.4% for Mauritius Oil Refineries Ltd and 1.4% for Phoenix Beverages Ltd.

As for the commercial sector, share prices fell for Harel Mallac Ltd (37.8%), Cie des Magasins Populaires Ltée (21.9%) and Ireland Blyth Ltd (1.9%). However, they rose 8.3% for Rogers & Co Ltd, owing to the above-mentioned amalgamation as well as the announced dividend in specie of CIM shares, 4.3% for Vivo Energy Mauritius Ltd, formerly Shell Mauritius Ltd, attributable to the change in the parent company and 3.7% for Innodis Ltd due to their commendable performance underchallenging conditions in the distribution and chicken production sectors.

Prices of all investment sector shares decreased, by 40.0% for Caudan Development Ltd, affected by the coming into operation of the new Mega commercial complex at Bagatelle, 35.3% for Fincorp Investment Ltd, 35.1% for National Investment Trust Ltd, 31.0% for Promotion and Development Ltd, 27.2% for United Docks Ltd, 14.6% for P.O.L.I.C.Y Ltd, 14.4% for The Mauritius Development Investment Trust Ltd, 8.7% for ENL Commercial Ltd, 7.3% for Belle Mare Holding Ltd and 1.3% for Terra Mauricia Ltd, exchanged 1:1 for Harel Frères Ltd which was in the sugar sector.

Due to the drop in average occupancy and room rates, owing to more intense competition in Europe where the bulk of our tourists originates, hotel shares prices fell sharply, Sun Resorts Ltd (42.9%), Lux Island Resorts Ltd, formerly Naïade Resorts Ltd,(40.9%) and New Mauritius Hotels Ltd (35.9%). Automatic Systems Ltd leisure share price dropped by 30.4% due to severe competition from Lotto which offered new innovative gambling products.

In the sugar sector, the share price of Omnicane Ltd rose by 2.8%, due to its development plan and better results, whilst those of ENL Land Ltd O and P shares fell by 11.5% and 6.5% respectively.As for foreign investments on the OM, net disinvestments of Rs 305 M were registered in the first 10 months of 2012 (2011: Rs 570M) owing to the continued volatility of world and emerging markets and have contributed to the SEMDEX having worsened more than overseas market indices.

Development and Enterprise Market (DEM)

The DEMEX of 156 at 30 June 2011 traded within a narrow range during the year. After going up to 148 on 16 August 2011, it then rose to 155 on 9 January 2012 and was 149 at 30 June 2012, a fall of 4.5% during the year.

The main decreases in share prices were RHT Holding Ltd (85.1%), Sté de Développement Industriel et Agricole Ltée (44.4%), Hotelest Ltd (39.0%), Constance Hotels Services Ltd (33.8%) and Medine Ltd P (31.0%). Share prices rose by 302.8% for Margarine Industries Ltd and 48.5% and 44.1% for Flacq United Estates Ltd and Deep River Beau Champ Ltd (DRBC) due to their bonus issues of 5: 1 and 19:1 respectively. FUEL was subsequently amalgamated into DRBC which was renamed Alteo Ltd (Alteo).

At 30 June 2012, the OM and DEM listed shares represented 32% and 45% of the MDIT’s portfolio respectively but these percentages will subsequently alter due to ALteo’s shift from DEM to OM. The graph below shows that, during the year ended 30 June 2012, the downward trend for MDIT share price was less sharp than for the weighted average of the SEMDEX and the DEMEX.

Overseas markets

In the second half of 2011, the Euro zone went through another wave of acute economic turbulence brought about by the sovereign debts crisis in Greece and other Euro zone members. Global growth rose by 4% in 2011, compared to 5% in 2010, and the World Economic Outlook forecast of 3.5% in 2012 despite better policies being implemented to avoid a worsening of the crisis in the Euro zone.

In the first quarter of 2012, the Chinese and Indian economies have slowed down whilst in the second quarter, USA appears to be on track to recovery, however threatened by fiscal uncertainty and weak demand, whilst Europe was impacted by the increased political and financial uncertainty in Greece as well as the banking sector problems in Spain.

In the year ended 30 June 2012, the above economic conditions have helped the indices of US stock markets to continue to rise whilst, on the other hand, depressed those of the European, Asian and Mauritius stock markets which, it is recalled, improved in the previous year.

The graph below shows positive returns for the Dow Jones and Nasdaq and a SEMDEX return which is more negative than the FTSE, Hang Seng and Nikkei and only less negative than the CAC 40.

Investment strategy

The strategy of MDIT remains the constant re-balancing of its local investment portfolio to reduce any over-concentration in any one company or sector of the economy. Trading activities being also one of the main characteristics of our Fund, the strategy on the trading side is to ensure that local securities are bought and sold when their prices are at relatively low and high levels respectively.

The Company invests in stocks where their respective prices have fallen below their financial fundamentals and subscribes to rights issues of shares and bonds with good price growth potentials. Moreover, disinvestments would likely occur for shares held in companies involved in medium term projects which would adversely impact on their results and thus weigh down on their market prices.

The Investment Committee is consulted in respect of substantial transactions and meets regularly to monitor themovements in the securities’ portfolio ensuring that the investment strategy is implemented.

Official Market

United Basalt Products Ltd (UBP) - 01 July 2011

UBP announced the conversion of Rs 150M receivable from its wholly-owned subsidiary Marbella Espace Maison Ltée (MEML) into fully-paid ordinary shares of Rs10 each.

Dale Capital Group Ltd (DCPL) - 25 July 2011

DCPL announced a restructuration to reduce the Group debt burden, involving its 100% step-subsidiary, Dale Capital Partners Holdings Ltd (DCPH), selling its 90% holding in Dale Capital Partners (Mauritius) Ltd (DCPM) for USD 3,355,060 and DCPH subsequently holding 80% of Dale International Trust Co Ltd.

ENL Commercial Ltd (ENLC) and ENL Investment Ltd (ENLI) - 23 August 2011

ENLC and ENLI Investment Ltd announced a restructuration, with NMHL and TPL shares being disposed to ENLI, ENL Land shares to ENL Finance Ltd (ENLF) and ENCL shares to ENL Ltd and ENLF.

Automatic Systems Ltd (ASL) - 8 September 2011

ASL advised its amalgamation with HH Management Ltd (HML) after acquisition of a 100% stake in HML.Sun Resorts Ltd (SRL) - 18 October 2011

SRL and Armand Appavou & Co Ltd entered into a lease agreement under which SRL leased Ambre Resort & Spa and sublease the hotel land for an initial period of five years starting 1 October 2012 with the option to renew/extend the lease/sub-lease until 30 September 2032.

Soap & Allied Industries Ltd (SAIL) - 8 November 2011

SAIL, effective 1 January 2012, amalgamated with its wholly owned subsidiary Sail Distributors Ltd.Terra Mauricia Limited (Terra), replacing Harel Frères Ltd (HFL) - 10 November 2011 Terra, the new holding company formed to better reflect HFL widely diversified activities, announced that it would be listed on the SEM in the Investments Sector and that the HFL shareholders would be required to swap their shares on a 1:1 basis for shares in Terra.

LUX Island Resorts Ltd (LUX), formerly Naiade Resorts Ltd (Naiade) - November/December 2011

LUX operates, with effect from 1 December 2011, under the new LUX* Island Resorts brand with five of its hotels renamed as LUX* Belle Mare, LUX* Le Morne, LUX* Grand Gaube, LUX* Maldives, and LUX* Ile de la Reunion while the other properties retained their names but are presented as Produced by LUX*. Subsequently, there was a name change to LUX Island Resorts Ltd from Naiade Resorts Ltd.

Vivo Energy Mauritius Ltd (Vivo) formerly Shell Mauritius Ltd - December 2011/January 2012

Vivo announced the purchase by Plateau Holding BV, a joint venture between Vitol (40%), Helios (40%) and Royal Dutch Shell (20%), of 75% of Shell Mauritius Ltd shares through its 100% owned subsidiary Vivo Energy Mauritius Holdings BV (VEMH) at a transfer price set at Rs 161. Subsequently, this offer price was offered by VEMH to the Vivo minority shareholders and was accepted by 352 shareholders representing only 2.2% of total shareholding.

Air Mauritius Ltd (MK) - 14 February 2012

MK announced that a strategic review of its business was carried out with the assistance of Seabury APG, and included measures to reduce costs, optimize network and improve organization structure.

Mauritius Stationery Manufacturers Ltd (MSM) - 14 February 2012

MSM disclosed its restructuration plan aimed at renewing with profitability in two years following the reduction of its personnel and operating sites as well as outsourcing some services and selling off used/obsolete equipment.

Swan Insurance Co Ltd (SWAN) & Anglo-Mauritius Assurance Sty Ltd (ANGLO) - March/April 2012

SWAN and ANGLO was amalgamated with CIM Insurance Ltd (CIL) and CIM Life Ltd (CLL) respectively and Rogers receiving 6,653 shares in Intendance Holding Ltd, SWAN’s parent company, in final exchange for CIL and CLL shares.

Bramer Banking Corporation Ltd (BBCL), amalgamation with Mauritius Leasing Co Ltd - May 2012

BBCL shares were traded as from 9 May 2012 on the Official Market with an introductory price of Rs 9.50 after its amalgamation with Mauritius Leasing Company Ltd (MLC) and Bramer Holding Co Ltd (BHCL) and the allotment inter alia of 1.78 BBCL shares for each ordinary share held in MLC.

Gamma Civic Ltd (GCL) - 15 May 2012

GCL informed that its board had approved the split of each of its ordinary shares of Rs 10 into 10 ordinary shares of Re 1.P.O.L.I.C.Y Ltd (POLICY) - 22 May 2012

POLICY announced a bonus issue of 1 share for every 3 shares held, which was made after 30 June 2012.

State Bank of Mauritius Ltd (SBM) – May/June 2012

SBM announced that each SBM share of Re 1 nominal value would be split into 100 shares of 1 cent each and that its next financial year shall cover a period of 18 months from 1 July 2012 to 31 December 2013, and thereafter annually from 1 January to 31 December.

Omnicane Ltd (Omnicane) - June 2012

Omnicane acquired a total of 20% holding in Real Good Food Company PLC, a UK company listed on the London Stock Exchange, for Rs 370.1M and thereafter set up a multi-currency medium term note programme to issue in tranches for up to a maximum nominal value of Rs 3 billion. Subsequently, a first tranche of Rs 1.08 billion of notes was issued at 7.15% p.a. interest, payable semi annually on 16 June and 16 December and on maturity date of 16 August 1917, to fund itsstrategic investments in the sugar and renewal energy sectors in Mauritius and Africa, and these notes are listed on the SEM.

Ireland Blyth Ltd (IBL) - 29 June 2012

IBL now owns 51% of Winhold Ltd, the holding company of Pick and Buy Ltd (Winner’s Supermarket Chain) and IBL Properties Ltd (the property development arm of Winner’s), following the redemption of preference shares and a further injection of capital by Shophold (Mauritius) Ltd (SML) which increased to 49 % its holding in Winhold Ltd.

Alteo Ltd (Alteo), formerly Deep River Beau Champ Ltd which incorporated Flacq United Estates Ltd

Deep River Beau Champ Ltd (DRBC) converted its preference shares to ordinary shares in the ratio of 1:0.98 and then made a bonus issue of 19:1 ordinary shares. On the other hand, FUEL made a bonus issue of 5:1 ordinary shares and amalgamated into DRBC with every FUEL share exchanged for 0.8965 DRBC share after payment of a dividend in cash of Rs 0.33 and in specie of 1:1 Fuel Properties Ltd (FPL) shares valued at Rs 3.92 per share. FPL holds 50% in Haute Rive Holdings Ltd, a joint venture company between FUEL and Indian Ocean Real Estate Co Ltd, involved in the development of the Azuri project. After the amalgamation, DRBC was renamed Alteo Ltd.

Rogers and Co Ltd (Rogers) and ENL Investment Ltd (ENLI)

Rogers was being restructured to separate the effective interests of ENLI and Elgin Ltd (Elgin) in Rogers’ holding company, Rogers Consolidated Shareholding Ltd (RCSL) This involved a cross transfer of a number of assets between Rogers and its subsidiary CIM Financial Services Ltd (CFSL) and the listing of CFSL on the SEM after a dividend in specie of the shares held by Rogers in CFSL, with ENLI and Elgin being the main shareholders of Rogers and CFSL.

Development and Enterprise Market

Mauritius Freeport Development Ltd (MFD) - 14 October 2011

MFD 1:4 rights issue of 30M new ordinary shares at Rs 5 each, payable in two equal installments of Rs 2.50 was oversubscribed and the Rs 150 M raised financed the completion of the final phase of building warehouses/offices at Zone 5 in the Mer Rouge region.

United Investments Ltd (UTIN) - 11 November 2011

UTIN issued 8,349,756 ordinary shares of Re 1 each for the acquisition of a stake of 18% in Les Gaz Industriels Ltd and an additional 7.34% holding in Mechanization Company Ltd (MECOM).

Union Sugar Estates Ltd (UNSE) – November / December 2011

UNSE disposed for Rs 5M its wholly owned subsidiary Lignecaliste Property Co Ltd (LCPL) which had net assets of Rs 2.3M inclusive of 229.944 hectares of cane land in a region with high rainfall and uneven topography valued at Rs 253M, and an indebtedness of Rs 251M. Subsequently, to further reduce the group’s indebtedness, UNSE sold to Anglo Mauritius Society Ltd (ANGLO) for Rs 123M the offices at Le Caudan Waterfront which were owned by Société Barkly Wharf.

Deep River Investments Ltd (DRIL) - 8 December 2011

DRIL informed that the Judge in Chambers has maintained the injunction issued prohibiting the disposal of shares other than in accordance with the terms of the shareholders agreement of 30 October 2008. The order will hold good pending determination of the issues before the competent forum.

Tropical Paradise Ltd (TPL) - 14 December 2011

TPL 3:4 rights issue of 52.5M ordinary shares at a price Rs 6.25 was oversubscribed and the Rs 328.1M raised was partly finance the acquisition of Hennessy Park Hotel, formerly The Link Hotel, in Ebène for Rs 600M.

United Investments (UIL) - 17 February 2012

UIL informed the subscription of 17,316,129 out of the 19,163,719 new ordinary shares available for subscription at the rights issue price of Rs 8. The Rs 138.5M raised would partly finance the acquired increase in stake in Attitude Resorts Ltd from 24.5% to 40%.

Deep River Investment Ltd (DRIL) - April 2012

DRIL referred to the Financial Services Commission (FSC) the proposal of intent received from GEM Management Ltd to make a firm offer, subject to conditions After the FSC’s reply was received, DRIL turned it down as not being a “firm intention to offer” under the Securities (Takeover) Rules 2010.

Robert Le Maire Ltd (RLM) - 11 May 2012

GML Investissement Ltée (GMLI), holder of 65.02% stake in RLM, acquired 99.9% of the shares held by the minority shareholders who accepted their cash price offer of Rs 215 per share ex dividend of Rs 5.50.

Ascencia Ltd (ASCE) - March/June 2012

ASCE acquired from Foresite Property Holding Ltd (FPHL) a plot of land adjacent to Phoenix Commercial Centre (PCC) for Rs 90.0 M and paid for in shares. Its Manhattan and Cascades buildings and Riche-Terre Industrial Park were subsequently for Rs 445M to finance the extension of the PCC and Riche-Terre Commercial Centre buildings.

OffPERFORMANCE REVIEW

Official Market (Om) Investments

The downward movement of the SEMDEX during the year impacted adversely on the sales of OM investments which decreased to Rs 109.9M and only enabled the realisation of a lower profit on a cost basis of Rs 74.8M, 82.0% of which was on shares in the following five OM companies:

MCB

MCB, incorporated in 1838, is the leading banking institution in Mauritius and a major financial services provider in the region, with a presence in eight countries via its subsidiaries, associates and representative offices. It is also involved in non-banking financial and investment services and has the highest market capitalisation of around USD 1.4 billion representing a share of nearly 25%.

Excluding non-recurrent gains of Rs 410 M in 2010/11, Group net profit remained at about Rs 4.1 billion. This testifies the resilience of MCB’s performance in the current challenging economic environment. Core earnings were underpinned by increases of 8.5% in interest income to Rs 6.4 billion and 18% in net fee and commission income to Rs 2.7 billion, principally stemming from the persistent rise in regional trade financing. While non-bank activities were impeded by financial volatility, the share of foreign-source income was maintained at 43%, despite a decline in the contribution of associate Banque Française Commerciale Océan Indien Ltée (BFCOI) due to a notable increase in impairment charges.

For the quarter to 30 September 2012, the Group profit rose by 6.9% to reach Rs 1,136.3M. This performance was considered to be satisfactory in the difficult operation context and has as its origin the MCB’s business development initiative aimed at market diversification and continuously improving customer service. Operating income increased by 5% despite on-going strains in the money and foreign exchange markets and stiffer competition in specific segments, while the rise in expenses eased off. Contribution from associate was on the upturn but impairment remained at a high level. For the half year to 31 December 2012, MCB is expecting the results to reflect the trend shown in the first quarter.

MCB share price of Rs 188 at 30 June 2011 decreased less than the market trends to reach Rs 166 on 8 August 2012 and Rs 162 on 9 March 2012. It then picked up to Rs 169 on 29 June 2012 and was Rs 162 on 16 November 2012. As the latter price has a good P/E ratio of 9.36 and is 13.8% lower than at 30 June 2011, the MCB share is presently attractive to buy.

Rogers

Rogers, one of the largest conglomerates in Mauritius, was before the separation of CIM Financial Services Ltd (CIM) on 12 October 2012, engaged in both domestic and foreign operations in the core business sectors of financial services, hotels, leisure, logistics, property, real estate and agribusiness, travel and aviation and held strategic interests in New Mauritius Hotels, Air Mauritius and Lafarge.

For the quarter to 30 June 2012, Group PAT rose from Rs 13M to Rs 441M, impacted by an exceptional profit of Rs 422M on the amalgamation of its insurance and investment businesses into the Swan Group. Increases in PAT achieved were: Rs 33M by CIM to reach Rs 74M, due to the improved performance of the Global Business Sector and the dollar appreciation against the rupee, Rs 21M by the Property Sector and Rs 14M by the Logistics Sector. Moreover, the loss in the Hotel Sector was reduced by Rs 53M due to higher occupancy and the reversal of deferred tax liability provisions. The Real Estate and Agribusiness Sector incurred a loss of Rs 48M (2011: profit of Rs 38M), attributable to a reduction in value of biological assets and fewer residences delivered at Villas Val Riche, and there was a decreased profit of Rs 3M in the Travel and Aviation Sector and no dividend from Air Mauritius (2011: Rs 7M).

For the nine months to 30 June 2012, Group PAT amounted to Rs 782M (2011: Rs 321M) and, for the full year, earnings per share excluding the exceptional profit was expected to be maintained.

Rogers share price of Rs 300 at 30 June 2011 dropped to Rs 275 but was, following the announcements of the abovementioned amalgamation and the unbundling of CIM, propelled to a peak of Rs 389 before falling to Rs 325 at 30 June 2012 and Rs 290 on 12 October 2012. The price which was adjusted to Rs 168, ex dividend of Rs 2 in cash and in specie of 27 CIM shares, then went down to Rs 130 on 16 November 2012.

After the spin-off of CIM in October 2012, Rogers announced that, following acquisition from its parent company ENL, it now holds 37.8% of Intendance Holdings Ltd, Swan’s holding company, and will consolidate NMH, in view of its share of 20% in common with ENL. Further, Rogers plans to not only make Ascencia become the most prominent property owner of developed property in Mauritius but also tap new sources of growth in the rapidly emerging economies of the region.

LUX (formerly Naïade)

LUX owns and manages nine hotels in the Indian Ocean, comprising LUX Belle Mare, Grand Gaube, Le Morne, Maldives and Ile de la Reunion, as well as Hôtel Le Récif, Merville and Tamasa hotels and some bungalows and a restaurant at Iles des Deux Cocos.

For the year ended 30 June 2012, group revenue increased by 9.6% on last year to Rs 4.2 billion and operating profit by 13.2% to Rs 378.9 M. The Group managed, in Mauritius, to not only increase by 6% the number of hotel guests despite virtually no growth in tourist arrivals to our island, but also maintain its average room rate in spite of an appreciating rupee against most other currencies. However, due to rising operational costs, including branding, operating profit fell by Rs 43M to Rs 220M. The Reunion operating profit was also down to Rs 19M due to revenue growth of only 1%. On the other hand, LUX Maldives, driven by strong tourist arrivals from China achieved increases in occupancy and room rates by 13% points and 20% points respectively, boosted its revenue by 13% to Rs 1.1 billion and doubled its operating profit which reached Rs 140M.

For the low season quarter to 30 September 2012, the operating loss rose by Rs 13.3M to Rs 78.6M, attributable to the Mauritius operations with 18.8% basis points hotel occupancy drop following decreases of 13% and 22% in tourist arrivals from Europe and France which are Lux’s main and number one markets respectively. An operating profit increase of Rs 1.5M in Maldives compensated a similar decrease in Reunion. Net loss for the quarter thus increased to Rs 161.6M, from Rs 120.4M which, however, included an exceptional profit of Rs 27.3M. For the high season quarter to 31 December 2012, subject to no significant deterioration in the economic environment, an improved performance on last year was expected essentially due to improved efficiency and non-recurring costs.

LUX share price of Rs 33.50 at 30 June 2011 fell, in line with market indices affected by the global uncertainty, to 25.90 on 2 December 2011 before rising to Rs 29.00 on 28 January 2012. It then trended significantly downwards to Rs 19.80 on 29 June 2012 and Rs 15.20 on 16 November 2012.

As the latter almost record low price is at a high discount of 50.4% to NAV and represents only 14.3% of its adjusted record price of Rs 106 ex the December 2010 rights issue at Rs 17.00, LUX is a share which has a lot of recovery potential.

Omnicane

Omnicane Ltd, formerly Mon-Trésor & Mon-Désert Ltd (MTMD), a long established sugar cane group, is one of the largest sugar and electricity producers in Mauritius. It has a 20% shareholding in UK listed Real Good Food Company plc which is involved in sugar marketing, packing, distribution and the transformation of refined sugar into products, such as marzipan, sugar paste, caramels and soft icing, and is the largest independent sugar distributor in Europe.

Omnicane profit before tax for the nine months ended 30 September 2012 went down from Rs 200.1M to Rs 6.5M. Out of the lower profit of Rs 194.6M, Rs 86.2M is due to operating profit impacted by lower sugar accruing of 20,260 tonnes (2011: 22,246 tonnes), the new silo for refined sugar coming into operation in the first quarter and major repairs at La Baraque power plant during the intercrop maintenance period. Finance cost was slightly lower by Rs 4.9M to Rs 419.2M while profit on sale of land decreased substantially by Rs 113.8M.

For the last quarter of 2012, the energy segment was forecast to perform better to enable the year’s profit to be similar to last year. Sugar profitability would continue to be affected by the estimated 6.7% reduction in the 2012 crop sugar accruing while sale of land plots, mainly at Highlands, would improve. As for the projects, the Ethanol Distillery at La Baraque and the Airport Hotel were progressing well and the Cane Growing and Sugar Milling project in Kenya and the Hydro-Electric Plant in Rwanda was expected to reach financial close by the end of 2012.

The above projects would be financed by land sale proceeds and issues of notes of up to Rs 3 billion which would also help to re-structure the company’s short term debt to medium term. A first tranche of five year notes for Rs 1.08 billion was issued in August 2012 at 7.15% p.a. interest payable semi-annually and the issue of a second tranche is scheduled for December 2012.

Omnicane share price of Rs 72.00 at 30 June 2011 decreased to a low of Rs 67.50 on 11 October 2011 and then went up to Rs 76.00 on 6 December 2011. It was Rs 74.00 on both 29 June 2012 and 16 November 2012, a price which is below its NAV of Rs 82.89 based on land revaluation carried out five years ago in December 2007.

NMH

NMH is the largest well established hotel group which owns and manages eight hotels in Mauritius, namely, Royal Palm, Dinarobin, Paradis, Trou aux Biches, Shandrani, Le Victoria, Le Cannonier, Le Mauricia and the St Anne Resort and Spa in Seychelles. In Morocco, it has a 100% shareholding in Domaine Palm Marrakech involved in the villas development project managed by subsidiary Beachcomber Hotel SA, the owner of the Royal Palm Marrakech hotel under construction.

NMH PAT for the nine months to 30 June 2012 decreased to Rs 754.5M (2011: Rs 801.9M), with the drop in EPS being from Rs 4.77 to Rs 4.50. This was mainly due to Rs 11.2M of share of loss of associates compared to a profit Rs 25.2M for the corresponding period of 2010/11. For the low season quarter to 30 June 2012, NMH achieved a 14% growth in guest nights sold, despite a 1.6% rise in tourist arrivals to the island, but unfavourable exchange rates and the adverse results of associates contributed to increase by Rs 48.3M the loss of the quarter to reach Rs 172.3M.

NMH was expecting the difficult trading conditions to worsen owing to a deterioration of the disequilibrium between air and bed capacities, the economic problems on the source markets and the euro exchange rate. In view of this and based on their trend of booking, lower overall results for the year to 30 September 2012 were forecast than for last year.

NMH share price of Rs 103 at 30 June 2011 fell sharply to Rs 66.00 on 29 June 2012 and then rose slightly to Rs 68.00 on 7 August 2012. After the announcement of no dividend payment in September 2012, it decreased further and was Rs 54.00 on 16 November 2012. The latter price represents only 26.2% of the record of Rs 206 in January 2008 and is lower than its NAV of Rs 75.49.

Dem Investments

Sales of DEM investments during the year under review amounted to Rs 46.3M and yielded a profit on a cost basis of Rs 32.3M, 85.5% of which was in the following five DEM companies:

ENL

ENL Ltd (formerly Espitalier Noel Ltd) is a major group with five distinct clusters, namely ENL Agri, ENL Commercial, ENL Investment, ENL Property and ENL Lifestyle. The latter was set up as a company to invest in the leisure and retail businesses and its first initiatives were the launch of the Ocean Restaurant and the Voila Bagatelle. ENL is by far the largest investment in our DEM portfolio, with a value of Rs 319.8M at 30 June 2012 after taking in account Rs 93.5M for the 32,264 ENL ordinary shares also held.

ENL operating profit for the year to 30 June 2012 decreased by Rs 39.2M to Rs 41.6M, mainly attributable to the losses of two subsidiaries which were partly offset by the higher profit of ENL Agri. Excluding fair value gains on investment properties, profit before tax was Rs 679.8M compared to Rs 228.2M last year. This major improvement results from higher profit on sale of land and Rs 164.8M of fair value gain of net assets value over acquisition price (2011: net deficit of Rs 146.0M) and Rs 62.0M recognised as compensation for land leased for 99 years.

For the quarter ended 30 September 2012, operating profit amounted to Rs 14.9M (2011: loss of Rs 27.9M) owing to the better results from sugar cane growing and the property segment, particularly with phase 2 of Les Allées d’Helvetia nearing completion. Share of profits from associates increased by Rs 131.8M due to the exceptional profit of Rs 422M realised by Rogers on the amalgamation of its insurance and investment businesses with those of the Swan Group. However, finance costs were Rs 57.9M higher, impacted by an exchange gain of Rs 19.6M last year when there was also the above-mentioned fair value gain of Rs 164.8M.As Rogers is controlled by ENL after restructuration which was completed in October 2012, its consolidation by ENL as from the quarter to 31 December 2012 will have a significant impact on the financial profile of ENL.

Despite a 12.0% rise in net asset value from Rs 7,208.29 to Rs 8,073.05, ENL P share price of Rs 3,400 at 30 June 2011 fell to a low of Rs 2,400. It then picked up to Rs 2,900 on 29 June 2012 and was Rs 2,780 at 16 November 2012. The latter ENL P share price is at a very substantial discount of 65.6% to its NAV.

DRBC/FUEL (subsequently called Alteo Ltd)

DRBC, forming part of the Agro-Industry cluster of CIEL Group, is involved in cane growing, sugar milling and refining activities as well as energy production, property development, hospitality and leisure activities.

DRBC amalgamated on 10 July 2012 with FUEL which had similar cane growing, sugar milling and energy production activities, and was renamed Alteo Ltd. Every FUEL share was exchanged for 0.8965 DRBC share after a dividend per share in cash of Rs 0.33 and in specie of 1:1 Fuel Properties Ltd (FPL) shares worth Rs 3.92. FPL holds 50% in Haute Rive Holdings Ltd, a joint venture company between FUEL and Indian Ocean Real Estate Co Ltd, involved in the Azuri project developmentnear Roche Noire in the east of the island.

DRBC turnover for the year to 30 June 2012 increased by 12.6% to reach Rs 3,673M, attributable to the rise in sugar production from 86,000 tonnes to a record of 91,000 tonnes in Tanzania and higher sugar prices and energy exports to the grid in Mauritius. PAT increased by 5.6% to Rs 700.4M despite the fact that last year’s figures included Rs 96.2M of profit on the sale of non-core 40% shareholding in General Construction Co Ltd and Rs 92.1M of fair value gain on investmentproperty. The higher profitability of the Tanzanian operations was partly offset by the loss in the property development sector. The loss from joint ventures were reduced to Rs 12.8M (2011: Rs 79.7M) following better hospitality sector results making up for the continued downturn in the life science activities.

For the first quarter to 30 September 2012, Alteo’s turnover rose by 47.3% to Rs 1,926.1M, due to the impact of the FUEL amalgamation which was, however, reduced by a 34.1% drop in sugar sales in Tanzania to 21,128 tonnes. Mauritius sugar yield was in line with last year while no IRS villas were handed over. PBT rose from Rs 637.3M to Rs 809.3M before deducting finance cost of Rs 80.0M (2011: Rs 47.7M). Sale of 83 arpents of converted Trianon land for Rs 610M realised a profit of Rs 28.9M and a fair value gain of Rs 46.6M arose following associate FUEL Refinery Ltd becoming a subsidiary. As a result, Group earnings per share after the bonus issue rose by 7.5% to Rs 1.44

DRBC O share price of Rs 412 at 30 June 2011 rose to Rs 310.00 on 4 April 2012 when it was adjusted to Rs 25.50 ex the 19:1 bonus issue. It then went up to Rs 33.50 before dropping to Rs 29.90 at 30 June 2012. After the FUEL amalgamation, Alteo share price rose to Rs 31.90 on its first trading day on 31 July 2012 but then fell to Rs 29.60 on 16 November 2012. The latter price is at a substantial 51.8% discount to its NAV of Rs 61.46 had the amalgamation taken place on 30 June2012.

Union Flacq

Union Flacq Ltd (UFL) is an investment company forming part of the Groupe Mon Loisir (GML) and has controlling interests in Forward Investment and Development Enterprises Ltd (FIDES). It formerly controlled Flacq United Estates Ltd (FUEL) until 10 July 2012 when the latter was amalgamated into DRBC, renamed Alteo, and distributed dividend in specie, 0.5163 Alteo share per UFL share.

FIDES holds an investment portfolio which includes 80.5% holding in Flacq Associated Stonemasters Ltd (FAST), involved in the production and sale of macadams and bricks, a significant effective holding in LUX Island Resorts and the former non-sugar diversification companies of FUEL. Since 10 July 2012, it also has a 57.4% interest in Fuel Properties Ltd (FPL) with a book value of Rs 3.92 per share.Turnover for the year ended 30 June 2012 rose by Rs 22.5M to reach Rs 176.8M, attributable to investment activities despite Rs 20M drop for FAST, and helped operating profit to go up by Rs 22.7M. Other income fell by Rs 166.2M, of which Rs 141M is due to last year’s exceptional profit on disposal of the stake in Intendance Holding Ltd, and there was a reversal of the Rs 4 M deferred tax

provision made last year. As a result, PAT decreased 23.0% to Rs 152.8M and EPS to Rs 16.86 cum Alteo dividend in specie.

For the quarter to 30 September 2012, sales of macadams and bricks fell by 18% to Rs 30.9M but was partly compensated by a rise of Rs 2.0M in investing activities which received Rs 107.4M of higher income attributable to the exchange of FUEL shares for Alteo shares on amalgamation of these companies. FPL’s 50% subsidiary Haute Rive Holding Ltd continued ground works with respect to the Azuri IRS and Ocean Front living projects in Roche Noire. Nearly all the 106 units for localresidents have been sold while sales of IRS units had reached around 54%

UFL share price of Rs 12.20 at 30 June 2011 increased to Rs 20.00 on 21 June 2012 before dropping to Rs 18.90 on 29 June 2012. It then rose to Rs 22.60 before closing at Rs 21.70 on 22 July 2012 and its adjusted price of Rs 5.30 ex Alteo dividend in specie has dropped to Rs 4.70 on 16 November 2012. The latter price appears to be attractive since UFL’s net assets includes a value of Rs 2.25 per share for the FPL shares obtained from FUEL before its amalgamation into DRBC.

ENL Investment

ENL Investment Ltd (ENLI) is ENL’s main investment company and is listed on the DEM. Its investments include sizeable holdings in Rogers and NMH and the Food and Allied Industries Ltd (FAIL). FAIL is a diversified agro-industrial group engaged poultry and livestock feed production, flour milling and the manufacturing of dairy, canned and frozen foods, and a subsidiary, Tropical Paradise Ltd, which owns and operates three town hotels, namely, the Labourdonnais Waterfront Hotel, Le Suffren Hotel and Marina in Port Louis, and the Hennessy Park Hotel in Ebène.

ENLI PAT rose from Rs 275.4M to Rs 1,017,2M for the year to 30 June 2012, comprising Rs 45.1M of higher profit from associates and Rs 565.8M of profit on disposal of non-core investments (2011: Rs 164.8M of negative goodwill which arose from the acquisition of an associate).

The decision to dispose of the non-core investments proved to be well timed as the stock market has been on a downward trend since then. The resources generated by the sale have been utilised towards settling part of the Company’s debts and to increase its stake in strategic investments.

For the quarter ended 30 September 2012, ENLI made an operating loss of Rs 3.1M (2011: profit of Rs 3.3M) due to no dividend declared by NMH. The share of results of associates increased by Rs 169.6M owing to exceptional profits realised by Rogers whilst in 2011 there was a negative goodwill of Rs 164.8M. Thus ENLI PAT decreased marginally from Rs 190.4M to Rs 189.3M.

As Rogers has become a 60% subsidiary after restructuration which was completed in October 2012, its consolidation by ENLI as from the quarter to 31 December 2012 will have a significant impact on the financial profile of ENLI.

ENLI share price of Rs 40.50 rose to Rs 42.50 on 6 September 2012 and thereafter took a downward trend to Rs 38.20 at 30 June 2012 and was Rs 34.50 on 16 November 2012. The latter price is at a high discount of 46.0% to its net asset value of Rs 63.88 at 30 June 2012.

CIEL Investment

CIEL Investment Ltd (CIL) is an investment company forming part of the CIEL Group and owns 100% of CIEL Capital Ltd and Corporate Services Ltd, 62% in Mauritius International Trust Co Ltd, 55.5 % in Investment Professionals Ltd, and 50% in Bank One Ltd and other CIEL Group companies in the investment, property, health care and life sciences sectors. Its shareholdings also comprise 29.2% and 20% in Sun Resorts Ltd and Constance Hotels Services Ltd respectively, 39.7% in The Kbo Fund LLC, 29.7% in Execom Ltd, and 9.9% in IPRO Growth Fund Ltd.

CIL PAT for the year ended 31 March 2012 rose almost 130%, from Rs 214.3M to Rs 489.4M, inclusive of Rs 424.7M of increase in fair value of investment properties which also boosted earnings per share by 69.6% from 23 cents to 39 cents.

However, CIL NAV per share fell by 12.6%, from Rs 5.41 to Rs 4.73. For the six months to 30 September 2012, CIL incurred a loss after tax of Rs 76.7M compared to a profit of Rs 247.9M forthe same period last year but which comprised the above-mentioned fair value increase of Rs 424.7M. The share of loss of associates, which reflects the seasonality of the hotel sector and the difficult operating conditions prevailing in the hospitality sector, went down from Rs 146.1M to Rs 122.5M, mainly attributable to a higher share of profit from the Kibo Fund attributable to profit on disposal of one of its investments.

CIL share price of Rs 3.70 at 30 June 2011 decreased to reach Rs 2.65 on 13 March 2012 and after going up to Rs 3.00 on 25 March 2012, it then dropped back to Rs 2.65 at 30 June 2012 and was Rs 2.45 on 16 November 2012. The latter price is at a substantial discount of 62.3% to its NAV and is 33.8% lower than at 30 June 2011.

Overseas Investments

At 30 June 2012, the value of the overseas portfolio was Rs 135.9M and represented for 10% of the total investment portfolio (2011: 9%).

The returns in line with their market indices were: JF Funds in Asia (-13.5%) and London & Capital (-6.2%) with the Hang Seng (-13%) and FTSE 100 (-6%) respectively, and Fidelity International Fund (+ 2.4%) with the Dow Jones (+ 4%). COGEFI’s return of -0.7% was substantially less negative than the CAC 40 (-20%) but the returns for the investments made in Blackrock Global Funds (-14.5%), through Anglo-Mauritius, and Comgest and other funds (-10.9%), through MCB IM, were much more negative than the average of the market indices already mentioned.

Income and DividendFor the year to 30 June 2012, the top five dividends received from the local companies amounted to Rs 21.0M and represented 57.5% of total dividend income, as shown in the table below:

In 2011/12, Local dividend income decreased by Rs 2.4M to 36.7M, mainly attributable to NMH (-Rs 0.8M) and Rogers (-Rs 0.3M) and the reduced dividends due to the shares sold during the year. However, the Company made a loss of Rs 73.1M (2011: surplus of Rs 328.8M) due to the revaluation deficit of Rs 101.1M (2010/11: surplus of Rs 271.7M). Excluding the latter deficit, earnings per share

fell from 78 cents to 17 cents on a revaluation basis and from 43 cents to 32 cents on a cost basis and enabled the payment of a dividend of 31 cents. Based on the share price of Rs 5.05 at 30 June 2012, the dividend yield at 6.1% remained one of the highest yields among the OM and DEM listed companies.

Yield on Investments

After crediting interest receivable and exclusive of the revaluation deficit, the net yield on equity capital fell from 36.0% in 2011 to 13.1% in 2012. On a cost basis, the net yield decreased during the year from 100.2% to 89.4%.

Share Price and Nav

Between 30 June 2011 and 2012, the MDIT share price which dropped by 14.4%, from Rs 5.90 to Rs 5.05 and its NAV by 12.5%, from Rs 4.25 to Rs 3.72, both performed better than the 15.3% fall in the SEMDEX, from 2,027 to 1,776. Moreover, as will be seen in the graph below, the MDIT share price has throughout the year maintained its substantial percentage premium above its NAV. This is a clear sign of the continued investors’ confidence in the Fund and its dividend yield being higher than that of the market. On 16 November 2012, MDIT share price and the SEMDEX were Rs 4.70 and 1,657 respectively.

The Economy

The economic growth decreased to 3.9% in 2011 (2010: 4.2%), mainly attributable to the declines in tourism, transport and construction being higher than the better growths for agriculture, textile, business and financial services and infrastructure and 8.4% for export enterprises. Other growths were 0.3% in investment (2010: 0.7% decline) and 2.5% in consumption (2010: 2.7%) while inflation and savings rates were 6.5% and 15.2% respectively (2010: 2.9% and 15.4%).

In 2012, the domestic economy is projected to expand by 3.4%, 0.1% point lower than the initial forecast. Growths are expected for business and financial services (8.3% and 4.8%), transport (4.4%), export enterprises (3.9%), textile (2.7%), construction (1.2%) and tourism (0.5%) but would be negative for sugar (-7.8%). Other estimates are a rise of 2.6% in consumption, a contraction of 0.7% in investment and inflation and savings rates of 4.1% and 14.9% respectively.

Sugar and other agricultural production

In 2011, sugar production was 435,309 tonnes, a decrease of 3.8% (2010: 3.2%) and is expected to further decline by 5.8% to 410,000 tonnes in 2012. However, other agricultural production grew by 3.4% (2010: 1.5%) and a slightly higher growth of 3.5% is forecast in 2012. The 2011 sugar production were in the form of 70% refined (2010: 58%), 30% special (2010: 25%) and nil raw (2010: 17%) and imports of 50,000 tonnes of raw sugar are assumed in the 2012 growth estimate.

Tourism

Tourist arrivals reached 964,642 in 2011, a growth of 3.2%, compared to 7.3% in 2010, due to the continued difficult economic climate in our main European market which was partly compensated by increased arrivals from other markets particularly from Asia and Africa. Tourist earnings rose to Rs 42.8 billion after a marked depreciation of the Euro against the rupee, impacted by the weakened European economies and the downgrade in credit ratings of Euro zone countries. The higher percentage rise in hotel rooms than tourist arrivals, coupled with stagnant airline seat capacity and demand, have inevitably forced hotels to engage in heavy discounting and led to a further adverse effect on their operating profits.

For 2012, the CSO estimates a 0.5% decrease in tourist arrivals to 960,000 (June 2012 estimate: 980,000) as the sector still remains under the shadow of the prolonged European debt crisis. For the quarter to September 2012, total arrivals rose by 1% but dropped by 13% from Europe and 22% from France. To help improve future arrivals, Emirates have been allowed to increase from 11 to 14 their weekly flights from Dubai,and the MTPA and Air Mauritius are working together to develop alternative markets like China, which provides 25% of the tourists to Maldives, as well as India.

Textile

The textile industry posted a significant 8.0% growth rate in 2011 attributable to increased market diversification and the closure of most South African textile factories. The projected growth of 2.7% for 2012 should rise following the August 2012 AGOA agreement providing until 2015, an extension of the ‘Third-country Fabric’ provision and duty free access of apparel products on the US market.

Financial services

The financial services sector grew in 2011 by 5.5% (2010: 5.3%), a better performance mainly due to offshore activities, and in 2012, 4.8% growth is estimated including 12.4% for global business after inter-alia offices set up by international funds managers and law firms and corporate services providers and 3 more double taxation agreements with African countries bringing it to a total of 17.

Construction

The construction sector registered a negative growth of 2.0% in 2011 due to reduced private investments and the completion of some major construction projects such as hotels and commercial buildings. A negative growth of 1.2% is also forecasted in 2012.

Transport, Storage and communications

Transport, storage and communications grew in 2011 at 4.9% (2010: 5.3%) and a slower rate (4.4%) is also projected in 2012 despite the sustained performance of the ICT and seafood industries.

Real Estate, Renting and Business Services

The above services realised a higher growth of 9.0% in 2011 but this rate is estimated to slightly decrease to 8.3% in 2012 mainly due to a slowdown in IRS and RES developments.

Future Prospects

The SEMDEX has maintained its downward movement after 30 June 2012 with hotel share prices presently at near record lows and below net asset values. This is attributable to the prolonged debt crisis in Europe, our main market, and the continued difficult global economic environment. The index of 1,776 at 30 June 2012 after being dragged down to a low of 1,681 on 30 August 2012, recovered slightly to 1,703 at 30 September 2012 and was 1,657 on 16 November 2012. For the quarter to 30 September 2012, the lower share prices resulted in a fair value deficit of 36 cents and a loss per share of 16 cents (2011: 29 cents). However, inclusive of UFL and Rogers dividends in specie equivalent to 21 cents, profit after tax on a cost basis rose to 29 cents per share (2011: 4 cents).

In future, the SEMDEX would be helped by a higher national growth rate estimate of 4% for next year (2012: 3.4%) and the impact of the 2013 Budget measures. New impetus has been given to manufacturing including freeport status, tourism with two direct weekly flights from Shanghai, financial services with incentives to set up regional treasury centres and headquarters, education, ntertainment and shopping, health, agriculture, fishing and ICT-BPO. Furthermore, listed debenture interests have become non-taxable and, to promote Mauritius as the natural investment and business platformbetween the Asia, the Middle East and Africa, businessmen and tourists from 29 additional African countries would be able to obtain a visa on arrival and the number of double taxation treaties signed with African countries will be increased from 17 to 22 in 2013.

The local market indices would also be favourably affected by the continued excess market liquidity, the record low hotel share prices, the attractive Price/NAV ratios of shares in the investment sector and the higher profitability of banks and industrial companies which have operations overseas. Moreover, the realised after tax profit on a cost basis would impact positively on the dividends for the current financial year to 30 June 2013.

Directorship

Mr Marc Hein has resigned as director on 22 March 2012 following his appointment as Chairman of the Financial Services Commission. The Board wishes to express its appreciation and thanks to him for his contribution during the past two years and welcomes Mrs Aruna Collendavelloo as a new director.

By order of the Board

Georges Leung Shing

ChairpersonDate: 16 November 2012