medine.com€¦ · HIGHLIGHTS Corporate Information 04 Group Structure 05 Our Vision & Core Values 06 Medine at a Glance 07 This Year’s Major Achievements 08 Financial Highlights

2018

MEDINEANNUAL REPORT

HIGHLIGHTS Corporate Information 04

Group Structure 05

Our Vision & Core Values 06

Medine at a Glance 07

This Year’s Major Achievements 08

Financial Highlights 10

Group Organisational Chart 11

Board Profile 12

Senior Management’s Profile 18

Chairman’s Message 21

ACTIVITIES REVIEWCEO’s Message 25

Clusters’ Review 28

Human Resources 48

Corporate Social Responsibility 52

CORPORATE GOVERNANCECorporate Governance Report 58

Directors of Subsidiaries 80

Statement of Directors’ Responsibilities 81

Statement of Compliance 82

Secretary’s Certificate 83

FINANCIAL STATEMENTSIndependent Auditor’s Report 86

Financial Statements 92

Notes to the Financial Statements 97

CONTENTS

Dear Shareholder,

The Board of Directors of MEDINE LIMITED is pleased to present its Annual Report for the year ended 30 June 2018.

This report was approved by the Board of Directors on 25 September 2018.

René Leclézio Thierry SauzierChairman Director and Chief Executive Officer

2 • MEDINE L IMITED ANNUAL REPORT 2018 3 • MEDINE L IMITED ANNUAL REPORT 2018

lH I G H L I G H T S

M E D I N E AT A G L A N C E



MEDINE IS STRATEGICALLY POSIT IONED ON THE WEST COAST

HIG

HLI

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TS



G R O U P S T R U C T U R E

Founded in 1911 as The Medine Sugar Estates Company Limited and renamed Medine Limited in 2009, the company’s history is inherently linked to that of Mauritius. As a major player in the island’s sugar and cane industries for more than a century, Medine Group successfully got away from a monocrop agriculture, based on sugar cane, to become a diversified group with four pillars of activity: Agriculture, Education, Leisure and Property. As a pioneer in the cane industry, Medine strives to be a trendsetter in each of its activity sectors.

MEDINE LIMITED

AGRICULTURE EDUCATIONLEISURE PROPERTY OTHERS

The Medine Sugar Milling Company

Limited(80%)

Société Reufac(72%)

Casela Limited (100%)

Safari Adventures Co Ltd (40%)

Tamarina Beach Club Hotel Limited

(100%)

Tamarina Golf Club Limited

(100%)

Le Cabinet Limited (100%)

Talent Solutions Ltd (100%)

Pierrefonds Services Limited

(100%)

Middlesex International

(Mauritius) Ltd (49%)

Westcoast Secondary School Ltd

(20%)

Fondation Medine Horizons

(100%)

Medine Rum Limited (100%)

The Indian Ocean Rum Company Limited

(50%)

Akuo Energy Solution (Mauritius) Ltd

(50%)

Akuo Austral (Mauritius) Limited

(49%)

Akuo Energy (Mauritius) Limited (100%)

Cascavelle Shopping Mall Limited

(56.9%)

Clarens Fields Ltd(100%)

Pierrefonds Estate Company Limited

(100%)

Tamarina Golf Estate Company Limited

(100%)

Broll Property and Facility Management Limited

(50%)

TGE ManagementServices Limited (100%)

Uniciti Ltd (100%)

Uniciti Commercial Properties Ltd (100%)Uniciti Education Properties Ltd (100%)

Uniciti Eduhousing Ltd (100%)Uniciti Management Services Co Ltd (100%)

Uniciti Office Park Ltd (100%)Uniciti Residential Properties Co Ltd (100%)

Uniciti Sports and Cultural Properties Ltd (100%)

GROUP STRUCTURE


C O R P O R AT E I N F O R M AT I O N

REGISTERED OFFICE4 Uniciti Office Park (Previously known as Clarens Fields Business Park)Rivière Noire RoadBambous 90203MauritiusTel: (230) 401 6101Fax: (230) 452 9600E-mail: [email protected]

REGISTRAR AND TRANSFER AGENTMCB Registry and Securities Limited

BANKERSThe Mauritius Commercial Bank LtdBarclays Bank Mauritius LimitedState Bank of Mauritius LtdAfrAsia Bank LimitedABC Banking Corporation LtdMauBank Ltd

AUDITORBDO & Co. (Chartered Accountants)

CORPORATE INFORMATION

7 • MEDINE L IMITED ANNUAL REPORT 2018



AGRICULTURE LEISURE EDUCATION PROPERTY OTHERS

BOIS D’OLIVE LOGO

Primary colour

CMYK

4738650

CMYK

70509035

CMYK

1815250

RGB

217211195

PANTONE 7527C

RGB

778746

PANTONE 574C

RGB

149146111

PANTONE 451C

BOIS D’OLIVE LOGO BOIS D’OLIVE LOGO

BOIS D’OLIVE LOGO BOIS D’OLIVE LOGO BOIS D’OLIVE LOGO

BOIS D’OLIVE LOGO BOIS D’OLIVE LOGO BOIS D’OLIVE LOGO

Primary colour Primary colour

Primary colour Primary colour Primary colour

Primary colour Primary colour Primary colour

BEAUX SONGES

LA FABRIQUE

PANTONE:418 C

C: 62M: 54Y: 64K: 36

Our Vis ionTo be a unique lifestyle provider through

integrated sustainable development of property,

leisure, agro-business and services.

Our Core Values

CUSTOMER FOCUS INNOVATION AND CREATIVITY

RESPONSIBILITY

ENTREPRENEURSHIP DEDICATION PROACTIVITY

QUALITY


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H I G H L I G H T SO U R V I S I O N & C O R E VA L U E S



T H I S Y E A R ’ S M A J O R A C H I E V E M E N T S

SPARC’s opening

Tulawaka Gold Coaster’s opening at Casela

Student Life Restaurant’s opening

Uniciti Office Park Phase 2: start of delivery

2018

2018

2018

2018

Mar.

Apr.

Mar.

June


T H I S Y E A R ’ S M A J O R A C H I E V E M E N T S

Launch of Uniciti

Launch of Uniciti Education Hub

Middlesex UniversityMauritius Campus’ opening

2017

2018

2017

Sept.

Feb.

Nov.

THIS YEAR’S MAJOR ACHIEVEMENTS



G R O U P O R G A N I S AT I O N A L C H A R T

Chief Executive OfficerTHIERRY SAUZIER

Group Head of CorporateDHIREN PONNUSAMY

Managing DirectorVINCENT LABAT

* Up to 31st July 2018

Managing DirectorRAOUL MAUREL

Managing DirectorPAUL WILLIAMS

Managing DirectorMARC DESMARAIS

Managing DirectorSTEPHANE POUPINEL*

AGRICULTURE EDUCATIONLEISURE

CASELA TAMARINA

PROPERTY

GROUP ORGANISATIONAL CHARTMEDINE GROUPJUNE 30, 2018

0

1

2

3

4

5

Rs 6.9BnMARKET CAPITALISATION

Rs 14.6BnTOTAL EQUITY

Rs 3.1BnLONG TERM LIABILITIES

1,149NUMBER OF EMPLOYEES

REVENUES

LOSSES/PROFITS

DIVIDEND YIELD

0

0.5

1.0

1.5

2.0

2015

1.40

2016

1.59

1.73

2017 2018

1.70

(Rs

Bn)

(Rs

M)

-1000

-800

-600

-400

-200

0

200

400

600

800

2015

(85.6)

2016

629.2

2017

62.3

2018

(844.7)


F I N A N C I A L H I G H L I G H T S




B O A R D P R O F I L E

THIERRY SAUZIER (Born in 1968)

Executive Director and Chief Executive Officer

Appointed as:• Director on 10 December 2010• Deputy Chief Executive Officer from 14 February 2011 to

30 September 2017• Chief Executive Officer on 1 October 2017• Member of the Corporate Governance Committee

on 9 February 2018

Qualifications• Maîtrise d’Économie Appliquée (University of Paris Dauphine)

Professional Journey• Started his career at the Credit Lyonnais in France• Joined the MCB Stockbrokers Ltd in 1992, qualified as a Licensed

Stockbroker in 1993 and managed the company for seven years• In 2000, he joined the Corporate Banking Department of the

Mauritius Commercial Bank Ltd• Appointed at Medine in 2004 as Project Consultant• Development under his leadership of Tamarina Golf Estate,

Mauritius’ first IRS Project • In 2007, he set up the function that was to become the Medine

Property cluster• Managing Director of the Medine Property cluster from

December 2009 to September 2017• Deputy CEO of the Medine and Eudcos Groups since February 2011• Development under his leadership of the Education cluster and

Uniciti, the Group’s Smart City• CEO of the Medine Group since October 2017

Skills• Finance and Strategy• Significant experience in Property Development • Strong strategic understanding and detailed knowledge of the

Medine Group

Current External Commitments• None

Current External Appointments In Listed Companies• Excelsior United Development Companies Limited

PIERRE DOGER DE SPÉVILLE (Born in 1938)

Non-Executive Director

Appointed as:• Director on 25 September 1978• Chairman from 23 June 1999 to 30 June 2011• Member of the Corporate Governance Committee

since 19 October 2005• Chairman of the Corporate Governance Committee

from 30 June 2011 to 6 February 2018

Qualifications• Notary Public

Professional Journey• Notary Public from 1965 to 1997

Skills• Valuable experience across several sectors• Detailed knowledge of the company





RENÉ LECLÉZIO (Born in 1956)

Non-Executive Director and Chairman

Appointed as:• Director on 25 June 2001• Vice Chairman from 27 September 2002 to 30 June 2011• Chairman on 1 July 2011• Member of the Corporate Governance Committee on 11 April 2005

Qualifications• BSc (Chem Eng), Imperial College, London• MBA (London Business School)

Professional Journey• Chemical engineer in the oil and gas industry, London• Assistant Manager of Project Finance at Lloyds Merchant Bank,

London

Skills• Investment management• Property development• Experience across several economic sectors• Detailed knowledge of the Medine Group• Finance and Strategy

Current External Commitments• Managing Director of Promotion and Development Ltd• Director of several public and private companies

Current External Appointments In Listed Companies• Promotion and Development Ltd• Caudan Development Ltd• Mauritius Freeport Development Company Ltd• Swan General Ltd • Swan Life Ltd• Excelsior United Development Companies Limited

JACQUES TIN MIOW LI WAN PO, G.O.S.K (Born in 1944)

Non-Executive Director and Vice Chairman

Appointed as:• Director on 28 July 2004• Vice Chairman on 1 July 2011• Member and Chairman of the Audit Committee on 11 April 2005

Qualifications• Fellow of the Association of Chartered Certified Accountants

(FCCA)

Professional Journey• Executive Chairman in the food processing sector of Food

Canners Ltd, as well as in the alcoholic drinks sector of New Goodwill Co Ltd/ International Distillers (Mauritius) Ltd

• Founder of Sungold Trading Ltd in 1989• Owner of the Pizza Hut franchise• Former member of the Monetary Policy Committee• Board Member of the Bank of Mauritius from 2006 to 2014

Skills• Extensive knowledge in the food and alcohol manufacturing

industries, in marketing consumer products and in business project development

• Strong financial skills and strategic understanding• Experience in setting up corporate structures• Well versed in operational control• Good knowledge of banking and other financial institutions

Current External Commitments• Executive Chairman of Food Canners Ltd and its associated

companies, as well as that of the New Goodwill Investment Group, which includes International Distillers (Mauritius) Ltd

• Director of several companies and institutions



RAMAPATEE GUJADHUR (Born in 1945)


Appointed as: • Director on 21 January 2004

Qualifications• Associate member of the Institute of Bankers in England and

Wales (ACIB)

Professional Journey• Former Senior Manager at The Mauritius Commercial Bank Ltd• Former Director of Air Mauritius Ltd from 2001 to 2014

Skills• Well versed in Corporate Governance Matters • Valuable experience across several sectors• Detailed knowledge of the Group• Strong Financial skills and strategic understanding

Current External Commitments• Director of several companies• Director of Mahanagar Telephone (Mauritius) Ltd, a fully-owned

subsidiary of MTML India

Current External Appointments In Listed Companies• None

MARC LAGESSE (Born in 1963)

Independent Non-Executive Director

Appointed as:• Director on 27 September 2017• Member of the Corporate Governance Committee

on 27 September 2017• Chairman of the Corporate Governance Committee

on 9 February 2018

Qualifications• BSc Statistics, Computing, Operational Research and Economics

(University College London) • MBA with specialisation in Finance and Macroeconomics

(London Business School)

Professional Journey• Proprietary trader in derivatives in the UK• Former General Manager and Director of Mauritius Fund

Management Co Ltd• Former CEO of MCB Investment Management Co Ltd• Former Group Head of Capital Markets of MCB Ltd • Former Chief Executive Officer of Hertshten Group Ltd

Skills• Member of the initial National Corporate Governance

Committee, involved in the writing of the Code for Mauritius• Considerable experience in the identification and development

of new business opportunities• Valuable executive level experience across several sectors and

geographies, including India, China, Africa • Broadly-based NED experience and interest across diverse sectors• Strong capital markets knowledge and experience

Current External Commitments• Member of the Investment Committee of the S.I.P.F.• Chair of the Africa Investment Committee of the UK based,

International donor funded, PIDG Ltd• Chair of Quantum Insurance Ltd• Chair of the Board of Governors of Clavis International Primary School

Current External Appointments In Listed Companies• Independent Non-Executive Director and Chair of the Corporate

Governance Committee at United Investments Limited• Excelsior United Development Companies Limited


THOMAS DOGER DE SPÉVILLE (Born in 1989)


Appointed as:

• Director on 30 June 2015

Qualifications• MBA from the Institut Supérieur de Commerce de Paris, France

Professional Journey• Founder and Managing Director of two companies specialised

in online promotion on the French market• General Manager of Monoprix Bagatelle (CMPL Ltd) from

December 2014 to June 2016

Skills• Marketing and commercial skills• Strategy development and execution

Current External Commitments• Managing Director of Saffra Ltd, involved in food and non-food

distribution in Mauritius


LAJPATI GUJADHUR (Born in 1943)

Non-executive Director

Appointed as:• Director on 26 October 1988

Qualifications• Attorney-at-Law/ particular interest in property & company

law and civil litigation

Professional Journey• Attorney-at-Law since April 1969 • Attorney of the Supreme Court of Mauritius since 21 May 1969• Company Secretary of four family companies• Director of Rogers & Co. Ltd from 1990 to 2000

Skills• 50 years’ experience in legal matters, particularly civil law








MARC DE RAVEL DE L’ARGENTIÈRE (Born in 1963)


Appointed as:• Director on 1 July 2008• Member of the Audit Committee on 30 June 2011

Qualifications• Certificate in Accounting, Marketing, Negotiation,

Organisational Behaviour, Project Management (Edingburgh Business School)

Professional Journey• Manager and promoter of several business entities• Manager at Grays Ltd from 1988 to 2007, responsible of

managing world repute brands, and of importing, marketing and distributing in Mauritius and Madagascar

• Audit team member at De Chazal Du Mée Chartered Accountants from 1987 to 1988

• Worked at De Ravel & Co Chartered Accountants South Africa from 1985 to 1987

Skills• Strong commercial skills• Valuable experience across several sectors• Strong Financial skills and strategic understanding

Current External Commitments• Manager and promoter of several business entities involved in

property development and agriculture• Managing Director of Mont Calme Ltd since 2007, involved in

property development


DANIEL GIRAUD, G.O.S.K (Born in 1952)

Executive Director

Appointed as:• Chief Executive Officer from 1 November 2002 to

30 September 2017• Director from 15 October 2003 to 29 December 2017• Member of the Corporate Governance Committee

from 11 April 2005 to 29 December 2017

PATRICIA GODER, ACIS

Group Company Secretary

Born in 1968. Chartered Secretary from the Institute of Chartered Secretaries and Administrators in UK. Worked for accounting and company secretarial firms before joining the Group as Deputy Secretary in 2000. Group Company Secretary since November 2006. Completed an Executive Management Programme with Essec Business School in 2016.

JOCELYNE MARTIN (Born in 1960)


Appointed as:• Director on 18 June 2014• Member of the Audit Committee on 30 June 2015• Member of the Corporate Governance Committee

on 13 November 2015

Qualifications• BSc (Hons) in Statistics at the London School of Economics• Member of the Institute of Chartered Accountants of England

and Wales

Professional Journey• Trained at Deloitte Haskins & Sells, London (now part of PwC)• Senior Manager at De Chazal Du Mée• Group Financial Controller at Promotion and Development Ltd

from 1995 and thereafter appointed to the Board of Directors of Promotion and Development Ltd and Caudan Development Ltd in December 2004

Skills• Strong financial skills• Extensive executive experience of financial reporting and

corporate finance• Portfolio development and commercial skills• Strategic understanding of organisational and human resources

issues• Valuable experience across several sectors of the economy

Current External Commitments• Finance Director of Promotion and Development Ltd, its Group

and Subsidiaries• Company Secretary of Promotion and Development, and

Caudan Development Ltd

Current External Appointments In Listed Companies• Promotion and Development Ltd• Caudan Development Ltd• Mauritius Freeport Development Company Ltd• Excelsior United Development Companies Limited

SHAKIL MOOLLAN (Born in 1972)

Independent Non-Executive Director

Appointed as:• Director on 30 September 2015• Member of the Audit Committee on 27 September 2017

Qualifications• BA (Hons) Finance and Accounting from the University of East

London (UK)• Member of the Chartered Institute of Management (UK)

Professional Journey• 20 years’ experience as Partner in accounting and audit firms • Founder of Moollan & Moollan (Chartered Certified Accountants)• Founder of several business units forming the Moollan &

Moollan Group, providing turn key solutions to businesses for their financial administration

Skills• Hands on expertise in Corporate turnaround• Well versed in Corporate Finance• Strong Marketing portfolio development• Valuable experience across several sectors

Current External Commitments• Group Managing Partner of Moollan & Moollan (Chartered

Certified Accountants)• Independent Non-Executive Director of a bank in Mauritius and

Chair of its Audit Committee• Director of various Global companies

Current External Appointments In Listed Companies• None







S E N I O R M A N A G E M E N T ’ S P R O F I L E

VINCENT LABAT

Managing Director, Agriculture Cluster

Born in 1962. Joined Les Gaz Industriels Ltd in July 1996 as General Manager, before being appointed as Managing Director from 2003 to 2009. Joined Medine as Project Development Executive in July 2010. Was appointed as Managing Director of the Agriculture cluster in July 2011.

PAUL WILLIAMS

Managing Director, Casela World of Adventures

Born in 1968. Pursued a career in entertainment parks since 2000. Worked at Merlin Entertainment Group in Europe (General Manager of Sea Life Val d’Europe and Head of Openings) and Asia (Bangkok cluster General Manager and Director for Thailand). Joined Medine as Managing Director of Casela World of Adventures in December 2013.

STEPHANE POUPINEL

Managing Director, Property Cluster

(from October 2017 to July 2018)

RAOUL MAUREL

Managing Director, #Tamarina

Born in 1980. Graduated in Marketing from Murdoch University, and in Food and Beverage Management from Shatec – The International Hotel & Tourism School. Started his career in hospitality in 2003 and worked in four hotels in Mauritius and Madagascar. Worked for four years as General Manager of Paradise Cove Boutique Hotel, before joining Medine Leisure in September 2015.


S E N I O R M A N A G E M E N T ’ S P R O F I L E

THIERRY SAUZIER

Chief Executive Officer (as from 1st October 2017)

Born in 1968. Holder of a Maîtrise d’Économie Appliquée from the University of Paris Dauphine. Worked in stockbroking and banking in France and Mauritius for 12 years before joining Medine in 2004 as Project Consultant. Led the Tamarina Golf Estate IRS project to its completion, and in 2007, set up the function that was to become the Medine Property cluster. Managing Director of that cluster from December 2009 to September 2017. Director of the Company since December 2010, Deputy Chief Executive Officer from February 2011 to September 2017 and Chief Executive Officer since October 2017.

DHIREN PONNUSAMY

Group Head of Corporate

Born in 1979. Holder of a BSc (Hons) in Economics from the London School of Economics & Political Science and a Chartered Financial Analyst Charterholder. Managing Director at Standard Chartered Bank PLC in London, including a number of senior CFO positions in South Korea, Singapore, Africa and the Philippines. Joined Medine as Group Head of Corporate in January 2018.

MARC DESMARAIS

Managing Director, Education Cluster

Born in 1965. Holder of a Master of Science in Human Resources from University College Dublin. Worked at HSBC, both in Mauritius and internationally, as well as at the MCB. Has more than 15 years’ experience at senior Management level. Joined Medine as Group Head of Human Resources since February 2010 and heads the Education cluster since 2015.

SENIOR MANAGEMENT’S PROFILE





C H A I R M A N ’ S M E S S A G E

Dear Shareholder,

In my statement last year I talked at length about the problems which we were encountering in our 80 per cent owned subsidiary, Medine Sugar Milling Company (MSMC). We consider that the sharing of the sugar kitty between the refiners, speciality sugar producers, Medine and the planters is not fair on Medine, and we have made numerous demands to the Mauritius Sugar Syndicate (MSS) for a higher premium, unfortunately to no avail. We also suggested that one company, Mauritius Sugar (MS), be created, which would have the four millers as 100 per cent owned subsidiaries. MS would have Sugar Investment Trust (SIT) holding 20 per cent of the shares, and the millers holding the remainder in proportions to be determined by an independent expert. This structure would ensure production of the different sugar varieties at optimal cost. This suggestion was not taken up. So, after years of denial, continuous downward pressure on the sugar price and a lack of cooperation between the various stakeholders, economic reality finally caught up with us. This year Medine Group lost Rs 845 million, of which Rs 680 million came from the Agriculture cluster, which includes Rs 368 million of mill impairment. This was the worst year in the history of the company, and a red flag for the state of the Mauritian sugar industry.

Medine has been milling sugar for over 100 years, and it is not without considerable introspection and sadness that the directors, conscious of their fiduciary responsibility to all the stakeholders, took the difficult decision to request officially that government approve the closure of the mill. At the time of writing we had still not had a reply from government, but the closure has been meticulously planned so as to have a minimal impact both on the welfare of the employees, and on the extra traffic which will be generated from the transfer of cane to other mills. If government plays the game, and we have no reason to believe otherwise, then the closure stone should generate almost no ripples in the economic pond.

Agro is not the only cluster to blame for this year’s eye-popping losses. The Education and Casela clusters also lost Rs 36 million and Rs 59 million respectively. Education is a long term investment in a sector in which we truly believe, and these losses, albeit reducing, will continue for some time. Casela’s bad year is due to the start-up costs associated with the sports complex, SPARC, and the students’ canteen. Both of these, along with an improved performance in the park, as seen in the July and August figures, will make of 2019 a much better year. The build-to-lease assets in special purpose vehicles (SPVs) are following their course,

but they often take a number of years to mature while the banks are being reimbursed. To cap it all, timing issues meant that there were fewer land sales than budgeted in the year, which could have made up for some of the losses.

We must now turn the page on this eventful year, and look forward. Medine’s management has commissioned an external consultant to undertake a full review of the group’s operations, and the markets in which the various clusters operate. Their findings, along with their strategic recommendations, will be presented to Medine’s board of directors later this year. We are confident that we have already done much over the last 10 years to diversify the company’s activities outside of agriculture, and the new review should give us the tools for the next 10 years.

I would like to thank my fellow directors for their continued support during the year, and also to thank the CEO, Thierry Sauzier, and his young and dynamic management team, for the dedication that they have demonstrated. These are trying times, and a mill closure is a particularly strong symbol of how things change in life, and why we must continually adapt in order to progress. The Nomination Committee recommended the appointment of Gilbert Gnany as director of the company to fill the casual vacancy left by Daniel Giraud, which recommendation you will be asked to ratify at the Annual General Meeting in December. Gilbert has had a long and successful career in economics and banking, and I am certain that he will make a valuable contribution to the company.

Yours sincerely,

René LeclézioChairman

20 October 2018

C H A I R M A N

R E N É L E C L É Z I O

YEMEN EXPERIENCE

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C H I E F E X E C U T I V E O F F I C E R

T H I E R R Y S A U Z I E R

How would you qualify Medine’s overall 2017/18 performances in the broader economic context? What was the impact on the Group’s results?

The overall growth of the Mauritian economy remains encouraging, at around 3.9%, with a backdrop of stable employment and relatively low inflation. Most sectors of the economy, with the exception of Sugar, are performing well. We believe the significant infrastructure projects which are currently in flight will have a positive impact on the economy as a whole, and will have a catalytic effect on the island’s connectivity, which is crucial to future sustainable growth.

That being said, the Group’s headline results for 2017/18 are disappointing, culminating to a significant Rs 845 million loss. It is important, however, to put these results into context. They reflect challenges which were not new and now had to be dealt with. Sugar, our oldest cluster, has been in constant decline for a number of years, and our Milling operations had been unviable and running at losses for quite some time. When I took over as CEO of the Group last year, it was very clear that a number of courageous decisions had to be taken. I had to acknowledge the reality of the situation: building a healthier and stronger platform for the Group’s future was critical if we wanted to grow sustainably.

The headline results incorporated Rs 595 million of asset writedowns, mainly related to the Agriculture cluster. On an underlying basis, the operating losses of the Group amounted to Rs 249 million. While these are still disappointing, the impact is on a different scale to that of the headline results. How does the Group’s performance objectives for 2017/18 compare with the underlying financial results of the clusters?

As mentioned previously, the Group’s underlying losses, excluding the one-off restructuring write downs, were Rs 249 million. Whilst this is certainly below our expectations, our performance in 2017/18 was impacted, on one hand, by the drop in the sugar price and, on the other hand, by timing with regards to investments and realisation of real estate projects. For a number of years, the Property cluster generated strong returns, which in turn helped offset the poor performance of the Group’s other activities. This year saw a smaller profit in our Property cluster, at Rs 85 million, due to a couple of land sales not materialising and delays in obtaining the Mount Pleasant’s morcellement permit, which in turn meant a number of deeds of sales could not be signed before the end of the financial year.

On a more positive note, the Education cluster, which is at the heart of the development of Uniciti, saw losses which were broadly in line with the previous financial year. As a relatively new yet strategic cluster, Education is seeing a larger share of investment spend, especially in the initial years. This is critical, as we need to invest in order to attract new students and create an unmatched environment for new institutions to join Uniciti.

As for the Leisure cluster, Casela extended its activities during the financial year, taking over the management of Uniciti’s canteen and our sports centre, SPARC. The launch of these two new activities affected the cluster’s bottom line, as losses in the first year of operations were both expected and inevitable. The Park itself remains profitable but saw a small decline in profits, as operations were affected by the adverse weather conditions at the beginning of 2018, as well as the delay in opening the new Tulawaka Gold Coaster ride.

Tamarina Beach Club Hotel saw higher profits in 2018, improving further on the previous year, and has seen a strong turnaround over the last 3 years. This was primarily driven by a number of initiatives taken by the new management team of the Hotel, as well as the favourable conditions prevailing in the Tourism sector.

Overall, the Group’s financial performances in the year under review were well below par, but we are confident that we now have a clearer picture of the way forward. What were your objectives for 2017/18? Are there any key achievements you would like to highlight for the year under review?

With 2017/18 being a year of transition for the Group, particularly with the change of CEO, it was important for me to quickly reassess our priorities and establish near term objectives to kick-start the restructuring of certain activities, shift the culture of the Group towards a performance-based one and create clear accountability within the organisation. These were essential to give impetus to the new “Medine model”, on which we have made strong progress so far. For a number of years, complacency had settled into certain businesses, and tough decisions had been deferred as the situation in some areas were complex and fairly sensitive. Nevertheless, we felt it was time to take action and face these challenges, especially those of the Agriculture cluster.

QUESTIONS TO THE CEO | THIERRY SAUZIER







In addition, I restructured the Corporate function by hiring some key talents, which gives us stronger leadership bench as we navigate through this period of change and transformation.

Obtaining the Smart City Certificate and launching Uniciti were also important highlights of the year. This was the result of a lot of hard work. It will help us realise the vision that we had set in our masterplan.

The financial year 2017/18 also saw the launch of a number of new and exciting projects, including but not limited to:

• Uniciti in September 2017• The Middlesex University Mauritius Campus in November 2017• The Uniciti Education Hub in March 2018• SPARC Sports Centre in February 2018• The Student Life Restaurant in March 2018• The Tulawaka Gold Coaster Ride in Casela in April 2018• Phase 2 of the Uniciti Office Park in June 2018

You will find more information on these different initiatives on pages 8 to 9 of this report.

What was the Group’s approach to risk management? What are some of the main risks that you would call out?

The key risks we face are in Agriculture, where we have no control over the price of sugar as it is driven by global factors. At the current sugar price, the cluster will chronically generate losses in the coming years and, while avenues for improving the efficiency of our operations are being explored, they are unlikely to offset the decline in the sugar price. This is why we have taken actions to restructure this cluster and reduce the financial burden this is putting on the Group. The strategic review we have started also heavily focuses on this cluster, to find realistic and sustainable solutions to our sugar challenge.

On the Property side, our risks are largely related to delays in obtaining permits. We need to continue working with the authorities to streamline some of these processes as they impede on the development of critical projects and overall economic growth.

Openness and connectivity are also major challenges for our real estate and educational projects. Opening our borders to capital, technology, knowledge transfer and foreign brainpower, is a real challenge for Mauritius in general and needs a national strategic alignment if we, as a country, are to realise our full potential.

In 2017/18, we also put a lot of emphasis on strengthening our governance processes to be more transparent, and I believe the quality and level of discussion and constructive challenge with the Board has significantly stepped up. What are Medine’s key priorities for 2018/19?

The Uniciti Education Hub will remain the driving force of our real estate projects, helping us populate our city and create a unique lifestyle for the residents. For this purpose, our teams will keep focusing on the recruitment of foreign and Mauritian students, with Middlesex’s strategy for Africa already starting to bear fruit.

Grouping our integrated real estate offer for students and foreign companies is a priority for the future. We aim to consolidate our academic and soft skills offerings, with accommodation facilities, restaurants, a sports centre that is among the best on the island and in the region, as well as shopping and leisure facilities.

Property remains, therefore, the Group’s driving force. Furthermore, the Property cluster aims to generate cash flow to finance the infrastructure and development of our real estate portfolio, which shall generate recurring revenues for the Group.

Our partnership with Akuo Energy Indian Ocean will make us the first smart city to offer electrical energy on a large scale. Our first 17.5 MW photovoltaic farm, located in Henrietta, will feed 12,115 homes by February 2019, and we wish to replicate the model on the 30,000 m2 existing roofing in Uniciti. We trust the authorities will facilitate the process, which in the long-term will benefit the ecology of the region and of our country.

“I restructured the Corporate function by hiring some key talents, which gives us

stronger leadership bench as we navigate through this period of

change and transformation.”

Finally, we will focus our efforts on two social projects: a school for the disadvantaged within Uniciti, and transitional housing facilities for families currently living in precarious conditions. We wish to bring together a few corporates who share a similar passion to drive this key housing and education initiative, as it becomes a clear priority in terms of CSR.

Acknowledgements

I would like to thank all our employees for their efforts during this difficult period. Their resilience, drive and enthusiasm are key to our continuous improvement and growth.

Finally, I would like to thank the Board of Directors for their support during this year of change and transition. I believe we now have some strong foundations to grow on.

Thierry SauzierChief Executive Officer

25 September 2018

FOOD CROP

AGRICULTURE

G R O W N O W,H A R V E S T L AT E R



A G R I C U LT U R E C L U S T E R


A G R I C U LT U R E C L U S T E R

The Agriculture cluster consists mainly of the following five activities:

• Cane cultivation• Milling operations• Food crops• Poultry production• Nursery and landscaping services

OPERATING CONTEXT

The last few years have been quite challenging for the sugar industry, with the global imbalance between sugar production and consumption rising and having a negative impact on world prices. Operational costs, on the other hand, are high and increasing, combined with a prohibitive regulatory labour framework for this industry. With sugar prices at an all-time low, initiatives at a national level are required to reform an industry which risks extinction with far reaching economic and ecological implications for the country.

Sugar activities as a whole represent approximately 80% of the turnover of the cluster, and sugar prices are unfortunately at their lowest and are not expected to improve in the short- to medium-term. This subsequently led to an abandonment of the planters supplying less cane to the milling operations.

PERFORMANCE REVIEW

Cane Cultivation

During the year under review, sugar production fell to 36,273 tons, compared to 38,536 tons last year. A total of 3,451 hectares of sugarcane was harvested, with a yield of 85.8 tons per hectare, compared to 3,495 hectares and a yield of 85.7 tons in 2016/17. The estate and its planters harvested 296,117 and 67,153 tons of cane respectively, totalling 363,270 tons. Cane delivery to Medine mill amounted to 361,902 tons, while 1,368 tons of estate canes were sent to other mills due to fires in the fields before start of crop season. Extraction rate for 2017/18 was disappointing island wise and reached 10.01% for Medine – inferior to the 10.41% recorded in 2016/17.

Revenues from sugar activities for the period under review amounted to Rs 383 million, compared to Rs 448 million in 2016/17. This decrease was the result of lower sugar prices obtained and lower tonnage compared to last year. Additionally,

Medine recorded a loss of Rs 153 million compared to the previous year’s Rs 23.0 million profit, a drop brought about by higher operating expenses (Rs 537 million compared to Rs 425 million in 2016/17). This is explained by a fall of Rs 80 million in fair value of standing crop, due to expected lower sugar prices for the 2017/18 crop and impairment of bearer plants of Rs 70 million.

Milling Operations | Sugar Activity

The 2017 crop season started on 10 July and ended on 18 November, constituting a total of 108 crushing days. An overall 361,760 tons of canes were crushed during this period, at an average extraction rate of 10.02%, thereby yielding 36,251 tons of Plantation White Sugar (PWS).

Medine Milling ended its production with a Reduced Overall Recovery (ROR) of 86.3, compared to 86.2 last year. The total downtime for the period was 109 hours, an improvement from the 200 hours recorded in 2016/17.

On another hand, sugar revenues for financial year 2017/18 fell to Rs 126 million, compared to Rs 140 million in 2016/17. Total operating expenses for the year under review amounted to Rs 196 million (including depreciation and finance costs), compared to Rs 204 million in 2016/17. The results also include a provision for impairment of assets totalling Rs 368 million.

Additionally, millers’ share for financial year 2017/18 was 7,863 tons, compared to 8,223 tons in 2016/17, with sugar prices per ton amounting to Rs 10,717, compared to Rs 15,572 last year.

Energy Activity

Medine’s power plant produced 27 GWh of green energy for the year under review, of which 17.2 GWh were exported to the CEB grid. Revenues generated from electricity totalled Rs 51 million, compared to Rs 49 million in 2016/17. Total operating expenses dropped to Rs 64 million (including depreciation and finance costs), compared to Rs 69 million in 2016/17.

Food Crops

This year, the production of fruits and vegetables reached 3,679 tons compared to 4,460 tons for 2016/17. The total surface area harvested also decreased, going from 192 hectares last year to 182.2 hectares in 2017/18. This was the result of adverse climatic conditions during the summer months, bringing about a

AGRICULTURE CLUSTER

delay in plantation. Consequently, the average yield went down to 17.6 ton per hectare, compared to 20.7 ton per hectare last year.

The total volume of products sold under the “Jardins de Medine” brand has reached 577 tons in 2017/18, representing 16% of the total sales in volume and 29% in terms of value.

Revenue for the period under review amounted to Rs 101 million, compared to Rs 107 million in 2016/17. Total operating expenses amounted to Rs 111 million, compared to Rs 105 million last year, resulting in a Rs 10 million net loss.

Poultry Production

Sales revenues for the period 2017/18 went down to Rs 120 million, compared to Rs 143 million in 2016/17. Total operating expenses amounted to Rs 126 million, compared to Rs 132 million last year, resulting in a loss of Rs 6 million in 2017/18. This was brought about by lower sales of poultry meat, due to excessive humidity during the summer months, as well as poor feed quality

affecting some batches. As a result, lower operational parameters were recorded for the year under review, with a lower average live weight and a higher death rate. Goodwill amounting to Rs 37 million was impaired during the year.

Nursery and Landscaping Services

Medine Nursery recorded a 55% turnover from external sales made from Medine Garden Centre, with remaining 45% resulting from internal sales to Medine Landscaping. Revenues for the year under review totalled Rs 7.9 million, constituting a slight drop compared to the Rs 8.8 million recorded last year.

Medine Landscaping’s turnover for the period under review was split between new landscaping projects (60%) – including Middlesex University, Sparc, Uniciti roads & swales and Uniciti Office Park (phases 2A and 2B), and maintenance services (40%). As a result, revenues for the year under review saw a significant increase, going from Rs 39.4 million last year to Rs 52.4 million in 2017/18.

STRATEGY & OUTLOOK

The results in the year under review highlight the scale of the challenge of the broader sugar industry. While a number of initiatives have been launched over the last few years to diversify into alternative activities, the benefit from these initiatives were more than offset by the collapse in the sugar price.

A number of bold decisions will need to be taken in the next financial year to restructure the Agriculture cluster and minimise the losses in sugar-related activities. In addition, the Group has kicked off a strategic review of all its activities, which will likely lead to an acceleration of our diversification plan.

RISKS AND MITIGATING ACTIONS

ACTIVITIES RISKS MITIGATING ACTIONS

Cane cultivation Further decreases in sugar prices

Highly unionised industry

• Medine to work with authorities for G2G preferential quotas and tariffs, and new markets

• Mechanisation and automation

Food crops Climate risks: adverse weather conditions

• Wind breakers and phytosanitary treatment• Integrated pest management which is a broad

based approach towards sustainable agriculture

Poultry production Health risks: diseases • Enforced biosecurity measures

Nursery and landscaping activities Fierce competition from other players on the market

• Focus on internal market• Control costs to be competitive

TAMARINA GOLF CLUB

LEISURE

S H A R E P R I C E L E S S M O M E N T S T O D AY,C R E AT E D R E A M S T O M O R R O W



L E I S U R E C L U S T E R

OVERVIEW OF ACTIVITIES

Medine’s Leisure cluster consists of the following businesses:

• Casela World of Adventures, established as one of Mauritius’ leading attractions for both locals and tourists, is home to a rich variety of species, including 300 mammals, 1,500 birds and around 200 reptiles. Visitors can choose from a plethora of activities, ranging from a Safari Quad or a Segway ride, to heart throbbing interactions with rhinos, cheetahs and lions. The park also offers a large panel of thrilling attractions like tobogganing in the Avalanche Mines, zip lining, Canyon Swing jumping, karting, or the recently opened Tulawaka Gold Coaster 800-metres ride.

• Tamarina Golf & Spa Boutique Hotel holds out the promise of spontaneous, relaxed and joyful holidays full of wonderful surprises. Located right on Tamarin Bay, this intimate 4-star boutique hotel offers a selection of 50 garden- or sea-facing rooms, a choice of 3 different restaurants & bars, and a wellness centre.

• Tamarina Golf Club is an 18-hole, par 72 Championship golf course that possesses an unmatched layout, location and beauty. It spreads over 36 hectares and offers spectacular views on the Rempart Mountain and the Tamarin Bay, amidst a wild savannah backdrop, lush greens and wide fairways.

• Sports Aquatics and Recreation Centre (SPARC) is Mauritius’ newest multi-sports facility and members’ club. Largest on the island, this high-end facility is part of Uniciti, Medine’s 350-hectares smart city. It opened its doors in February 2018, providing the necessary infrastructure and amenities for the practice of different sports. SPARC also hosts a medical & health centre with more than 25 medical and paramedical practitioners, as well as a Clubhouse café & diner.

• Yemen is the largest deer reserve on the island, extending over 4,000 hectares of private wilderness. Besides hunting and the sale of venison, which have long been at the core of the business, Yemen now offers a variety of new experiences to Mauritians and tourists alike.

• Casela Catering is in charge of all Food & Beverages (F&B) activities within the Medine Group, including the provision of F&B to Casela World of Adventures’ main restaurant and outlets, SPARC’s Clubhouse, Talents, the Middlesex University Cafeteria, student and Uniciti Business Park canteens.

LEISURE CLUSTER



OPERATING CONTEXT

During the financial year 2017/18, tourist arrivals in Mauritius grew by 5.2% in 2017 and by 3.4% in the first semester of 2018, with people coming mainly from Europe and the Indian Ocean region. This increase positions the tourism industry as one of the fastest-growing in the country. It is currently being reinforced by improved air accesses between Mauritius and the Netherlands, Saudi Arabia and Kenya.

According to the World Travel and Tourism Council, the total contribution of the leisure sector to global GDP is expected to increase by 4% at the end of 2018, while a 2.4% growth is forecasted for direct and indirect employment.

Mauritius as a destination remains in demand, though there are some macro environment factors which can affect next year’s performances. Those include the volatility of the Euro and Pound sterling and the increase in the price of oil, amongst other things.

PERFORMANCE REVIEW

CASELA WORLD OF ADVENTURES

The financial year 2017/18 was a transformational one for Casela, with the launch of a major ride at Casela World of Adventures and two new lines of business, thereby demonstrating Medine’s strong commitment to developing its leisure activities.

Casela World of Adventures recently launched the Tulawaka Gold Coaster, its most significant attraction since December 2014. This new exciting ride enhances Casela’s offering of thrilling activities, but also cements its unique position as the leading attraction in Mauritius and the Indian Ocean region.

Additionally, Casela World of Adventures’ management team finalised the operational integration of Casela Karting (acquired last year), and launched two brand new activities: Casela Catering from September 2017, and SPARC in February 2018.

The centralisation of services like Human Resources, Accounting, Marketing, Health & Safety has made these businesses more efficient from a financial point of view.

During the period under review, Casela saw broadly flat revenues on prior year, with the poor weather conditions in the early part of the year offsetting the higher spend per head in the Park. The fall in profits was largely due to the costs generated by the launch of the two new businesses, SPARC and Casela Catering.

TAMARINA GOLF AND SPA BOUTIQUE HOTEL

The Hotel performed well during the year under review, with Average Room Rate (ARR) increasing by 10% as compared to last year. The occupancy rate reached 83% for the financial year 2017/18 – an excellent performance, especially for a “non-chain” and “stand-alone” hotel operating in such a competitive context.

In financial year 2017/18, the Hotel’s net profit more than doubled, going from Rs 3 million in 2016/17 to Rs 6.2 million this period. This increase was the result of higher revenue, combined with lower operating expenses.

Finally, the Hotel obtained a rating of 5.2 out of 6 on Holiday Check and received a Certificate of Excellence from Trip Advisor. It also won the World Travel Awards 2018 as leading boutique hotel in Mauritius.

“The financial year 2017/18 was a transformational

one for Casela”

“The occupancy rate reached 83% for the financial year 2017/18 – an excellent performance, especially

for a “non-chain” and “stand-alone” hotel operating in such a

competitive context.”







RISKS MITIGATING ACTIONS

Staff recruitment & retention • Provide attractive career path opportunities throughout the Group• Develop our talent through the Medine Training Centre, Talents

Air connectivity • On-going discussions with relevant authorities, with regards to air access and tourism policies

Increasing competition in the Mauritian leisure & hospitality industry

• Perfect Medine’s service offering • Maintain competitive prices• Invest at pace to offer innovative value propositions

Health & Safety risks: diseases or casualties

• Ensure highest levels of health and safety training to all staff members• Infrastructure that is best in class, compliant to national and international norms

TAMARINA GOLF CLUB

After twelve years of operation, a few upgrades were made to the Tamarina Golf Club’s (TGC) fairways, tee boxes and greens, and irrigation system. Additionally, our bio fertilisation project proved quite efficient, recording a considerable gain on quality and costs.

In the same vein, Tamarina maintained its competitive prices throughout the period, thereby managing to attract several corporate events. Clients were also drawn to our Resort thanks to the excellent service we strive to provide, the accessibility of the region, and the generally favourable weather conditions we

benefit from all year round. Despite the increased competition from new Golf courses, revenues increased by 3%, while costs were tightly managed.

YEMEN

During the year under review, Yemen’s turnover increased by 19.6% with profits reaching Rs 5.5 million. Additionally, we are exploring opportunities with tour operators, hotels, wedding planners, event organisers and caterers, and these look promising. Consequently, we expect considerable growth in awareness as

we unfold our marketing plan during the course of 2018/19.

STRATEGY & OUTLOOK

CASELA WORLD OF ADVENTURES

The objective for 2018/19 is to adapt the park’s marketing strategies and commercial offers to meet the needs of both locals and tourists. To do so, Casela World of Adventures will focus on offering unique, awe-inspiring and emotional experiences to all visitors, thereby positioning the park as a truly unique destination in the Indian Ocean.

#TAMARINA GOLF AND SPA BOUTIQUE HOTEL & TAMARINA GOLF CLUB

Forward bookings at Tamarina are positive. The average room rate is expected to increase less steeply in 2018/19, as compared to the period under review. With the new road linking Flic en Flac to Tamarina completed on 1 July 2018, many hotel partners and PDS promoters in the region have already showed

interest to develop marketing strategies using our golf offer. As a result, growing the number of rounds with West Coast hotels is at the heart of our strategy for the period 2018/19.

SPORTS AQUATICS AND RECREATION CENTRE (SPARC)

Becoming the brand leader in the fitness & leisure industry is SPARC’s objective for 2018/19. As an upscale, quality-driven sports complex, SPARC is perfectly positioned to attract students, professionals and families, and to host major events. Its overall strategic focus for 2018/19 involves:

• Full-time professional coaches to develop a unique swimming programme as well as various sports, and to form national athletes;

• Hosting major sports events; • Providing top-of-the-range gym equipment and innovative

gym programmes; and• Offering competitive prices.

UNICITI EDUCATION HUB

EDUCATION

L E A R N T O D AY,L E A D T O M O R R O W



E D U C AT I O N C L U S T E R


Medine’s Education cluster revolves around the Uniciti Education Hub which has been created as the embodiment of a distinctive and comprehensive offer, blending under one entity the whole educational offer of Uniciti, the Group’s newly launched Smart City (September 2017).

Realising an integrated knowledge-based model in Uniciti will be a key driver in contributing to educate the growing human capital of Mauritius and the wider African region.

With the aim of creating a unique and fully-integrated international campus in Mauritius, Medine has developed, on two sites, namely Pierrefonds Campus and Uniciti, the following five comprehensive educational offerings:

While Uniciti Education Hub encapsulates a wider offer, Higher Education in particular is truly the flagship project, spearheading the vision of setting up an integrated and international campus geared towards Mauritius and Africa. Counting a population of 1,700 students, the higher education offer regroups 6 renowned international institutions, including Ecole Centrale de Nantes, ENSA Nantes, SUPINFO International University, Université Paris 2 Pantheon-Assas, Middlesex University Mauritius and Vatel.

Another important aspect of Medine’s educational offering is Talents, a key player in the field of corporate learning and organisation culture programmes. Talents provides a holistic training approach at all levels, across various industries, and offers a variety of digital learning solutions.

Through Uniciti Education Hub, Medine ambitions to contribute to the social, cultural and economic well-being of the community. By positioning itself as a lead player in higher education, the Group wishes to play a significant role in enriching younger generations’ lives. This is not only in line with our strategic vision but also aligns with the government’s objective of transforming Mauritius into a knowledge economy.

“While Uniciti Education Hub encapsulates a wider offer,

Higher Education in particular is truly the flagship project,

spearheading the vision of setting up an integrated and international campus geared

towards Mauritius and Africa.”

“Through Uniciti Education Hub, Medine ambitions to contribute to the social, cultural and economic well-being of the community.”

EDUCATION CLUSTER




OPERATING CONTEXT

There are 81 higher education institutions (10 public funded institutions and 71 overseas awarding bodies) in Mauritius today, welcoming more than 45,000 Mauritian students as well as foreign learners from 69 countries, all studying towards a variety of different courses. Mauritius has started the journey towards becoming a gateway to Africa and the rest of the world in the education sector.

PERFORMANCE REVIEW

During the year under review, Medine has laid its priority on operational planning, to drive the implementation of Uniciti Education Hub’s development plan. The period 2017/18 has seen the emergence of new, and strengthening of, existing competitors, in turn making student recruitment within local and regional competitive markets quite challenging.

On the one hand, the number of students in higher education rose from 1,500 to 1,850, with broad-based growth across most of our institutions. Net losses generated by Medine’s tertiary institutions remained almost at par with last year, going from Rs 29.7 million in 2016/17 to Rs 29.4 million this year. Through a better optimisation of its marketing and campus running costs, the cluster has been able to contain its operational expenses at Rs 50 million, and is planning to continue to optimise its efficiency in the years to come.

The performance of Talents deteriorated, with losses going from Rs 2.0 million to Rs 3.5 million in the current year. These results are in part due to operational restructuring to the business, to reflect the aggressive competitive landscape, with the phasing out of some of the resource intensive end-of-year activities and corporate events.

Talents is currently undergoing a strategic review and repositioning, which it is expected will turn it around. The avenues to attend this include:

• Strengthening the Group’s partnership with Hemsley Fraser to provide innovative solutions within its product bundle offer; and

• Collaborating with digital learning partners for services like Learning Management services, Online training and Online Training Assessment.

On a more positive note, the set-up of the Middlesex University Mauritius campus, within Uniciti Smart City’s earmarked higher education campus zone, was a major achievement for Medine’s Education cluster. This dynamic expansion was further strengthened with the rebranding of the Medine Education Village into the Uniciti Education Hub in January 2018.

“On a more positive note, the set-up of the Middlesex University Mauritius

campus, within Uniciti Smart City’s earmarked higher education campus zone, was a major achievement for

Medine’s Education cluster.”






STRATEGY & OUTLOOK

Leveraging on the attractiveness of Uniciti, Medine continues to focus its efforts into the brand awareness of the Uniciti Education Hub and its higher education institutions. It does so through an integrated marketing and communication strategy, in support of student recruitment, which remains the Group’s primary focus.

In addition, Medine intends to carry on nurturing its relationships with industry partners, pursuing its mission to source solid and tangible partnerships with universities and schools that have an international flair and an ambition to settle in Mauritius.

Our partner institutions have been carefully chosen in respect of their cohesive approach towards learning but also for their distinctive involvement in research programmes. Today, in a fast-paced world with increasing demand for transdisciplinary skills and competencies, learning stretches far beyond academic excellence. Our institutions are attuned to the new requirements of the workplace and know how to adjust themselves accordingly. The programmes delivered by these institutions are tailored to suit the needs of our Mauritian students as well as those of the young African generation.

In the same vein, the successful implementation of Medine’s undergraduate programmes has given way to solidly grounded academic programmes, with pertinent lecturers. It has also contributed in broadening knowledge through international exposure and professional internships with Université Paris 2 Panthéon-Assas, Ecole Nationale Superieure d’Architecture de Nantes, SUPINFO International University and/ or Centrale Nantes.

Leveraging on its close ties with industry partners and its overarching willingness to provide a dynamic ecosystem for students to thrive, Medine aims to host workshops to promote ideas, creativity and innovation. Hence, the Group’s strategic objectives for 2018/19 include:

• Enhancing its portfolio with high-calibre institutions and partners, in order to offer students more choice and to participate in the development of a knowledge hub.

• Attracting entrepreneurs, investors and potential partners to support and contribute towards its project.



Fierce competition from international educational institutions

• Encourage Mauritian students to favour local educational institutions• Offer different and more varied opportunities that are not yet available in Mauritius

Foreign exchange risk: impacts on Mauritius as an educational destination

• Negotiate fair prices for foreign students with an all-inclusive package• Offer assistance to foreign students in all their dealings, thereby contributing to

reducing the costs associated with their enrolment in Mauritian institutions

UNICITI OFFICE PARK

PROPERTY

L AY I N G B R I C K S N O W,I N V E S T I N G I N T H E F U T U R E


l lA C T I V I T I E S R E V I E WP R O P E R T Y C L U S T E R

l lA C T I V I T I E S R E V I E WP R O P E R T Y C L U S T E R


Medine Property was launched in 2007 as the Group’s property development arm, to develop the land assets earmarked as part of the vision of Medine’s 2005-2025 Masterplan.

After eleven years, Medine Property has now become the driving force of the Group and is one of Mauritius’ leaders in property and urban development. Our leitmotiv is to give value to Medine’s Group land bank, by creating an ecosystem based on sustainable, harmonious and coherent urban projects over the years.

Medine’s Property cluster revolves around the following activities:• Sales activities (Morcellement, bulk sales and residential units)• Build and Lease (Education, Student Housing, Office, Retail/

Commercial, Sports & Leisure, Medical)• Master Planning (Uniciti & Wolmar)• Overall Land Bank Management • Other revenue-generating activities (Brokerage services,

Property Management, Asset Management)• Strategic partnerships and alliances

During the year under review, the Rs 85 million profits generated by Medine Property came mainly from the Mount Pleasant and Bois d’Olive morcellements. The revenues from sale-of-land activities were lower than expected and largely impacted by the delay in the obtention of the Mount Pleasant’s Morcellement Permit, as well as some bulk sales that did not materialise.

Our Build and Lease portfolio performed well this financial year, with major investments realised during the period, including:

• The completion of Middlesex University in Uniciti in September 2017, thereby adding to Medine’s educational property offering.

• The on-going construction of extensions to the existing Westcoast Primary and Secondary Schools.

• The delivery of two leisure projects currently operated by Casela: SPARC Sports Complex and Uniciti’s Student Life Restaurant, as well as that of the 8 additional blocks to the Uniciti Office Park, now standing at approximately 15,000 m2.

• High quality infrastructure works for Uniciti, such as the Uniciti underpass, as well as several road extensions to connect new developments across the Smart City.

The Cascavelle food court’s major renovation project, for which works started in February 2018, is on-going at the time of writing. The new food court will provide customers with added convenience within a completely redesigned space, which shall increase from 8 to over 22 food outlets.

OPERATING CONTEXT

These recent years have seen the emergence of several Smart Cities in addition to other developments, thus resulting in a large supply of residential units on the market. Subsequently, a slow sale pace has been observed throughout the period, mainly for high end residential offerings.

Moreover, growth rates in the construction sector have led to a significant increase in the costs of construction over the last few years.

In addition, the delay incurred for the obtention of permits has also impacted our activities. As such, significant efforts are being deployed to ensure a close follow-up of all permit applications with the relevant authorities.

On another note, there are several encouraging budgetary measures that have been highlighted. Medine also hopes to be able to help improve access to the West, that has become a major issue for the inhabitants of the whole region.

PERFORMANCE REVIEW

During the financial year 2017/18, major achievements included the delivery of Uniciti’s Smart City Certificate in October 2017 and that of the Smart City Developer Certificates for the following entities:

• Uniciti Education Properties Ltd, holder of Middlesex University, Westcoast Primary and Secondary Schools, and Ile aux Enfants Pre-primary School & Nursery.

• Uniciti Office Park Ltd, holder of Office Park Phase 2.• Uniciti Commercial Properties Ltd, holder of Student Life

Restaurant and Kart Track.• Uniciti Sports and Cultural Properties Ltd, holder of SPARC.

Additionally, Medine Property has generated Rs 85 million of profits in 2017/18, compared to Rs 303 million last year.

PROPERTY CLUSTER

“After eleven years, Medine Property has now become the driving force

of the Group and is one of Mauritius’ leaders in property and

urban development.”


Fierce competition from other property development businesses in the Mauritian market

• Work with the most professional teams• Maintain competitive prices• Emphasise quality and uniqueness of Medine’s property offerings• Promote the Group’s property activities across new markets, both locally

and internationally• Target existing clients to encourage Word-of-Mouth

Gearing • Implement strict operational cost-containment measures• Closely monitor cash flow

Delay in permits obtention process • Well established operating procedures, strict compliance, and assistance of professional consultants to ensure an efficient and effective process

STRATEGY & OUTLOOK

With over a decade’s experience in the property development sector, Medine’s Property cluster has successfully undertaken a wide array of projects. Additionally, the required infrastructure has been set up to welcome a diversified range of potential new inhabitants on the West Coast.

Despite the challenges ahead, including entering the highly competitive market for residential units and materialising the Group’s various projects dependent on obtention of necessary permits in time, Medine’s outlook remains promising. Leveraging on its experience, the prime geographical location of its land bank and a dedicated, young and proactive team, the Group aims to ensure a perennial development of its activities, in line with the vision of the 2005-2025 Masterplan.

The strategic focus for 2018/19 mainly consists of:• The Uniciti project, developed around education and centred around two major components:

» Reinforcement of our Education Hub with new Higher Education Operators settling within our Uniciti Campus

» Foreign Business Relocation within our Uniciti Office Park• Residential offerings within Uniciti, including:

» Morcellements » Residential units » Bulk sales

• Efficient management of our existing yielding asset portfolio• Implementation of high-quality infrastructure within Uniciti• Residential offerings outside Uniciti.

“With over a decade’s experience in the property development sector,

Medine’s Property cluster has successfully undertaken a wide

array of projects”

SPARC UNICITI

HUMANRESOURCES

G R E AT P E O P L E ,S T R O N G V I S I O N


l lA C T I V I T I E S R E V I E WH U M A N R E S O U R C E S

EMPLOYEES(2017: 1090)

1149MEN

860WOMEN289

NEW EMPLOYEES(growth +5%)

+59WORKERS

(2017: 739)

715STAFF

(2017: 351)

385

0

0.5

1.0

1.5

2.0

2015

(Rs

Bn)

0

50

100

150

200

250

0

50

100

150

200

250

300

350

l lA C T I V I T I E S R E V I E WH U M A N R E S O U R C E S


18-29

Staff Staff

Workers Workers

below 530-39 5-1540-49

(Years) (Years)

15-2550-64 above 25above 65

DEMOGRAPHICSAGE BAND

SENIORITY TENURE

HUMAN RESOURCES | MEDINE GROUP JUNE 2018

Medine believes that its people are core to its ability to deliver on its strategy and to the Group’s

long-term growth. We are committed to attracting, developing and retaining capable, engaged and

productive employees, while ensuring their work environment is safe and healthy.

GENERAL POLICY ON SOCIAL, SAFETY AND HEALTH AT WORK

Management monitors the enforcement of health and safety guidelines by:

• Promoting a health and safety culture within the Group;• Providing employees with adequate training and equipment,

so as to ensure safe work practices;• Providing necessary resources to avoid employees taking any

undue risks; and• Undertaking necessary corrective and preventive actions when

unhealthy or unsafe working conditions are identified.

The employees’ adherence to established safety practices is mandatory. Medine undertakes to comply with all the health and safety principles, as set out in the Occupational Safety and Health Act 2005, so far as they are reasonably practical to comply with.

PERFORMANCE MANAGEMENT

Medine strongly believes that the Group’s performance is directly linked to that of its employees, which is why the mission of the HR department is to direct employees’ efforts towards the successful achievement of the Group’s strategic objectives.

Medine has strived to implement a tailor-made Performance Management System (PMS) that drives performance. The system was refreshed in 2016 through the digitalisation of the PMS, comprising of a reviewed rating scale and development of a competency guideline that aims to standardise the evaluation process.

EQUAL OPPORTUNITY

The following principles apply to all aspects of employee recruitment, including promotion and training:

i. Recruitment policies, procedures and practices shall meet all the terms and objectives of the Group’s equal opportunity policy.

ii. Opportunities for employment, including promotion and training, are equally opened to all, and selection is based on merit.

0

50

100

150

200

250

0

50

100

150

200

250

300

350

123

217

151

270

86

198

14

46

15

191

64

45

2 10

153

329

191 193

VOLUNTEERINGACTIVITIES

CORPORATE SOCIALRESPONSIBILITY

A C T R E S P O N S I B LY,A C H I E V E G R E AT N E S S



C O R P O R AT E S O C I A L R E S P O N S I B I L I T Y




The Fondation Medine Horizons (FMH) is registered with the Registrar of Companies as a Private Limited Company, with the special “Charitable Institution” status. It administers all of Medine’s CSR funds and is, therefore, the official relay between the Group’s companies, the relevant authorities and stakeholders.

In operation since 2006 and in line with Medine’s mission, the objective of the FMH is to sustainably develop the West Coast’s heritage, in order to help the Mauritian society and future generations grow. After twelve years of existence, the FMH team has established close relationships with private and public institutions, non-governmental organisations (NGOs) and the civil society in general. Since its inception, the foundation has been supporting its own projects, in the name of the Medine and EUDCOS Groups, as well as 160 external social projects within the Western region. Additionally, FMH benefited from the support of external contributors financing projects outside Medine’s catchment area and guidelines.

MEDINE’S VOLUNTARY CONTRIBUTIONS

During the year under review, Medine invested Rs 10.5 million through FMH to support its own social initiatives. Furthermore, the Group promoted in-kind donations and volunteering actions to its subsidiaries and employees, thanks to whom support was provided to local NGOs and associations. These included:

Education

• MEDINE EXCELLENCY SCHOLARSHIPS: Since 2016, Medine has been providing 22 deserving young Mauritians with access to top-notch higher education programmes from the Uniciti Education Hub. This year again, the Group rewarded two young women from challenging social backgrounds, by giving them an opportunity to get into prestigious institutions affiliated with the Uniciti Education Hub: Université Paris II Panthéon-Assas and Middlesex University Mauritius.

• EMPLOYEES’ CHILDREN SCHOLARSHIPS: Since 2013, Medine has been allocating scholarships to the children of its employees who show keen interest in their studies. Eleven kids benefited from these grants in 2017/18, adding to the other 13 already enrolled. Additionally, the CEO, Thierry Sauzier, committed to give an additional Tertiary grant to any institution forming part of Uniciti Education Hub.

• SCHOOL BAGS: In May 2018, in the wake of Mauritius’ 50th Anniversary, 3,000 pupils from ten primary schools in FMH’s catchment area have received school bags from Medine. This initiative started on 16 May at Flic en Flac Government School and was supported by Uniciti Education Hub.

• SCHOOL TRANSPORT: Ten employees’ children, residing in remote areas of Yemen and Henrietta, were provided with transport facilities to and from school.

• SPECTACLE CULTUREL ESTUDIANTIN: Medine sponsored the “Spectacle Culturel Estudiantin”, a performance organised yearly by Lindsay Moothien and his secondary school students, to whom he teaches theatre and human values.

• EMPLOYEE VOLUNTARY ACTIONS: Wall painting – The Higher Education and secondary school students of Uniciti Education Hub embellished the external wall of the ZEP Bambous ‘A’ Government Primary School by painting a mural, illustrating the theme “protection of the environment”.

School fees – The twenty-seven employees who were introduced by FMH to l’École Familiale de l’Ouest have, this year again, contributed towards the school fees of some 40 students.

FONDATION MEDINE HORIZONS

13%

49%

38%

13%

Environment

• DONATION OF RS 1 MILLION TO CYCLONE FUND: Further to the call of the Prime Minister, Pravind Kumar Jugnauth, to the private sector after the cyclone Berguitta, Medine gave away a Rs 1 million cheque towards the Prime Minister’s Cyclone Relief Fund, thereby contributing to the rehabilitation of cyclone victims.

• DISTRIBUTION OF ENDEMIC SEEDS: As part of Mauritius’ independence celebrations, Medine offered 1,600 “Latanier bleu” endemic seeds to its employees.

• PRESERVATION OF THE ENVIRONMENT: A Memorandum of Understanding (MoU) was signed in May by Paul Williams, Managing Director of Casela World of Adventures, and the Honorable Mahen Seeruttun, Minister of Agro-Industry and Food Security. This five-year agreement is geared towards the setting up of a major conservation programme to safeguard endemic species and educate the public about Mauritius’ rich fauna & flora, its fragility and the need to preserve it.

• CLEAN-UP MAURITIUS & EMBELLISHMENT CAMPAIGN: As part of independence celebrations, Medine was involved in different projects, including the “Clean Up Campaign” led by the Mauritian Government. The Group provided human resources for the cleaning of La Marie and Albion villages, and the Vacoas/Phoenix and Beau-Bassin/Rose-Hill bus stations and markets. The Group also donated plants as well as 300 75-L garbage bins to the Municipal Councils of Beau-Bassin/Rose-Hill and Vacoas/Phoenix, and to the Black River District Council, for the embellishment and cleaning of their constituencies.

• VEGETABLE GARDENS: With the expertise of Medine Agriculture staff members, the Group has helped three NGOs from its catchment area set up vegetable gardens. The cluster has also donated fresh vegetables to ten associations, thereby helping them raise funds to support the community.

Land & Building Facilities

Medine also provides land and/ or buildings to several NGOs at a significant discount, or for a token gesture.

On-going Projects

• LOCAL HANDS occupies a building at Rue Dragon in Bambous, where it carries out its handicraft project, thereby enabling Mauritian craft workers to derive income from traditional handicraft techniques.

• GENERAL CONSTRUCTION CO. LTD has setup a social centre and charity shop run by, and for, inhabitants of the locality, on a 400 m2 plot of land at Avenue Folles Herbes, Bambous.

• ASSOCIATION KINOUETE operates from a container situated at Palma, offering counselling and social reintegration services to ex-detainees (especially women).

• ÉCOLE FAMILIALE DE L’OUEST was allocated a plot of land at Eaux Bonnes, Bambous, to build an alternative school, welcoming vulnerable children who are outside the local mainstream education system.

• THE MAURITIAN WILDLIFE FOUNDATION was given a 20-year mandate (valid till 2033) to manage the biodiversity of the Mondrain nature reserve, situated on the crest of the Vacoas Ridge, overlooking the Magenta valley in Black River.

• ASSOCIATION FOR THE WELFARE OF ORPHANS AND HANDICAPPED CHILDREN (AWOHC) occupies a 777 m2 portion of land at Eaux Bonnes, Bambous, where it runs a day-care centre for handicapped children.

• GROUPE ELAN occupies two 20,852-m2 portions of land in Chebel. The Group sets up agricultural projects to help towards the rehabilitation of ex-detainees.

• FONDATION POUR L’ENFANCE - Terre De Paix currently operates a special needs school and a youth shelter at Albion, providing childcare facilities to those with family issues.

• LA PROMENADE DE MEDINE – Medine entrusted a 5 acres park to the Bambous community, along with barbecue facilities and children’s play areas.

New Projects

• WAKAJISHI ACADEMY received a Letter of Intent from Medine to operate its “Child of Light” project at the Medine ex Farmers’ Market, located in Bambous. The project comprises a Centre d’Éveil, a specialised school for autistic children, a security services training centre and, later on, an orphanage.







CSR LEVY CONTRIBUTIONS

In addition to the above-mentioned projects, FMH has received Rs 2 million of CSR levy contributions from 5 sister companies and 12 non-group participating companies. This has enabled the Group to support 23 projects, of which 9 from the 6 different categories below were directly supported by FMH.

Education

• ÉCOLE FAMILIALE DE L’OUEST (EFO) provides alternative education to students who are outside the local mainstream system, providing them with a work placement in private companies.

• CENTRE D’AMITIÉ caters for vulnerable groups living in Camp La Pailles, Bambous, by providing nursery and pre-primary school services.

• QUARTIER DE LUMIÈRE (CENTRE LA RUCHE) works towards the physical, emotional, social, linguistic and intellectual development of children living in La Valette.

• INSTITUT CARDINAL JEAN MARGÉOT (LES AMIS DE ZIPPY) cares for the social and emotional well-being of Saint Benoit RCA Std III students, teaching them how to cope with every day difficulties, to identify and talk about their feelings, and explore ways of dealing with them.

• ASSOCIATION D’ALPHABÉTISATION DE FATIMA provides alternative education to adolescents who are outside the formal mainstream system, helping them become literate and employable.

• ASSOCIATION LES ENFANTS D’UN RÊVE supports “Pitila Petzi” pre-primary school by catering for vulnerable children and their families.

• ANGES DU SOLEIL supports and accompanies vulnerable children and families living in Tamarin and Black River, offering various activities like education, sports, health, etc.

• GARDERIE MATERNELLE L’ÉTOILE provides pre-primary school services to children residing in Black River.

• WILLFLY offers after school activities to children living in Black River, aiming at reducing poverty.

Poverty Alleviation & Socio-Economic Development

• CARITAS SEED VISITATION, VACOAS, offers counselling and emergency assistance to people living in extreme poverty.

• SAFIRE, BAMBOUS, ensures the social integration and rehabilitation of street children.

• ÉTOILE DU BERGER operates three Children shelters for those who have been abandoned or taken away from their families.

• LOVEBRIDGE supports and empowers families who are under the poverty threshold.

Sports & Leisure

• BAMBOUS MARTIAL ART & SPORTS welcomes and trains youngsters from the region, helping them improve their technique.

• CUREPIPE STARLIGHT initiates youngsters to handball and trains them for international competitions.

• RUGBY UNION MAURITIUS promotes rugby and its values by contributing to the Southern Cyclones Team in Bel Ombre.

• CARPE DIEM ART THERAPY fosters an environment for children to self-develop, improve their communication skills and nurture their human values.

50%

12%

12%

10%

8%

8%

Health

• HAEMOPHILIA ASSOCIATION MAURITIUS offers medical assistance to patients suffering from haemophilia.

• CHRYSALIDE provides a shelter and rehabilitation services to women suffering from substance abuse.

• ASSOCIATION DE PARENTS D’ENFANTS INADAPTÉS DE L’ILE MAURICE (APEIM) provides medical assistance to children suffering from intellectual deficiencies, as well as support to their parents and the members of their family.

• RÊVE ET ESPOIR contributes towards the social integration of mentally handicapped people.

Environment

• MAURITIAN WILDLIFE FOUNDATION aims at the conservation of the Pink Pigeons.

Entrepreneurship

• ANGES POUR ELLES empowers, mentors and coaches women entrepreneurs through the launch of an online networking platform.

With the new CSR levy framework further reducing the total amount of funds directly operated by FMH, the Group will continue to support social projects, limiting itself to the most impactful.

Additionally, Medine will continue to innovate and promote a culture of dialogue and collaboration with all concerned parties (authorities & stakeholders, including the community), to help implement and better coordinate actions for the sustainable development of its catchment area.

Internal and external committees will be formed, to lead, support and implement social initiatives in the Medine catchment area. A volunteering culture will also be promoted, whereby employees will be invited to participate in hands-on activities that benefit vulnerable communities and contribute towards the preservation and upliftment of the environment, through the sharing of expertise, knowledge, skills, talents and time. In-kind donations will also be favoured.

To be even more accessible and for the ease of its operations, FMH will have its own social centre as from the end of 2018, welcoming members of the community and encouraging them to organise social activities.

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1H I G H L I G H T S

M E D I N E A T A G L A N C E

1H I G H L I G H T S

M E D I N E A T A G L A N C E

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C O R P O R AT E G O V E R N A N C E

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Medine Limited is a public interest entity, as defined under the Financial Reporting Act 2004. The Board of Directors adheres to the highest principles of good governance and ensures that these are followed and applied throughout the Group. It recognises the importance of such principles and views their application as an opportunity to critically review the Company’s structure and processes. It believes that the adoption of the highest standards of governance is imperative for the enhancement of stakeholder value.

The Company’s compliance with the principles of the National Code of Corporate Governance for Mauritius (2016) is set out in the report.

ORGANISATIONAL CHART AND STATEMENT OF ACCOUNTABILITIES

The Group’s organisational chart showing the key senior positions and their respective reporting lines is found on page 11 of this report.

CORPORATE GOVERNANCE FRAMEWORK

The current corporate governance framework of the group is set out below:

GOVERNANCE STRUCTURE

Medine Limited is led by a unitary Board, whose responsibilities are, inter alia, the review and adoption of strategic plans, the overview of business performance, the adoption of appropriate risk management systems and the establishment of proper internal control systems.

Role of the Board

The main role of the Board is to maintain a high standard of governance so as to protect and enhance shareholders’ value. It sets the overall strategy for the Group, oversees executive management and ensures that good corporate governance policies and practices are developed within the Group. The Board acts in good faith, with due diligence and care, and in the best interests of the Company and its shareholders. It is responsible for leading and controlling the Company and meeting all legal and regulatory requirements.

Role of Board Committees

The Board delegates its duties and powers, where necessary, to board committees, in order to ensure operational efficiency and that specific issues are being handled with relevant expertise. Two board committees have been established, namely the Audit Committee and the Corporate Governance Committee. Each Committee has its specific duties and authorities set out in its charter, which is available on the company’s website.

Role of Management

Management is responsible for the Company’s day-to-day business operations and is accountable for the performance of the clusters forming part of the Group.

Key Roles and Responsibilities

The Position Statements of the Chairman, the Chief Executive Officer and the Company Secretary have been approved by the Corporate Governance Committee. Their key roles and responsibilities have been clearly defined and are summarised below. The functions and roles of the Chairman and the Chief Executive Officer are separate to ensure a better balance of power and authority on the Board.

Chairman

• Responsible for the leadership of the Board• Ensures the Board’s effectiveness• Ensures that directors receive accurate, timely and clear information• Encourages active participation of all Board members in

discussions and decisions• Ensures effective communication with stakeholders

Chief Executive Officer

• Responsible for the day-to-day running of the Group’s operations • Develops and recommends to the Board strategies in line with

the long-term vision of the Group• Responsible for the implementation of the strategy and

policies set by the Board

Company Secretary

• Ensures compliance with all relevant statutory and regulatory requirements

• Prepares and circulates the agenda for Board and Board Committees meetings, with any supporting document

• Participates in the induction process of newly appointed Directors

• Provides comprehensive practical support and guidance to directors as to their responsibilities

• Monitors governance processes

EXTERNAL AUDITORINTERNAL AUDITFUNCTION

CHIEF EXECUTIVEOFFICER

CORPORATE GOVERNANCECOMMITTEE

EXECUTIVECOMMITTEE

AUDIT COMMITTEE

MANAGEMENT COMMITTEE

SHAREHOLDERS

BOARD

CORPORATE GOVERNANCE REPORT


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BOARD OF DIRECTORS

Board Composition

The Company’s Constitution provides that the Board should consist of a minimum of six and a maximum of fourteen directors.

As at 30 June 2018, the Board was composed of eleven directors who have a complementary set of skills, expertise and experience, namely in agriculture, property and business project development, corporate governance, marketing, banking, law, finance and strategy.

All directors ordinarily reside in Mauritius.

The names and profiles of the Board members are set out on pages 12 to 17.

Change in Officers

Mr Daniel Giraud, G.O.S.K., retired as Chief Executive Officer of the Group on 30 September 2017 after 15 years in office and resigned as Director of the Company on 29 December 2017.

Mr Thierry Sauzier was appointed as Chief Executive Officer of the Group on 1 October 2017.

Mr Marc Lagesse was appointed by the Board as independent non-executive Director on 27 September 2017 to replace Mr Gérald Lincoln, who resigned in June 2017. His appointment was approved at the annual meeting of the shareholders held on 19 December 2017.

Board Meetings

The Board meets regularly, at least at quarterly intervals, and holds additional meetings as and when it deems appropriate. Meetings are scheduled annually in advance, according to an annual Board calendar.

Six Board meetings were held during the year under review. The Directors reviewed and adopted the Company’s and the Group’s audited financial statements, approved the Company’s and the Group’s budget and unaudited quarterly results, and the declaration of an interim and a final dividend, and reviewed management reports pertaining to the Group’s different clusters, inter alia.

The Agenda is prepared by the Company Secretary and circulated to the Chairman, the Chief Executive and the Group Head of Corporate for their comments and approval. Once finalised, the agenda and accompanying Board papers are sent to all directors at least one week prior to the meeting, giving them the opportunity to participate fully in the Board meeting.

Minutes of Board meetings are prepared by the Company Secretary with details of decisions reached, any concerns raised, and dissenting views expressed. Draft minutes are shared with the Chairman, the Chief Executive and the Group Head of Corporate for review, before circulating to the directors at least one week prior to the next meeting. Once approved by the Board, minutes are signed by the Chairman of the meeting.

Attendance at Board Meetings

The Directors who held office and their attendance at Board Meetings during financial year ended 30 June 2018 are given below:

DIRECTORS CATEGORYATTENDANCE AT

MEETINGS

René Leclézio (Chairman) Non-executive 6/6

Pierre Doger de Spéville Non-executive 6/6

Thomas Doger de Spéville Non-executive 6/6

Daniel Giraud, G.O.S.K (up to 29th December 2017) Executive 2/3

Lajpati Gujadhur Non-executive 6/6

Ramapatee Gujadhur Non-executive 4/6

Marc Lagesse (as from 27 thSeptember 2017) Independent non-executive 4/5

Jacques Tin Miow Li Wan Po, G.O.S.K (Vice-Chairman) Non-executive 6/6

Jocelyne Martin Non-executive 6/6

Shakil Moollan Independent non-executive 5/6

Marc de Ravel de L’Argentière Non-executive 6/6

Thierry Sauzier Executive 6/6

Where Board meetings could not be held, the directors approved matters by way of written resolutions circulated to them. Supporting documents were also circulated in the process.

BALANCE

GENDER DIVERSITY

AVERAGE AGE

LENGTH OF TENURE


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Board Charter

The Board has not yet approved its Charter. Once approved, a copy will be made available on the website.

Constitution

The Company was incorporated as a public company on 27 June 1913 under the name of The Medine Sugar Estates Company Limited. It changed its name to Medine Limited on 9 September 2009.

The Company’s Constitution is in conformity with the provisions of the Companies Act 2001 and comprises the following main clauses:

• The Company has wide objects and powers;• There are no pre-emptive rights on share transfers;• Fully paid shares are freely transferable;• The Company is authorised to purchase or otherwise acquire

its own shares;• The quorum for a meeting of shareholders is three shareholders

present or represented, and holding at least 51% of the ordinary shares of the Company;

• The minimum number of Directors is six and the maximum number is fourteen;

• The quorum for a meeting of the Board is five;• An additional Director may be appointed by the shareholders

by ordinary resolution but so that the total number of Directors shall not at any time exceed the maximum number fixed in accordance with the Constitution;

• The Board has the right to appoint any person to be a Director to fill a casual vacancy. A Director so appointed shall hold office only until the next Annual Meeting and shall then retire but still be eligible for appointment;

• A Director who is interested shall not be allowed to 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 meeting of shareholders, the chairman of the meeting has a casting vote.

A copy of the Company’s Constitution is available on the website and upon request in writing to the Company Secretary at the registered office of the Company, 4 Uniciti Office Park, Rivière Noire Road, Bambous 90203.

Directors’ Service Contracts

Mr Thierry Sauzier has an employment contract with the Company with no expiry date. The other Directors have no service contract with the Company.

Conflicts of Interest Directors do their best to avoid conflicts of interest. Should any conflict or potential conflict occur, it would be the duty of the Director to make a full and timely disclosure to the Board. Any declaration of interest is entered into the Register of Interests.

However, the Constitution of the Company provides that a Director who is interested would not be allowed to vote on any matter relating to the transaction or proposed transaction in which he is interested and would not be counted in the quorum present at the Board meeting.

Related Party Transactions

Details on related-party transactions are given in note 45 of the financial statements.

Contracts of Significance

During the year under review, there was no contract of significance to which the Company was a party and in which a Director of the Company was interested, either directly or indirectly.

Directors’ Remuneration and Benefits

STATEMENT OF REMUNERATION PHILOSOPHY

The members of the Corporate Governance Committee, in its capacity as the Remuneration Committee, have been entrusted with determining and recommending to the Board, for its approval, the level of non-executive Directors’ fees, and a general policy on executive and Senior Management remuneration.

The Group’s underlying philosophy is to set remuneration at an appropriate level to attract, retain and motivate high-calibre personnel and to reward them in accordance to their individual as well as collective contribution towards the achievement of the Company’s objectives and performance, whilst taking into account current market conditions and the Company’s financial position.

The remuneration policy for executive Directors approaching retirement is determined by the Corporate Governance Committee on a case-by-case basis.

Non-executive Directors receive an annual fixed fee. Any revisions in fees are submitted to the shareholders for approval at the annual meeting of shareholders. Directors who also serve on Board Committees receive an attendance fee per meeting. In addition, Board members may also be entitled to non-material preferential tariffs in some of the group’s business activities. The Corporate Governance Committee, in its capacity as Remuneration Committee, reviewed both the Directors’ fees and benefits, and have ascertained that the latter are appropriate and are not likely to cause any conflict of interest in Directors’ decision-making.

Non-executive directors have not received remuneration in the form of share options or bonuses directly associated with the company’s performance.

Fees to which Directors and Board Committee members are currently entitled are as follows:

ANNUAL

FIXED FEES

Rs

ATTENDANCE FEE

PER MEETING

Rs

BOARD

Chairman 240,000 -

Vice-Chairman 200,000 -

Director 180,000 -

CORPORATE GOVERNANCE COMMITTEE

Chairman - 15,000

Member - 10,000

AUDIT COMMITTEE

Chairman - 20,000

Member - 15,000

The remuneration of the Directors for the year under review is set out below:

2017/18

Rs

2016/17

Rs

DIRECTORS OF THE HOLDING COMPANY

REMUNERATION AND BENEFITS PAID BY THE HOLDING COMPANY TO:

• Executive Directors 29,057,098 24,370,682

• Non-executive Directors 2,485,000 2,390,000

REMUNERATION AND BENEFITS PAID BY SUBSIDIARY COMPANIES TO:

• Executive Directors 45,000 60,000

• Non-executive Directors 190,000 190,000

OTHER DIRECTORS OF SUBSIDIARY COMPANIES

REMUNERATION AND BENEFITS PAID BY THE RESPECTIVE SUBSIDIARY COMPANIES TO:

• Executive Directors - -

• Non-executive Directors 90,000 90,000


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Directors’ dealings in Shares

With regards to Directors’ dealings in the shares of the Company, the Directors confirm that they have followed the principles of the Model Code for Securities Transactions by Directors, as detailed in Appendix 6 of the Listing Rules, issued by the Stock Exchange of Mauritius Limited.

The Company Secretary maintains a Register of Interests that is updated with any dealing in shares or any transaction entered into by directors and their associates, which is required to take place outside the close periods, of which they are informed by the Company Secretary.

Directors’ Share Interests

The Directors’ direct and indirect interests in the shares of the Company as at 30 June 2018 were as follows:

ORDINARY

DIRECT INDIRECT

DIRECTORS NUMBER % %

René Leclézio 2,985 - 0.97

Pierre Doger de Spéville 9,073,466 8.64 4.13

Thomas Doger de Spéville 16,265 0.02 -

Lajpati Gujadhur 373,407 0.36 -

Ramapatee Gujadhur 1,585,962 1.51 -

Marc Lagesse 190,000 0.18 -

Jacques Tin Miow Li Wan Po, G.O.S.K 669 - 0.39

Jocelyne Martin 6,100 0.01 -

Shakil Moollan 1,460 - -

Marc de Ravel de L’Argentière 462,032 0.44 -

Thierry Sauzier 175,000 0.17 -

During the year under review, share dealings by Directors were as follows:

NUMBER OF SHARES ACQUIRED

DIRECTLY INDIRECTLY

René Leclézio - 778,210

Pierre Doger de Spéville 45,000 5,700

Thomas Doger de Spéville 9,000 -

Marc Lagesse 190,000 -

Jacques Tin Miow Li Wan Po, G.O.S.K - 23,050

Shakil Moollan 1,460 -

Thierry Sauzier 6,000 -

Directors and Officers Liability Insurance

The Directors and Officers of the Company and of its subsidiaries benefit from an indemnity insurance cover contracted by the Company.

Third Party Management Agreement

There is no third-party management agreement with regards to the Company or its subsidiaries.

BOARD COMMITTEES

To assist the Board in the discharge of its duties, the following Board committees were established with charters approved by the Board and which clearly define their terms of reference, composition and functionality.

Audit Committee

The Audit Committee is composed of four members whose attendance at meetings is given below:

MEMBERS CATEGORY ATTENDANCE AT MEETINGS

Jacques Tin Miow Li Wan Po, G.O.S.K (Chairman) Non-executive Director 7/7

Jocelyne Martin Non-executive Director 7/7

Shakil Moollan (as from 27th September 2017) Independent non-executive Director 6/6

Marc de Ravel de L’Argentière Non-executive Director 7/7

The committee met seven times during the year under review, satisfactorily fulfilling its role, as defined by its terms of reference, namely:

• Reviewing the financial reporting process, in particular the accuracy, reliability, integrity and compliance with legal and regulatory requirements of the Company’s interim and annual financial statements.

• Reviewing the adequacy and effectiveness of its risk management and internal control system.• Assessing and recommending the appointment of internal and external auditors.• Reviewing the annual financial statements before their submission to the Board and discussing the results of the external audit

process with the external auditor.

In 2018, the Audit Committee members visited the SPARC Sports Complex and the canteen, which started operations during the year, with the aim of reviewing the control systems in place.


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Corporate Governance Committee

The Corporate Governance Committee is composed of five members whose attendance at meetings is given below:

MEMBERS CATEGORY ATTENDANCE AT

MEETINGS

Pierre Doger de Spéville (Chairman up to 6thFebruary 2018) Non-executive Director 2/2

Daniel Giraud, G.O.S.K (up to 29th December 2017) Executive Director 1/1

Marc Lagesse (Member as from 27th September 2017 and Chairman as from 9th February 2018)

Independent non-executive Director 1/1

René Leclézio Non-executive Director 2/2

Jocelyne Martin Non-executive Director 2/2

Thierry Sauzier (as from 9thFebruary 2018) Executive Director 1/1

The committee met twice during the year under review and, in accordance with its formal terms of reference, acted in its capacity as:

• The Nomination Committee, with the role of making recommendations to the Board in respect of issues relating to the appointment of Directors and the composition, size and structure of the Board, and of ensuring that there is a clearly defined and transparent procedure for shareholders to recommend potential candidates.

• The Remuneration Committee, with the role of making recommendations to the Board on remuneration issues for executive Directors and the Company’s general policy on executive and senior management remuneration and packages.

• The committee with the responsibility of driving the process for the implementation of the National Code of Corporate Governance for Mauritius throughout the Group and ensuring that the disclosure and reporting requirements set by the Code are complied with.

The Company Secretary acts as secretary of both Board committees. Minutes of each meeting are recorded.

There is transparency and full disclosure from Board committees to the Board of Directors. Minutes of the meetings of the Audit Committee are submitted to the Board for noting.

The charters of both committees are reviewed as and when necessary. These are available on the website.

Executive Committee

The Executive Committee was set up pursuant to the Constitution of the Company. Its main role is to review the operational and financial performance of the different clusters of the group. Hence, it is not a decision-making committee.

The Committee is composed of the Chairman, Mr René Leclézio, the Vice-Chairman, Mr Jacques Tin Miow Li Wan Po, G.O.S.K and the Chief Executive Officer, Mr Thierry Sauzier. The Committee is chaired by Mr Leclézio and meets on a monthly basis.

The Company Secretary acts as secretary of this committee. Minutes of each meeting are recorded.

In addition to Board Committees, a Management Committee was set up during the year under review with defined terms of reference.

Management Committee

The Management Committee comprises of the Chief Executive, the Group Head of Corporate and the Managing Director of each business cluster. The Committee is chaired by the Chief Executive and meets on a monthly basis. At the Chair’s request, the Committee may have regular invitees, but these invitees have no voting rights nor constitute the committee’s quorum.

The Committee’s responsibility is to deal with the day-to-day activities of the Group’s business, develop and implement business plans, policies, procedures and budgets that have been recommended and approved by the Board, monitor the operating and financial performance of the Group, prioritise and allocate investment and resources, manage and develop talent, and manage the risk profile of the Group.

The Committee implements the policy and strategy adopted by the Board and deals with all operational matters affecting the Group. Of its own motion or at the Board’s request, it promptly gives or makes available to the Board such information, reports and other documents to enable the Board to carry out its duties.

BOARD EFFECTIVENESS

Nomination Process

The nomination of any director is reviewed and discussed by the Corporate Governance Committee in its capacity as Nomination Committee, taking into account the candidate’s skills, qualifications and experience. The Committee recommends to the Board the nomination to be put before the annual or special meeting of the shareholders for approval.

Board Induction and Training

An induction pack is immediately sent to a newly appointed director upon his appointment, containing namely his letter of appointment, a copy of the last Annual Report, minutes of recent Board meetings, a schedule of dates of future Board meetings, an organisational structure and other documents pertaining to his role, legal duties and responsibilities, namely the Constitution, the Code of Ethics and Business Conduct, the Code of Corporate Governance and salient features of the DEM rules, the Companies Act and the Securities Act. He would meet the Chief Executive and senior management to be briefed on the operations and businesses of the Group.

A newly appointed director is required to notify the Company Secretary of his interests and those of his associates in the Company’s shares for entry in the Register of Interests and further notification to the relevant authorities.

Newly appointed directors are encouraged to register as members of the Mauritius Institute of Directors and to follow training courses to develop and refresh their knowledge and skills, fees of which are borne by the Company.

Board and Directors’ Evaluation

The last Board evaluation exercise was carried out individually in November 2016 to enable the Board to take appropriate actions to improve its effectiveness and functioning and the next one will be conducted during the next financial year.

SENIOR OFFICERS’ SHARE INTERESTS

Senior Officers’ direct and indirect interests in the shares of the Company as at 30 June 2018 were as follows:

ORDINARY

DIRECT INDIRECT

SENIOR OFFICERS NUMBER % %

Patricia Goder 100 - -

Stéphane Poupinelde Valencé

25,000 0.02 -

Thierry Sauzier 175,000 0.17 -

During the year under review, share dealings by Senior Officers were as follows:

NUMBER OF SHARESACQUIRED DIRECTLY

Thierry Sauzier 6,000


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RISK MANAGEMENT

The Group’s policy is to develop a minimum framework for governance that lays the foundation for further development of superior governance practices that are vital for growing the business. The Group recognises that transparent disclosure, financial control and accountability are pillars of good corporate governance. It is the Group’s endeavour to attain the highest level of governance to enhance stakeholder value.

The Group is committed to the identification, monitoring and management of the risks associated with its business activities and has embedded in its management systems a number of management controls to that end. These include:

Prospects

A key business risk to the Agriculture cluster is the price of sugar, which is highly dependent on the world sugar prices and the price volatility due to the market liberalisation by the European Union in October 2017. Production is falling, and the Group is benefitting less from economies of scale, which adversely affects its competitiveness in the sugar industry. Diversification into food crops faces uncertainty over its return, as the local market for vegetables in particular is very price-sensitive and the main risks associated with sugar and food crop production are caused by natural hazards, such as droughts, cyclones and floods, as well as by harmful factors such as pests and diseases. The Group has insurance cover for sugar production, and the Agriculture cluster has also invested extensively in irrigation systems to manage drought risks.

The Property cluster is influenced mainly by economic growth in the country. The ability of commercial local businesses to rent properties depends on the former’s financial performance. With the increased competition due to new shopping malls across the country and a low economic growth, these businesses may struggle to stay operational. The sale of residential and non-residential properties relies on local residents’ purchasing power, but with economic growth forecast remaining relatively low for 2019, the prospect of increase in demand remains unknown. The Medine Group is also facing uncertainty over the allocation of permits from the authorities to redevelop land for residential and non-residential projects. Delays in granting permits have been encountered in the recent past.

The tourism industry has a direct relationship with the leisure related activities. Tamarina Beach Club Hotel operates in a highly competitive environment and its performance is tributary to pricing strategies and growth in the tourism industry. The golf operation is well established and is in high demand from local residents. Its results are, however, dependent on the level of frequentation by the tourist segment. The Tourism Authority is helping local businesses by showcasing Mauritius as a golf destination abroad. Casela activities have recorded phenomenal growth in the last few years and sustainability of the growth is influenced by its investment in new and innovative product offerings and marketing strategy, to maintain and grow its popularity and frequentation by local residents and tourists. Given the nature of its activities, Casela is exposed to certain risks and the Group ensures that it has in place robust processes and procedures to manage these risks and ensure the safe operation of its activities for both its visitors and employees.

HUMAN RESOURCES RISK

The Group’s future success and growth are highly dependent on its innovativeness, competence and capabilities, and the commitment of its employees. Competition to hire the best is further intensified by the scarcity of qualified specialists in the sectors in which we operate. Therefore, sourcing and recruiting key specialists and talents and retaining them within the Group are priorities for the Company.

Our managers and employees, with their commitment to the Group, are of central importance to our success. To find key personnel to fill vacancies, and to avoid losing competent employees, we position ourselves as an attractive employer and promote the long-term retention of employees in the Group. As well as career prospects and attractive incentives, we offer development programmes where and when needed for senior Management and training for our other employees. We consider talent development to be a priority in mitigating the risks of skill mismatch. The management of human resources risk is an on-going activity that involves careful planning and constant fluidity to enable Management to tackle any potential changes in the human resources sector. On the basis of the controls and policy in place, we assume that the likelihood of a serious human resources risk occurring is low.

INFORMATION TECHNOLOGY (IT) RISK

IT risks can affect a business’s results when information is unavailable, erroneous or unintentionally disclosed, or when the processes to be depicted have been implemented in IT systems in a way that is too inflexible, too complex, or illegal. Security gaps and insufficient emergency planning measures can quickly become incidents that affect the entire Company.

Data protection violations due to incorrect authorisations create a negative external impression. The increasing dependency on IT, as well as the growing interconnectivity of IT landscapes makes it necessary for companies to invest heavily in maintenance and enhancement. In addition, data processing is a time-consuming and costly activity. As the complexity of the IT landscape increases, so do the potential risks and costs to the business.

The general risk situation means that more professional threats can be expected, with the trend moving towards targeted industrial espionage and sabotage. Significant risk scenarios for the Group include the failure of its central IT systems, the publication of classified confidential information and the unauthorised manipulation of its IT systems.

In view of establishing a framework that lays the foundation for development of governance practices and to have transparent disclosure and adequate financial control for a growing business, the Board has decided to implement a Risk Management Framework. In that context, Ernst & Young has been recently appointed to assist Medine in elaborating a Risk Register and developing a Risk Management Framework, whereby the Audit Committee will have continued possibility to appraise progress being made regarding the mitigating controls that have been identified.

By virtue of the diverse nature of its business activities, the Group is exposed to a variety of risks, as outlined hereunder:

BUSINESS RISK

The overall revenues and operating results of the Group depend on a diversity of products and services, and this diversified strategy in itself limits the risk faced by the Group, since the markets involved differ in their structure and economic cycles. The Group has an informal risk-management process in place as an integral part of its ongoing business-planning processes. Potential negative developments, such as changes in customer demand or the political framework, are dealt with in a timely manner to avoid deviations from the business plan.


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The Group ensures the necessary availability of business-critical application systems and access to business-relevant data, by means of appropriate redundancy of systems, networks and sites, as well as suitable tested contingency measures. An IT Security Policy is in place within the Group. It includes appropriate organisational and technical precautions for access control, access rights, virus protection and data protection. The effectiveness of these measures is continuously monitored and reviewed by the internal auditor as well as the external auditor. A dedicated process ensures that IT risks are evaluated, and appropriate measures taken. On the basis of the measures taken, we assume that the likelihood of a serious IT risk occurring is low.

HEALTH, SAFETY AND ENVIRONMENTAL RISKS

Given the diversity of its business activities, the Group is exposed to risks of possible damage to people, goods and its image. We minimise the risks to people and the environment by means of auditing, advising and training in matters of environmental protection as well as occupational health and safety. In order to ensure the continuity of plant and equipment, we monitor these risks at all our locations. By adhering to high technical standards, our rules of conduct, and all legal requirements in environmental protection and occupational health and safety, the Group ensures the preservation of its goods and assets.

Casela is fully committed to the health and safety of its visitors, employees and animals, and adheres to all domestic regulations and international norms, namely ERCA (European Rope Certification) for ziplines and TUV (German Ride Certification) for the Tulawaka Gold Coaster. Welcoming nearly 500,000 visitors per year with over 450 staff, thousands of animals, and including rides and attractions, Casela has put in place robust processes and procedures for every activity, in order to ensure a safe and secure environment for its visitors and staff. These processes and procedures are regularly audited (both internally and externally).

LEGAL AND COMMERCIAL RISKS

The multiple business units within the Group minimise legal risk by consulting the Group’s own in-house Legal Counsel, who provides sound legal advice on relevant files on a day-to-day basis, assists business units in complying with applicable laws and regulations in force, and vets or drafts a variety of legal documents to facilitate business transactions. Having sound legal documents in place not only ensures quality of service through effective execution by relevant business units of their own contractual obligations, thus avoiding any claim for damages, but also offers business units, where applicable, the relevant safeguards and recourse with a view to reducing legal and commercial risks such as ensuring a satisfactory quality of service

from third parties or payment from debtors. The analysis of legal and commercial risks at the conception stage of any potential project enables business units to effectively carry out due diligence exercises and adopt the most viable legal framework.

The in-house Legal Counsel ensures effective communication between the Group and external legal advisors, so as to facilitate the handling of any litigation files. The Group has shown itself to be active in protecting its most valuable assets – its land resources –, by taking the necessary legal measures to minimise the risk of any illegal occupation and/ or encroachment and any litigation where the issue of ownership of land can be disputed.

MARKET RISK

Some of the Group’s activities are adversely affected by the present economic slowdown in some of their markets in Europe, and there is a risk that the Eurozone’s debt crisis and Brexit may make matters worse for them in other markets too. By virtue of the diverse nature of the Group’s investments, however, such events will not significantly affect the overall financial viability of the Group.

AGRICULTURAL RISK

The risks associated with sugar and food crop production are caused by natural hazards, such as drought, cyclones and floods, as well as by harmful factors such as pests and diseases. The risks associated with natural hazards are covered by insurance.

FINANCIAL RISK

The Group’s management of financial risk is detailed in note 3 of the financial statements.

STRATEGIC RISK

Strategic risk, if unmanaged, may result in the destruction of shareholder value. It is a material risk type that may arise from our failure to execute our strategy, our failure to position the Group strategically, or a suboptimal response to material negative plan deviations caused by external or internal factors. In addition to risk controls at our different business cluster levels, the Group ensures that business decisions are made with all available information and has the structures in place to manage resource allocation towards optimal business execution. The Group also recognises that it is operating in a highly dynamic business environment, which requires agile responsiveness. In this context, a strategic review of all the group’s activities is currently under way with the support of EY Parthenon, an external consulting firm based in Paris.

INTERNAL CONTROL

The objective of the internal control system for accounting is to implement controls that provide assurance that the financial statements are prepared in compliance with the relevant accounting laws and standards. It covers measures designed to ensure the complete, correct and timely transfer and presentation of information that is relevant for the preparation of the consolidated financial statements and the management report of the Group.

The internal control system is subject to continuous development and is an integral component of the accounting and financial reporting processes of all the Group’s relevant business units and functions. With respect to the accounting process, the internal control system measures are intended to minimise the risk of materially false statements in the consolidated accounting process of the Group.

Policies, systems, processes and procedures have been put in place and their application is regularly reviewed and assessed by the internal auditor to ensure that they are effective and are being complied with. Through the audits conducted on the Company’s various operating units and on its subsidiaries, the external auditor also reports and makes recommendations to Management and to the Audit Committee on any material weaknesses in accounting and internal control systems that come to its notice. Its findings are discussed with Management as well as with the members of the Audit Committee.

INTERNAL AUDIT

The internal audit function provides to the Audit Committee, to Management and ultimately to the Board, independent and objective assurance as to the adequacy and effectiveness of the risk management and internal control framework and governance processes.

The internal audit function has been outsourced to Messrs Ernst & Young. As internal auditor, it has unrestricted access to the records, Management and employees of all operating units within the Group. It reports to the Audit Committee and maintains an open line of communication with Management.

Since its appointment in 2006, the internal auditor has carried out a number of audit assignments on the basis of an annual audit plan approved by the Audit Committee. It regularly reports its findings to the committee and also reviews the extent to which its recommendations are implemented. Its intervention has contributed to the improvement and strengthening of the internal control systems applicable in the Group’s various operating units. Moreover, at the Audit Committee’s request, the frequency of EY’s internal audits assignments has increased given the Group’s risk exposure.

During the year under review, the internal auditor reported to the Audit Committee on factual findings with respect to stock review of Medine Agriculture’s annexe stores, on its findings, revenue and debtors’ management review, as well as procurement to payment process with regards to Casela Limited, revenue and debtors’ management relating to Tamarina Golf Club Limited, and revenue management, procurement and payment with regards to Talent Solutions Ltd.

As recommended by the Audit Committee, a Mystery Shopper exercise was conducted twice at Casela World of Adventures, whereby the internal auditor proceeded with an incognito observation of processes and key controls operated at different points of sale in the park. Both reports were discussed by the Audit Committee during the year. It has been agreed that the exercise would be repeated on a regular basis and reported to the Audit Committee.

Moreover, the Risk and Compliance Officer reported his findings to the Audit Committee on the review of costing sheets in respect of Talent Solutions Ltd.

In addition, as recommended by the Audit Committee, a Head of Internal Audit & Risk Management has been recruited with the primary role of implementing a risk management framework and to ensure that each business unit is complying with relevant policies and procedures.


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EXTERNAL AUDITOR

The Audit Committee is responsible for making a recommendation on the appointment, reappointment and removal of the external auditor.

The Committee plays a key role in evaluating the effectiveness and independence of the external auditor. Any instruction to the external auditor to provide non-audit services is closely reviewed and approved by the Board, on the recommendation of the Audit Committee, thus ensuring the auditor’s independence.

A resolution for the re-appointment of BDO & Co as auditor of the Company for financial year ending 30 June 2019 will be proposed at the forthcoming annual meeting of the shareholders.

The Finance Act 2016 provides that listed companies are required to rotate their auditor every seven years, and a subsequent regulation (Government Notice No. 64 of 2017) provides that the current auditor is allowed to continue in office for the financial year ending 30 June 2019. Consequently, the Company will undertake to rotate its auditor as from financial year ending 30 June 2020.

Auditor’s Remuneration

GROUP COMPANY

2017/18Rs

2016/17Rs

2017/18Rs

2016/17Rs

Audit fees paid to:

- BDO & Co. 3,140,000 2,705,000 975,000 955,000

- Other firms - - - -

Fees paid for other services provided by:

- BDO & Co. - - - -

- Other Firms 5,404,975 536,443 4,591,375 178,550

SHAREHOLDER RELATIONS AND COMMUNICATION

Communication with Shareholders

The Board recognises the importance of communication with shareholders.

Shareholders are kept informed, through press communiqués, of all material events affecting the Company, especially if an event could have an effect on the share price.

During the year under review, the Group’s quarterly results, half-yearly results and audited financial statements, were submitted to the Stock Exchange of Mauritius Ltd and to the Financial Services Commission, immediately after being approved by the Directors, and were published accordingly.

Shareholders are encouraged to attend all meetings of shareholders, annual or special, in order to remain informed of the Group’s strategy and objectives.

The Annual Report, including the notice of the Annual Meeting of Shareholders, is sent to each shareholder of the Company, and the notice of the meeting is published in two daily newspapers at least 14 days before the meeting. The present Annual Report is available on the Company’s website.

At a shareholders’ meeting, the shareholders are given the opportunity to ask questions. The Chairman and the Chief Executive Officer are normally available to answer them. All Directors, including the chairmen of both Board committees, are expected to attend the Annual Meeting. The Chief Finance Officer and the external auditor are also present to assist the Directors in addressing queries by shareholders.

Shareholders’ queries that are received by telephone, letter or email, are properly attended to by the Company Secretary and by the Registrar and Transfer Agent of the Company.

Any matter in relation to any off-market transfer of shares, change of name or address and loss of share certificates or dividend cheques should be addressed to the Registrar and Transfer Agent as follows:

MCB Registry & Securities Ltd,2nd Floor, MCB Centre, Sir William Newton Street, Port LouisTel. 202 5640Email address: [email protected]

In addition, any request for copies of quarterly accounts or annual report, and of the statement of direct and indirect interests of officers of the Company required under rule 8(2) (m) of the Securities (Disclosure Obligations of Reporting Issuers) Rules 2007 should be addressed to the Company Secretary as follows:

4 Uniciti Office Park,Rivière Noire Road,Bambous 90203Tel. 401 6101Email address: [email protected]

SHAREHOLDING PROFILE

Medine Limited is listed on the Development & Enterprise Market (DEM) of the Stock Exchange of Mauritius with an issued and fully paid-up share capital of Rs 1,050,000,000 consisting of 105,000,000 ordinary shares of Rs 10 each.

MEDINE LIMITED

PAD*OTHER

SHAREHOLDERS

35.11% 64.89%

* Promotion and Development Ltd and its 100% subsidiary, Commercial Holding Ltd


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COMMON DIRECTORS

Mr René Leclézio and Mrs Jocelyne Martin are both directors of Promotion and Development Ltd, and Mr Leclézio is also a director of Commercial Holding Ltd.

The Company’s share ownership spread, shareholder category profile and substantial shareholders as at 30 June 2018 were as follows:

SIZE OF SHAREHOLDING NUMBER OFSHAREHOLDERS

NUMBER OF SHARES HELD % HOLDING

1 - 500 shares 1,133 179,472 0.17

501 - 1,000 shares 314 241,197 0.23

1,001 - 5,000 shares 786 2,010,684 1.91

5,001 - 10,000 shares 280 1,991,527 1.90

10,001 - 50,000 shares 396 8,697,305 8.28

50,001 - 100,000 shares 77 5,296,360 5.04

100,001 - 250,000 shares 52 7,630,828 7.27

250,001 - 500,000 shares 15 5,487,260 5.23

Above 500,000 shares 26 73,465,367 69.97

Total 3,079 105,000,000 100.00

CATEGORY

Individuals 2,698 46,391,719 44.18

Insurance and Assurance companies 9 2,806,859 2.67

Investment and Trust companies 65 38,082,597 36.27

Pensions and Provident Funds 40 5,577,693 5.31

Other Corporate Bodies 267 12,141,132 11.56

Total 3,079 105,000,000 100.00

SHAREHOLDING OVER 5% NUMBER OF SHARES HELD % HOLDING

PAD* 36,857,598 35.11

Mr Pierre Doger de Spéville** 13,410,366 12.77

*Promotion and Development Ltd’s shareholding, inclusive of that of its 100% subsidiary, Commercial Holding Ltd (2,013,237 shares/1.92%).**Mr Pierre Doger de Spéville’s shareholding, inclusive of that of his wholly owned société, Sperry & Cie (4,336,900 shares/4.13%).

The number of shareholders given above is indicative, due to consolidation of multi portfolios for reporting purposes. The total number of active shareholders as at 30 June 2018 was 3,118.

SHAREHOLDERS’ AGREEMENT

There is no shareholders’ agreement with regards to the Company.

DIVIDEND POLICY

Whilst the Board has not determined a formal dividend policy, it endeavours to pay dividends that reflect the Company’s financial performance, after taking into account the funding requirements of the Company’s current and forthcoming projects.

Dividend per ordinary share paid over the past five years:

FINANCIAL YEAR END INTERIMRs

FINALRs

TOTALRs

30.06.2014 0.60 0.60 1.20

30.06.2015 0.60 0.60 1.20

30.06.2016 0.80 0.80 1.60

30.06.2017 0.90 1.20 2.10

30.06.2018 1.20 1.45 2.65

An interim dividend of Rs 1.20 and a final dividend of Rs 1.45 per ordinary share and totalling Rs 278.25 million (2016/17 totals: Rs 2.10 per ordinary share – Rs 220.5 million) were declared on 19 December 2017 and 21 June 2018 respectively, for the year ended 30 June 2018. These were paid on 15 February and 18 September 2018 respectively.

CALENDAR OF EVENTS

EVENTS DATE

Balance Sheet Date 30 June

Last Annual Meeting of Shareholders December 2017

Interim dividend 2017/18DeclarationPayment

December 2017 February 2018

Final dividend 2017/18DeclarationPayment

June 2018September 2018

Publication of first-quarter results November

Publication of half-year results February

Publication of third-quarter results May

Publication of end-of-year results September

Publication of Annual Report 2017/18 December 2018

Forthcoming Annual Meeting of Shareholders December 2018


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CODE AND POLICIES

Code of Ethics and Business Conduct

Medine has adopted a Code of Ethics and Business Conduct, which supports its commitment to a policy of fair dealing, honesty and integrity in the conduct of its business.

The Code of Ethics and Business Conduct lists and details the standards of behaviour that have made Medine’s reputation. They are the standards that all Directors and employees are expected to uphold in conducting the Company’s business. They go beyond the requirements of law. The Code has been actively endorsed by the Board of Directors and shared with all employees at all levels in the Group.

Compliance by all employees with the high moral, ethical and legal standards of the Code is mandatory, and if employees become aware of, or suspect, a contravention of the Code, they are encouraged to promptly and confidentially report it.

The Code of Ethics and Business Conduct is available on the company’s website.

Environmental Policy and Initiatives

Medine recognises the importance of environmental initiatives and aims to be environment-friendly in all its dealings.

The Company has thus identified its most significant adverse environmental impacts as:

• Depletion of natural resources through the procurement and use of goods and services

• Carbon emissions into the atmosphere from the use of fossil-fuel-based energy in its offices and through its business transport requirements;

• Production of waste in its offices; and• Use of water resources and the discharge of wash water to

the sewer.

It has also identified its positive environmental impacts as:• The reduction of waste through the promotion of recycling and

waste-management activities;• The introduction and use of a range of energy-saving devices

and practices; and• The implementation of practices that reduce its carbon

emissions.

Medine is committed to managing its environmental impacts and continuously improving its environmental performance by:

• Complying, as a minimum requirement, with relevant legislation, regulations and other relevant requirements;

• Setting realistic objectives and targets for each of its most significant environmental impacts;

• Minimising its energy consumption and carbon emissions and encouraging the use of less polluting forms of transport whenever possible;

• Minimising the amount of waste produced by way of reduction, recovery, re-use and recycling;

• Communicating its Environmental Statement and relevant procedures to employees and other stakeholders and promoting environmentally sensitive behaviour; and

• Where possible, reporting its environmental commitment and performance.

Employee Share Option Scheme

There is no share option plan in place within the Group.

Charitable and Political Donations

The Group generally channels all CSR initiatives through Fondation Medine Horizons. In compliance with the CSR Fund Provision introduced by the Finance Act 2009, the Company and its subsidiaries usually entrust Fondation Medine Horizons with their CSR levy. Medine Limited made charitable contributions following the cyclonic period and further contributions through Fondation Medine Horizons to support various social initiatives, as described on pages 54 to 57. Political donations made during the year were made up of several contributions and in line with the Group’s apolitical position.

GROUP

2017/18Rs M

2016/17Rs M

Donations made during the year:• Political• CSR - Voluntary• Other donations

1.81.42.5

1.0 1.42.9

COMPANY

2017/18Rs M

2016/17Rs M

Donations made during the year:• Political• CSR - Voluntary• Other donations

1.81.42.5

1.0 1.42.8

25 September 2018

0

10

20

30

40

50

60

70

80

20182017201620152014

Shar

e Pr

ice

(Rs)

SHARE PRICE PERFORMANCE VS DEMEX OVER THE PAST FIVE YEARS

(June)

(June)

0

50

100

150

200

250

20182017201620152014

Dem

ex P

rogr

essi

on


Thierry SauzierDirector and Chief Executive Officer

68

185.02

206.81193.90

212.83

239.98

65

57.5063.25 65.25


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DIRECTORS OF MEDINE LIMITED’S SUBSIDIARIES AS AT 30 JUNE 2018

DIRECTORS

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René Leclézio • • • • • • • • • • • • • • • •

Gansam Boodram •

Marc Desmarais • •

Pierre Doger de Spéville •

Thomas Doger de Spéville •

Eric Espitalier Noël •

Hector Espitalier Noël •

Lajpati Gujadhur •

Sheo Shankar Gujadhur •

Philipp Gutsche •

Jean Francois Koenig •

Vincent Labat •

Marc Lagesse •

Jacques Tin Miow Li Wan Po, G.O.S.K

• • • •

James Mackay •

Raoul Maurel • •

Rafik Meerun •

Dhiren Ponnusamy • • • • • • • • •

Marc de Ravel de L’Argentière •

Thierry Sauzier • • • • • • • • • • • • • • • • • • • • •

Paul Williams •

Company law requires the Directors to prepare financial statements for each financial year, which give a true and fair view of the financial position, financial performance and cash flow of the Company and of the Group. In preparing such financial statements, the Directors are required to:

• Ensure that adequate accounting records and an effective system of internal control and risk management have been maintained;• Select suitable accounting policies and then apply them consistently;• Make judgements and estimates that are reasonable and prudent;• State whether International Financial Reporting Standards have been followed and complied with, subject to any material departures

being disclosed and explained in the financial statements; and• Prepare the financial statements on the going-concern basis, unless it is inappropriate to presume that the Company will continue

in business.

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

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy and at any time, the financial position of the Company, and enable them to ensure that the financial statements comply with the Companies Act 2001. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors report that:

• Adequate accounting records and an effective system of internal control and risk management have been maintained;• The Code of Corporate Governance has been adhered to and, where there has not been compliance, relevant explanations have

been provided in the Statement of Compliance; and• The external auditor is responsible for reporting on whether the financial statements are fairly presented.

Signed on behalf of the Board of Directors

25 September 2018



STATEMENT OF DIRECTORS’ RESPONSIBILITIES


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Name of Public Interest Entity (‘P.I.E’): Medine Limited

Reporting period: Year ended 30 June 2018

We, the Directors of Medine Limited, hereby confirm that to the best of our knowledge the P.I.E has not fully complied with the principles of the Code of Corporate Governance.

Reasons for non-compliance with some areas of the Code are given below:

Signed by

25 September 2018

STATEMENT OF COMPLIANCE (Section 75(3) of the Financial Reporting Act)

COMPANY SECRETARY’S CERTIFICATE JUNE 30, 2018

PRINCIPLES AREAS OF THE CODE AND REASONS FOR NON-COMPLIANCE

1 • The Board Charter will be approved during the next financial year.

2 • The Company has only one executive director since the former Chief Executive Officer, who was an executive director, retired in September 2017.

• The Chairman of the audit committee is no more an independent director since he has served on the Board for more than nine consecutive years, from the date of his first election. However, the Board believes that he has the requisite skills and experience to chair that committee.

3 • The Company’s Succession Plan will be approved during the next financial year.

4 • The remuneration of the Directors has not been disclosed on an individual basis, due to the commercial sensitivity of such information.

• A Board and Directors’ evaluation exercise will be conducted during the next financial year.

5 • A Risk Management Framework will be implemented during the next financial year.• There is no formal whistle-blowing policy, but this is presently under review for

potential future implementation.



In my capacity as Company Secretary of Medine Limited (the ‘’Company’’), I certify that, to the best of my knowledge and belief, the Company has filed with the Registrar of Companies for the financial year ended June 30, 2018 all such returns as are required of the Company under the Companies Act 2001.

Patricia GoderCompany Secretary

25 September 2018

FIN

AN

CIA

L ST

ATE

ME

NTS

TAMARINA GOLF CLUB


l VF I N A N C I A L S TAT E M E N T S

I N D E P E N D E N T A U D I T O R ’ S R E P O R T



INDEPENDENT AUDITOR’S REPORTTo the Shareholders of Medine Limited

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Opinion We have audited the consolidated financial statements of Medine Limited and its subsidiaries (the Group), and the Company’s separate financial statements on pages 92 to 160 which comprise the statements of financial position as at June 30, 2018, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the financial statements on pages 92 to 160 give a true and fair view of the financial position of the Group and of the Company as at June 30, 2018, and of their financial performance and their cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with the Companies Act 2001. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group and of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Mauritius, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter How our audit addressed the key audit matter

(1) Impairment of bearer plants included under property, plant and equipment

At June 30, 2018, the Group’s and the Company’s bearer plants under property, plant and equipment amounted to Rs.69,574,000.

Because of declining prices of sugar on the world market, sugar proceeds have fallen significantly over the past few years. Consequently, management has performed an impairment assessment of those bearer plants. Arising from this assessment, an impairment charge of Rs.69,574,000 relating to these bearer plants has been recognised in profit or loss.

As the assessment of the recoverable amount using value-in-use (VIU) models required management to exercise significant judgment over the estimation of forecasted cash flows and discount rates, this is considered to be a key audit matter.

Refer to notes 5 and 30 in the financial statements.

We reviewed management’s identification of indicators of impairment for bearer plants and thereafter we:

– obtained the VIU calculations;– evaluated the reasonableness of the key inputs to these

calculations considering our knowledge of the business and our understanding of the sugar cane industry;

– considered the adequacy of the disclosures in relation to impairment of these bearer plants.

Based on our procedures, we found management’s assessment of the recoverable amounts and resulting impairment charge of the bearer plants to be appropriate and the disclosures in the financial statements in respect of the impairment to be adequate.

INDEPENDENT AUDITOR’S REPORTTO THE SHAREHOLDERS OF MEDINE LIMITED

Key audit matter How our audit addressed the key audit matter

2 Impairment of property, plant and equipment and inventories related to The Medine Sugar Milling Company Limited

At June 30, 2018, the Group has significant property, plant and equipment and inventories that are associated with its sugar milling activities in The Medine Sugar Milling Company Limited.

Because of declining prices of sugar on the world market, sugar proceeds have fallen significantly over the past few years. As a result, The Medine Sugar Milling Company Limited has continued to make losses over the past five years and has a deficit of assets as well as net current liabilities as at June 30, 2018. Accordingly, it is now insolvent and its financial statements have been prepared on break up basis.

Consequently, management has performed an impairment assessment of those property, plant and equipment and inventories that are associated with its sugar milling activities. Arising from this assessment, an impairment charge of Rs.355,225,000 and Rs.82,918,000 relating to these assets has been recognised in profit or loss and offset against previous revaluation surplus in other comprehensive income respectively to bring their carrying amounts to their recoverable amounts.

As the assessment of the recoverable amounts has required management to obtain an independent valuation report on the factory equipment and given the significance of the amounts of impairment charge, this is considered to be a key audit matter.

Refer to notes 4(l), 5, 14 and 30 in the financial statements

We reviewed the appropriateness of the use of the break up basis of accounting for the preparation of the financial statements of The Medine Sugar Milling Company Limited and thereafter we:– verified that all the assets including property, plant and

equipment and inventories have been adjusted to their recoverable amounts;

– obtained the independent valuation report for the factory equipment and evaluated its reasonableness considering our knowledge of the business and our understanding of the sugar cane industry;

– considered the adequacy of the disclosures in relation to impairment of these assets; and

Based on our procedures, we found management’s assessment of the recoverable amounts and resulting impairment charge of these assets to be appropriate and the disclosures in the financial statements in respect of the impairment and use of the break up basis of accounting for The Medine Sugar Milling Company Limited to be adequate.

3 Valuation of investment properties

Investment properties, which are significant assets in the Group’s statement of financial position, are valued at Rs.2,965,055,000 as at June 30, 2018.

The Group measures its investment properties at fair value.

Fair value, which is a significant accounting estimate, is dependent on a range of judgemental assumptions. In 2017, the valuation of investment properties was performed by an independent property surveyor. While, in 2018, the valuation of investment properties has been carried out by management.

Due to the level of judgment involved in the valuation of investment properties as well as the significance of these assets to the Group’s statement of financial position, this is considered to be a key audit matter.

Refer to notes 4 & 6 in the financial statements

As part of our audit procedures, we:– observed management’s controls and effectiveness of

systems in place for the valuation of investment properties;– assessed the methodologies used and the appropriateness

of the key assumptions based on our knowledge of the property industry;

– verified on a sample basis the accuracy and relevance of the input data used within the fair value calculations; and

Based on our audit procedures, we found investment properties to be properly accounted and disclosed in in the financial statements.

INDEPENDENT AUDITOR’S REPORTTo the Shareholders of Medine Limited

Other information The Directors are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and our auditor’s report thereon. The chairman’s statement is expected to be made available to us after the date of this auditor’s report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

When we read the chairman’s statement, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Directors and Those Charged with Governance for the Financial Statements The directors are responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards and in compliance with the requirements of the Companies Act 2001, and for such internal control as the directors determine is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Group and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group and the Company or to cease operations, or have no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Group and the Company’s financial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and

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

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group and the Company’s internal control.

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

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

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

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


Auditor’s Responsibilities for the Audit of the Financial Statements (continued)

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.











Report on Other Legal and Regulatory Requirements

Companies Act 2001 We have no relationship with, or interests in, the Company or any of its subsidiaries, other than in our capacity as auditors and dealings in the ordinary course of business. We have obtained all information and explanations we have required. In our opinion, proper accounting records have been kept by the Company as far as it appears from our examination of those records. Financial Reporting Act 2004 The Directors are responsible for preparing the corporate governance report. Our responsibility is to report the extent of compliance with the Code of Corporate Governance as disclosed in the annual report and on whether the disclosure is consistent with the requirements of the Code. In our opinion, the disclosure in the annual report is consistent with the requirements of the Code.

Other matter

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

BDO & CO PER Georges Chung Ming Kan, F.C.C.AChartered Accountants Licensed by FRC

Port Louis, Mauritius.

Date: 25 September 2018

STATEMENTS OF FINANCIAL POSITIONYEAR ENDED 30 JUNE 2018





STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEYEAR ENDED 30 JUNE 2018

THE GROUP THE HOLDING COMPANYNote 2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000ASSETSNon-current assetsProperty, plant and equipment 5 16,573,642 16,893,713 11,865,781 13,623,765 Investment properties 6 2,965,055 2,324,336 1,017,642 1,353,410 Intangible assets 7 43,344 86,573 36,673 75,234 Investments in subsidiaries 8 - - 6,024,616 2,022,944 Investments in associates 9 145,733 144,705 124,939 119,271 Investments in available-for-sale financial assets 10 106,924 107,455 106,916 107,447 Deferred expenditure 11 1,037,129 455,101 231,144 240,311 Biological assets 12 11,913 11,555 11,913 11,555 Deferred tax assets 13 8,385 9,958 - -

20,892,125 20,033,396 19,419,624 17,553,937

Current assetsProperty, plant and equipment 5 108,210 - - - Deferred expenditure 11 181,498 810,815 181,498 810,815 Biological assets 12 132,782 209,655 132,782 209,655 Inventories 14 35,445 48,074 13,665 15,592 Trade and other receivables 15 417,690 344,658 250,203 162,229 Amount due from group companies 16 - - 687,586 739,265 Cash in hand and at bank 37 39,729 32,757 13,938 11,480

915,354 1,445,959 1,279,672 1,949,036

Total assets 21,807,479 21,479,355 20,699,296 19,502,973

EQUITY AND LIABILITIESCapital and reservesShare capital 17 1,050,000 1,050,000 1,050,000 1,050,000 Revaluation surplus and other reserves 18 13,003,572 13,153,741 9,980,626 11,642,450 Retained earnings 556,417 1,587,000 5,311,791 3,219,020 Owners' interest 14,609,989 15,790,741 16,342,417 15,911,470 Non-controlling interests 35,323 117,398 - - Total equity 14,645,312 15,908,139 16,342,417 15,911,470

LIABILITIESNon-current liabilitiesDeferred tax liabilities 13 21,282 21,141 - - Borrowings 19 2,697,363 2,033,491 870,875 382,577 Retirement benefit obligations 20 340,880 289,634 320,610 236,922

3,059,525 2,344,266 1,191,485 619,499 Current liabilitiesRetirement benefit obligations 20 53,908 - - - Borrowings 19 2,734,896 2,256,298 2,244,895 1,917,544 Trade and other payables 21 1,161,588 844,652 698,261 575,721 Amount due to group companies 22 - - 69,988 352,739 Dividends 23 152,250 126,000 152,250 126,000

4,102,642 3,226,950 3,165,394 2,972,004 Total liabilities 7,162,167 5,571,216 4,356,879 3,591,503

Total equity and liabilities 21,807,479 21,479,355 20,699,296 19,502,973

The financial statements were approved for issue by the Board of Directors on 25 September 2018

René Leclézio Thierry SauzierDirector Director

The notes on pages 97 to 160 form an integral part of these financial statements.Auditor’s report on pages 86 to 90.

THE GROUP THE HOLDING COMPANY

Note 2018 2017 2018 2017

Rs’000 Rs’000 Rs’000 Rs’000

Turnover 24 1,555,556 1,634,819 676,632 765,616 Sugar insurance compensation 46,692 7,873 36,819 7,654 Other operating revenue 25 101,318 83,213 84,220 48,083

1,703,566 1,725,905 797,671 821,353 Operating expenses 26 (1,939,515) (1,765,359) (1,012,309) (927,879)Sugar insurance premium (15,174) (18,019) (11,268) (12,760)Other gains/(losses) - net 27 872 (438) - - Changes in fair value of consumable biological assets 12 (80,210) (40,262) (80,210) (40,262)Other income 28 16,490 33,992 81,623 90,175

(313,971) (64,181) (224,493) (69,373)Profit on sale of land 29 184,848 357,670 1,587,286 357,670 Amortisation of VRS costs 11 (b) - (50,012) - (50,012)Fair value gain of investment properties 6 24,286 52,560 39,050 52,560 Share of profit in associates 9 4,960 7,776 - - Gain on disposal of investment in associate 41 - 2,073 - - Gain/(Loss) on disposal of investment in subsidiary 42 (c) 8,910 - (10,600) - Impairment losses 30 (476,570) - (445,347) -

(Loss)/Profit before finance costs (567,537) 305,886 945,896 290,845 Finance costs 31 (266,302) (238,341) (165,145) (123,546)(Loss)/Profit before taxation 33 (833,839) 67,545 780,751 167,299 Income tax charge 35 (10,829) (5,238) - - (Loss)/Profit for the year (844,668) 62,307 780,751 167,299

Other comprehensive income for the yearItems that may be reclassified subsequently to profit or loss(Decrease)/Increase in fair value of available-for-sale investments 10 & 38 (531) 21,066 (531) 21,066 Items that will not be reclassified subsequently to profit or lossRemeasurement of retirement benefitobligations 20 & 38 (88,769) (12,428) (71,023) (12,752)Share of other comprehensive income of associates 9 & 38 - 8 - - Impairment losses on property, plant and equipment 30 & 38 (82,918) - - - Income tax relating to component of othercomprehensive income 13(b) & 38 9,115 (57) - - Other comprehensive income for the year, net of tax (163,103) 8,589 (71,554) 8,314

Total comprehensive income for the year (1,007,771) 70,896 709,197 175,613

(Loss)/Profit attributable to:- Owners of the parent 36 (756,712) 76,785 780,751 167,299 - Non-controlling interests (87,956) (14,478) - -

(844,668) 62,307 780,751 167,299

Total comprehensive income attributable to:- Owners of the parent (902,502) 85,464 709,197 175,613 - Non-controlling interests (105,269) (14,568) - -

(1,007,771) 70,896 709,197 175,613

(Loss)/Earnings per share (Rs.) 36 (7.21) 0.73 7.44 1.59

(Loss)/Earnings per share excluding impairment losses(Rs.) 36 (3.37) 0.73 11.68 1.59






STATEMENTS OF CHANGES IN EQUITYYEAR ENDED 30 JUNE 2018

STATEMENTS OF CHANGES IN EQUITYYEAR ENDED 30 JUNE 2018

Note

Attributable to owners of the parent

ShareCapital

RevaluationSurplus

and OtherReserves

RetainedEarnings Total

Non-Controlling

interestsTotal

EquityTHE GROUP Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Balance at July 1, 2017 1,050,000 13,153,741 1,587,000 15,790,741 117,398 15,908,139

Loss for the year - - (756,712) (756,712) (87,956) (844,668)

Other comprehensive income for the year 38 (a) - (145,790) - (145,790) (17,313) (163,103)

Total comprehensive income for the year - (145,790) (756,712) (902,502) (105,269) (1,007,771)

Consolidation adjustment (i) - - - - 23,194 23,194

Transfer - revaluation surplus realised

on disposal of land 18 (a) - (4,379) 4,379 - - -

Dividends to owners of the parent 23 - - (278,250) (278,250) - (278,250)

Balance at June 30, 2018 1,050,000 13,003,572 556,417 14,609,989 35,323 14,645,312

Balance at July 1, 2016 1,050,000 13,208,663 1,667,114 15,925,777 98,341 16,024,118

Profit/(Loss) for the year - - 76,785 76,785 (14,478) 62,307

Other comprehensive income for the year 38 (a) - 8,679 - 8,679 (90) 8,589

Total comprehensive income for the year - 8,679 76,785 85,464 (14,568) 70,896

Consolidation adjustment (i) - - - - 33,625 33,625


on disposal of land 18 (a) - (63,601) 63,601 - - -

Dividends to owners of the parent 23 - - (220,500) (220,500) - (220,500)

Balance at June 30, 2017 1,050,000 13,153,741 1,587,000 15,790,741 117,398 15,908,139

Note (i): The consolidation adjustment is in respect of the increase in the stated capital of Cascavelle Shopping Mall Limited in 2018 and 2017.


NoteShare

Capital

RevaluationSurplus

and OtherReserves

RetainedEarnings Total

THE HOLDING COMPANY Rs’000 Rs’000 Rs’000 Rs’000

Balance at July 1, 2017 1,050,000 11,642,450 3,219,020 15,911,470

Profit for the year - - 780,751 780,751

Other comprehensive income for the year 38 (b) - (71,554) - (71,554)

Total comprehensive income for the year - (71,554) 780,751 709,197


on disposal of land 18 (b) - (1,590,270) 1,590,270 -

Dividends 23 - - (278,250) (278,250)

Balance at June 30, 2018 1,050,000 9,980,626 5,311,791 16,342,417

Balance at July 1, 2016 1,050,000 11,697,737 3,208,620 15,956,357

Profit for the year - - 167,299 167,299

Other comprehensive income for the year 38 (b) - 8,314 - 8,314

Total comprehensive income for the year - 8,314 167,299 175,613


on disposal of land 18 (b) - (63,601) 63,601 -

Dividends 23 - - (220,500) (220,500)

Balance at June 30, 2017 1,050,000 11,642,450 3,219,020 15,911,470


NOTES TO THE FINANCIAL STATEMENTSYEAR ENDED 30 JUNE 2018





STATEMENTS OF CASH FLOWSYEAR ENDED 30 JUNE 2018


Note 2018 2017 2018 2017Rs’000 Rs’000 Rs’000 Rs’000

Operating activities

Cash received from customers 1,680,775 1,681,154 796,365 828,533

Cash paid to suppliers and employees (1,364,030) (1,501,331) (834,243) (852,865)

Cash generated from/(absorbed by) operations 316,745 179,823 (37,878) (24,332)

Interest paid 31 (282,500) (241,904) (166,641) (124,818)

Interest received 28 1,044 4,023 55,163 28,933

Net cash generated from/(absorbed by)

operating activities 35,289 (58,058) (149,356) (120,217)

Investing activities

Net proceeds from sale of land 227,455 585,237 3,923,156 585,237

Expenditure in respect of land development (871,168) (819,524) (164,629) (605,816)

Purchase of property, plant and equipment (199,160) (188,886) (34,573) (82,909)

Proceeds on disposal of property, plant and equipment 6,064 8,384 5,194 7,555

Proceeds on disposal of investment properties - - 392,018 -

Purchase of intangible assets 7 (2,510) (8,123) (314) (614)

Purchase of investment properties 6 (179,701) (54,827) - -

Disposal of subsidiaries, net of cash disposed 42(d) 8,768 - 8,275 -

Investment in subsidiaries 8 - - (4,161,847) (44,522)

Purchase of investment in associates 9 (5,668) (4,600) (5,668) (11,720)

Proceeds from disposal of investment in associate 41 - 2,400 - -

Dividends received 11,369 22,512 1,769 34,800

Net cash used in investing activities (1,004,551) (457,427) (36,619) (117,989)

Financing activities

Cash granted to group companies - - (428,752) (5,943)

Cash from related companies 62,569 42,041 53,536 44,774

Issue of shares to non-controlling interest 23,194 33,625 - -

Loans received 1,516,892 607,650 1,025,000 250,000

Loans repaid (270,772) (292,505) (130,144) (162,730)

Finance lease repaid (522) (494) (522) (494)

Dividends paid to owners of the parent 23 (252,000) (178,500) (252,000) (178,500)

Net cash from/(used in) financing activities 1,079,361 211,817 267,118 (52,893)

Increase/(Decrease) in cash and cash equivalents 110,100 (303,668) 81,143 (291,099)

Movement in cash and cash equivalents

At July 1, (900,567) (596,899) (744,398) (453,299)

Increase/(Decrease) 110,100 (303,668) 81,143 (291,099)

At June 30, 37 (790,467) (900,567) (663,255) (744,398)


1. GENERAL INFORMATION

Medine Limited is a limited liability company incorporated and domiciled in Mauritius. The main activity of the company consists principally of the planting of sugar cane for the production of sugar and by-products of sugar cane namely molasses and bagasses and other agricultural products. The registered office of Medine Limited is situated at 4 Clarens Fields Business Park, Black River Road, Bambous and its place of business is at Bambous.

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

2. SIGNIFICANT ACCOUNTING POLICIES

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

These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of Preparation

The financial statements comply with the Companies Act 2001 and have been prepared in accordance with International Financial Reporting Standards (IFRS). The financial statements include the consolidated financial statements of the parent company and its subsidiary company (The Group) and the separate financial statements of the parent company (The Company). The financial statements are presented in Mauritian Rupees.

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. certain property, plant and equipment are carried at revalued amounts/deemed costs;ii. available-for-sale investments are stated at fair value;iii. investment properties are stated at fair value;iv. consumable biological assets are stated at fair value; andv. relevant financial assets and financial liabilities are stated at fair value or at amortised cost.

Amendments to published Standards effective in the reporting period

Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12). The amendments clarify the accounting for deferred tax where an asset is measured at fair value and that fair value is below the asset’s tax base. The amendment has no impact on the Company’s financial statements.

Disclosure Initiative (Amendments to IAS 7). The amendments require the entity to explain changes in its liabilities arising from financing activities. This includes changes arising from cash flows (e.g. drawdowns and repayments of borrowings) and non-cash changes such as acquisitions, disposals, accretion of interest and unrealised exchange differences. A reconciliation of the opening and closing carrying amounts for each item for which cash flows have been or would be classified as financial activities is presented in note 37 (c).

Annual Improvements to IFRSs 2014-2016 Cycle

IFRS 12 Disclosure of Interests in Other Entities. The amendments clarify that entities are not exempt from all of the disclosure requirements in IFRS 12 when entities have been classified as held for sale or as discontinued operations. The amendment has no impact on the Company’s financial statements.

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

Certain standards, amendments to published standards and interpretations have been issued that are mandatory for accounting periods beginning on or after January 1, 2018 or later periods, but which the Group has not early adopted.







2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.1 Basis of Preparation (Cont’d)

Standards, Amendments to published Standards and Interpretations issued but not yet effective (CONT’D)

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

IFRS 9 Financial InstrumentsIFRS 15 Revenue from Contract with CustomersSale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28)IFRS 16 LeasesClarifications to IFRS 15 Revenue from Contracts with CustomersClassification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2)Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments to IFRS 4)Annual Improvements to IFRSs 2014-2016 CycleIFRIC 22 Foreign Currency Transactions and Advance Consideration Transfers of Investment Property (Amendments to IAS 40)IFRS 17 Insurance ContractsIFRIC 23 Uncertainty over Income Tax TreatmentsPrepayment Features with negative compensation (Amendments to IFRS 9)Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28)Annual Improvements to IFRSs 2015-2017 CyclePlan Amendment, Curtailment or Settlement (Amendments to IAS 19)

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.

2.2 Property, Plant and Equipment

Land and buildings, held for use in the production or supply of goods or for administrative purposes, are stated at their fair value, based on periodic valuations, by external independent valuers, less subsequent depreciation for buildings. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

Up to 2004, certain property, plant and equipment were revalued yearly on a replacement cost basis using indices provided by the Mauritius Sugar Authority less subsequent depreciation.

All other property, plant and equipment are initially recorded at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Costs may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. All repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

Subsequent costs are included in the assets carrying amount or recognised as a separate asset as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

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 revaluation surplus, directly in equity; all other decreases are charged to profit or loss.

Properties in the course of construction for production, rental or administrative purposes or for purposes not yet determined are carried at cost less any recognised impairment loss. Cost includes professional fees and for qualifying assets, borrowing costs capitalised. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.


2.2 Property, Plant and Equipment (Cont’d)

Bearer plants

Bearer plants have been estimated based on the cost of land preparation and planting of bearer canes.

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

Annual rates (%)Leasehold land 5%

Improvement to land 1% and 10%

Factory buildings and equipment 1% - 33%

Weighing equipment 2.5% - 3.6%

Cultivation equipment 3% - 20%

Transport equipment 10% and 20%

Animals 2.5% - 6.67%

Bearer plants 12.5%

Hotel and leisure building 2% - 5%

Other buildings and equipment 1% - 33%

Golf course and infrastructure 1%

Freehold land is not depreciated.

The assets' residual values, useful lives and depreciation method are reviewed, and adjusted prospectively, if appropriate, at the end of each reporting period.

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

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

2.3 Investment Property

Investment property, held to earn rentals/or for capital appreciation or both and not occupied by the Group is carried at fair value, representing open-market value determined annually. Changes in fair values are included in profit or loss.

Gains and losses on disposal of investment property are determined by reference to their carrying amount and are recognised in profit or loss.

When the use of a property changes from owner-occupied to investment property, the property is remeasured to fair value and reclassified as investment property.

When the use of a property changes such that it is reclassified as property, plant and equipment, its fair value at the date of reclassification becomes its cost for subsequent accounting.

2.4 Intangible Assets

(a) GoodwillGoodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.








2.4 Intangible Assets (Cont’d)

Goodwill is tested annually for impairment.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the gains and losses on disposal. Goodwill is allocated to cash-generating units for the purpose of impairment testing.

(b) Computer softwareAcquired computer software licences are capitalised on the basis of costs incurred to acquire and bring to use the specific software and are amortised over their estimated useful lives (3 - 10 years).

Costs associated with developing or maintaining computer software are recognised as an expense as incurred.

2.5 Investments in Subsidiaries

Separate financial statements of the investorInvestments in subsidiaries are carried at cost. The carrying amount is reduced to recognise any impairment in the value of individual investments.

Consolidated financial statementsSubsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

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 interests 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 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 profit or loss as a bargain purchase gain.

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.

Transactions with non-controlling interestsThe Group treats transactions with non-controlling interests as transactions with equity owners of the group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

Disposal of subsidiariesWhen the Group ceases to have control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial assets. In additions, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.


2.6 Investments in Associates

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

Consolidated financial statementsAn associate is an entity over which the Group has significant influence but not control, or joint control, generally accompanying a shareholding between 20% and 50% of the voting rights.

Investments in associates are accounted for using the equity method. Investments in associates are initially recognised 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.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the associate’s identifiable assets and liabilities recognised at the date of acquisition is recognised as goodwill, which is included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of identifiable assets and liabilities over the cost of acquisition, after assessment, is included as income in the determination of the Group’s share of the associate’s profit or loss.

When the Group’s share of losses exceeds its interest in an associate, the Group discontinues recognising further losses, unless it has incurred legal or constructive obligation or made payments on behalf of the associate.

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

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.

Dilution gains and losses arising in investments in associates are recognised in profit or loss.

2.7 Financial Assets

(a) Categories of financial assetsThe Group classifies its financial assets as available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired.

Management determines the classification of its investments at initial recognition and re-evaluates this designation at every reporting period.

Available-for-sale financial assetsAvailable-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within twelve months of the reporting period.

(b) Recognition and measurementInitial measurementPurchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase or sell the asset. Investments are initially measured at fair value plus transaction costs for all financial assets.

Subsequent measurementAvailable-for-sale financial assets are subsequently carried at their fair values.

Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost.

Unrealised gains and losses arising from changes in the fair value of financial assets classified as available-for-sale are recognised in other comprehensive income. When financial assets classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in profit or loss as gains and losses on financial assets.








2.7 Financial Assets (Cont’d)

Subsequent measurement (cont’d)The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by considering various valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flows analysis, cost, net assets, capitalised earnings and dividend basis.

DerecognitionFinancial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.

(c) Impairment of financial assets classified as available-for-saleThe Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered in determining whether the securities are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss measured as the difference between acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in equity is removed from equity and recognised in profit or loss.

Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale are not reversed through profit or loss.

2.8 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 profit or loss.

2.9 Borrowings

Borrowings are recognised initially at fair value being their issue proceeds net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

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.

2.10 Trade and Other Payables

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

2.11 Cash and Cash Equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and bank overdraft. Bank overdraft is shown within borrowings in current liabilities on the statement of financial position.

2.12 Share Capital

Ordinary shares are classified as equity.


2.13 Biological Assets

Consumable biological assetsStanding sugar cane cropStanding canes are measured at their fair value. The fair value of standing canes is the present value of expected net cash flows from the standing canes discounted at the relevant market determined pre-tax rate.

Other crops and plantsOther crops and plants are measured at their fair value. The fair value of the other crops and plants is the present value of expected net cash flows from the sale of the other crops and plants, discounted at the relevant market determined pre-tax rate.

Changes in fair value of consumable biological assets are recognised in profit or loss.

2.14 Deferred Expenditure

(a) Land Development and ExpenditureLand Development and Expenditure is in respect of costs incurred to prepare land in a saleable condition that is to be sold and is released to profit or loss on disposal.

(b) Voluntary Retirement SchemeVRS costs (net of refunds under the Multi Annual Adaptation Scheme and pension obligations previously provided for) are carried forward on the basis that under the Scheme, the Company acquires the right to sell land on which no conversion taxes are payable. The VRS costs will be recouped through the sale of these lands. These amounts are amortised over a period of 5 years. The amortisation is reviewed and reassessed yearly to ascertain the adequacy of the yearly charge taking into account the right exercised.

2.15 Current and Deferred Income Taxes

The tax expense for the period comprises of current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current taxThe current income tax charge is based on taxable income for the year calculated on the basis of tax laws enacted or substantively enacted by the end of the reporting period.

Deferred taxDeferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, if the deferred income tax arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither accounting nor taxable profit or loss, it is not accounted for.

Deferred income tax is determined using tax rates that have been enacted or substantively enacted at the reporting date and are expected to apply in the period when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which deductible temporary differences can be utilised.

For the purposes of measuring deferred tax liabilities and deferred tax assets for investment properties that are measured using the fair value model, the carrying amounts of certain properties are presumed to be recovered entirely through sale, unless the presumption is rebutted. The presumption is rebutted when the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodies in the investment property over time, rather than through sale.

2.16 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 expenses. Net realisable value is the estimate of the selling price in the ordinary course of business, less the costs of completion and selling expenses.








2.17 Retirement Benefit Obligations

a. Defined contribution plansA defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. The Group has not legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Payments to defined contribution plans are recognised as an expense when employees have rendered services that entitle them to the contributions.

b. Defined benefit plansA defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit plans define 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.

The liability recognised in the statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method.

Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), is recognised immediately in other comprehensive income in the period in which they occur. Remeasurements recognised in other comprehensive income shall not be reclassified to profit or loss in subsequent period.

The Group determines the net interest expense/(income) on the net defined benefit liability/(asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit liability/(asset), taking into account any changes in the net defined liability/(asset) during the period as a result of contributions and benefit payments. Net interest expense/(income) is recognised in profit or loss.

Service costs comprising current service cost, past service cost, as well as gains and losses on curtailments and settlements are recognised immediately in profit or loss.

c. Gratuity on retirementArtisans and labourers of sugar companies are entitled to a gratuity on death or retirement, based on years of service. This item is not funded. The benefits accruing under this item are calculated by an actuary and have been accounted for in the financial statements.

For employees who are not covered by the above pension plans, the net present value of gratuity on retirement payable under the Employment Rights Act 2008 is calculated by an actuary and provided for. The obligations arising under this item are not funded.

2.18 Foreign Currencies

a. Functional and presentation currencyItems included in the financial statements (of each of the Group’s entities) 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. All values are rounded to the nearest thousand (Rs’000) except where otherwise indicated.

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

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in profit or loss within ‘finance income or cost’. All other foreign exchange gains and losses are presented in profit or loss within ‘other (losses)/gains – net’.


2.18 Foreign Currencies (Cont’d)

b. Transactions and balances (Cont’d)

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

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

2.19 Impairment of Non-Financial 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).

2.20 Accounting for 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 are charged to profit or loss on a straight-line basis over the period of the lease.

Finance leases are capitalised at the lease’s inception at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss unless they are attributable to qualifying assets in which case, they are capitalised in accordance with the policy on borrowing costs.

The property, plant and equipment acquired under finance leasing contracts is depreciated over the useful life of the asset.

2.21 Operating Leases

Assets leased out under operating leases are included in investment properties in the statement of financial position. The carrying amounts of investment properties represent their fair value. Rental income is recognised in profit or loss on a straight line basis over the lease term.

2.22 Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalised until such time as the assets are substantially ready for their intended use or sale. Other borrowing costs are expensed.

2.23 Dividend Distribution

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

2.24 Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods supplied and services rendered, stated net of discounts, returns, value added taxes, rebates and other similar allowances and after eliminating sales within the Group.








2.24 Revenue Recognition (Cont’d)

a. Sales of goods Sales of goods are recognised when the goods are delivered and titles have passed, at which time all of the following conditions are satisfied:

• the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;• the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor

effective control over the goods sold;• 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 recognition of sugar and molasses proceeds is based on total production of the crop year. Bagasse proceeds are accounted for in the year in which it is received.

Sugar prices are based on the recommendations made to all sugar companies by the Mauritius Chamber of Agriculture after consultation with the Mauritius Sugar Syndicate. Any differences between the recommended prices and the final prices are reflected in profit or loss of the period in which they are established.

b. Rendering of servicesRevenue from rendering of services are recognised in the accounting year in which the services are rendered (by reference to the completion of the specific transaction assessed on the basis of the actual service provided as a proportion of total services to be provided).

Admission fee that permits only membership of the golf club is recognised as revenue when no significant uncertainty as to its collectibility exists.

c. Other revenues earned by the Group are recognised on the following bases:• Dividend income is recognised when the shareholder’s right to receive payment is established.• Interest income is recognised 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.

• Rental income and management fee are recognised on an accruals basis in accordance with the substance of the relevant agreements.

• Other income – on an accrual basis unless collectibility is in doubt.

2.25 Sale of Land

The profit arising on sale of land is recognised in profit or loss on the date the deed of sale is signed and the corresponding debtor accounted in the statement of financial position. All other prepayments collected in respect of sale of land are credited to ‘’Deposit on sale of land’’ in the statement of financial position.

2.26 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources that can be reliably estimated will be required to settle the obligation.

2.27 Segment Reporting

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

3. FINANCIAL RISK MANAGEMENT

3.1 Financial Risk Factors

The Group’s activities expose it to a variety of financial risks, including:• Foreign exchange risk; • Credit risk; • Interest rate risk; • Liquidity risk; • Equity market price risk; and• Market risk.

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

Foreign exchange riskThe Group is exposed to foreign exchange risk arising from various currency exposures primarily with respect toUS dollars, Euros and GBP. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities.

The group’s dealings in foreign currency purchases is managed by seeking the best rates. Fluctuations arising on purchase transactions are partly offset by sales transactions, effected in US dollars, Euros and GBP to some extent.

The GroupAt June 30, 2018, if the rupee had weakened/strengthened by 1% against the US dollar/Euro/GBP with all variables held constant, post tax loss of the group for the year would have been Rs.175,000 lower/higher, mainly as a result of foreign exchange gains/losses on translation of US dollar/Euro/GBP denominated assets.

At June 30, 2017, if the rupee had weakened/strengthened by 1% against the US dollar/Euro/GBP with all variables held constant, post tax profit of the group for the year would have been Rs.152,000 higher/lower, mainly as a result of foreign exchange gains/losses on translation of US dollar/Euro/GBP denominated assets.

USD EURO GBP MUR Total

2018 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000Bank balances 3,221 9,902 530 26,076 39,729 Trade and other receivables - 6,902 76 410,712 417,690

USD EURO GBP MUR Total

2017 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000Bank balances 775 13,917 1,903 16,162 32,757 Trade and other receivables - 17,222 33 327,403 344,658

The Holding CompanyAt June 30, 2018, if the rupee had weakened/strengthened by 1% against the US dollar/Euro/GBP with all variables held constant, post tax profit of the company for the year would have been Rs.36,000 (2017: Rs.18,000) higher/lower, mainly as a result of foreign exchange gains/losses on translation of US dollar/Euro/GBP denominated assets. Profit is more sensitive to movement in exchange rates in 2018 than 2017 because of the increased amount of US dollar/Euro/GBP denominated assets.

Credit riskCredit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s trade and other receivables. The amounts presented in the statement of financial position are net of allowances for doubtful receivables, estimated by the Group’s management based on prior experience and the current economic environment.

The Group has 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. Cash transactions are limited to high credit quality financial institutions. The Group has policies that limit the amount of credit exposure to any financial institution.







3. FINANCIAL RISK MANAGEMENT (CONT’D)

3.1 Financial Risk Factors (Cont’d)

Credit Risk (Cont’d)The table below shows the credit concentration of the group and the company at the end of the reporting period:

THE GROUP THE HOLDING COMPANY 2018 2017 2018 2017

Counterparties % % % %10 major counterparties per company 83 72 56 67 Others (diversified risk) 17 28 44 33

100 100 100 100

Management does not expect any losses from non-performance of these customers.

Interest rate riskThe Group’s income and operating cash flows are exposed to interest rate risk as it sometimes borrows at variable rates. The Group has interest-bearing assets.

The GroupAt June 30, 2018, if the interest rates on rupee-denominated borrowings had been 1% lower/higher with all other variables held constant, post-tax loss for the year would have been Rs.36,747,000 lower/higher, mainly as a result of lower/higher interest expense on floating rate borrowings.

At June 30, 2017, if the interest rates on rupee-denominated borrowings had been 1% lower/higher with all other variables held constant, post-tax profit for the year would have been Rs.29,386,000 higher/lower, mainly as a result of lower/higher interest expense on floating rate borrowings.

The above risk is mitigated by the interest-bearing assets as follows:

At June 30, 2018, if the interest rates on rupee-denominated bank balances and interest bearing assets had been 1% lower/higher with all other variables held constant, post-tax loss for the year would have been Rs.448,000 higher/lower, mainly as a result of lower/higher interest income on bank balances.

At June 30, 2017, if the interest rates on rupee-denominated bank balances and interest bearing assets had been 1% lower/higher with all other variables held constant, post-tax profit for the year would have been Rs.1,672,000 lower/higher, mainly as a result of lower/higher interest income on bank balances.

The Holding CompanyAt June 30, 2018, if the interest rates on rupee-denominated borrowings had been 1% lower/higher with all othervariables held constant, post-tax profit for the year would have been Rs.23,020,000 (2017: Rs. 17,663,000 higher/lower, mainly as a result of lower/higher interest expense on floating rate borrowings.

The above risk is mitigated by the interest-bearing assets as follows:

At June 30, 2018, if the interest rates on rupee-denominated bank balances and interest bearing assets had been 1% lower/higher with all other variables held constant, post-tax profit for the year would have been Rs. 448,000 (2017: Rs. 1,501,000) lower/higher, mainly as a result of lower/higher interest income on bank balances and interest bearing assets.

Liquidity riskLiquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivery of cash or another financial asset.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Group aims at maintaining flexibility in funding by keeping committed credit lines available.


3.1 Financial Risk Factors (Cont’d)

Liquidity risk (Cont’d)The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the end of the reporting period to the contractual maturity date

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

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000At June 30, 2018Bank overdrafts 830,196 - - - 830,196 Finance lease 560 582 1,222 - 2,364 Bank loans 1,904,140 163,499 1,300,768 1,231,292 4,599,699 Trade and other payables 1,161,588 - - - 1,161,588

At June 30, 2017Bank overdrafts 933,324 - - - 933,324 Finance lease 523 553 1,810 - 2,886 Bank loans 1,322,451 281,846 862,658 886,624 3,353,579 Trade and other payables 844,652 - - - 844,652

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

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000At June 30, 2018Bank overdrafts 677,193 - - - 677,193 Bank loans 1,567,142 21,071 848,000 - 2,436,213 Finance lease 560 582 1,222 - 2,364 Amount due to group companies 69,988 - - - 69,988 Trade and other payables 698,261 - - - 698,261

At June 30, 2017Bank overdrafts 755,878 - - - 755,878 Bank loans 1,161,143 36,143 268,071 76,000 1,541,357 Finance lease 523 553 1,810 - 2,886 Amount due to group companies 352,739 - - - 352,739 Trade and other payables 575,721 - - - 575,721

Equity market price riskThe Group is susceptible to equity market price risk arising from uncertainties about future prices of the equity securities because of investments held by the Group and classified on the statement of financial position as available-for-sale. To manage its price risk arising from investments in equity securities, the Group diversifiesits portfolio.

Sensitivity analysisThe table below summarises the impact of increases/decreases in the fair value of the investments on equity. The analysis is based on the assumption that the fair value has increased/decreased by 5%

Impact on equity


Rs’000 Rs’000 Rs’000 Rs’000

Available-for-sale 5,347 5,373 5,346 5,372

Market riskThe Group is exposed to market risk arising from changes in sugar prices and the incidence of the exchange rate. This risk will directly impact on future crop proceeds. The risk is not hedged.








3.2 Fair Value Estimation

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

Instruments included in level 1 comprise primarily quoted equity investments classified as trading securities or available-for-sale.

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

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

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.

3.3 Biological Assets

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

3.4 Capital Risk Management

The Group’s objectives when managing capital are:• to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders

and benefits for other stakeholders; and• to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

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 capita to shareholders, return capital to shareholders, issue new shares, 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 to adjusted capital. Net debt is calculated as total debt (as shown in the Statement of financial position) less cash and cash equivalents. Adjusted capital comprises all components of equity (ie share capital, non-controlling interests, retained earnings, and revaluation surplus and other reserves).

During 2018, the Group’s strategy, which was unchanged from 2017, was to maintain the debt-to-adjusted capital ratio at the lower end, in order to secure access to finance at a reasonable cost.

The debt-to-adjusted capital ratios at June 30, 2018 and at June 30, 2017 were as follows:


Rs.'000 Rs.'000 Rs.'000 Rs.'000

Total debt (note 19) 5,432,259 4,289,789 3,115,770 2,300,121Less: cash and cash equivalents (note 37) (39,729) (32,757) (13,938) (11,480)Net debt 5,392,530 4,257,032 3,101,832 2,288,641

Total equity 14,645,312 15,908,139 16,342,417 15,911,470 Add: subordinated debt instruments - - - - Adjusted capital 14,645,312 15,908,139 16,342,417 15,911,470

Debt-to-adjusted capital ratio 0.37:1 0.27:1 0.19:1 0.14:1

The increase in the debt-to-adjusted capital ratio during 2018 resulted primarily from the increase in borrowings.

There were no changes in the Group’s approach to capital risk management during the year.

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 makes 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.

a. Impairment of available-for-sale financial assets

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

b. Biological assets

Consumable biological assets - Standing Sugar CanesThe fair value of standing sugar canes crop has been arrived at by discounting the present value (PV) of expected net cash flows from standing canes discounted at the relevant market determined pre-tax rate.

The expected cash flows have been computed by estimating the expected crop and the sugar extraction rate and the forecasts of sugar prices which will prevail in the coming year. The harvesting costs and other direct expenses are based on the yearly budget of the company.

Other key assumptions for biological assets are disclosed in Note 12.

c. Land

The land were valued at June 30, 2016 at fair value based on the valuation report made by JPW International Ltd, Independent Property Surveyor, in association with Professional Valuers Co Ltd, on an open market value basis. Additional information is disclosed in Note 5.

d. Investment properties

Investment properties, held to earn rentals/or for capital appreciation or both and not occupied by the Group/Company is carried at fair value with changes in fair value being recognised in profit or loss. Investment properties consist of freehold land and buildings. Freehold land classified as investment properties have been valued at their open market value on June 30, 2017 by JPW International Ltd, Independent Property Surveyor, in association with Professional Valuers Co Ltd. Buildings classified as investment properties have been valued by management on June 30, 2018.Additional information is disclosed in Note 6.

e. Pension benefits

The present value of the pension obligations depends 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 obligation.

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 obligation.

Other key assumptions for pension obligation are based in part on current market conditions. Additional information is disclosed in Note 20.







4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D)

f. Limitations of sensitivity analysis

Sensitivity analysis in respect of market risk demonstrates the effect of a change in a key assumption while other assumptions remain unchanged. In reality, there is a correlation between the assumptions and other factors. It should also be noted that these sensitivities are non-linear and larger or smaller impacts should not be interpolated or extrapolated from these results.

Sensitivity analysis does not take into consideration that the Group’s assets and liabilities are managed. Other limitations include the use of hypothetical market movements to demonstrate potential risk that only represent the Group’s view of possible near-term market changes that cannot be predicted with any certainty.

g. Impairment of assets

Property, plant and equipment, investment properties and intangible assets are considered for impairment if there is a reason to believe that impairment may be necessary. Factors taken into consideration in reaching such a decision include the economic viability of the asset itself and where it is a component of a larger economic unit, the viability of that unit itself.

Future cash flows expected to be generated by the assets or cash-generating units are projected, taking into account market conditions and the expected useful lives of the assets. The present value of these cash flows, determined using an appropriate discount rate, is compared to the current net asset value and, if lower, the assets are impaired to the present value.

Cash flows which are utilised in these assessments are extracted from the yearly budget.

h. Fair value of securities not quoted in an active market

The fair value of securities not quoted in an active market may be determined by the Group using valuation techniques including third party transaction values, multiple earnings, net asset value, cost, dividend or discounted cash flows, whichever is considered to be appropriate. The Group would exercise judgement and estimates on the quality and quantity of pricing sources used. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

i. Asset lives and residual values

Property, plant and equipment are depreciated over its useful life taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In reassessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values. Consideration is also given to the extent of current profits and losses on the disposal of similar assets.

j. Depreciation policies

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

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

k. Deferred tax on investment properties

For the purposes of measuring deferred tax liabilities or deferred tax assets arising from investment properties the directors reviewed the Group’s investment property portfolio and concluded that certain of the Group’s investment properties are held under a business model whose objective is to consume substantially all of the economic benefits embodied in the investment properties over time, rather than through sales. Therefore, in determining the Group’s deferred taxation on investment properties, the directors have determined that the presumption that the carrying amounts of investment properties measured using the fair value model are recovered entirely through saleis rebutted for certain of the Group’s investment properties. As a result, the Group has recognised deferred taxes on changes in fair value of such investment properties.

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D)

l. The Medine Sugar Milling Company Limited - Impairment losses

With the fall in the price of sugar, The Medine Sugar Milling Company Limited “TMSMCL” has incurred losses over the last five years and has been able to meet its past liquidity requirements only with the financial support of its main shareholder, Medine Ltd, who has made total advances of Rs.178,980,000 to TMSMCL as at June 30, 2018.

Consequently, without additional financing to meet its liquidity requirement for the next twelve months, TMSMCL is insolvent as prior to reclassifying non-current liabilities to current liabilities:

• TMSMCL’s current liabilities exceeded its current assets by Rs.407,564,000 as at June 30, 2018; and • TMSMCL’s bank overdraft and bank loans repayable within one year amounted to Rs.68,921,000 and Rs.20,301,000

respectively as at June 30, 2018.

Furthermore, prior to adjusting the values of assets in the financial statements to their recoverable amounts, TMSMCL had made a loss of Rs.90,357,000 during the year ended June 30, 2018 and had accumulated revenue deficit of Rs.246,107,000 as at June 30, 2018.

On the above basis, the directors of TMSMCL have considered it inappropriate to prepare the financial statements of TMSMCL on a going concern basis and therefore the directors have prepared these financial statements on a break-up basis.

The effects of preparing the financial statements of TMSMCL on a break up basis are as follows:

1. All assets including property, plant and equipment and inventories are adjusted to their recoverable amounts. The impairment losses in respect of factory equipment and inventories recognised in profit or loss amounted to Rs.355,525,000 and Rs.12,249,000 respectively (note 30);

2. All non-current assets are reclassified as current assets within one year; and3. All non-current liabilities are reclassified as current liabilities within one year.







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5. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

(a) THE GROUP (CONT’D)

(iii) No assets has been acquired under finance leases during the year (2017: Rs.nil)

(iv) Leased assets included in property, plant and equipment:

Transport Equipment

2018 2017Rs’000 Rs’000

Cost 3,874 3,874

Accumulated depreciation (2,447) (1,673)

Net book amount 1,427 2,201

(v) Freehold land of the Group have been valued at their open market value as at June 30, 2016 by JPW InternationalLtd, Independent Property Surveyor, in association with Professional Valuers Co Ltd.

The fair value of the land is based on its market value, which is defined as intended to mean the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently, and without compulsion.

The market value of the land was derived using the following approach:a) The Comparative Method of Valuation involves the assessment of the property based on sale comparable in the neighbourhood

and adjusted to reflect its location, characteristics and size;b) The Residual Method of Valuation involves the discounted cash flow analysis; and c) The Income Capitalisation Approach takes a property’s forecast net operating income and allocates these future benefits to

the mortgage and equity components, based on market rates of return and loan to value ratios which is capitalised at an appropriate rate of return to produce a capital value.

The factory buildings and equipment, weighing equipment and transport equipment of a subsidiary, were valued by the directors on a replacement cost basis using indices provided by the Mauritius Sugar Authority. Revaluation of the said assets were made on an annual basis until December 31, 2004.

Details of the Group’s property, plant and equipment measured at fair value and information about the fair value hierarchy as at June 30, 2018 are as follows:

2018 2017

Level 2 Level 3 Level 2 Level 3

Rs’000 Rs’000 Rs’000 Rs’000

Freehold land 14,599,341 - 14,601,242 -

Factory buildings and equipment - 368,641 - 368,641

Weighing equipment - 4,721 - 4,721

Transport equipment - 762 - 762

Other buildings and equipment - 39,239 - 39,239

Total 14,599,341 413,363 14,601,242 413,363

The revaluation surplus net of deferred income taxes was credited to revaluation surplus in shareholders’ equity.



The fair value of land is classified in level 2 of the fair value hierarchy as it has been valued using observable market data but there is no active market.

At June 30, 2018, the most significant observable inputs for the valuation of land are as follows:

Significant observable Range of observable

Use of land input input Rs.’000/Arpent

Agricultural Price per Arpent 366 - 1,478

Shrubs, bareland and hunting grounds Price per Arpent 94 - 1,430

Office and operations Price per Arpent 375 - 4,500

River reserves and reservoir Price per Arpent 38 - 375

Significant increase/(decrease) in the above observable inputs in isolation would result in a significant higher/(lower) fair value.

The movement in the opening balance and closing balance of the property, plant and equipment categorised within level 2 of the fair value hierarchy is as follows:

2018 2017

Rs’000 Rs’000

Level 2

At July 1, 14,601,242 14,601,530

Transfer to land development and expenditure (1,901) (288)

At June 30, 14,599,341 14,601,242

The fair values of the factory buildings and equipment, weighing equipment, transport equipment and other buildings and equipment were determined on the basis of the costs from prior transactions, as adjusted on an annual basis up to December 31, 2004 using indices provided by the Mauritius Sugar Authority and on the basis of the estimated useful life of each asset. The fair values reflect the cost of a market participant to construct or acquire assets of comparable utility and age, adjusted for obsolescence. The indices provided by the Mauritius Sugar Authority is the most significant unobservable inputs used for this valuation. Significant increases/(decreases) in the above estimated range of unobservable inputs in isolation would result in a significant higher /(lower) fair value.

There was no movement in the opening balance and closing balance of the property, plant and equipment categorised within level 3 of the fair value hierarchy in 2017 and 2018.









(vi) If the property, plant and equipment were stated on the historical cost basis, the amounts would be as follows:

Land

FactoryBuildings &Equipment

Weighing &CultivationEquipment

TransportEquipment

OtherBuildings Total

At June 30, 2018 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000Cost 347,400 404,002 3,110 5,828 18,804 779,144

Accumulated depreciation - (377,201) (2,197) (5,828) (18,680) (403,906)

Net book value 347,400 26,801 913 - 124 375,238

At June 30, 2017

Cost 347,416 404,002 3,110 5,828 18,804 779,160

Accumulated depreciation - (321,525) (2,097) (5,828) (17,715) (347,165)

Net book value 347,416 82,477 1,013 - 1,089 431,995

(vii) The above property, plant and equipment have been pledged as security for borrowings.(viii) Depreciation charge has been charged in operating expenses.

(b) THE HOLDING COMPANYFreehold

Land Leasehold

LandFactory

Equipment

Weighing & Cultivation Equipment

Transport Equipment

Buildings and

EquipmentWork in

progressBearer Plants Total

Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000

(i) COST AND VALUATION

At July 1, 2017

- Cost - 111 1,999 620,392 174,002 769,066 2,885 134,496 1,702,951

- Valuation 13,100,240 - - - - - - - 13,100,240

13,100,240 111 1,999 620,392 174,002 769,066 2,885 134,496 14,803,191

Additions - - - 5,857 946 10,642 - 17,128 34,573

Disposals (1,523,041) - - - (14,431) (101,964) - - (1,639,436)

Assets scrapped - - - (17,626) (6,665) (881) - - (25,172)

Transfer to investment

properties (note 6) - - - - - (44,438) - - (44,438)

Transfer to land development and expenditure (note 11(a)) (1,901) - - - - (58) - - (1,959)

11,575,298 111 1,999 608,623 153,852 632,367 2,885 151,624 13,126,759 At June 30, 2018- Cost - 111 1,999 608,623 153,852 632,367 2,885 151,624 1,551,461 - Valuation 11,575,298 - - - - - - - 11,575,298

11,575,298 111 1,999 608,623 153,852 632,367 2,885 151,624 13,126,759

DEPRECIATION

At July 1, 2017 - 100 816 544,038 155,939 413,531 - 65,002 1,179,426

Charge for the year - - 20 18,047 7,761 36,975 - 17,048 79,851

Disposal adjustments - - - - (11,358) (4,105) - - (15,463)

Impairment losses (note 30) - - - - - - 69,574 69,574

Transfer to investment

properties (note 6) - - - - - (27,238) - - (27,238)

Adjustment for scrapped assets - - - (17,626) (6,665) (881) - - (25,172)

At June 30, 2018 - 100 836 544,459 145,677 418,282 - 151,624 1,260,978

NET BOOK VALUEAt June 30, 2018 11,575,298 11 1,163 64,164 8,175 214,085 2,885 - 11,865,781


(b) THE HOLDING COMPANYFreehold

Land Leasehold

LandFactory

Equipment

Weighing & Cultivation Equipment

Transport Equipment

Buildings and

EquipmentWork in

progressBearer Plants Total

Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000

(ii) COST AND VALUATION

At July 1, 2016

- Cost - 111 1,999 639,106 192,909 753,119 2,885 154,331 1,744,460

- Valuation 13,100,528 - - - - - - - 13,100,528

13,100,528 111 1,999 639,106 192,909 753,119 2,885 154,331 14,844,988

Additions - - - 15,896 6,124 43,916 - 16,973 82,909

Disposals - - - (8,708) (14,241) (6,459) - - (29,408)

Assets scrapped - - - (25,902) (10,790) (22,525) - (36,808) (96,025)

Transfer to land development and expenditure (note 11(a)) (288) - - - - - - - (288)

Transfer from land development and expenditure (note 11(a))

- - - - - 1,015 - - 1,015

13,100,240 111 1,999 620,392 174,002 769,066 2,885 134,496 14,803,191 At June 30, 2017- Cost - 111 1,999 620,392 174,002 769,066 2,885 134,496 1,702,951 - Valuation 13,100,240 - - - - - - - 13,100,240

13,100,240 111 1,999 620,392 174,002 769,066 2,885 134,496 14,803,191

DEPRECIATION

At July 1, 2016 - 100 796 561,930 176,240 401,664 - 82,283 1,223,013

Charge for the year - - 20 16,464 4,730 36,497 - 19,527 77,238

Disposal adjustments - - - (8,708) (14,241) (3,008) - - (25,957)

Adjustment for scrapped assets - - - (25,648) (10,790) (21,622) - (36,808) (94,868)

At June 30, 2017 - 100 816 544,038 155,939 413,531 - 65,002 1,179,426

NET BOOK VALUE

At June 30, 2017 13,100,240 11 1,183 76,354 18,063 355,535 2,885 69,494 13,623,765

(iii) No assets have been acquired under finance leases in 2017 and 2018.

(iv) Leased assets included in property, plant and equipment:

Transport Equipment

2018 2017Rs’000 Rs’000

Cost 3,874 3,874

Accumulated depreciation (2,445) (1,671)

Net book amount 1,429 2,203








(b) THE HOLDING COMPANY (CONT’D)

(v) Freehold land of the Company have been valued at their open market value as at June 30, 2016 by JPW International Ltd, Independent Property Surveyor, in association with Professional Valuers Co Ltd.

The fair value of the land is based on its market value, which is defined as intended to mean the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing sellerin an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently, and without compulsion.

The market value of the land was derived using the following approach:

a) The Comparative Method of Valuation involves the assessment of the property based on sale comparable in the neighbourhood and adjusted to reflect its location, characteristics and size;

b) The Residual Method of Valuation involves the discounted cash flow analysis; and c) The Income Capitalisation Approach takes a property’s forecast net operating income and allocates these future benefits to


Details of the Company's property, plant and equipment measured at fair value and information about the fair value hierarchy as at June 30, 2018 are as follows:

2018 2017Level 2 Level 2Rs’000 Rs’000

Freehold land 11,575,298 13,100,240

The revaluation surplus net of deferred income taxes was credited to revaluation surplus in shareholders’ equity.

The fair value of land is classified in level 2 of the fair value hierarchy as it has been valued using observable market data but there is no active market.

At June 30, 2018, the most significant observable inputs for the valuation of land are as follows:

Significant Range of observable

Use of land observable input input Rs.’000/Arpent

Agricultural Price per Arpent 366 - 1,478

Shrubs, bareland and hunting grounds Price per Arpent 94 - 1,430

Office and operations Price per Arpent 375 - 4,500

River reserves and reservoir Price per Arpent 38 - 375

Significant increases/(decreases) in the observable inputs in isolation would result in a significant higher/(lower) fair value.

The movement in the opening balance and closing balance of the property, plant and equipment categories within level 2 of the fair value hierarchy are as follows:

2018 2017

Level 2 Rs’000 Rs’000

At July 1, 13,100,240 13,100,528

Disposals (1,523,041) -

Transfer to land development and expenditure (1,901) (288)

At June 30, 11,575,298 13,100,240


(b) THE HOLDING COMPANY (CONT’D)

(vi) If the property, plant and equipment were stated on the historical cost basis, the amounts would be as follows:

2018 2017Land Rs’000 Rs’000

Net book value at June 30, 2018 and June 30, 2017 295,880 301,680

(vii) Above property, plant and equipment have been pledged as security for borrowings. (viii) Depreciation charge has been charged in operating expenses. (ix) If an item of owner-occupied property becomes an investment property because its use has changed, any difference resulting

between the carrying amount and the fair value of this item at the date of transfer is treated in the same way as a revaluation under IAS 16. Any resulting increase in the carrying amount of the property is recognised in profit or loss to the extent that it reverses a previous impairment loss, with any remaining increase recognised in other comprehensive income and increase directly to equity in revaluation surplus within equity. Any resulting decrease in the carrying amount of the property is initially charged in other comprehensiveincome against any previously recognised revaluation surplus, with any remaining decrease charged to profit or loss.

6. INVESTMENT PROPERTIES


2018 2017 2018 2017VALUATION Rs.'000 Rs.'000 Rs.'000 Rs.'000At July 1, 2,324,336 2,216,949 1,353,410 1,300,850

Additions 179,701 54,827 - -

Transfer from land development and

expenditure (note 11(a)) 788,839 - - -

Transfer to property, plant and

equipment (note 5 (b)) (369,307) - - -

Transfer from property, plant and

equipment (note 5 (b)) 17,200 - 17,200 -

Disposals - - (392,018) -

Increase in fair value 24,286 52,560 39,050 52,560

At June 30, 2,965,055 2,324,336 1,017,642 1,353,410

(a) Details of the Group’s investment properties measured at fair value and information about the fair value hierarchy as at June 30, 2018 are as follows:

THE GROUPTHE HOLDING

COMPANY

Rs.'000 Rs.'000Fair value at June 30, 2018-Land 802,976 902,676 -Shopping mall, business park, educational buildings and other buildings 2,162,079 114,976 -Total 2,965,055 1,017,652

The fair value of the investment properties is based on its market value, which is defined as intended to mean the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently, and without compulsion. On the basis of current economic and property environnment, the directors are satisfied that the carrying amounts of the investment property reflects the fair value at the reporting date.

The land of the Group and the Holding Company have been valued by JPW International Ltd, Independent Property Surveyor, at their open market value on June 30, 2017.







6. INVESTMENT PROPERTIES (CONT’D)

The market value of the land was derived using the following approach:

(i) The Comparative Method of Valuation involves the assessment of the property based on sale comparable in the neighbourhood and adjusted to reflect its location, characteristics and size;

(ii) The Residual Method of Valuation involves the discounted cash flow analysis; and(iii) The Income Capitalisation Approach takes a property’s forecast net operating income and allocates these future benefits to


The buildings of the Group and the Holding Company have been valued by management at June 30, 2018. Last year, the buildings of the Group and the Holding Company have been valued by JPW International Ltd, Independent Property Surveyor, at their open market value on June 30, 2017.

The methods of valuation used to value the building constructed up to June 30, 2017 are firstly, the comparative method of valuation which involves the assessment of the retail floor space based on comparison of sales of office, retail and commercial spaces within the building or in close proximity to the property adjusted to reflect its characteristics, condition, floor and size and secondly, the investment method of valuation which involves the capitalisation of the rental income adjusted to take account of outgoings/taxes where applicable, at the estimated current rate of return expected from such properties. The most significant inputs into the valuation approach is price per square metre and rental income per square metre respectively.

While the fair values of the buildings added during the year ended June 30, 2018 were determined on the basis of the costs. The fair values reflect the costs of a market participant to construct such assets.

The fair value of land is classified in level 2 of the fair value hierarchy as it has been valued using observable market data but there is no active market while the fair value of buildings is classified in level 3 of the fair value hierarchy as it has been valued by management using both costs and other valuation techniques.

At June 30, 2018, the most significant observable inputs for the valuation of land and buildings are as follows:

Significant Range of observable

observable input input Rs.’000

Land Price per Arpent 186 - 6,000

Buildings Price per square metre 12 - 60

Significant increases/(decreases) in the above estimated range of unobservable inputs in isolation would result in a significant higher/(lower) fair value.

The movements in the opening balance and closing balance of the investment properties categorised within levels 2 and level 3 of the fair value hierarchy during the year are as follows:

THE GROUP 2018 2017

Level 2 Level 3 Total Level 2

At July 1, 2,324,336 - 2,324,336 2,216,949

Transfer (1,521,360) 1,521,360 -

Additions - 179,701 179,701 54,827

Transfer from land development and

expenditure (note 11(a)) - 788,839 788,839 -

Transfer from property, plant and -

equipment (note 5 (b)) - 17,200 17,200

Transfer to property, plant and -

equipment (note 5 (b)) - (369,307) (369,307)

Increase in fair value - 24,286 24,286 52,560

At June 30, 802,976 2,162,079 2,965,055 2,324,336

6. INVESTMENT PROPERTIES (CONT’D)

THE HOLDING COMPANY Level 2

2018 2017

Rs.'000 Rs.'000

At July 1, 1,353,410 1,300,850

Disposals (392,018) -

Transfer from property, plant and

equipment (note 5 (b)) 17,200 -

Increase in fair value 39,050 52,560

At June 30, 2016 1,017,642 1,353,410

(b) Gains and losses arising from changes in the fair value of investment properties are included in profit or loss for the period in which they arise.

(c) Rental income from the investment properties amounted to Rs.180,167,000 (2017: Rs.137,223,000) for the groupand Rs.59,477,000 (2017: Rs.49,206,000) for the company (note 24).

Direct operating expenses in respect of investment properties amounted to Rs.84,324,000 (2017: Rs.50,065,000) for the group and Rs.21,519,000 (2017:Rs.18,976,000) for the company.

(d) The above investment properties have been pledged as security for borrowings.

7. INTANGIBLE ASSETS

(a) THE GROUP 2018

ComputerSoftware Goodwill Total

COST Rs.'000 Rs.’000 Rs.’000

At July 1, 2017 32,058 69,522 101,580

Additions 2,510 - 2,510

Impairment losses (note 30) - (39,522) (39,522)

At June 30, 2018 34,568 30,000 64,568

AMORTISATION

At July 1, 2017 15,007 - 15,007

Charge for the year 6,217 - 6,217

At June 30, 2018 21,224 - 21,224

NET BOOK VALUE

At June 30, 2018 13,344 30,000 43,344







7. INTANGIBLE ASSETS (CONT’D)

(a) THE GROUP (CONT’D) 2017


COST Rs.'000 Rs.’000 Rs.’000

At July 1, 2016 35,400 66,793 102,193

Additions 5,394 2,729 8,123

Assets scrapped (8,736) - (8,736)

At June 30, 2017 32,058 69,522 101,580

AMORTISATION

At July 1, 2016 16,765 - 16,765

Charge for the year 3,297 - 3,297

Adjustment for scrapped assets (5,055) - (5,055)

At June 30, 2017 15,007 - 15,007

NET BOOK VALUE

At June 30, 2017 17,051 69,522 86,573

(b) THE HOLDING COMPANY 2018


COST Rs.'000 Rs.’000 Rs.’000At July 1, 2017 20,788 66,793 87,581 Additions 314 - 314 Impairment losses (note 30) - (36,793) (36,793)At June 30, 2018 21,102 30,000 51,102

AMORTISATIONAt July 1, 2017 12,347 - 12,347 Charge for the year 2,082 - 2,082 At June 30, 2018 14,429 - 14,429

NET BOOK VALUEAt June 30, 2018 6,673 30,000 36,673

2017


COST Rs.'000 Rs.’000 Rs.’000At July 1, 2016 21,563 66,793 88,356 Additions 614 - 614 Assets scrapped (1,389) - (1,389)At June 30, 2017 20,788 66,793 87,581

AMORTISATIONAt July 1, 2016 11,747 - 11,747 Charge for the year 1,989 - 1,989 Adjustment for scrapped assets (1,389) - (1,389)At June 30, 2017 12,347 - 12,347

NET BOOK VALUEAt June 30, 2017 8,441 66,793 75,234

7. INTANGIBLE ASSETS (CONT’D)

(c) Amortisation charge has been charged in operating expenses.

(d) The above intangible assets have been pledged as security for borrowings.

(e) In 2017, Goodwill of Rs.2,729,000 relates to the purchase of the karting activities of Kart Zoe Ltd (note 41(c)(ii)). (f) Impairment test for goodwill: goodwill is allocated to the Company’s Cash-Generating Units (CGU’s) identified according to the

business segment.

8. INVESTMENTS IN SUBSIDIARIES

THE HOLDING COMPANY2018 2017

Unquoted Rs.'000 Rs.'000At July 1, 2,022,944 1,978,422 Additions (note (i)) 4,180,547 44,522 Disposals (note (ii)) (18,875) - Impairment losses (note 30) (160,000) - At June 30, 6,024,616 2,022,944

The impairment losses relates to The Medine Sugar Milling Company Limited. Additional information is disclosed in note 4(l).

THE HOLDING COMPANY2018 2017

Rs.'000 Rs.'000Note (i): Additional investments made in existing subsidiaries were as follows: Cascavelle Shopping Mall Limited 30,607 44,372 Uniciti Ltd 3,902,540 - Pierrefonds Estate Company Limited 213,000 25 TGE Managements Services Limited 18,700 - Tamarina Golf Estate Limited 15,700 - Uniciti Office Park Ltd - 25 Uniciti Commercial Properties Ltd - 25 Uniciti Sports and Cultural Properties Ltd - 25 Pierrefonds Services Limited - 25 Uniciti Management Services Co Ltd - 25

4,180,547 44,522

Note (ii): During the year, the Company disposed all its investment in TGE Management Services Ltd to its associated company Broll Property and Facility Management Services Ltd. The following subsidiaries were also disposed at cost to Uniciti Ltd, a wholly owned subsidiary of Medine Limited.

2018Rs.'000

Uniciti Residential Properties Ltd 25 Uniciti Education Properties Ltd 25 Uniciti Eduhousing Ltd 25 Uniciti Office Park 25 Uniciti Commercial Properties Ltd 25 Uniciti Sports & Cultural Properties Ltd 25 Uniciti Management Services Ltd 25

175

Note (iii): The impairment assessment of each cash generating unit is based mainly on the projected discounted future cash flows and also takes into account the difficult economic environment.







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8. INVESTMENTS IN SUBSIDIARIES (CONT’D)

(b) Subsidiaries with material non-controlling interests

Profit/(Loss)allocated to

non-controlling interests during

the period

Accumulated non-

controllinginterests

Detail of subsidiaries that have non-controlling interests that are material to the entity:

NAME OF COMPANY2018 Rs.'000 Rs.'000The Medine Sugar Milling Company Limited (91,566) (88,497)Cascavelle Shopping Mall Limited 3,610 122,689

2017The Medine Sugar Milling Company Limited (16,251) 20,383 Cascavelle Shopping Mall Limited 1,773 95,885

(c) Summarised financial information on subsidiaries with material non-controlling interests.

(i) Summarised statement of financial position and statement of profit or loss and other comprehensive income:

NAME OF COMPANYCurrent assets

Non-current assets

Current liabilities

Non-current

liabilities Revenue

Profit/(Loss)

for the year

Other comprehensive

income forthe year

Totalcomprehensive

income forthe year

Dividendpaid to non-

controllinginterests

2018 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000

The Medine Sugar Milling Company Limited 126,388 - 568,872 - 179,341 (457,831) - (457,831) -

Cascavelle Shopping Mall Limited 14,646 851,347 127,303 454,095 103,623 8,375 - 8,375 -

2017

The Medine Sugar Milling Company Limited 42,658 579,434 (280,069) (240,121) 191,824 (81,253) (534) (81,787) -

Cascavelle Shopping Mall Limited 30,208 750,787 61,909 496,666 97,381 4,113 - 4,113 -

(ii) Summarised cash flow information

NAME OF COMPANYOperating activities

Investing activities

Financing activities

Net increase/ (decrease) in

cash and cash equivalents

2018 Rs.’000 Rs.’000 Rs.’000 Rs.’000The Medine Sugar Milling Company Limited (35,857) (11,057) 74,752 27,838 Cascavelle Shopping Mall Limited 71,679 (104,345) 32,932 266

2017

The Medine Sugar Milling Company Limited (7,234) 8,760 (19,600) (18,074)Cascavelle Shopping Mall Limited 14,194 (31,129) 28,128 11,193

The summarised financial information above is the amount before intra-group eliminations.

9. INVESTMENTS IN ASSOCIATES


2018 2017 2018 2017Rs.'000 Rs.'000 Rs.'000 Rs.'000

(a) At July 1, 144,705 144,648 119,271 107,551 Addition (notes (i)) 5,668 4,600 5,668 11,720 Share of dividends (9,600) (12,000) - - Share of profit net of tax 4,960 7,776 - - Disposal of associate (note 41) - (327) - - Share of reserves (note 38(a)) - 8 - - At June 30, 145,733 144,705 124,939 119,271







9. INVESTMENTS IN ASSOCIATES (CONT’D)

Note (i): During the year, following the increase in the share capital of Broll Property and Facility Management Limited, Medine Limited has made additional investment of Rs.5,650,000 (2017: Rs.4,600,000) in Broll Property and Facility Management Limited, with no change in shareholding. Also, in 2017, the investment held in The Indian Ocean Rum Company Ltd by Medine Rum Limited has been transferred to Medine Limited for a cash consideration of Rs.7,120,000.

Medine Ltd has invested Rs.13,000 in Akuo Energy Solution (Mauritius) Ltd and Rs.5,000 in Akuo Austral (Mauritius) Limited.

(b) The associated companies are as follows:

NAME OF COMPANY Nature of businessPlace of

businessClass of

shares held

Ownership interestand voting power

2018 2017

Safari Adventures Limited Leisure activities Cascavelle Ordinary shares 40% Indirect 40% Indirect

The Indian Ocean Rum Company Limited Production and sales of premium rum

Bambous Ordinary shares 50% Direct 50% Indirect

Broll Property and Facilitiy Management Limited Property Management Services

Cascavelle Ordinary shares 50% Direct 50% Direct

Middlesex International (JSS) Mauritius Ltd Education Flic en Flac Ordinary shares 49% Direct 49% Direct

Akuo Energy Solution (Mauritius) Ltd Solar power Henrietta Ordinary shares 50% Direct -

Akuo Austral (Mauritius) Limited Solar power Henrietta Ordinary shares 49% Direct -

All of the above associates are accounted using the equity method and there are no quoted market price for their shares.

The year end of all the associated companies, which are incorporated in Mauritius, is June 30, except for Middlesex International JSS(Mauritius) Ltd which is July 31, 2018. Consequently, management accounts of Middlesex International JSS (Mauritius) Ltd for the period ended June 30, 2018 have been used.

(c) Summarised financial information in respect of each of the material associates is set out below.

Profit/ Total Dividends

Non- Non- (loss) Compre- Compre- received

Current current Current current for the hensive hensive during the

Assets Assets Liabilities Liabilities Revenues year income income year

NAME Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000

2018Safari Adventures Limited 25,806 24,650 (2,717) (1,594) 81,669 27,007 - 27,007 9,600 The Indian Ocean Rum

Company Limited 16,290 440 (845) (4,125) 16,653 (3,231) - (3,231) - Broll Property and Facility

Management Limited 25,998 12,017 (27,308) (575) 38,919 (7,045) - (7,045) - Akuo Energy Solution

(Mauritius) Ltd 25 - - - - - - - - Akuo Austral (Mauritius) Limited 10 - - - - - - - - Middlesex International

(JSS) Mauritius Ltd 52,094 2,491 (61,267) - 155,965 (1,190) - (1,190) -

2017Safari Adventures Limited 30,616 21,093 (6,739) (1,762) 94,138 34,306 - 34,306 12,000

The Indian Ocean Rum

Company Limited 23,263 530 (7,956) (845) 19,780 (480) 15 (465) -

Broll Property and Facility

Management Limited 5,481 2,470 (6,983) - 15,539 (2,136) - (2,136) -

Middlesex International

(JSS) Mauritius Ltd 29,011 4,222 (26,734) (10,738) 144,090 (11,993) - (11,993) -

The summarised financial information above represents amounts shown in the associates’ financial statements prepared in accordance with IFRS.

9. INVESTMENTS IN ASSOCIATES (CONT’D)

(d) Reconciliation of the summarised financial information to the carrying amount recognised in the financial statements:

TotalOpening

net assetsIssue of

share comprehensive

Dividend for the

Addition/(Disposal) of Closing

Ownership Interest in Carrying

NAME July 1, capital income year investment net assets interest associates Goodwill value

Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.’000 % Rs.’000 Rs.’000 Rs.’000

2018Safari Adventures Limited 43,150 - 27,007 (24,000) - 46,157 40% 18,463 17,471 35,934 The Indian Ocean Rum

Company Limited 14,993 - (3,231) - - 11,762 50% 5,881 - 5,881 Broll Property and Facility

Management Limited 968 11,300 (2,136) - - 10,132 50% 5,066 - 5,065 Middlesex International (JSS)

Mauritius Ltd (235) - (6,447) - - (6,682) 49% (3,274) 102,109 98,835 Akuo Energy Solution

(Mauritius) Ltd - 25 - - - 25 50% 13 - 13

Akuo Austral (Mauritius) Limited - 10 - - - 10 49% 5 - 5 Total 58,876 (2,504) 15,193 (24,000) - 61,369 26,154 119,580 145,733

2017

Safari Adventures Limited 38,844 34,306 (30,000) - 43,150 40% 17,260 17,471 34,731

The Indian Ocean Rum

Company Limited 15,457 - (464) - - 14,993 50% 7,497 - 7,497

Broll Property and Facility

Management Limited (6,096) 9,200 (2,136) - - 968 50% 484 - 484

Middlesex International (JSS)

Mauritius Ltd 7,754 - (7,989) - - (235) 49% (115) 102,109 101,994

Career and Recruitment Solutions Ltd 2,626 - (1,809) - (817) - - - -

Total 58,585 9,200 21,908 (30,000) (817) 58,876 25,126 119,580 144,706

(e) Though the Group holds 20% of the equity share capital of Westcoast Secondary School Ltd, the Group does not have significant influence over the financial and operating policy decisions of this company. Consequently, this investment is classified as available-for-sale investments.







10. INVESTMENTS IN AVAILABLE-FOR-SALE FINANCIAL ASSETS


Available-for-sale financial assets Rs.'000 Rs.'000 Rs.'000 Rs.'000At July 1, 107,455 86,389 107,447 86,381

(Decrease)/Increase in fair value (notes 18 & 38) (531) 21,066 (531) 21,066

At June 30, 106,924 107,455 106,916 107,447

Current - - - -

Non current 106,924 107,455 106,916 107,447

106,924 107,455 106,916 107,447

(a) Available-for-sale financial assets are analysed as follows:


Rs.'000 Rs.'000 Rs.'000 Rs.'000Quoted - Listed 18,145 16,633 18,145 16,633

Quoted - DEM 81,261 82,352 81,261 82,352

Unquoted 7,518 8,470 7,510 8,462

106,924 107,455 106,916 107,447

(b) At June 30, 2018 Level 1 Level 3 Total

Rs'000 Rs'000 Rs'000THE GROUP

Available-for-sale financial assets 99,406 7,518 106,924

THE HOLDING COMPANY


At June 30, 2017 Level 1 Level 3 Total

Rs'000 Rs'000 Rs'000THE GROUP


THE HOLDING COMPANY


(c) The fair value of listed or quoted available-for-sale financial assets is based on the Stock Exchange of Mauritius or DEM quoted prices at the close of business at the end of the reporting period. There were no transfers between level 1 and level 3 in the period. For fair value measurement in level 3, the movement were as follows:


2018 2017 2018 2017Rs.'000 Rs.'000 Rs.'000 Rs.'000

Opening 8,470 8,470 8,462 8,462

Decrease in fair value (952) - (952) -

Closing 7,518 8,470 7,510 8,462

In assessing the fair value of unquoted available-for-sale financial assets, the group uses mainly the cost basis.

10. INVESTMENTS IN AVAILABLE-FOR-SALE FINANCIAL ASSETS (CONT’D)

Analysis of unquoted investments:


Rs.'000 Rs.'000 Rs.'000 Rs.'000

Cost basis 7,518 8,470 7,510 8,462

The directors are of opinion that the carrying amounts of the investments in securities represent their fair value.

(d) Investment in Fondation Medine Horizons

Details of the investment are as follows:

Country of Class of Stated Nominal value % Holding

Incorporation shares held Capital of investment 2018 & 2017

Rs'000 Rs’000

Fondation Medine Horizons Mauritius Ordinary 25 25 100%

Though Medine Limited holds 100% of the share capital of Fondation Medine Horizons, Fondation Medine Horizons is not considered as a subsidiary company of Medine Limited, as no portion of the income, property and funds of Fondation Medine Horizons shall be paid or transferred to Medine Limited.

In assessing the fair value of unquoted available-for-sale financial assets, the group uses mainly the cost basis.

(e) None of the financial assets are either past due or impaired.

(f) All investments are denominated in Rupee.

11. DEFERRED EXPENDITURE


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000Land development and expenditure (note 11(a)) 1,218,627 1,265,916 412,642 1,051,126

Less: current portionLand development and expenditure (181,498) (810,815) (181,498) (810,815)

Non-current portion 1,037,129 455,101 231,144 240,311

(a) Land development and expenditure


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000At July 1, 1,265,916 837,341 1,051,126 837,341

Expenditure for the year 871,168 820,606 164,629 605,816

Transfer from property, plant and equipment (note 5) 1,959 288 1,959 288

Defered Expenditure written off (11,165) - (11,165) -

Transfer to profit or loss upon sale of land (120,412) (391,304) (793,907) (391,304)

Transfer to property, plant and equipment (note 5) - (1,015) - (1,015)

Transfer to investment properties (note 6) (788,839) - - -

At June 30, 1,218,627 1,265,916 412,642 1,051,126

Borrowing costs of Rs.11,707,000 (2017: Rs.1,082,000) (note 31) arising on the financing of the development costs have been capitalised and have been included in ‘Expenditure for the year’. This represents a capitalisation rate of 1.6% (2017: 1.9%) for the borrowing cost of the loan used to finance the project.







11. DEFERRED EXPENDITURE (CONT’D)

(b) Voluntary Retirement Scheme 2 & 3


2018 2017 2018 2017

COST Rs.'000 Rs.'000 Rs.'000 Rs.'000At July 1 & June 30, 358,793 358,793 344,035 344,035

AMORTISATIONAt July 1, 358,793 308,781 344,035 294,023

Amortisation for the year - 50,012 - 50,012

At June 30, 358,793 358,793 344,035 344,035

NET BOOK VALUEAt June 30, - - - -

Estimates regarding the costs of land and infrastructures to be distributed to the relevant employees but not yet disbursed are carried as payables.

(c) Milling rights - Mon Desert Alma Sugar Milling Co. Ltd

THE GROUP

2018 2017

COST Rs.'000 Rs.'000At July 1 & June 30, 3,307 3,307

AMORTISATIONAt July 1, 3,307 3,247

Amortisation for the year (note 26) - 60

At June 30, 3,307 3,307

NET DEFERRED EXPENDITUREAt June 30, - -

The deferred expenditure relates to the compensation paid to Mon Desert Alma Sugar Milling Co. Ltd in respect of the funding of part of the Blue Print costs of the said company, and is released to profit or loss over eight years.

12. BIOLOGICAL ASSETS

THE GROUP AND THE HOLDING COMPANY

Consumable biological assets 2018 2017

Non-current Rs.'000 Rs.'000

Other crops and plants 11,913 11,555

Current

Standing sugar cane crop 114,486 193,544

Other crops and plants 18,296 16,111

132,782 209,655

Total 144,695 221,210

12. BIOLOGICAL ASSETS (CONT’D)

(a) The movements in biological assets are as follows:


Standing sugar Other crops

cane crop and plants Total

Rs.'000 Rs.'000 Rs.'000

At July 1, 2017 193,544 27,666 221,210

Expenditure for the year - 3,695 3,695

(Decrease)/Increase in fair value

- Due to harvest and sales (193,544) (46,103) (239,647)

- Due to biological transformation 114,486 44,951 159,437

At June 30, 2018 114,486 30,209 144,695

Non-current - 11,913 11,913

Current 114,486 18,296 132,782

Total 114,486 30,209 144,695

At July 1, 2016 232,099 25,235 257,334

Expenditure for the year - 4,138 4,138

(Decrease)/Increase in fair value

- Due to harvest and sales (232,099) (45,024) (277,123)

- Due to biological transformation 193,544 43,317 236,861

At June 30, 2017 193,544 27,666 221,210

Non-current - 11,555 11,555

Current 193,544 16,111 209,655

Total 193,544 27,666 221,210


2018 2017

(b) Number of hectares of sugar cane plantations at year end 3,363 3,673

Tonnage of sugar cane harvested during the year 300,000 299,505


(b) Principal assumptions used are: 2018 2017

Expected price of sugar (ton) Rs. 11,125 14,750

Discount rate 4.90% 4.90%

Expected extraction rate (% sugar produced to sugar cane crushed) 10.75% 10.70%

Expected sugar cane yield (ton of sugar cane harvested per hectare) 89.20 80.82

Biological assets have been pledged as security for borrowings.







12. BIOLOGICAL ASSETS (CONT’D)

(d) Details of the Group’s biological assets measured at fair value and information about the fair value hierarchy as at June 30, 2018 are as follows:

Level 3

Rs.'000

Standing sugar cane crop 114,486

Other crops and plants 30,209

Total 144,695

The fair value measurements have been categorised as Level 3 fair values based on unobservable inputs used in the valuation techniques used.

At June 30, 2018, the most significant unobservable inputs used for the valuation are as follows:

Description of unobservable inputs Unobservable inputs

Standing sugar cane crop Sugar cane yield - tons of sugar 89.2 tons

cane harvested per hectare

Extraction rate - % sugar 10.75%

produced to sugar cane crushed

Price of sugar per ton Rs.11,125

Discount rate 4.9%

The higher the sugar cane yield, the extraction rate and the price of sugar, the higher the fair value.The higher the discount rate, the lower the fair value.

(e) The group is exposed to the following risks relating to its sugar cane plantations: (i) Adverse climatic conditions such as droughts, floods and disease outbreaks as the sugar cane plantations are mainly

located in the western region of the island. (ii) Fluctuation in the price of sugar, the movement in exchange rate and fluctuation in the volume of sugar produced and sold.

The group has short-term contract in place for supply of sugar to its major customer. (iii) The seasonal nature of the sugar cane farming business requires a high level of cash flow during the inter crop season. The

group actively manages the working capital requirements and has secured sufficient credit facilities sufficient to meet the cash flow requirements.

13. DEFERRED INCOME TAXES

Deferred income taxes are calculated on all temporary differences under the liability method at 17% (2017: 15%).

(a) There is a legally enforceable right to offset current tax assets against current tax liabilities and deferred income tax assets and liabilities when the income taxes relate to the same fiscal authority on the same entity.

The following amounts are shown in the statements of financial position:


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000

Deferred tax assets (8,385) (9,958) - -

Deferred tax liabilities 21,282 21,141 - -

12,897 11,183 - -

13. DEFERRED INCOME TAXES (CONT’D)

(b) The movement on the deferred income tax account is as follows:


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000

At July 1, 11,183 5,888 - -

Charged to profit or loss (note 35) 10,829 5,238 - -

(Credited)/Charged to other comprehensive

income (notes 35 & 38) (9,115) 57 - -

At June 30, 12,897 11,183 - -

(c) Deferred tax assets and liabilities, deferred tax charge/(credit) to profit or loss and deferred tax charge/(credit) to other comprehensive income, without taking into consideration the offsetting of balances within the same fiscal authority on the same entity, are attributable to the following items.

As at July 1, 2017

Charged/ (Credited)

to other comprehensive

income

Charged to profit

or loss

As at June 30,

2018

THE GROUP Rs.'000 Rs.'000 Rs.'000 Rs.'000

Deferred income tax liabilities

Accelerated tax depreciation 30,053 (7,824) 1,070 23,299

Asset revaluations 3,841 (3,841) - -

33,894 (11,665) 1,070 23,299

Deferred income tax assets

Tax losses (16,066) - 9,759 (6,307)

Retirement benefit obligations (6,645) 2,550 - (4,095)

(22,711) 2,550 9,759 (10,402)

Net deferred income tax liabilities 11,183 (9,115) 10,829 12,897

As at July 1, 2016

Charged/ to other

comprehensive income

Charged to profit

or loss

As at June 30,

2017

THE GROUP Rs.'000 Rs.'000 Rs.'000 Rs.'000

Deferred income tax liabilities

Accelerated tax depreciation 27,917 - 2,136 30,053

Asset revaluations 3,841 - - 3,841

31,758 - 2,136 33,894

Deferred income tax assets

Tax losses (19,167) - 3,101 (16,066)

Retirement benefit obligations (6,703) 57 1 (6,645)

(25,870) 57 3,102 (22,711)

Net deferred income tax liabilities 5,888 57 5,238 11,183







13. DEFERRED INCOME TAXES (CONT’D)

(d) Deferred income tax assets are recognised only to the extent that the related tax benefit is probable. The Group and the Company have respectively a net deferred tax assets of Rs.187,732,000 (2017: Rs.158,418,000) and Rs.128,400,000 (2017: Rs.115,075,000) to carry forward against future taxable income which have not been recognised in these accounts due to uncertainty of their recoverability.

The net deferred tax assets arises as follows: THE GROUP THE HOLDING COMPANY

2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000

Tax losses not recognised 531,243 550,843 336,788 399,194

Timing differences not provided for

- Retirement benefit obligations 325,546 241,476 320,610 236,922

- Accelerated tax depreciation 247,518 263,804 97,897 131,049

573,064 505,280 418,507 367,971

Total tax losses and timing differences 1,104,307 1,056,123 755,295 767,165

Net deferred tax assets at 17% (2017:15%) 187,732 158,418 128,400 115,075

Tax losses expire on a rolling basis over 5 years.

14. INVENTORIES


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000

Spare parts (realisable value) 3,917 15,320 3,272 2,323

Fertilizers and herbicides (cost) 7,871 10,832 7,871 10,832

General goods and consumables (cost) 20,066 13,834 749 858

Others (realisable value) 3,591 8,088 1,773 1,579

35,445 48,074 13,665 15,592

(a) Inventories have been pledged as security for borrowings.

(b) The cost of inventories recognised as expense and included in operating expenses amounted to Rs.138,943,000 (2017: Rs.140,351,000) for the group and Rs.34,967,000 (2017: Rs.46,527,000) for the company.

(c) Inventories are stated at the lower of cost and net realisable value as follows:


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000

At cost 59,031 58,307 23,176 23,999

Fall in value (11,337) (10,233) (9,511) (8,407)

Impairment lossses (note 30) (12,249) - - -

At net realisable value 35,445 48,074 13,665 15,592

(d) The additional fall in value of Rs.1,104,000 in 2018 (2017: nil) has been included in operating expenses.

15. TRADE AND OTHER RECEIVABLES


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000

Trade receivables - sugar and molasses 31,415 23,030 22,278 13,318

Trade receivables - others 157,104 180,528 84,863 97,631

Trade receivables - total 188,519 203,558 107,141 110,949

Provision for receivable impairment (14,318) (16,235) (7,082) (6,743)

Trade receivables - net 174,201 187,323 100,059 104,206

Debtors land transactions 12,256 4,038 12,256 4,038

Prepayments 55,579 24,709 14,224 3,542

Amount receivables from related companies 61,137 16,126 66,059 11,311

Other receivables (note (d)) 114,517 112,462 57,605 39,132

417,690 344,658 250,203 162,229

(a) The carrying amounts of trade and other receivables approximate their fair value. (b) As at June 30, 2018, trade receivables of Rs.14,318,000 (2017: Rs.16,459,000) and Rs.7,082,000 (2017: Rs.6,743,000) were

impaired for the Group and the Company respectively. The amount of provision for impairment for the Group and for the Company was Rs. 14,318,000 (2017: Rs.16,235,000) and Rs. 7,082,000 (2017: Rs.6,743,000) respectively. The individually impaired receivables mainly relate to customers, which are in unexpectedly difficult economic situations. It was assessed that a portion of these receivables is expected to be recovered.

The ageing of these receivables is as follows:


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000

3 to 6 months 1,544 353 - -

Over 6 months 12,774 16,106 7,082 6,743

14,318 16,459 7,082 6,743

(c) As at June 30, 2018, trade receivables of Rs.25,467,000 (2017: Rs.34,295,000) for the Group and Rs.12,964,000 (2017: Rs.11,560,000) for the Company were past due but not impaired.

These relate to a number of independent customers for whom there is no recent history of default. The ageing analysis of these trade receivables is as follows:


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000

3 to 6 months 1,951 8,703 - -

Over 6 months 23,516 25,592 12,964 11,560

25,467 34,295 12,964 11,560







15. TRADE AND OTHER RECEIVABLES (CONT’D)

(d) Other receivables is analysed as follows:


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000

Other receivables - Gross 114,517 112,782 57,605 39,132

Less: provision for receivable impairment - (320) - -

Other receivables - Net 114,517 112,462 57,605 39,132

As at June 30, 2018, no other receivables were impaired for the Group (2017: Rs.320,000). It was assessed that no portion of these receivables is expected to be recovered. The amount of provision for impairment for the Group was nil (2017: Rs.320,000).

(e) The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies:


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000

Rupee 410,712 327,403 250,203 162,229

Euro 6,902 17,222 - -

Pound Sterling 76 33 - -

US Dollar - - - -

417,690 344,658 250,203 162,229

(f) The movement on the provision for impairment of trade and other receivables are as follows:


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000

At July 1, 16,555 18,060 6,743 6,976

Provision for receivable impairment (note 26) 2,180 712 400 -

Unused amounts reversed (note 28) (1,164) (1,966) - (233)

Receivables written off during the

year as uncollectible (2,657) (251) (61) -

Disposal of subsidiary company (596) - - -

At June 30, 14,318 16,555 7,082 6,743

Analysed as follows:

- Trade receivables 14,318 16,235 7,082 6,743

- Other receivables - 320 - -

14,318 16,555 7,082 6,743

(g) The other classes within trade and other receivables do not contain impaired assets.

(h) The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above except for the deposits and bank guarantees received from tenants covering rental charges for three months. The Group has no other collateral as security.

16. AMOUNT DUE FROM GROUP COMPANIES

THE HOLDING COMPANY

2018 2017

Rs.'000 Rs.'000

Current account with subsidiaries - Gross 866,566 739,265

Less impairment losses (note 30) (178,980) -

Current account with subsidiaries - Net 687,586 739,265

(a) The carrying amounts of amount owed by group companies approximate their fair value.

17. SHARE CAPITAL

2018 & 2017

Rs.'000

105,000,000 issued and fully paid ordinary share of Rs.10 each 1,050,000

Ordinary shares carry one vote per share and carry a right to dividends.







18. REVALUATION SURPLUS AND OTHER RESERVES

(a) THE GROUP

Revaluation surplus

on fixed assets

Sugar MillersDevelopment

Fund

Fixedassets

replacementreserve

Modernisationand agricultural

diversificationreserve

Actuarialloss reserve

Reserves ofassociates

Fairvalue

reserve Total

Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000

Balance at July 1, 2017 13,261,145 8,659 33,415 18,774 (227,246) (219) 59,213 13,153,741

Decrease in fair value of available-for-saleinvestments (notes 10 & 38(a)) - - - - - - (531) (531)

Remeasurement of retirement benefit obligations (note 38(a)) - - - - (88,257) - - (88,257)

Impairment losses on property, plant and equipment (note 38(a)) (57,002) - - - - - (57,002)

Transfer - revaluation surplusrealised on disposal of land (4,379) - - - - - - (4,379)

At June 30, 2018 13,199,764 8,659 33,415 18,774 (315,503) (219) 58,682 13,003,572

Balance at July 1, 2016 13,324,746 8,659 33,415 18,774 (214,851) (227) 38,147 13,208,663

Increase in fair value of available-for-sale investments (notes 10 & 38(a)) - - - - - - 21,066 21,066

Remeasurement of retirement benefit obligations (note 38(a)) - - - - (12,395) - - (12,395)

Share of reserves in associates (note 9(a)) - - - - - 8 - 8

Transfer - revaluation surplus

realised on disposal of land (63,601) - - - - - - (63,601)

At June 30, 2017 13,261,145 8,659 33,415 18,774 (227,246) (219) 59,213 13,153,741

(b) THE HOLDING COMPANY

Revaluation surplus

on fixed assets

Profit on disposal of

milling assets

Sugar Millers Development

Fund

Fixed assets

replacement reserve

Modernisation and

agricultural diversification

reserveActuarial

loss reserve

Fair value

reserve Total


Balance at July 1, 2017 11,687,828 45,753 8,659 33,415 15,473 (207,892) 59,214 11,642,450 Decrease in fair value of available-for-sale investments (notes 10 & 38(b)) - - - - - - (531) (531)

Remeasurement of retirement benefit obligations (note 38(b)) - - - - - (71,023) - (71,023)

Transfer - revaluation surplus realised on disposal of land (1,590,270) - - - - - - (1,590,270)

At June 30, 2018 10,097,558 45,753 8,659 33,415 15,473 (278,915) 58,683 9,980,626

Balance at July 1, 2016 11,751,429 45,753 8,659 33,415 15,473 (195,140) 38,148 11,697,737

Increase in fair value of available-for-sale investments (notes 10 & 38(b)) - - - - - - 21,066 21,066

Remeasurement of retirement benefit obligations (note 38(b)) - - - - - (12,752) - (12,752)

Transfer - revaluation surplus realised on disposal of land (63,601) - - - - - - (63,601)

At June 30, 2017 11,687,828 45,753 8,659 33,415 15,473 (207,892) 59,214 11,642,450

18. REVALUATION SURPLUS AND OTHER RESERVES (CONT’D)

(c) Revaluation surplus on fixed assets The revaluation surplus relates to the revaluation of property, plant and equipment.

(d) Profit on disposal of milling assets Profit on disposal of milling assets relates to profit arising on the transfer of fixed assets to a subsidiary company “The Medine

Sugar Milling Company Limited”. As the company holds 80% of the share capital of that subsidiary company, at group level, this profit is hence not considered as realised.

(e) Sugar millers development fund Sugar Millers Development Fund is a reserve created for specific development project.

(f) Fixed assets replacement reserve The fixed assets replacement reserve relates to a reserve for replacement of fixed assets. (g) Modernisation and agricultural diversification reserve The Modernisation and Agricultural Diversification reserve is a statutory reserve earmarked to finance both modernisation and

agricultural diversification. (h) Fair value reserve The fair value reserve for investment comprises the cumulative net change in fair value of available-for-sale financial assets

that has been recognised in other comprehensive income until the investments are derecognised or impaired. (i) Actuarial gain/(loss) reserve The actuarial gain/(loss) reserve represents the cumulative remeasurement of defined benefit obligation recognised. (j) Reserves of associates Reserves in associates relate to the Group’s share of the reserves of associates arising on equity accounting.

19. BORROWINGS


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000

Bank overdrafts (notes (a) and 37(b)) 830,196 933,324 677,193 755,878

Bank loans (notes (a) and (b)) 4,599,699 3,353,579 2,436,213 1,541,357

Obligations under finance leases (note (c)) 2,364 2,886 2,364 2,886

5,432,259 4,289,789 3,115,770 2,300,121

Anlaysed as follows:

Current

Bank overdrafts 830,196 933,324 677,193 755,878

Bank loans 1,904,140 1,322,451 1,567,142 1,161,143

Obligations under finance leases 560 523 560 523

2,734,896 2,256,298 2,244,895 1,917,544

Non-current

Obligations under finance leases 1,804 2,363 1,804 2,363

Bank loans 2,695,559 2,031,128 869,071 380,214

2,697,363 2,033,491 870,875 382,577

Total borrowings 5,432,259 4,289,789 3,115,770 2,300,121







19. BORROWINGS (CONT’D)

(a) Borrowings are secured over the assets of the company. The rates of interest on the bank loans vary between 4.05% and 7.25% for the Group and between 4.05% and 7.15% for

the Company. The rates of interest on the bank overdrafts vary between 6.25% and 7.50% for the Group and is 6.5% for the Company.

(b) Bank loans can be analysed as follows:


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000

Repayable by instalments

-before one year 1,904,140 1,322,451 1,567,142 1,161,143

-after one year and before two years 163,499 281,846 21,071 36,143

-after two years and before three years 327,236 141,442 247,000 21,071

-after three years and before five years 973,532 721,216 601,000 247,000

-after five years 1,231,292 886,624 - 76,000

4,599,699 3,353,579 2,436,213 1,541,357

(c) Finance lease liabilities - minimum lease payments:THE GROUP AND

THE HOLDING COMPANY

2018 2017

Rs.'000 Rs.'000

Not later than one year 668 668

Later than one year and not later than two years 668 669

Later than two years and not later than three years 390 650

Later than three years and not later than five years 930 1,281

Later than five years - -

2,656 3,268

Future finance charges on finance leases (292) (382)

Present value of finance lease liabilities 2,364 2,886


2018 2017

Rs.'000 Rs.'000

The present value of the finance lease liabilities may be analysed as follows: 560 523

Not later than one year 582 553

Later than one year and not later than two years 355 553

Later than two years and not later than three years 867 1,257

Later than three years and not later than five years - -

Later than five years 2,364 2,886

Lease liabilities are effectively secured as the rights to the leased assets revert to the lessor in the event of default.The rates of interest on these leases are 5.5%.

The Group leases various assets under non-cancellable finance lease agreement. The lease terms are five years and the ownership of the assets lie within the Group.

19. BORROWINGS (CONT’D)

(d) The exposure of the Group’s borrowings to interest-rate changes and the contractual repricing dates are as follows:

THE GROUP

6 -12 1 - 5 Over6 months months years 5 years Total

Rs.'000 Rs.'000 Rs.’000 Rs.’000At June 30, 2018Total borrowings 5,432,259 - - - 5,432,259

At June 30, 2017

Total borrowings 4,289,789 - - - 4,289,789

THE HOLDING COMPANY

6 -12 1 - 5 Over6 months months years 5 years Total

Rs.'000 Rs.'000 Rs.’000 Rs.’000At June 30, 2018Total borrowings 3,115,770 - - - 3,115,770

At June 30, 2017

Total borrowings 2,300,121 - - - 2,300,121

(e) The carrying amounts of borrowings are not materially different from their fair value. The fair values are based on cash flows discounted using a rate based on the average borrowing rate of 6.15% (2017: 6.4%)

and are within level 2 of the fair value hierarchy as the borrowing rate reflects market interest rate. (f) The carrying amounts of the Group’s borrowings are denominated in Rupee.

20. RETIREMENT BENEFIT OBLIGATIONS


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000Amounts recognised in the Statements of financial position- Pension benefits (note (a)) 389,852 284,502 320,610 236,922

- Other post retirement benefits (note (b)) 4,936 5,132 - -

394,788 289,634 320,610 236,922

Analysed as follows :

- Current 53,908 - - -

- Non Current 340,880 289,634 320,610 236,922

394,788 289,634 320,610 236,922

Amounts charged to profit or loss (note 34)- Pension benefits (note (a)(v)) 46,636 40,596 36,718 33,467

- Other post retirement benefits (note (b)) 189 424 - -

Total included in Employee Benefit Expense 46,825 41,020 36,718 33,467

Amounts charged to other comprehensive income Remeasurement of retirement benefit obligations

recognised in other comprehensive

income (notes (a)(v) and 38) 88,769 12,428 71,023 12,752







20. RETIREMENT BENEFIT OBLIGATIONS (CONT'D)

(a) Pension benefits (i) Pension schemes The company has a defined contribution scheme with the Sugar Industry Pension Fund for certain employees. This contribution is topped up for certain employees with an insurance company so that the scheme operates as a defined

benefit one. The Group operates a defined benefit pension. The plan is a final salary plan, which provides benefits to members in the form of

a guaranteed level of pension payable for life. The level of benefits provided depends on members’length of service and their salary in the final years leading up to retirement.

The assets of the fund are held independently and administered by The MCB Investment Management Co Ltd and Confident

Asset Management Ltd. The most recent actuarial valuations of plan assets and the present value of the defined benefit obligations were carried out at

June 30, 2018 by AON Hewitt Ltd (Actuarial Valuer). The present value of the defined benefit obligations, and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

(ii) The amounts recognised in the Statements of financial position are as follows:


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000Present value of defined benefit obligations 1,042,551 902,468 871,460 761,215

Fair value of plan assets (652,699) (617,966) (550,850) (524,293)

Liability in the Statements of financial position 389,852 284,502 320,610 236,922

(iii) The movement in the fair value of plan assets over the year is as follows:


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000At July 1, 617,966 579,329 524,293 483,267

Interest income 39,306 40,309 33,237 33,604

Employer contributions 30,055 37,152 24,053 29,535

Employee contributions 3,456 3,962 2,928 3,468

Benefits paid (60,471) (48,689) (53,320) (28,619)

Return on plan assets excluding interest income 22,387 5,903 19,659 3,038

At June 30, 652,699 617,966 550,850 524,293

(iv) The movement in the present value of defined benefit obligations over the year is as follows:


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000At July 1, 902,468 847,959 761,215 703,505

Current service cost 27,195 23,208 22,254 19,191

Past service cost 2,023 - (72) -

Employee contributions 3,456 3,962 2,928 3,468

Interest cost 56,724 57,697 47,773 47,880

Benefits paid (60,471) (48,689) (53,320) (28,619)

Liability experience gain (3,080) - (7,673) -

Liability loss due to change in financial

assumptions 114,236 18,331 98,355 15,790

At June 30, 1,042,551 902,468 871,460 761,215


(v) The amounts recognised in profit or loss and other comprehensive income are as follows:THE GROUP THE HOLDING COMPANY

2018 2017 2018 2017Rs.'000 Rs.'000 Rs.'000 Rs.'000

Service cost:Current service cost 27,195 23,208 22,254 19,191 Past service cost 2,023 - (72) - Net interest expense 17,418 17,388 14,536 14,276 Components of defined benefit costs recognised in profit or loss 46,636 40,596 36,718 33,467 Return on plan assets excluding interest income (22,387) (5,903) (19,659) (3,038)Liability experience gain (3,080) - (7,673) - Liability experience loss due to change in financial assumptions 114,236 18,331 98,355 15,790 Components of defined benefit costs recognisedin other comprehensive income 88,769 12,428 71,023 12,752 Total of defined benefit cost 135,405 53,024 107,741 46,219

The past service cost, the current service cost and the net interest expenses for the year is included in operating expenses in profit or loss. The actuarial gain/(loss) on retirement benefit obligations is included in other comprehensive income.

(vi) The reconciliation of the net defined benefit liability in the statement of financial position is as follows:THE GROUP THE HOLDING COMPANY

2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000At July 1, 284,502 268,630 236,922 220,238 Amounts recognised in profit or loss 46,636 40,596 36,718 33,467 Amounts recognised in other comprehensive income 88,769 12,428 71,023 12,752 Employer contribution (30,055) (37,152) (24,053) (29,535)At June 30, 389,852 284,502 320,610 236,922

(vii) The allocation of plan assets at the end of the reporting period for each category, are as follows: THE GROUP AND

THE HOLDING COMPANY 2018 2017

% % Local equities 33 34 Local bonds 18 20 Property 12 15 Overseas bonds and equities 29 25 Other 8 6 Total Market value of assets 100 100

(viii) The principal actuarial assumptions used for accounting purposes are as follows: THE GROUP AND

THE HOLDING COMPANY 2018 2017

% % Discount rate 6.10% 6.50%Future salary increases: - Staff 5.00% 5.00% - Artisan Labourers 4.00% 4.00%Future pension increases: - Staff 1.50% 0.00% - Artisan Labourers 0.00% 0.00%Rate of medical cost increase 6.10% 6.50%Average retirement age (ARA) 60 60 Average life expectancy for: - Male at ARA 23.2 years 23.2 years - Female at ARA 26.2 years 26.2 years

The weighted average duration of the defined benefit obligation is 11 years.








(ix) The assets of the plan are invested in bonds, equities and properties. 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 end of the reporting period. Expected returns on equity and property investments reflect long-term real rates of return experienced in the respective markets.


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000

Actual return on plan assets 61,693 46,212 52,896 36,642

Sensitivity analysis on Defined benefit obligation at the end of the reporting period


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000

Increase in benefit obligation at end of period

resulting from a 1% decrease in discount rate 148,077 106,621 126,628 93,705

Decrease in benefit obligation at end of period

resulting from a 1% increase in discount rate 122,919 88,695 105,738 78,528

An increase/decrease of 1% in other principal actuarial assumptions would not have a material impact on defined benefit obligations at the end of the reporting period. (xi) The sensitivity above have been determined based on a method that extrapolates the impact on net defined benefit obligation

as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The present value of the defined benefit obligation has been calculated using the projected unit credit method.

The sensitivity analysis may not be representative of the actual change in the defined benefit obligation as it is unlikely that

the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

(xii) The defined benefit pension plan exposes the Group to actuarial risks, such as longevity risk, currency risk, interest rate risks and market (investment) risk.

(xiii) The funding requirements are based on the pension fund’s actuarial measurement framework set out in the funding polices of

the plan. (xiv) The funding policy is to pay contributions to an external legal entities at the rate recommended by the entity’s actuaries. The

expected contributions to post-employment benefit plans for the year ending June 30, 2019 are Rs.39,355,000 for the Group and Rs.27,153,000 for the Company.

(b) Other post retirement benefits Other post retirement benefits comprise mainly of retirement gratuity payable under the Employment Rights Act 2008. (i) Movements in the retirement gratuity are as follows:


2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000

At July 1, 5,132 4,708 - -

Disposal of subsidiary company ( note 42(b)) (385) - - -

Total current service cost charged in profit or loss 189 424 - -

At June 30, 4,936 5,132 - -

(ii) It has been assumed that the rate of future salary increases will be equal to the discount rate. (iii) The total charge was included in ‘operating expenses’.

21. TRADE AND OTHER PAYABLES


2018 2017 2018 2017Rs.'000 Rs.'000 Rs.'000 Rs.'000

Trade payables 154,708 82,395 43,243 38,926 Other payables and accruals 552,219 334,424 201,849 111,158

Provision for VRS cost of land and infrastructure 93,100 93,100 91,000 91,000

Deposit on sale of land 63,284 144,036 63,284 144,036

Amount payable to related companies 298,277 190,697 298,885 190,601 1,161,588 844,652 698,261 575,721

The carrying amounts of trade and other payables approximate their fair value.

22. AMOUNT DUE TO GROUP COMPANIES

THE HOLDING COMPANY

2018 2017Rs.'000 Rs.'000

Current account with subsidiaries 69,988 352,739

The carrying amounts of amount owed to group companies approximate their fair value.

23. DIVIDENDS

THE HOLDING COMPANY

2018 2017

Rs.'000 Rs.'000Amount due at July 1, 126,000 84,000

Interim

Re.0.90 per share proposed on December 22, 2016 and paid - 94,500

on February 15, 2017

Re.1.20 per share proposed on December 19, 2017 and paid

on February 15, 2018 126,000 -

Final

Re.1.20 per share proposed on June 27, 2017 and paid

on September 15, 2017 - 126,000

Re.1.45 per share proposed on June 21, 2018 and payable

on September 18, 2018 152,250 -

278,250 220,500

Dividends paid during the year

Final - Re.0.80 per share proposed on June 22, 2016 and paid on

September 15, 2016 - (84,000)

Interim - Re 0.90 per share proposed on December 22, 2016

and paid on February 15, 2017 - (94,500)

Final - Re.1.20 per share proposed on June 27, 2017 and paid

on September 15, 2017 (126,000) -

Interim - Re.1.20 per share proposed on December 19, 2017 and paid

on February 15, 2018 (126,000) -

(252,000) (178,500)

Amount due at June 30, 152,250 126,000







24. TURNOVERTHE GROUP THE HOLDING COMPANY

2018 2017 2018 2017Rs.'000 Rs.'000 Rs.'000 Rs.'000

Sugar 434,401 556,310 318,634 416,430 Foodcrops and nursery 105,134 111,795 105,134 111,795 Poultry 120,180 142,905 120,180 142,905 Casela 318,078 320,523 - - Forestry and sale of deer 36,046 30,063 36,046 30,063 Landscaping 37,161 15,217 37,161 15,217 Hotel 133,710 128,914 - - Golf 64,093 62,135 - - Rental income 180,167 137,223 59,477 49,206 Education and training 56,546 78,466 - - Others 70,040 51,268 - -

1,555,556 1,634,819 676,632 765,616

Except for the sale of sugar, there are no other transactions with a single external customer that accounts for 10% or more of the Group’s total revenue.

25. OTHER OPERATING REVENUETHE GROUP THE HOLDING COMPANY

2018 2017 2018 2017Rs.'000 Rs.'000 Rs.'000 Rs.'000

Sale of stones 24,240 19,049 24,240 19,049 Sale of electricity 50,750 48,696 - - IT support revenue 1,024 1,470 11,567 12,064 Rental of machinery and other services - - - - Commission, property and assets management fees 14,996 4,135 36,076 10,135 Commission on resale of villas 181 1,837 181 1,837 Other revenues 10,127 8,026 12,156 4,998

101,318 83,213 84,220 48,083

26. EXPENSES BY NATURETHE GROUP THE HOLDING COMPANY

2018 2017 2018 2017Rs.'000 Rs.'000 Rs.'000 Rs.'000

Depreciation (note 5) 231,124 201,491 79,851 77,238 Amortisation (note 7) 6,217 3,297 2,082 1,989 Amortisation of Milling rights (note 11(c)) - 60 - - Employee benefit expense (note 34) 673,734 592,322 392,652 344,398 Costs of inventories recognised as expense 138,943 140,351 34,967 46,527 Hiring of labour and agricultural equipment 102,043 97,517 102,043 97,517 Irrigation costs 27,978 31,894 27,978 31,894 Other expenses - sugar activities 69,395 66,416 69,395 66,416 Fertilizers 40,254 47,863 37,519 45,800 Other expenses - non sugar activities 225,201 212,412 99,806 52,119 Power station running costs 22,164 18,161 - - Utilities 81,050 64,710 19,567 13,131 Poultry expenses 94,312 107,342 94,312 107,342 Administrative expenses 148,782 139,835 46,601 38,943 Increase in provision for receivable impairment (note 15(f)) 2,180 712 400 - Assets scrapped- Intangible assets (note 7) - 3,681 - - Assets scrapped - Property, plant and equipment (note 5) 16,972 2,713 - 1,157 Marketing and advertising expenses 59,167 34,582 5,136 3,408 Operating expenses 1,939,515 1,765,359 1,012,309 927,879

27. OTHER GAINS/ (LOSSES) - NET


Rs.'000 Rs.'000 Rs.'000 Rs.'000Net foreign exchange gain/(losses) on operations (note 31) 872 (438) - -

28. OTHER INCOME


Rs.'000 Rs.'000 Rs.'000 Rs.'000Dividend income 1,769 10,512 1,769 34,800 Interest income 1,044 4,023 55,163 28,933 Profit on disposal of property, plant and equipment 1,208 4,586 989 4,104 Corporate management fees 8,592 7,325 23,092 21,825 Reversal of receivable impairment (note 15(f)) 1,164 1,966 - 233 Sundry income 2,713 5,580 610 280

16,490 33,992 81,623 90,175

29. PROFIT ON SALE OF LAND


Rs.'000 Rs.'000 Rs.'000 Rs.'000Revenue from sale of developed land 318,478 781,534 318,478 781,534 Cost of land and expenditure inrespect of land development (133,630) (423,864) (133,630) (423,864)Profit from sale of developed land 184,848 357,670 184,848 357,670

Revenue from sale of land - - 3,087,811 - Cost of land - - (1,685,373) - Profit on sale of land - 1,402,438 -

Total 184,848 357,670 1,587,286 357,670

Note (i) : Relates to sale of land to Uniciti Ltd, a wholly subsidiary of Medine Limited.

30. IMPAIRMENT LOSSES


Rs.'000 Rs.'000 Rs.'000 Rs.'000Impairment losses on property, plant and equipment :- Factory (note 5) 438,143 - - - Less: Reversal of revaluation surplus (note 38) (82,918) - - - Impairment losses on property, plant and equipment - factory recognised in profit or loss 355,225 - - - Impairment losses on property, plant and equipment- bearer plants (note 5) 69,574 - 69,574 - Impairment losses on intangible assets (note 6) 39,522 - 36,793 - Impairment losses on inventories (note 14(c)) 12,249 - - - Impairment losses on investment in subsidiary (note 8) - - 160,000 - Impairment losses on amount owed by subsidiary(note 16) - - 178,980 - Total impairment losses recognised in profit and loss 476,570 - 445,347 -







31. FINANCE COSTS - NET


Rs.'000 Rs.'000 Rs.'000 Rs.'000Gain on exchange on financing activities (note 32) 4,491 2,481 1,496 1,272

Interest expense- Bank overdrafts 34,315 53,919 28,077 35,260 - Bank loans repayable by instalments 237,348 184,425 110,835 85,000 - On current account with related companies 9,262 3,560 27,729 4,558 - Others 1,575 - - -

282,500 241,904 166,641 124,818 Less : amounts included in the cost of qualifying assets (note 11) (11,707) (1,082) - - Interest expenses - net 270,793 240,822 166,641 124,818 Finance costs - net (266,302) (238,341) (165,145) (123,546)

32. NET FOREIGN EXCHANGE GAINSTHE GROUP THE HOLDING COMPANY

2018 2017 2018 2017Rs.'000 Rs.'000 Rs.'000 Rs.'000

The exchange differences credited to - - profit or loss are included as follows:Other losses - net (note 27) 872 (438) - - Finance costs - net (note 31) 4,491 2,481 1,496 1,272

5,363 2,043 1,496 1,272

33. PROFIT BEFORE TAXATION


Profit before taxation is arrived at after: Rs.'000 Rs.'000 Rs.'000 Rs.'000crediting:Profit on disposal of property, plant and equipment 1,208 4,586 989 4,104 Increase in fair value of investment properties 24,286 52,560 39,050 52,560 Reversal of provision for receivable impairment 1,164 1,966 - 233

and charging:Depreciation on property, plant and equipment- owned assets 230,348 200,715 79,075 76,462 - leased assets 776 776 776 776 Amortisation of intangible assets (note 7) 6,217 3,297 2,082 1,989 Provision for receivable impairment 2,180 712 400 - Costs of inventories recognised as expenses 138,943 140,351 34,967 46,527 Employee benefit expense (note 34) 673,734 592,322 392,652 344,398

34. EMPLOYEE BENEFIT EXPENSE


(a) Analysis of staff costs Rs.'000 Rs.'000 Rs.'000 Rs.'000Wages and salaries 576,063 498,173 314,601 271,366 Social security costs and other benefits 50,846 53,129 41,333 39,565 Pension costs (note 20) 46,825 41,020 36,718 33,467

673,734 592,322 392,652 344,398

(b) The number of employees at the end of the year was:- Production 715 739 276 283 - Administration 385 351 184 177

1,100 1,090 460 460

35. INCOME TAX


(a) Amounts shown on the statements of Rs.'000 Rs.'000 Rs.'000 Rs.'000profit or loss and other comprehensiveincome are as follows:Current tax on the adjusted profit for the year at 15% (2017: 15%) - - - - Deferred tax charge to profit or loss (note 13(b)) 10,829 5,238 - - Charge to profit or loss 10,829 5,238 - - (Credit)/Charge to other comprehensive income (note 13 (b)) (9,115) 57 - - Total charge for the year 1,714 5,295 - -

(b) The tax on the group’s and the company’s (loss)/profit before tax differs from the theoretical amount that would arise using the basic tax rate of the group and the company as follows:


Rs.'000 Rs.'000 Rs.'000 Rs.'000(Loss)/Profit before tax (833,839) 67,545 780,751 167,299

Tax calculated at the rate of 15% (2017: 15%) (125,076) 10,132 117,113 25,095 Income not subject to tax (65,531) (57,812) (226,173) (59,486)Excess of depreciation over capital allowances 7,686 8,120 7,628 4,713 Other tax allowances (2,614) (10,475) (2,614) (10,475)Expenses not deductible for tax purposes 84,559 12,252 84,117 10,864 Tax losses carried forward - 1,474 - - Tax losses not recognised 100,976 36,348 19,929 29,289 Utilisation of tax losses - (39) - - Current tax on the adjusted profit - - - - Deferred tax charge to profit or loss (note 13(b)) 10,829 5,238 - - Charge to profit or loss 10,829 5,238 - - (Credit)/Charge to other comprehensive income (note 13 (b)) (9,115) 57 - - Total charge/(credit) for the year 1,714 5,295 - -







36. (LOSS)/EARNINGS PER SHARE


(Loss)/Profit attributable to owners of the parent (756,712) 76,785 780,751 167,299

Impairment losses attributable to owners of the parent (403,075) - (445,347) -

(Loss)/Profit excluding impairment losses attributableto owners of the parent (353,637) 76,785 1,226,098 167,299

Number of shares in issue ('000) 105,000 105,000 105,000 105,000

(Loss)/Earnings per share (Rs.) (7.21) 0.73 7.44 1.59

(Loss)/Earnings per share excludingimpairment losses (Rs.) (3.37) 0.73 11.68 1.59

37. CASH AND CASH EQUIVALENTS


Rs.'000 Rs.'000 Rs.'000 Rs.'000

(a) Cash and bank balances 39,729 32,757 13,938 11,480

(b) Cash and cash equivalents and bank overdrafts include the following for the purpose of the statement of cash flows:


Rs.'000 Rs.'000 Rs.'000 Rs.'000Cash and bank balances 39,729 32,757 13,938 11,480 Bank overdrafts (note 19) (830,196) (933,324) (677,193) (755,878)

(790,467) (900,567) (663,255) (744,398)

(c) Reconciliation of liabilities arising from financing activities Disposal of (i) THE GROUP At July 1, Cash Subsidiary At June 30,

2017 Flows Company 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000Finance lease liabilities 2,886 (522) - 2,364 Current bank loans 1,322,451 581,689 - 1,904,140 Non - current bank loans 2,031,128 664,431 - 2,695,559 Liabilities arising from financing activities 3,356,465 1,245,598 - 4,602,063 Cash and cash equivalents and bank overdrafts 900,567 (109,432) (668) 790,467 Net Debt 4,257,032 1,136,166 (668) 5,392,530

(i) THE HOLDING COMPANY At July 1, Cash At June 30, 2017 Flows 2017

Rs.'000 Rs.'000 Rs.'000

Finance lease liabilities 2,886 (522) 2,364 Current bank loans 1,161,143 405,999 1,567,142 Non - current bank loans 380,214 488,857 869,071 Liabilities arising from financing activities 1,544,243 894,334 2,438,577 Cash and cash equivalents and bank overdrafts 744,398 (81,143) 663,255 Net Debt 2,288,641 813,191 3,101,832

38. OTHER COMPREHENSIVE INCOME

Revaluation

Retirement surplus

Fair value benefit on fixed (a) THE GROUP reserves obligations assets Total

Rs.'000 Rs.'000 Rs.'000 Rs.'000(i) 2018

Decrease in fair value of available-for-sale

investments (note 10) (531) - - (531)Remeasurement of retirement benefit

obligations (note 20 (a)(v)) - (88,769) - (88,769)Impairment losses on property, plant

and equipment (note 30) - - (82,918) (82,918)Share of other comprehensive income

of associates (note 9(a)) - - - - (531) (88,769) (82,918) (172,218)

Income tax (charge)/credit

Deferred tax (note 13) - (2,550) 11,665 9,115 Other comprehensive income for theyear 2018, net of tax (531) (91,319) (71,253) (163,103)

Other comprehensive income attributable to:- Owners of the parent (531) (88,257) (57,002) (145,790)- Non-controlling interests - (3,062) (14,251) (17,313)

(531) (91,319) (71,253) (163,103)

Retirement Share of

Fair value benefit reserves in

reserves obligations associates Total

Rs.'000 Rs.'000 Rs.'000 Rs.'000(ii) 2017

Decrease in fair value of available-for-sale

investments (note 10) 21,066 - - 21,066 Remeasurement of retirement benefit

obligations (note 20 (a)(v)) - (12,428) - (12,428)Share of other comprehensive income

of associates (note 9(a)) - - 8 8 21,066 (12,428) 8 8,646

Income tax (charge)/credit

Deferred tax (note 13) - (57) - (57)Other comprehensive income for the

year 2017, net of tax 21,066 (12,485) 8 8,589

Other comprehensive income attributable to:

- Owners of the parent 21,066 (12,395) 8 8,679 - Non-controlling interests - (90) - (90)

21,066 (12,485) 8 8,589







38. OTHER COMPREHENSIVE INCOME (CONT’D)

Retirement

Fair value benefit (b) THE HOLDING COMPANY reserves obligations Total

Rs.'000 Rs.'000 Rs.'000(i) 2018

Decrease in fair value of available-for-sale investments (note 10) (531) - (531)Remeasurement of retirement benefits obligations

(note 20 (a)(v)) - (71,023) (71,023)Other comprehensive income for the year 2018, net of tax (531) (71,023) (71,554)

(ii) 2017

Increase in fair value of available-for-sale investments (note 10) 21,066 - 21,066

Remeasurement of retirement benefits obligations

(note 20 (a)(v)) - (12,752) (12,752)

Other comprehensive income for the year 2017, net of tax 21,066 (12,752) 8,314

39. COMMITMENTS


Rs.'000 Rs.'000 Rs.'000 Rs.'000(a) Capital Commitments

Investment property 560,091 33,752 107,276 33,752 Property, plant and equipment 1,167 100,869 - -

561,258 134,621 107,276 33,752

40. CONTINGENT LIABILITIES


Rs.'000 Rs.'000 Rs.'000 Rs.'000(a) Corporate guarantee given for

subsidiary and other companies 254,347 249,896 254,347 249,896

(b) It has been agreed that the Sugar Industry will allocate through the Mauritius Sugar Producers Association, ‘‘2,000 Arpents’’ of land to the Empowerment Programme for social and infrastructural projects. The quantum of land to be granted by the Company is 131 Arpents.

(c) There are pending cases before the supreme Court between the Company and various persons claiming to be owners of

portions of land totalling 189 hectares situated in the region of Albion, near Camp Creoles. The Directors strongly believe that these claims are not justified and will have no impact on the financial statements of the Company, as the lands being claimed are registered in the name of the Company in full ownership.

(d) As per Section 30 of the Mauritius Cane Authority Act, a Company shall not cease to operate its factory unless the authorisation

of the Minister of Agro-Industry is obtained and the conditions, if any, imposed by the said Minister of Agro- Industry, have been complied with by the company or any other person so designated. No provision accordingly for any liability relating to these conditions, if any, has been recognised in these financial statements in respect of The Medine Sugar Milling Company Limited.

(e) The company has contingent liabilities amounting to Rs.12.3m in respect of claims made by some ex-employees. The company is being sued by these ex-employees for pension related claims or compensation at the punitive rate for unfair

dismissal. The outcome of these legal cases are still uncertain. The directors strongly believe that these claims made by these ex-employees are not justified and consequently, no provision has been made in the financial statements.

41. DISPOSAL OF INVESTMENT IN ASSOCIATE

During the year ended June 30, 2017, the Company has disposed of its 40% interest in Career and Recruitment Solutions Ltd.

This transaction has resulted in the recognition of a gain in profit or loss, calculated as follows:2017

Rs.000 Proceeds of disposal 2,400 Less: Carrying amount of investment on the date of disposal 327 Gain recognised on disposal of investment 2,073

42. DISPOSAL OF INVESTMENTS IN SUBSIDIARIES During the year, the company disposed of all its investment in TGE Management Services Ltd at a net consideration of Rs 8,100,000. In addition, as stated in note 8, certain subsidiaries were also disposed at cost to Uniciti Ltd, a wholly owned subsidiary of Medine Limited.

(a) Consideration received is as follows: THE GROUPTHE HOLDING

COMPANY2018

Rs.'000 Rs.'000

Consideration received 8,100 8,275

(b) Analysis of assets and liabilities over which control was lost THE GROUP

2018Rs.’000

Current assets

Inventory 289

Trade and other receivables 16,053

Provision for receivable impairment (note 15 (f)) (596)

Cash and cash equivalents 56

Non-current assets

Property, plant and equipment (note 5) 500

Current liabilities

Trade and other payables (16,003)

Borrowings (724)

Non-current liabilities

Retirement benefit obligations (note 20(b)) (385)

Net assets disposed of (810)







42. DISPOSAL OF INVESTMENTS IN SUBSIDIARIES (CONT'D)

(c) Gain on disposal of investments in subsidiaries THE GROUPTHE HOLDING

COMPANY2018

Rs.'000 Rs.'000Net consideration received 8,100 8,275 Group's share of net assets disposed (810) - Cost of investment - (18,875)Gain/(Loss) on disposal 8,910 (10,600)

(d) Net cash inflow on disposal of subsidiaries THE GROUPTHE HOLDING

COMPANY2018

Rs.'000 Rs.'000Net consideration received 8,100 8,275 Less: Cash and cash equivalents disposed of (56) - Add: Bank overdraft disposed of 724 - Net cash inflow on disposal of subsidiaries 8,768 8,275

43. ACQUISITION OF KARTING ACTIVITIES OF KART ZOE LTD (a) During the year ended June 30, 2017, the Company acquired the karting activities of Kart Zoe Ltd for Rs.11,300,000 in cash.

(b) Details of identifiable net assets acquired and goodwill are as follows:

2017

Rs.’000Purchase consideration 11,300

Fair value of identifiable assets acquired and liabilities assumed 8,571

Goodwill 2,729

The goodwill arising from the aquistion is mainly attributable to the potential profitability of the acquired business in the long term.

(c) Recognised amounts of identifiable assets acquired and liabilities assumed 2017

Rs.’000

Property, plant and equipment 8,571

44. SEGMENT REPORTING

The Group’s reportable segments are strategic business units that offer different products and services. They are managed separately because each business requires different resources and marketing strategies.

There are four main reportable segments:

- Agro - planter and miller of sugar cane for the production of sugar and by-products of sugar cane namely molasses and bagasses, sale of electricity, production of vegetables and fruits, landscaping and nursery.

- Leisure - operates a golf course and a hotel resort, casela nature and leisure park, nature escapade and revenue from forestry and deer farming.

- Property - land transactions, rental of office and commercial buildings and property development.

- Education - provides integrated infrastructure for tertiary education provided by specialist institution.

44. SEGMENT REPORTING (CONT’D) The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies. The company evaluates performance on the basis of profit or loss and account for intersegment sales and transfers as if the sales or transfer were to third parties, that is, at current market prices.

Agro Leisure Property Education Others Total

Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000

June 30, 2018

Revenues 825,541 551,928 260,408 55,207 10,483 1,703,566

Segment result (159,457) (21,790) (6,087) (26,067) (100,570) (313,971)

Profit on sale of land - - 184,848 - - 184,848

Impairment losses (473,841) (2,729) - - - (476,570)

Fair value gain of investment

properties - - 24,286 - - 24,286

Gain on disposal of subsidiary - - 8,910 - - 8,910

Share of profit/(loss) in associates - 10,801 (1,068) (3,159) (1,614) 4,960

(Loss)/Profit before finance costs (633,298) (13,718) 210,889 (29,226) (102,184) (567,537)

Finance costs (38,638) (41,209) (122,194) (6,897) (57,364) (266,302)

(Loss)/Profit before taxation (671,936) (54,927) 88,695 (36,123) (159,548) (833,839)

Income tax charge (7,614) - (3,215) - - (10,829)

(Loss)/Profit for the year (679,550) (54,927) 85,480 (36,123) (159,548) (844,668)

Loss attributable to:

- Owners of the parent (756,712)

- Non-controlling interests (87,956)

Loss for the year (844,668)

Segment assets 5,257,543 3,024,444 6,724,344 51,134 - 15,057,465

Associates - 35,934 5,065 98,835 5,899 145,733

Unallocated assets - - - - 6,604,281 6,604,281

Total assets 5,257,543 3,060,378 6,729,409 149,969 6,610,180 21,807,479

Segment liabilities 810,104 678,331 1,979,082 47,523 - 3,515,039

Unallocated liabilities - - - - 3,647,127 3,647,127

Total liabilities 810,104 678,331 1,979,082 47,523 3,647,127 7,162,167

Other segment items

Capital expenditure 42,445 111,705 223,074 1,751 2,396 381,371

Depreciation 110,552 93,108 20,225 2,180 5,059 231,124

Amortisation - 4,038 158 98 1,923 6,217







44. SEGMENT REPORTING (CONT’D)

Agro Leisure Property Education Others Total

Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000

June 30, 2017

Revenues 911,324 541,871 200,884 69,655 2,171 1,725,905

Segment result (73,721) 42,451 (5,460) (24,677) (52,786) (114,193)

Profit on sale of land - - 357,670 - - 357,670

Fair value gain of investment properties - - 52,560 - - 52,560

Gain on disposal of associate - - - 2,073 - 2,073

Share of profit/(loss) in associates - 13,721 (1,068) (4,638) (239) 7,776

(Loss)/Profit before finance costs (73,721) 56,172 403,702 (27,242) (53,025) 305,886

Finance costs (38,289) (38,533) (69,770) (5,552) (86,197) (238,341)

(Loss)/Profit before taxation (112,010) 17,639 333,932 (32,794) (139,222) 67,545

Income tax credit/(charge) (68) 97 (5,038) (229) - (5,238)

(Loss)/Profit for the year (112,078) 17,736 328,894 (33,023) (139,222) 62,307

Profit attributable to:

- Owners of the parent 76,785

- Non-controlling interests (14,478)

Profit for the year 62,307

Segment assets 5,990,367 3,060,188 4,464,993 59,458 - 13,575,006

Associates - 34,731 484 101,994 7,496 144,705

Unallocated assets - - - - 7,759,644 7,759,644

Total assets 5,990,367 3,094,919 4,465,477 161,452 7,767,140 21,479,355

Segment liabilities 903,710 1,100,662 1,549,863 67,207 - 3,621,442

Unallocated liabilities - - - - 1,949,774 1,949,774

Total liabilities 903,710 1,100,662 1,549,863 67,207 1,949,774 5,571,216

Other segment items

Capital expenditure 74,422 98,635 63,457 7,956 7,366 251,836

Depreciation 108,505 74,438 9,621 2,734 6,193 201,491

Amortisation - 1,637 - 193 1,467 3,297

(a) Other operations of the Group comprised mainly of holding of investment and bottling services, which are not of a sufficient size to be reported separately.

(b) There are no sales or other transactions between the business segments. Others represent unallocated costs and corporate expenses. Segment assets consist primarily of property, plant and equipment, investment properties, intangible assets, investments in associates, deferred expenditure, biological assets, inventories, receivables and operating cash, and exclude investments in available-for-sale financial assets. Segment liabilities comprise mainly of payables, borrowings, retirement benefit obligations and exclude items such as corporate borrowings and proposed dividend. Capital expenditure comprises additions to property, plant and equipment and intangible assets.

The company operates only in Mauritius and all sales are made on the local market.

45. RELATED PARTY TRANSACTIONS

Associated Companies Directors and Key

Management PersonnelCompanies with

Common Shareholders

(a) THE GROUP 2018 2017 2018 2017 2018 2017

Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000 Rs.'000

Sales of goods or services 9,811 - - - 10,513 15,953

Purchase of goods or services 15,600 112 - - 5,128 1,202

Rental income 568 - - - 14,303 1,548

Management fee receivable 1,252 500 - - 20,163 12,753

Remuneration and benefits - - 117,776 100,505 - -

Interest income 109 - - - 501 673

Interest expense 352 434 - - 8,910 5,258

Amount owed to related parties 6,018 - - - 292,259 160,697

Amount owed by related parties 57,858 - - - 3,279 16,126

Subsidiaries Associated Companies Directors and Key

Management PersonnelCompanies with

Common Shareholders

(b) THE HOLDING COMPANY 2018 2017 2018 2017 2018 2017 2018 2017


Sales of goods or services 3,420,635 44,022 1,649 - - - 6,241 9,305

Purchase of goods or services 14,259 2,425 1,051 112 - - 659 752

Rental income 240 12,965 568 - - - 10,361 1,548

Management fee receivable 55,712 45,207 1,252 500 - - 20,163 12,753

Remuneration and benefits - - - - 92,194 75,540 - -

Interest income 54,334 27,639 109 135 - - 501 673

Interest expense 18,467 1,193 352 434 - - 8,910 5,258

Amount owed to related parties 69,988 352,739 6,018 - - - 292,866 190,601

Amount owed by related parties 687,586 739,265 57,858 - - - 8,201 11,311



45. RELATED PARTY TRANSACTIONS (CONT’D)

(c) The above transactions have been made at arms’ length, on normal commercial terms and in the ordinary course of business.

The amount owed to/by related parties are unsecured, carried interest rate of 4.25% and settlement occurs in cash.

There has been no guarantees provided or received for any related party payables or receivables.

For the year ended June 30, 2018, the Group and the company has not recorded any impairment of receivables relating to amounts owed by related parties (2017:nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

(d) KEY MANAGEMENT PERSONNEL COMPENSATION


Rs.'000 Rs.'000 Rs.'000 Rs.'000

Salaries and short-term employee benefits 107,527 89,107 83,587 65,777

Post-employment benefits 10,249 11,398 8,607 9,763

117,776 100,505 92,194 75,540

46. EVENTS AFTER THE REPORTING PERIOD

On September 21, 2018, the Government of Mauritius has agreed to provide support to sugarcane planters who are facing financial difficulties due to the decline in sugar price on the world market. The following measures are being proposed for providing immediate relief to planters for Crop 2018:(a) a cash compensation of Rs.1,250 per ton of sugar; and(b) additional remuneration from bagasse of Rs.1,250 per ton of sugar thus bringing the revenue accruing from bagasse to Rs.1,700

for ton of sugar.The impact of the above mentioned measures on the Group’s profit or loss for the year ending June 30, 2019 is estimated at Rs.62 million.

This document is printed on Tauro Offset, a paper from well-managed forests.

Edited and designed by Beyond Communications

Medine Limited4, Uniciti Office Park, Rivière-Noire Road,

Bambous 90203, Mauritius.

T (230) 401 6101 | F (230) 452 9600E [email protected]

www.medine.com

Documents

medine.com€¦ · HIGHLIGHTS Corporate Information 04 Group Structure 05 Our Vision & Core Values 06 Medine at a Glance 07 This Year’s Major Achievements 08 Financial Highlights