ANNUAL REPORT 2016 E - Harel Mallac Group...Annual Report 2016 1 Dear Shareholder, The Board of...

COMPAGNIE DES MAGASINS POPULAIRES LIMITÉE18, Edith Cavell Street,Port Louis,Mauritius

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1Annual Report 2016

Dear Shareholder,

The Board of Directors of Compagnie des Magasins Populaires Limitée is pleased to present the Annual Report for the year ended 31 December 2016, the contents of which are listed below.

This report was approved by the Board of Directors at its meeting held on 5 May 2017.

Antoine L. HarelChairman

Charles HarelDirector

2 Group Profile

3 Corporate Information

4 Board of Directors

6 Chairman’s Statement

7 CEO’s Report

8 Corporate Governance Report

13 Statutory Disclosures

14 Secretary’s Certificate

15 Statement of Compliance Statement of Directors’ Responsibilities

16 Independent Auditors’ Report

19 Statements of Financial Position

20 Statements of Profit and Loss and Other Comprehensive income

5 Senior Management Profile Board of Directors of Subsidiary Companies

21 Statements of Changes in Equity

23 Statements of Cash Flows

24 Notes to the Financial Statements

2 Compagnie des Magasins Popula i res L imitée

VISIONTo be a leading player in the Mauritian retail industry

GROUP PROFILECompagnie des Magasins Populaires Limitée (CMPL) is a subsidiary of the Harel Mallac Group and operates under the retail brand MONOPRIX in five main categories:

• Food and Beverages• Fashion and Apparel• Beauty Care and Cosmetics• Maintenance Products• Home and Leisure

operating since

19756,300 m2total retail surface area

Rs 861m (+5%)turnover in 2016

258employees

3stores

2,420,156transactions in 2016

30,000product references

Agility and Determination in achieving.

Care and Engagement in what we do.

Trust and Responsibility in our relationships.

OUR GUIDING PRINCIPLES

3Annual Report 2016

QUALITY

ENGAGEMENT

• empower our people for optimal engagement and performance;

• advance our business practices to meet the highest standards;

• deliver innovative, sustainable and quality products and services.

At Compagnie des Magasins Populaires Limitée, we work with heart and dedication to bring exceptional value to all of our stakeholders.

To put these words into action, we endeavour to:

REGISTERED OFFICE18, Edith Cavell StreetPort LouisMauritiusTelephone: (230) 207 3000

BUSINESS REGISTRATION NUMBERC07002265

SECRETARYHM Secretaries Ltd.18 Edith Cavell StreetPort LouisMauritiusTelephone: (230) 207 3000

AUDITORSBDO & CoChartered Accountants10 Frère Félix de Valois StreetPort Louis

BANKERSThe Mauritius Commercial Bank LtdThe State Bank of Mauritius Ltd

LEGAL ADVISERSMr Yves HeinBarrister-at-Law

Mr André RobertAttorney-at-Law

NOTARYMr Didier MaigrotNotary Public

REGISTRYHarel Mallac Corporate Services Ltd.18 Edith Cavell StreetPort Louis

SUPERMARKETSMonoprix195 Royal RoadCurepipe

MonoprixBagatelle Shopping MallBagatelle

MonoprixCascavelle Shopping VillageRoyal Road, Bambous

CORPORATE INFORMATION


Antoine L. Harel (59)Chairman (Non-Executive)

Antoine L. Harel is a Fellow Member of the Institute of Chartered Accountants in England and Wales and holds a BA (Hons) degree in Accounting and Computing. He joined Harel Mallac & Co. Ltd in 1987.

In 1997, he was appointed Group CEO and has been Chairman of the Board since April 2005. He was President of the Mauritius Chamber of Commerce and Industry in 1992/1993. He was appointed to the Board of Directors of CMPL in August 1991 and is currently its Chairman.

Other directorships (listed companies):The Mauritius Chemical and Fertilizer Industry Limited (Chairman), Harel Mallac & Co. Ltd (Chairman), Chemco Limited (Chairman), Bychemex Limited (Chairman) and Les Gaz Industriels Ltd (Chairman).

Barthélémy Harel (54)Non-Executive Director

Barthélémy Harel holds a Diploma in Automobile Engineering together with a National Certificate in Design and Technology from Northbrook College, Sussex, UK. He worked at Iframac Limited from 1989 to November 2015 as Technical Manager of its Agro and Heavy Vehicles Department both for Mauritius and Madagascar. He held the position of Manager – Cummins Division of Mecom Ltd up to September 2016. He joined the Board of Directors in 2012.

Other directorships (listed companies): none.

Charles P. L. Harel (49)Non-Executive Director

Charles Harel holds a National Diploma in Management and Finance from the Cape Technikon, South Africa, as well as an MBA from the University of Birmingham, UK. He joined the Harel Mallac Group in 1998 as the General Manager of the Tourism and Retail Cluster. He has, over the years, held various positions across the Group before being nominated as the CEO Designate of Harel Mallac Group in 2013 and CEO from 1 January 2014. He joined the Board of Directors of CMPL on 14 August 1998.

Other directorships (listed companies):The Mauritius Chemical and Fertilizer Industry Limited, Harel Mallac & Co. Ltd, Chemco Limited and Bychemex Limited.

Gaëtan Leclézio (82)Independent Director

Gaëtan Leclézio joined Harel Mallac & Co. Ltd in 1953 where he subsequently held senior positions. He has served on the Boards of Directors of several subsidiaries of Harel Mallac & Co Ltd. He was appointed to the Board of Directors of the Group in 1973.


Michel Pilot (60)Non-Executive Director

Michel Pilot was the Head of Sales of the Agro-Industrial Department of Harel Mallac & Co. Ltd and was promoted General Manager in 1980. He was Managing Director of Harel Mallac Engineering Ltd from September 2005 to March 2016. He joined the Board of Directors of CMPL in 2004.


Michel Rivalland G.O.S.K. (63)Non-Executive Director

Michel Rivalland G.O.S.K. is a Fellow Member of the Chartered Association of Certified Accountants. He was a Managing Director of The Mauritius Chemical and Fertilizer Industry Limited from October 2006 to June 2009. Michel Rivalland is an Executive Director of Harel Mallac & Co. Ltd. He first joined the Board of Directors of CMPL on 2 June 2010.

Other directorships (listed companies):Harel Mallac & Co. Ltd, The Mauritius Chemical and Fertilizer Industry Limited, Bychemex Limited and Chemco Limited.

Mubarak Sooltangos (68)Independent Director

Mubarak Sooltangos is holder of a Diplôme d’Études Supérieures (DES) in Banking and Finance from Conservatoire National des Arts et Métiers de Paris, Institut Technique de Banque. After 19 years spent in the banking sector, he joined Happy World Ltd as General Manager. He was subsequently appointed Managing Director of Happy World Foods in 1995. He held the position of General Manager of the Trade and Commerce Division of the British American Investment Group of Companies from 2005 to 2007. Since then, he has been acting as a Management Consultant. He joined the Board of Directors of CMPL on 25 June 2014.


Alain Vallet (62)Independent Director

Alain Vallet holds a Diploma in Business Studies from the City of London Polytechnic. He joined Harel Mallac & Co. Ltd in 1979 as Commercial Executive in the Wine and Spirits Department. He helped in the launching of the Grays Group in the 1980s and was subsequently appointed General Manager in 1988 and member of its Board of Directors in 1993. He sat on several Boards of Directors and was an active figure of the Mauritius Chamber of Commerce and Industry, the Association of Mauritian Manufacturers and the Mauritius Employers’ Federation. He joined the Board of Directors of CMPL in 2005.

Other directorships (listed companies): Terra Mauricia Ltd.

5Annual Report 2016

Jean-Raymond SEMAESSEChief Executive Officer

Jean Raymond Semaesse joined CMPL on 13 July 2015 as Chief Executive Officer. He has extensive international experience in the retail sector, having held numerous senior positions within the Casino Group and Carrefour Group. Over the course of his career, he has managed retail brands such as Carrefour, Champion, Continent and Jumbo in France as well as in Mauritius and Reunion Island.

Sophie DOGER DE SPÉVILLEMarketing Manager

Sophie Doger de Spéville has a master’s degree in entrepreneurship with ISC Paris, a leading French business school. Sophie Doger de Spéville has worked in both the sales and marketing teams in various industries, including FMCG, in France first then Mauritius where she joined the marketing team at Casela World of Adventures. Sophie Doger de Spéville joined CMPL on 24 September 2016 as Marketing Manager.

Atish TEETANHuman Resources Executive

Atish Teetan was appointed Human Resources Executive of CMPL in May 2016 after spending almost 2 years at Harel Mallac and Co. Ltd in a similar position. Before joining the Group, Atish Teetan held the post of Human Resources Specialist for a Multinational. He has a Degree in Human Resources Management and has completed several development courses during his career.

Yann NG YUM LOONGPurchasing Manager

Yann Ng Yum Loong joined CMPL as General Manager of the Bagatelle outlet in February 2014, before taking on the challenge of setting up and centralizing the purchasing department for CMPL as Purchasing Manager since January 2015. He is a former executive of an important local group dealing in fast-moving consumer goods.

Ivan RAGONHead of Operations

Ivan Ragon joined CMPL in September 2014. He has been delegated to CMPL by MONOPRIX France with the objective of assisting with the further upgrade of the three outlets in Mauritius. He joined MONOPRIX France in 1983 and has held several positions across the Group before moving to Mauritius to assist the retail brand in the roll-out and alignment of the local stores to the international standards, concepts and operational processes of the MONOPRIX brand.

Steeve YEUNG WING YENFinancial Controller

Steeve Yeung Wing Yen joined CMPL as Financial Controller in March 2014. Prior to his employment with the Company, Steeve Yeung Wing Yen held the position of Financial Controller for the Services arm of Harel Mallac Group from 2004 to 2014. He is an Associate Chartered Accountant (ACA) of the Institute of Chartered Accountants in England and Wales.

CMPL (BAGATELLE) LIMITÉE

Antoine L. HarelCharles HarelMichel Rivalland G.O.S.K.

Christian Yong Kiang Young

CMPL (CASCAVELLE) LIMITÉE

Antoine L. HarelCharles HarelMichel Rivalland G.O.S.K.

Christian Yong Kiang Young

The Directors of CMPL (Mont Choisy) Limitée are Messrs Antoine L. Harel, Charles Harel, Michel Rivalland G.O.S.K. and Christian Yong Kiang Young.

BOARD OF DIRECTORS

OF SUBSIDIARY COMPANIES


STATEMENTCHAIRMAN’S

Dear Shareholder,

The Mauritian food retail sector has sustained its dynamic progression in 2016, with an ever-rising number of consumers, new hypermarkets and supermarkets on the island, and a very competitive environment.

As a pioneer in the modern food retail industry in Mauritius and operating three strategically located outlets, MONOPRIX remains a key actor of the segment, and believes in differentiating itself to maintain and grow its market share.

The year under review was both very challenging and very rewarding for the Company, as it marked the deployment of a major strategic plan aiming at consolidating operations and boosting revenue, while in parallel conducting a Rights Issue that resulted in bringing in Rs 141M to sustain the aforementioned plan.

Despite the challenges linked to the renovation and extension works in the three outlets, the Company has posted a 5% year-on-year growth in revenue, thus indicating that it has managed to regain significant market share during the course of the year. Even with these encouraging signs that CMPL’s strategic plan has started to pay off, your Company has unfortunately sustained losses of Rs 88.3M for the year under review.

Acknowledgements

I would like to take this opportunity to thank Jean-Raymond Semaesse, Chief Executive Officer of CMPL, who has worked relentlessly since his arrival in July 2015 to roll out the strategic plan and create a strong, efficient team around the MONOPRIX brand. I extend my thanks to all the MONOPRIX team for their enthusiasm, resilience and hard work during 2016. I am also grateful to my colleagues on the Board of Directors for their support and contribution over the last year.

Finally, I would like to acknowledge with thanks the continued support of all our stakeholders and the trust of our customers.

Antoine L. HarelChairman

7Annual Report 2016

REPORTCEO’S

Dear Shareholder,

Benefiting from a low inflation rate, the food retail sector remained dynamic during 2016. Mauritians are increasingly visiting shopping centres, hypermarkets and supermarkets, and allocate a larger share of their budget to food. 2016 has also seen an increase in the number of supermarkets on the island, thus resulting in fiercer competition, with a lasting impact on profit margins due to actors seeking to preserve their market share.

For MONOPRIX, 2016 saw the roll-out of several initiatives from the strategic plan: an improvement of the price positioning, the launch of our website and customer loyalty card, a Rights Issue and more importantly, the renovation work to modernise and expand the Curepipe and Cascavelle stores. The commercial offering has been completely reviewed to provide all Mauritians with access to the products they are looking for but most importantly, to preserve the added value of MONOPRIX by offering unique and diversified quality products with an additional effort on freshness.

MONOPRIX has also revised its pricing with more intense promotional activities to position itself as the most affordable in its class. This positioning has reduced the margin rate but has led to a 10% increase in customer traffic in the first half of 2016 (outside the renovation period) and 14% turnover growth in spite of the low inflation rate.

Moreover, the year was marked by the launch in July 2016 of the customer loyalty card, “Mon Porte-Monnaie Fidélité MONOPRIX”, which distinguishes itself from other similar schemes by offering cashback benefits to customers based on the amounts spent on each visit. To date, after some eight months, more than 30% of our turnover is generated by loyalty card holders. The year 2016 also saw the creation of the website as well as the mobile application, “myMonoprix”, thus bringing modernity and ease of use to customers.

August 2016 marked the end of the Rights Issue process: CMPL was able to raise the Rs 141M which will be leveraged to renovate assets and reinforce the market positioning of MONOPRIX. At the end of November 2016, the Bagatelle store was revamped to better meet the market demand through an improved commercial offering including larger shelving for frozen foods and a new promotional area.

The historic shop of MONOPRIX Curepipe also underwent drastic works that lasted five months and resulted in a state-of-the-art retail outlet with a larger surface area (expanded by 250m²), and a much-awaited rooftop car park, increasing parking capacity to more than 100 spaces. As for the Cascavelle outlet, the 500m² sales area extension was completed in mid-February 2017, leading to an expanded commercial offering, the development of non-food shelves, a new clothing-make-up concept and a wine cellar.

The above arrangements, coupled with some other actions to be carried out in the near future, provide us with comfort in our ability to meet the expectations of growing our market significantly in 2017 and contribute to improving your Company’s profitability. Together, we will make sure that MONOPRIX becomes the preferred retail brand for all Mauritians.

Jean-Raymond SemaesseChief Executive Officer


CMPL is committed to the highest standard of business integrity, transparency and professionalism in all its activities and ensures that the Company is managed ethically and responsibly to enhance business value for all its stakeholders.

BOARD OF DIRECTORS

The Board endeavours to exercise leadership, entrepreneurship, integrity and judgment in directing the Company, so as to achieve continuing prosperity for the organisation while embracing both performance and conformance.

The Board also ensures that the activities of the Company comply with all legal and regulatory requirements as well as with its constitution from which the Board derives its authority to act. The Board, among others, oversees the development and implementation of the Company’s corporate strategy and reviews performance objectives. It ensures the succession plans for key individuals and effective communication with the Company’s stakeholders, promotes the Company’s Code of Ethics and oversees financial and capital management. As such, it reviews and approves quarterly and annual financial reports, monitors financial results and approves major capital expenditure, major acquisitions, divestitures and material commitments. The Board also oversees compliance and risk management, both at Company and Group levels.

At 31 December 2016, the Board of Directors consisted of eight members, of whom five were Non-Executive and three Independent. The Board is of the opinion that in view of its size, having the CEO, Mr Jean Raymond Semaesse and the Financial Controller attending Board meetings whenever required is in accordance with the Code’s spirit regarding executive presence on the Board. Non-Executive Directors have free access to members of the management team, with whom they can interact freely.

With a view to enhancing the Board’s effectiveness, a Board performance review is carried out yearly to assess the Directors’ appreciation of the Board’s performance, its procedures and practices. The results of the assessment are examined by the Corporate Governance Committee. This Committee makes its recommendations to the Board on any required remedial action.

All Directors have access to the Company Secretary and newly appointed Directors follow an induction programme. The Directors of the Company hold office for one year but are eligible for re-appointment. They are elected or re-elected by separate resolutions yearly. The Board had, at 31 December 2016, two standing Board Committees (as described below), which meet regularly under the terms of reference set by the Board.

The Board entrusts the day-to-day management of the Company to the Chief Executive Officer who ensures the smooth running of the organisation’s and Group’s affairs.

The composition of the Board of Directors and directorships held by the Directors in other listed companies are given on page 4 while the composition of the Board of Directors of the Company’s wholly-owned subsidiaries is available on page 5.

BOARD MEETINGS

The Board meets regularly during the year. For the period under review, the Board met eight times. The Board meetings are conducted in accordance with the Company’s constitution and the Companies Act 2001.

Board meetings are organised in such a way that Directors receive all required information important to their understanding of the business to be conducted at the Board meeting so that they may make their full contribution and properly discharge their responsibilities.

At these Board meetings, the Company’s budget, performance and forecast are reviewed and approved, reports from the Chief Executive Officer and Committees’ Chairmen are received, strategic issues discussed and statutory matters approved. The Board may invite management or external consultants to attend Board meetings when desirable.

BOARD COMMITTEES

Corporate Governance Committee

The Corporate Governance Committee consists of Messrs Antoine L. Harel (Chairman), Gaëtan Leclézio and Charles Harel. The Company Secretary acts as secretary to the Committee. The Chief Executive Officer attends the Committee’s meetings whenever required.

The Committee’s terms of reference include the key areas that are the remit of a Nomination and Remuneration Committee. Its main responsibilities include establishing a formal and transparent procedure for developing policy on executive and senior management remuneration, as well as determining specific remuneration packages for Executive Directors of the Company when applicable. It oversees the process regarding recommendation of potential candidates and ensures that proposed Directors are fit and proper to act in that capacity. It further monitors the balance and effectiveness of the Board. The Committee also makes recommendations relating to the fees of the Company’s Non-Executive and Independent Directors.

The Corporate Governance Committee has assessed the Board and made recommendations for the election of Directors at the next annual meeting.

9Annual Report 2016

Audit Committee

The Audit Committee consists of Messrs Gaëtan Leclézio (Chairman), Michel Rivalland G.O.S.K. and Mubarak Sooltangos. The Company Secretary acts as secretary to the Committee. The Chief Executive Officer and the Financial Controller attend the Committee’s meetings whenever required.

The role and responsibilities of the Audit Committee are to assist the Board in discharging its duties relating to the safeguarding of assets, the operation of adequate systems and control processes, and the preparation of accurate financial reports and statements, in compliance with all applicable legal requirements and accounting standards. The Committee also addresses issues within the ambit of a Risk Management Committee and as such provides a forum for discussing business risks as well as control issues and formulates relevant recommendations for consideration by the Board. The Committee fulfilled its responsibilities for the year under review in compliance with its terms of reference approved by the Board.

The Board is satisfied that the Audit Committee has the required skills, knowledge and financial experience to discharge its duties effectively.

INTERNAL CONTROL

Internal control is a process designed to provide reasonable assurance regarding the achievement of the Company’s objectives and is performed by the Board of Directors, the Management and other personnel. It is applicable to and is built into various business processes so as to cover all significant enterprise areas.

Systems and processes have been implemented within the Company and the Group and are regularly controlled by the Internal Audit function to ensure that they are effective and are being adhered to. Three reviews were performed by the Internal Audit during the year. Internal Audit reports for the Company and the subsidiary companies are reviewed by the Audit Committee which makes its recommendations for modifications or upgrading of systems and processes as and when necessary to enhance their effectiveness.

INTERNAL AUDIT

The Internal Audit is a function responsible for providing assurance to the Board regarding the implementation, operation and effectiveness of internal control and risk management within the Company and its subsidiary companies. It reports to the Audit Committee and to the Board of Directors. It assists in the maintenance and improvement of the process by which risks are identified and managed and in the strengthening of the internal control framework. The Internal Audit function has been outsourced to Harel Mallac & Co. Ltd.

The Internal Audit conducts its assignments based on a yearly plan which is validated by the Audit Committee. The Internal Auditor has unrestricted access to the Company’s and subsidiaries’ records, Management and employees. Systems reviewed in 2016 include the sales and debtors cycle, the procurement and creditors cycle, the stock cycle, treasury management, fixed assets management, and thus cover all significant areas of the Company’s and Group’s internal control.

The reports produced by the Internal Audit were regularly submitted to the Audit Committee for discussion and for the follow-up of the implementation of recommended actions.

RISK MANAGEMENT

The Board regularly addresses and evaluates business, financial, regulatory and compliance, physical, human resources and IT risks. Although the Board is ultimately responsible for the process of risk management, the Management is accountable to the Board for the design, implementation and detailed monitoring of the risk management process. The Board has delegated to the Audit Committee the responsibility to supervise the monitoring and mitigation of risk exposure. The Audit Committee thus regularly reviews both internal and external risk factors and makes its recommendations to the Board as to the policies needed to mitigate risk.

A risk management framework was adopted in 2010 and a risk register has been elaborated for better safeguard of the Group’s interests and assets. The framework and register are reviewed on a regular basis.

The following key risks have been identified and information on financial risk management is given in Note 3 of the Financial Statements on pages 33 to 37.

Physical risks

Among the physical risks identified are unavoidable events such as riots, cyclones and other natural calamities. Mitigating actions have been undertaken, such as the adoption of cyclone and fire procedures, subscription to a relevant insurance cover, and the identification of a business continuity plan and disaster recovery plan.

Health and safety measures as well as security procedures have been implemented to limit the occurrence of on-site accidents. The Group also avails itself of the services of an Occupational Physician Consultant and a Health and Safety Officer. Finally, the Group’s control procedures ensure mitigation of risks relating to fraud and theft.


RISK MANAGEMENT (CONT’D)

Human Resources risks

Loss of key personnel has been identified as a major risk factor. In view of mitigating this risk, retention policies have been adopted as well as a formal performance assessment and reward system implemented within the Company and the Group.

Technology risks

In order to mitigate the risk of an IT crash or major breakdown, backup and restriction procedures have been set up within the Company and the Group.

GROUP STRUCTURE

The Directors recognise that the parent entity is Harel Mallac & Co. Ltd and that the ultimate parent entity is Société Pronema. The Director common to the aforesaid entities is Mr Antoine L. Harel who is gérant of Société Pronema and a Director of Harel Mallac & Co. Ltd. Messrs Charles Harel and Michel Rivalland G.O.S.K. sit on the Board of Directors of Harel Mallac & Co. Ltd.

The Company has three wholly owned subsidiaries, namely CMPL (Bagatelle) Limitée, CMPL (Cascavelle) Limitée and CMPL (Mont Choisy) Limitée.

MEMBERS’ ATTENDANCE AT BOARD AND COMMITTEE MEETINGS HELD IN 2016

DIVIDEND POLICY

The Company tends to distribute, as far as possible, a regular dividend to its shareholders after considering the Company’s performance and profitability, investment needs, capital expenditure requirements and growth opportunities. No dividend was declared for the year under review.

SHAREHOLDERS HOLDING MORE THAN 5 PERCENT OF THE COMPANY AS AT 31 MARCH 2017

Details of shareholders directly or indirectly interested in 5 percent or more of the ordinary share capital of the Company as at 31 March 2017 are listed on page 14.

DAILY SHARE PRICE FROM 1 JANUARY TO 31 DECEMBER 2016

DIRECTORS’ INTERESTS IN SHARES

The direct and indirect interests of Directors in the ordinary shares of the Company are to be found on page 13.

DIRECTORS’ DEALINGS IN SHARES OF THE COMPANY

The Directors follow the principles of the Model Code on Securities Transactions as detailed in Appendix 6 of the Stock Exchange of Mauritius Listing Rules whenever they deal in the shares of the Company. During the year under review, none of the Company’s Directors traded in the Company’s shares.

RELATED PARTY TRANSACTIONS

Related party transactions are detailed on pages 64 and 65.

COMPANY’S CONSTITUTION

The Company’s constitution does not provide any ownership restrictions or pre-emption rights. The constitution is in agreement with the Companies Act 2001 and the Listing Rules of the Stock Exchange of Mauritius and does not contain any material clause that needs to be disclosed.

SHAREHOLDERS’ AGREEMENTS AFFECTING THE GOVERNANCE OF THE COMPANY BY THE BOARD

The Company is not aware of any such agreement pertaining to the year under review.

DirectorsBoard of Directors

Corporate Governance Committee

Audit Committee

Harel, Antoine L. 8/8 4/4 -Harel, Barthélémy 8/8 - -Harel, Charles 8/8 4/4 -Leclézio, Gaëtan 8/8 4/4 4/4Pilot, Michel 7/8 - -Rivalland, MichelG.O.S.K. 8/8 - 2/4Sooltangos, Mubarak 6/8 - 4/4Vallet, Alain 7/8 - -

Year Dividend cover (times) Dividend yield (%)

2011 1.14 2.222012 - 3.102013 0.30 1.852014 - 2.702015 - -2016 - -

Jan-16

1,700.00

1,720.00

1,740.00

1,760.00

1,780.00

1,800.00

1,820.00

1,840.00

1,860.00

1,880.00

1,900.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

Feb-16

Mar-16

Apr-16

May-16

Jun-16

Jul-16

Aug-16

Sep-16

Oct-16

Nov-16

Dec-16

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11Annual Report 2016

THIRD PARTY MANAGEMENT AGREEMENT

The Company has a management contract with Harel Mallac & Co. Ltd for management support services including but not limited to financial, accounting, legal, internal audit and human resources fields. The agreement is renewable on a yearly basis.

DIRECTORS’ FEES

Non-Executive Directors may be paid Directors’ fees commensurate with their responsibilities on the Board. Those serving on the Board Committees may receive additional fees. One of the Non-Executive Directors does not receive Directors’ fees for sitting on the Board and the Board Committees.

DIRECTORS’ REMUNERATION

Directors’ remuneration is given on page 13. It has been disclosed globally due to the commercial sensitivity of the information.

REMUNERATION POLICY

The Company’s remuneration policy recommends that the Company provides competitive rewards for its senior executives and other management staff, taking into account the Company’s performance and external market data from independent sources, in particular salary levels for similar positions in comparable companies. The remuneration package consists of base salary, fringe benefits and individual and collective performance bonuses. The Board of Directors, upon recommendations of the Corporate Governance Committee, determines the remuneration package.

EMPLOYEE SHARE OPTION PLAN

No employee share option plan is available.

CODE OF ETHICS

The Company abides by the Code of Ethics of the Harel Mallac Group. It is extensively covered in the Company’s induction programme for all new employees and Directors.

SOCIAL, HEALTH AND SAFETY

In line with the philosophy of the Harel Mallac Group, the Company is committed to comply with the Occupational Health and Safety Policy and Standards for all its customers and employees in the workplace.

In 2016, First Aid and Fire Warden training sessions were organised for selected employees within the Company. As such, First Aid and Fire Warden teams are now in place.

The Company has not recorded any major workplace accidents and all minor incidents have been duly investigated and remedial actions taken in order to prevent reoccurrence in the future.

We have also set up our Health and Safety Committee which meets regularly to discuss the way forward in achieving a safe and healthy workplace. With regard to food hygiene, our employees have undergone training in food handling techniques.

In 2017, further initiatives will be rolled out throughout the Company to ensure a safe and healthy environment for our customers and also to enhance the Company’s health and safety culture.

The Company also ensures that its recruitment and promotion policies are fair and that procedures adopted are both transparent as well as competency and merit-based.

To encourage communication at all levels within the Company, we have set up an Employer/Employee Committee to enable free-flowing communication from top to bottom and vice versa. We also promote honest and transparent business practices.

CORPORATE SOCIAL RESPONSIBILITY

The three MONOPRIX outlets have engaged with their respective surrounding communities for actions benefitting underprivileged households in the regions of Bambous and Curepipe. In 2016, we continued our regular contribution of non-perishable food items to Caritas’ Banque Alimentaire project, and clothing items to the NGO’s beneficiaries living in poverty. In June, on the occasion of the “Fête du Pain”, the Cascavelle outlet has invited SOS Children’s Village residents to discover its bakery and learn how to prepare bread. For the second year in a row in September 2016, CMPL contributed cardboard walls to the « Salon Made in Femmes » organised by the Entreprendre au Féminin Océan Indien platform.

As a member of the Harel Mallac Group, CMPL fully supports the causes embraced by the Fondation Harel Mallac (FHM) which, since its inception in 2009, has been focusing on improving the education and living conditions of underprivileged children, in particular in the localities where the Group’s companies operate.

In 2016, the FMH has partnered with four major NGOs working with children: SOS Children’s Village in Bambous, École Sainte Famille in Bois Marchand, the APEIM School in Port Louis, and Collège Technique Saint Gabriel in Sainte Croix. This financial support was complemented by regular employee volunteering activities ranging from Music and Arts Days to the Christmas “Wish in a Box” celebration. The FHM has also supported sports-related projects led by the Trust Fund for Excellence in Sports and the Northern Pirates Sports Club.


SHAREHOLDER INFORMATION

Forthcoming Annual Meeting

A proxy form is enclosed for those shareholders who are unable to attend. Shareholders are requested to bring their ID cards or passports to the meeting, as these are required for registration.

Schedule of Events

PROFILE OF COMPANY’S SHAREHOLDERS AS AT 31 MARCH 2017

Shareholders’ Practical Guide

SUMMARY BY SHAREHOLDING CATEGORY AS AT 31 MARCH 2017

Publication of condensed audited results for previous year February / March 2017Annual Meeting May / June 2017Publication of condensed results for 1st quarter May 2017Publication of condensed results for 2nd quarter August 2017Publication of condensed results for 3rd quarter November 2017Dividend declaration December 2017Dividend payment December 2017 / January 2018

Size of Shareholding Number of Shareholders Number of Shares Owned % Holding

1-500 415 50,814 0.31501-1,000 37 28,264 0.171,001-5,000 52 130,915 0.805,001-10,000 7 53,096 0.3310,001-50,000 9 220,676 1.3650,001-250,000 1 187,944 1.15250,001-500,000 2 800,507 4.91Over 500,000 1 14,821,284 90.97Total 524 16,293,500 100.00

Size of Shareholding Number of Shareholders Number of Shares Owned %Holding

Individual 464 229,488 1.41Insurance and assurance companies 1 187,944 1.15Pension and provident funds 5 67,765 0.42Investment and trust companies 4 9,951 0.06Other corporate bodies 50 15,798,352 96.96Total 524 16,293,500 100.00

Issues ActionChange of address Contact the Company’s secretariatIf shares are deposited with the CDS Contact the personal brokerChange of name Contact the Company’s secretariatAcquisition or disposal of shares Contact the personal brokerShare transfers Contact the Company’s secretariatLost share certificate Contact the Company’s secretariatDirect dividend credit Forward the relevant form to the Company’s secretariat


PRINCIPAL ACTIVITY

The principal activity of the Company consisted, at 31 December 2016, of the operation of three retail stores in Curepipe, Bagatelle and Cascavelle respectively.

DIRECTORS OF THE COMPANY

The Directors of the Company and of its subsidiaries are listed on pages 4 and 5.

DIRECTORS’ REMUNERATION AND BENEFITS

Remuneration and benefits received, or due and receivable from the Company were as follows:

Directors of subsidiaries did not receive any remuneration as Board members of the subsidiaries.

DIRECTORS’ AND OTHER OFFICERS’ INTERESTS IN SHARES

The Directors’ and other Officers’ interests in the securities of the Company as at 31 December 2016 is as follows:

None of the other Officers have direct or indirect interests in the Company’s shares.None of the Directors or other Officers have direct interests in the Company’s subsidiaries, which are wholly-owed subsidiaries.

CONTRACT OF SIGNIFICANCE

There was no contract of significance to which the Company or its subsidiaries have been a party and in which a Director was materially interested be it directly or indirectly.

The Group The Company2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000Directors of the CompanyExecutive DirectorsFull-time - 3,562 - 3,562Part-time - - - -Non-Executive Directors 758 630 758 630Total 758 4,192 758 4,192

Directors Direct Interest Indirect Interest

Harel, Antoine L. - 842,310Harel, Barthélémy 303 824,804Harel, Charles 303 824,817Leclézio, Gaetan - -Pilot, Michel - -Rivalland G.O.S.K., Michel - -Sooltangos, Mubarak - -Vallet, Alain - -


SHAREHOLDING OF MORE THAN 5 PERCENT AS AT 31 MARCH 2017

At 31 March 2017, the following shareholders were directly or indirectly interested in more 5 percent of the Company’s share capital.

Except for the above, no person has reported any material interest of 5 percent or more of the equity share capital of the Company.

CORPORATE SOCIAL RESPONSIBILITY

The subsidiaries did not make any donations or Corporate Social Responsibility contributions during the years 2016 and 2015.

The Company or its subsidiaries made no political donations during the years 2016 and 2015.

AUDITORS’ FEES

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

No non-audit services were rendered by BDO & Co in 2016 and 2015.

Shareholder % holding

Harel Mallac & Co. Ltd. 90.96

2016 2015Rs.’000 Rs.’000

Donations 3 5(2016: 3 recipients; 2015: 6 recipients)

Corporate Social Responsibility contribution - -

The Group The Company2016 2015 2016 2015

Rs’000 Rs’000 Rs’000 Rs’000Audit fees payable to:-BDO & Co 770 770 330 330

Fees paid for other services provided by:-BDO & Co - - - -

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

HM Secretaries LtdSecretary

28 March 2017


Name of PIE: Compagnie des Magasins Populaires LimitéeReporting Period: 1 January 2016 to 31 December 2016

We, the Directors of Compagnie des Magasins Populaires Limitée, confirm that to the best of our knowledge, the PIE has complied with all of its obligations and requirements under the Code of Corporate Governance except for Sections 2.2.3 and 2.8.2. Reasons for non-compliance are as follows:

2.2.3 The Company does not have Executive Directors. The Board is of the opinion that in view of its size, having the CEO and the Financial Controller attending Board and Board Committees’ meetings, whenever required, is in accordance with the Code’s spirit regarding executive presence on the Board.

2.8.2 The Company does not disclose details of remuneration paid to each Director on an individual basis due to the commercial

sensitivity of the information.

Antoine L. Harel Charles HarelChairman Director

28 March 2017

Directors acknowledge their responsibilities for:

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

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

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

The External Auditors are responsible for reporting on whether the Company’s financial statements are fairly presented.

The Directors report that:

(i) adequate accounting records and an effective system of internal controls and risk management have been maintained;(ii) appropriate accounting policies supported by reasonable and prudent judgments and estimates have been used

consistently;(iii) applicable accounting standards have been adhered to. Any departure in the interest of fair presentation has been disclosed,

explained and quantified; and(iv) the Code of Corporate Governance has been adhered to. Reasons have been provided in the Statement of Compliance

where there has been non-compliance.

Approved by the Board of Directors on 28 March 2017 and signed on its behalf by:

Antoine L. Harel Charles HarelChairman Director


Independent Auditors’ ReportTo the Shareholders of Compagnie Des Magasins Populaires Limitée

This report is made solely to the members of Compagnie Des Magasins Populaires Limitée (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. Report on the audit of the Financial Statements Opinion We have audited the consolidated financial statements of Compagnie Des Magasins Populaires Limitée and its subsidiaries (the Group), and the Company’s separate financial statements on pages 19 to 65 which comprise the statements of financial position as at 31 December 2016, 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 19 to 65 give a true and fair view of the financial position of the Group and of the Company as at 31 December 2016, 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.

Material Uncertainty Related to Going Concern

We draw attention to note 2(b) of the financial statements. In forming our opinion, we have considered the adequacy of the disclosures in the note concerning the ability of the Group and the Company to continue on a going concern basis, the validity of which depends on the continued financial support of the Company’s main shareholder. The going concern assumption is also supported by the discounted cash flow forecasts of the Company and its subsidiaries over a period of five years. Actual results may be different from forecasts since anticipated events may not occur as expected. Our opinion is not modified in this respect.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, 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. In addition to the matter described in the ‘Material Uncertainty Related to Going Concern’ section, we have determined the matters described below to be the key audit matters to be communicated in our report.

1. The Company - Investment in and loans receivable from subsidiaries

Key Audit MatterAt 31 December 2016, the Company’s investment in and loan receivable from its subsidiaries amounted to Rs.229.7m representing 42% of total assets.We focused on this area as a key audit matter due to amounts involved being material and cash is tied up in the group receivables.

An impairment of Rs.139m in respect of investment in and loan receivable from one of the company’s subsidiaries was recorded during the year.

Related DisclosuresRefer to notes 7, 9 and 31 of the accompanying financial statements.

Audit ResponseWe have assessed the fair value and the recoverability of the Company’s investment in and loans receivable from its subsidiaries based on discounted cash flow forecasts of the subsidiaries over five years. We evaluated the key assumptions underlying the forecasts through analysis of past year results and discussion with management regarding future plans.


Independent Auditors’ Report (Cont’d)To the Shareholders of Compagnie Des Magasins Populaires Limitée

2. The Group and the Company - Assessement of net realisable value of inventories

Key Audit MatterInventories are stated at the lower of cost and net realisable value. The carrying amount of inventories at 31 December 2016 amounted to Rs.121.9m for the Group and Rs.31.5m for the Company. The exercise for the assessment of the net realisable value involves the use of judgement and assumptions.

Audit Response Our audit procedures were designed to challenge the basis used for assessing the net realisable value of inventories and included:- Examining the Company’s and its subsidiaries’ historical

patterns of inventory sold at full price and inventory sold below full price and below cost, together with the related margins achieved for each product lines; and

- Assessing the appropriateness of the percentages applied by challenging the assumptions made by the Directors on the extent to which older inventory can be sold.

Other Information Directors are responsible for the other information. The other information comprises of the following reports (but does not include the financial statements and our auditor’s report thereon), which we obtained prior to the date of this auditor’s report:

- Corporate Information- Board of Directors- Board of Directors of Subsidiary Companies- Senior Management Profile- Corporate Governance Report- Statement of Compliance- Statement of Directors’ Responsibilities- Secretary’s Certificate Other information also comprise of the reports listed below,which is expected to be made available to us after the date of this auditor’s report.

- Group Profile- Chairman’s Statement- CEO’s Report- Statutory Disclosures

Our opinion on the financial statements does not cover the other information and we do not and will 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 identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. When we read the other information, which will be made available to us after the date of our auditors’ report, 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.


Independent Auditors’ Report (Cont’d)To the Shareholders of Compagnie Des Magasins Populaires Limitée

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.

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, business advisers and dealings in the ordinary course of business. We have obtained all information and explanations we have required. In our opinion, proper accounting records have been kept by the Company as far as it appears from our examination of those records. Financial Reporting Act 2004 The Directors are responsible for preparing the corporate governance report. 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.

BDO & CO Rookaya Ghanty, F.C.C.A.Chartered Accountants Licensed by FRC

Port Louis, Mauritius.

28 March 2017


Statements of Financial PositionYear ended 31 December 2016

THE GROUP THE COMPANYNotes 2016 2015 2016 2015

ASSETS Rs Rs Rs RsNon-current assetsProperty, plant and equipment 5 341,452,412 260,729,946 250,649,141 182,441,625 Intangible assets 6 2,642,568 909,554 1,885,862 204,850 Investments in subsidiary companies 7 - - 15,005,000 30,005,000 Investments in financial assets 8 1,183,845 1,148,481 1,183,845 1,148,481 Non-current receivables 9 - - 66,034,328 135,342,556 Deferred tax assets 13 8,542,581 5,678,155 - -

353,821,406 268,466,136 334,758,176 349,142,512 Current assetsInventories 10 121,859,289 111,737,998 31,534,111 36,493,557 Trade and other receivables 11 46,744,294 29,942,602 29,215,071 8,858,358 Cash and cash equivalents 25(b) 34,642,937 21,013,571 16,876,784 4,902,168

203,246,520 162,694,171 77,625,966 50,254,083

Total assets 557,067,926 431,160,307 412,384,142 399,396,595

EQUITY AND LIABILITIESCapital and reserves (attributable to owners of the parent)Stated capital 12 162,935,000 21,935,000 162,935,000 21,935,000 Share premium 68,484 68,484 68,484 68,484 Revaluation surplus 131,338,092 133,051,781 131,338,092 133,051,781 Fair value reserve (1,178,609) (1,213,973) (1,178,609) (1,213,973)Actuarial reserve (1,025,949) (2,071,060) (1,755,981) (2,531,282)Revenue deficit (212,254,360) (125,626,205) (162,253,154) (2,203,920)Owners’ interests 79,882,658 26,144,027 129,153,832 149,106,090

Non current liabilitiesDeferred tax liabilities 13 7,597,212 7,998,135 7,597,212 7,998,135 Retirement benefit obligations 14 12,295,329 11,679,222 9,936,302 9,771,397 Borrowings 16 137,328,346 98,381,135 118,144,784 65,691,624

157,220,887 118,058,492 135,678,298 83,461,156 Current liabilitiesTrade and other payables 15 290,499,615 205,557,022 131,593,207 97,992,080 Borrowings 16 29,464,766 81,400,766 15,958,805 68,837,269

319,964,381 286,957,788 147,552,012 166,829,349

Total equity and liabilities 557,067,926 431,160,307 412,384,142 399,396,595

These financial statements have been approved for issue by the Board of Directors on 28 March 2017.

The notes on pages 24 to 65 form an integral part of these financial statements. Auditor’s report on pages 16 to 18.

Antoine L HarelChairman

Charles HarelDirector


Statements of Profit and Loss and Other Comprehensive IncomeYear ended 31 December 2016


Rs Rs Rs Rs

Turnover 2(m) 861,124,923 822,741,004 240,801,610 270,290,725 Cost of sales (711,274,372) (682,111,337) (196,495,023) (219,159,607)

Gross profit 149,850,551 140,629,667 44,306,587 51,131,118 Other income 18 5,641,740 7,979,440 4,101,276 7,864,380 Administrative expenses 19(a) (211,576,350) (203,701,901) (56,253,171) (61,837,754)Impairment losses 31 - - (139,068,829) - Depreciation and amortisation (23,783,882) (22,312,209) (6,472,804) (6,175,326)

Loss before finance costs 19 (79,867,941) (77,405,003) (153,386,941) (9,017,582)Finance costs 20 (11,923,680) (10,978,862) (8,913,723) (6,872,227)

Loss before taxation (91,791,621) (88,383,865) (162,300,664) (15,889,809)Taxation credit 22(a) 3,449,777 3,352,328 537,741 408,997

Loss for the year (88,341,844) (85,031,537) (161,762,923) (15,480,812)

Other comprehensive income:Items that will not be reclassified to profit or loss:Remeasurement of defined benefit obligations 24 1,045,111 (1,558,576) 775,301 (2,018,798)Gains on revaluation of land and buildings 24 - 61,298,219 - 61,298,219 Reclassification adjustments on disposal of available-for-sale financial assets included in profit or loss 24 - (1,658,840) - (1,658,840)Items that may be reclassified subsequently to profit or loss:Change in value of available-for-sale financial assets 24 35,364 (267,973) 35,364 (267,973)Other comprehensive income for the year, net of tax 1,080,475 57,812,830 810,665 57,352,608

Total comprehensive income for the year (87,261,369) (27,218,707) (160,952,258) 41,871,796

Loss attributable to:Owners of the parent (88,341,844) (85,031,537) (161,762,923) (15,480,812)

Total comprehensive income attributable to:Owners of the parent (87,261,369) (27,218,707) (160,952,258) 41,871,796

Loss per share 23 (12.42) (39.45) (22.74) (7.18)



Statements of Changes in EquityYear ended 31 December 2016

Attributable to owners of the parentShare capital

Share premium

Revaluation surplus

Fair value reserve

Actuarial losses

Revenue deficit Total

THE GROUP Rs Rs Rs Rs Rs Rs Rs

Balance at 1 January 2016 21,935,000 68,484 133,051,781 (1,213,973) (2,071,060) (125,626,205) 26,144,027

Loss for the year - - - - - (88,341,844) (88,341,844)Other comprehensive income for the year - - - 35,364 1,045,111 - 1,080,475 Total comprehensive income for the year - - - 35,364 1,045,111 (88,341,844) (87,261,369)

Issue of share capital 141,000,000 - - - - - 141,000,000 Release of excess depreciation on revalued buildings - - (1,713,689) - - 1,713,689 - Balance at 31 December 2016 162,935,000 68,484 131,338,092 (1,178,609) (1,025,949) (212,254,360) 79,882,658

Balance at 1 January 2015 21,935,000 68,484 73,233,010 712,840 (512,484) (42,074,116) 53,362,734

Loss for the year - - - - - (85,031,537) (85,031,537)Other comprehensive income for the year - - 61,298,219 (1,926,813) (1,558,576) - 57,812,830 Total comprehensive income for the year - - 61,298,219 (1,926,813) (1,558,576) (85,031,537) (27,218,707)

Release of excess depreciation on revalued buildings - - (1,479,448) - - 1,479,448 - Balance at 31 December 2015 21,935,000 68,484 133,051,781 (1,213,973) (2,071,060) (125,626,205) 26,144,027



Statements of Changes in EquityYear ended 31 December 2016

Share capital

Share premium

Revaluation surplus

Fair value reserve

Actuarial gains/

(losses)

Retained earnings/ (revenue deficit) Total

THE COMPANY Rs Rs Rs Rs Rs Rs Rs

Balance at 1 January 2016 21,935,000 68,484 133,051,781 (1,213,973) (2,531,282) (2,203,920) 149,106,090

Loss for the year - - - - - (161,762,923) (161,762,923)Other comprehensive income for the year - - - 35,364 775,301 - 810,665 Total comprehensive income for the year - - - 35,364 775,301 (161,762,923) (160,952,258)

Issue of share capital 141,000,000 - - - - - 141,000,000 Release of excess depreciation on revalued buildings - - (1,713,689) - - 1,713,689 - Balance at 31 December 2016 162,935,000 68,484

131,338,092 (1,178,609) (1,755,981) (162,253,154) 129,153,832

Balance at 1 January 2015 21,935,000 68,484 73,233,010 712,840 (512,484) 11,797,444 107,234,294

Loss for the year - - - - - (15,480,812) (15,480,812)Other comprehensive income for the year - - 61,298,219 (1,926,813) (2,018,798) - 57,352,608 Total comprehensive income for the year - - 61,298,219 (1,926,813) (2,018,798) (15,480,812) 41,871,796

Release of excess depreciation on revalued buildings - - (1,479,448) - - 1,479,448 - Balance at 31 December 2015 21,935,000 68,484

133,051,781 (1,213,973) (2,531,282) (2,203,920) 149,106,090



Statements of Cash FlowsYear ended 31 December 2016


Rs Rs Rs RsCash flows from operating activitiesCash used in operations 25(a) (32,830,186) (43,297,676) (26,575,824) (3,077,008)Interest paid (8,543,882) (11,125,270) (5,533,925) (7,018,631)Refund of tax - 79,412 - 79,412 Net cash used in operating activities (41,374,068) (54,343,534) (32,109,749) (10,016,227)

Cash flows from investing activitiesPurchase of property, plant and equipment (70,606,340) (15,658,208) (41,012,510) (2,004,624)Purchase of intangible assets (2,415,710) (130,552) (2,131,510) (25,404)Purchase of investments in financial assets - (4,548,137) - (4,548,137)Amount granted to subsidiary companies - - (53,360,596) (68,958,208)Proceeds on disposal of investments in financial assets - 33,868,787 - 33,868,787 Proceeds on disposal of property, plant and equipment 37,146 17,391 37,146 17,391 Interest received 22,203 17,054 22,203 17,054 Dividends received - 77,295 - 77,295 Net cash (used in)/generated from investing activities (72,962,701) 13,643,630 (96,445,267) (41,555,846)

Cash flows from financing activitiesIssue of ordinary shares 141,000,000 - 141,000,000 - Dividends paid 17 - (1,096,750) - (1,096,750)Finance lease principal payments (12,899,515) (11,877,922) (336,018) (191,152)Loan repaid (2,480,800) (2,509,163) (2,480,800) (2,509,163)Proceeds from long-term borrowings 51,989,963 - 51,989,963 - Net cash generated from/(used in) financing activities 177,609,648 (15,483,835) 190,173,145 (3,797,065)

Net increase/(decrease) in cash and cash equivalents 63,272,879 (56,183,739) 61,618,129 (55,369,138)

Movement in cash and cash equivalentsAt 1 January (44,181,262) 12,006,091 (60,292,665) (4,919,913)Increase/(decrease) 63,272,879 (56,183,739) 61,618,129 (55,369,138)Effect of foreign exchange rate changes (45,064) (3,614) (45,064) (3,614)

At 31 December 25(c) 19,046,553 (44,181,262) 1,280,400 (60,292,665)


Notes to the Financial StatementsFor the year ended 31 December 2016


1. GENERAL INFORMATION

Compagnie des Magasins Populaires Limitée is a limited liability company incorporated and domiciled in the Republic of Mauritius. The address of its registered office is 18, Edith Cavell Street, Port Louis.

The directors consider Harel Mallac & Co. Ltd., incorporated in the Republic of Mauritius as the holding company and Société Pronema, an entity registered in the Republic of Mauritius, as the ultimate parent entity.

2. SIGNIFICANT ACCOUNTING POLICIES

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

(a) Basis of preparation

The financial statements include the consolidated financial statements of the parent company and its subsidiary companies (the Group) and the separate financial statements of the parent company (the Company).

The financial statements of Compagnie des Magasins Populaires Limitée comply with the Companies Act 2001 and have been prepared in accordance with International Financial Reporting Standards (IFRS). Where necessary, comparative figures have been amended to conform with change in presentation in the current year. The financial statements are prepared under the historical cost convention, except that:

(i) Land and buildings are carried at revalued amount.(ii) Available-for-sale financial assets and relevant financial assets and financial liabilities are stated at fair value.

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

IFRS 14 Regulatory Deferral Accounts provides relief for first-adopters of IFRS in relation to accounting for certain balances that arise from rate-regulated activities (‘regulatory deferral accounts’). IFRS 14 permits these entities to apply their previous accounting policies for the recognition, measurement, impairment and derecognition of regulatory deferral accounts. The standard is not expected to have any impact on the Group’s financial statements.

Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11). The amendments clarify the accounting for the acquisition of an interest in a joint operation where the activities of the operation constitute a business. They require an investor to apply the principles of business combination accounting when it acquires an interest in a joint operation that constitutes a business. Existing interests in the joint operation are not remeasured on acquisition of an additional interest, provided joint control is maintained. The amendments also apply when a joint operation is formed and an existing business is contributed. The amendment has no impact on the Group’s financial statements.

Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38). The amendments clarify that a revenue-based method of depreciation or amortisation is generally not appropriate. Amendments clarify that a revenue-based method should not be used to calculate the depreciation of items of property, plant and equipment. IAS 38 now includes a rebuttable presumption that the amortisation of intangible assets based on revenue is inappropriate. This presumption can be overcome under specific conditions. The amendment has no impact on the Group’s financial statements.

Equity method in separate financial statements (Amendments to IAS 27). The amendments allow entities to use the equity method in their separate financial statements to measure investments in subsidiaries, joint ventures and associates. IAS 27 currently allows entities to measure their investments in subsidiaries, joint ventures and associates either at cost or at fair value in their separate FS. The amendments introduce the equity method as a third option. The election can be made independently for each category of investment (subsidiaries, joint ventures and associates). Entities wishing to change to the equity method must do so retrospectively. The amendment has no impact on the Group’s financial statements.

Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41). IAS 41 now distinguishes between bearer plants and other biological asset. Bearer plants must be accounted for as property plant and equipment and measured either at cost or revalued amounts, less accumulated depreciation and impairment losses. The amendment has no impact on the Group’s financial statements.



2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(a) Basis of preparation (cont’d)

Standards, Amendments to published Standards and Interpretations effective in the reporting period (cont’d)

Annual Improvements to IFRSs 2012-2014 cycle

• IFRS 5 is amended to clarify that when an asset (or disposal group) is reclassified from ‘held for sale’ to ‘held for distribution’ or vice versa, this does not constitute a change to a plan of sale or distribution and does not have to be accounted for as such. The amendment has no impact on the Group’s financial statements.

• IFRS 7 amendment provides specific guidance for transferred financial assets to help management determine whether the terms of a servicing arrangement constitute ‘continuing involvement’ and, therefore, whether the asset qualifies for derecognition. The amendment has no impact on the Group’s financial statements.

• IFRS 7 is amended to clarify that the additional disclosures relating to the offsetting of financial assets and financial liabilities only need to be included in interim reports if required by IAS 34. The amendment had no impact on the Group’s financial statements.

• IAS 19 amendment clarifies that when determining the discount rate for post-employment benefit obligations, it is the currency that the liabilities are denominated in that is important and not the country where they arise. The amendment has no impact on the Group’s financial statements.

• IAS 34 amendment clarifies what is meant by the reference in the standard to ‘information disclosed elsewhere in the interim financial report’ and adds a requirement to cross-reference from the interim financial statements to the location of that information. The amendment had no impact on the Group’s financial statements.

Disclosure Initiative (Amendments to IAS 1). The amendments to IAS 1 provide clarifications on a number of issues. An entity should not aggregate or disaggregate information in a manner that obscures useful information. Where items are material, sufficient information must be provided to explain the impact on the financial position or performance. Line items specified in IAS 1 may need to be disaggregated where this is relevant to an understanding of the entity’s financial position or performance. There is also new guidance on the use of subtotals. Confirmation that the notes do not need to be presented in a particular order. The share of OCI arising from equity-accounted investments is grouped based on whether the items will or will not subsequently be reclassified to profit or loss. Each group should then be presented as a single line item in the statement of other comprehensive income.

Investment entities: Applying the consolidation exception (Amendments to IFRS 10, IFRS 12 and IAS 28). The amendments clarify that the exception from preparing consolidated financial statements is also available to intermediate parent entities which are subsidiaries of investment entities. An investment entity should consolidate a subsidiary which is not an investment entity and whose main purpose and activity is to provide services in support of the investment entity’s investment activities. Entities which are not investment entities but have an interest in an associate or joint venture which is an investment entity have a policy choice when applying the equity method of accounting. The fair value measurement applied by the investment entity associate or joint venture can either be retained, or a consolidation may be performed at the level of the associate or joint venture, which would then unwind the fair value measurement. The amendment has no impact on the Group’s financial statements.

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

Certain standards, amendments to published standards and interpretations have been issued that are mandatory for accounting periods beginning on or after January 1, 2017 or later periods, but which the Group has not early adopted.

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

IFRS 9 Financial Instruments IFRS 15 Revenue from Contract with Customers Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28) IFRS 16 Leases Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12)Amendments to IAS 7 Statement of Cash Flows Clarifications to IFRS 15 Revenue from Contracts with Customers Classification 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 Cycle IFRIC 22 Foreign Currency Transactions and Advance Consideration Transfers of Investment Property (Amendments to IAS 40)




(a) Basis of preparation (cont’d)

Standards, Amendments to published Standards and Interpretations issued but not yet effective (cont’d)

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

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

(b) Going concern

The Group and the Company incurred losses of Rs.88.3m and Rs.161.8m respectively for the year ended 31 December 2016. At that date, net current liabilities amounted to Rs.116.7m and Rs.69.9m and revenue deficit amounted to Rs.212.3m and Rs.162.3m for the Group and the Company respectively.

The Directors consider it appropriate to prepare the financial statements on a going concern basis on the basis of confirmation obtained from the holding company that it will provide financial support to the Company and to its subsidiaries.

The financial statements do not include any adjustment that would result from a withdrawal of this financial support.

(c) Property, plant and equipment

Land and buildings are stated at their fair values based on periodic, but at least triennial valuations by external independent valuers, less subsequent depreciation for buildings. The revaluation surplus is adjusted to the cost or revalued amount of the asset. All other property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

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 net of deferred tax to other comprehensive income and shown in ‘Revaluation Surplus’ in shareholders’ equity. Decreases that offset previous increases of the same asset are charged against revaluation surplus directly in other comprehensive income; all other decreases are charged to profit or loss.

Each year, the difference between depreciation based on the revalued carrying amount of the assets charged to profit or loss and depreciation based on the assets’ original cost is transferred from revaluation surplus to retained earnings.

Depreciation is calculated on the straight line method to write off cost or the revalued amount of the assets to their residual values over their estimated useful lives. The principal annual depreciation rates are as follows:

Buildings 44 yearsImprovement to buildings 6.6 yearsMotor vehicles 5 yearsPlant and equipment 5-20 yearsFurniture and fittings 5-10 years

Land is not depreciated.

The assets’ residual values and useful lives are reviewed, and adjusted 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 comparing proceeds with carrying amount and are included in profit or loss. On disposal of revalued assets, the amounts included in “Revaluation surplus” are transferred to “Retained Earnings”.




(d) Intangible assets

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 using the straight line method over 3 - 5 years.

(e) Investments in subsidiaries

Separate financial statements of the investor In the separate financial statements of the investor, investments in subsidiary companies 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 value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree (if any) 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, 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 asset. In addition, 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.

(f) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined by the weighted average method. Net realisable value is the estimate of the selling price in the ordinary course of business, less selling expenses.




(g) Foreign currencies

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

(ii) 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 cash and cash equivalents are presented in profit or loss within finance costs. Foreign exchange gains and losses that relate to trade payables are accounted in cost of sales. All other foreign exchange gains and losses are presented in profit or loss within ‘other (losses)/gains - net’.

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.

Translation differences on non-monetary items, such as equities held at fair value through profit or loss, are reported as part of the fair value gain or loss. Translation differences on non-monetary items, such as equities classified as available-for-sale financial assets, are included in the fair value reserve in equity.

(h) Current and deferred income tax

Tax expense 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, for all temporary differences arising between the tax bases of assets and liabilities and their carrying values 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 transactions 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 of 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.

(i) Retirement benefit obligations

(i) Defined benefit planA 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.




(i) Retirement benefit obligations (cont’d)

(i) Defined benefit plan (cont’d)

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.

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

(iii) Profit sharing and bonus plansThe Company recognises a liability and an expense for bonuses and profit sharing based on a formula that takes into consideration the profitability of the Company after certain adjustments. The Company recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

(iv) Defined contribution plansA defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no 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 service that entitle them to the contributions.

(v) Termination benefitsTermination benefits are payable when employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.

(j) Financial instruments

Financial assets Categories of financial assets The Company classifies its financial assets in the following categories: loans and receivables and 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.

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




(j) Financial instruments (cont’d)

Financial assets (cont’d)

(ii) 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 after the end of the reporting period.

Initial 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.

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.

Subsequent measurementAvailable-for-sale financial assets are subsequently carried at their fair values. Loans and receivables are carried at amortised cost using the effective interest method.

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 disposal of financial assets.

Impairment of financial assets 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 profit or loss, is removed from equity and recognised in the 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.

Financial assets carried at amortised cost For loans and receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in profit or loss.

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

(iii) Trade receivablesTrade 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 flow. The amount of provision is recognised in profit or loss.




(j) Financial instruments (cont’d)

Financial assets (cont’d)

(iv) BorrowingsBorrowings 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.

Finance charges are accounted for on an accrual basis and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

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

(v) Trade and other payablesTrade and other payables are stated at fair value and subsequently measured at amortised cost using the effective interest method.

(vi) Share capitalOrdinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as deduction, net of tax, from proceeds.

(vii) Cash and cash equivalentsCash and cash equivalents comprise of cash in hand, cash at bank, other short term investments with original maturities of 3 months or less, loan at call and bank overdraft. Cash equivalents are short highly liquid investments that are readily convertible to known amounts of cash and which are subject to any insignificant risk of change in value. Loan at call and bank overdrafts are shown within borrowings in current liabilities in the statement of financial position.

(k) 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).

(l) Leases

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

Accounting for leasesFinance leases are capitalised at the lease’s inception at the lower of the fair value of the leased asset and the present value of the minimum lease payments. Each lease payment is allocated between the liability between the liability and finance charge so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss.

(m) Revenue recognition

Revenue is measured at the fair value of the consideration received and represents amounts receivable for goods supplied, stated net of discounts, returns, value added tax and rebates.




(m) Revenue recognition (cont’d)

Sales of goods are recognised when goods are delivered and title has passed, at which time all of the following conditions are satisfied:

• the Group has transferred to the buyer all 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 the revenue can be measured reliably;• it is probable that 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.

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

• Interest income - on a time-proportion basis using the effective interest method. When a receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate.

• Rental income - as it accrues and in accordance with the substance of the relevant agreement unless collectability is in doubt.• Commission - on an accruals basis.• Dividend income - when the shareholder’s right to receive payment is established.

(n) Provisions

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

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

(o) Segment reporting

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

(p) Alternative Minimum Tax (AMT)

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

(q) Dividend distribution

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



3. FINANCIAL RISK MANAGEMENT

3.1 Financial risk factors

The Group’s activities expose it to a variety of financial risks which have to be effectively managed so as to protect its long term sustainability and to safeguard the interests of its stakeholders.

The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

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

(a) Market risk (including currency risk, price risk and cash flow and fair value interest rate risk);(b) Credit risk; and(c) Liquidity risk

(a) Market risk

(i) Currency riskThe Group imports goods from foreign countries and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Euro and the US dollar. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities.

The foreign exchange risk exposure is managed based on a defined policy whereby fluctuations in exchange rates are monitored by management and best rates are negotiated with banks.

Currency profileThe currency profile of the Group’s financial assets and liabilities at the end of the reporting date is summarised below:

THE GROUPMUR USD EURO TOTAL

At 31 December 2016 Rs Rs Rs RsAssetsInvestment in financial assets 1,183,845 - - 1,183,845 Trade and other receivables 46,744,294 - - 46,744,294 Cash and cash equivalents 32,551,816 47,721 2,043,400 34,642,937

Liabilities Borrowings 166,793,112 - - 166,793,112 Trade and other payables 272,069,617 - 18,429,998 290,499,615

MUR USD EURO TOTALAt 31 December 2015 Rs Rs Rs RsAssetsInvestment in financial assets 1,148,481 - - 1,148,481 Trade and other receivables 29,942,602 - - 29,942,602 Cash and cash equivalents 20,902,558 47,171 63,842 21,013,571




3. FINANCIAL RISK MANAGEMENT (CONT’D)

3.1 Financial risk factors (cont’d)

(a) Market risk (cont’d)

(i) Currency risk (cont’d)

Currency profile (cont’d)

THE COMPANYMUR USD EURO TOTAL

At 31 December 2016 Rs Rs Rs RsAssetsInvestment in financial assets 1,183,845 - - 1,183,845 Trade and other receivables 29,215,071 - - 29,215,071 Cash and cash equivalents 14,785,663 47,721 2,043,400 16,876,784


At 31 December 2015AssetsInvestment in financial assets 1,148,481 - - 1,148,481 Trade and other receivables 8,858,358 - - 8,858,358 Cash and cash equivalents 4,791,155 47,171 63,842 4,902,168


Sensitivity analysisAt 31 December 2016, if the Rupee had weakened/strengthened by 5% against the following currencies, with all other variables held constant, result for the year would have been higher/lower, mainly as a result of foreign exchange gains/losses on translation of the following currencies:

THE GROUP AND THE COMPANY USD EURORs Rs

At 31 December 2016 +/- +/-

Cash in hand and at bank - impact on loss for the year 2,386 102,170

Trade and other payables - impact on loss for the year - 921,500

At 31 December 2015 +/- +/-

Cash in hand and at bank - impact on loss for the year 2,359 3,192

Trade and other payables - impact on loss for the year - 930,098





(a) Market risk (cont’d)

(ii) Price riskThe Group is exposed to price risk because of investments held by the Group and classified in the statements of financial position as available-for-sale and which are valued at their market price.

To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification is done in accordance with the limits set by the Group.

Sensitivity analysisThe table below summarises the impact of increases/decreases in the fair value of investments in financial assets on the Group’s and the Company’s equity.

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

Impact on equityTHE GROUP AND THE COMPANY

2016 2015Rs Rs

Available- for-sale financial assets 59,192 57,424

(iii) Cash flow interest rate riskThe Group’s interest rate risk arises principally from borrowings and deposits held at bank. Borrowings issued and deposits held at variable rates expose the Group to cash flow interest rate risk.

The Group has an interest rate policy which aims at minimising the annual interest costs using a mix of fixed and variable rate debts.

The Group’s interest rate risk arises mainly from its bank loan and loan at call.

Interest rate riskAt the end of the reporting date, if variable interest rates on Rupee denominated floating rate borrowings had been 50 basis points higher/lower with all variables held constant, post tax results for the year would have been higher/lower as follows:

THE GROUP AND THE COMPANY

2016 2015Rs Rs+/- +/-

Impact on results 563,535 325,914

(b) Credit risk

Credit risk is the risk of financial loss to the Group if a customer fails to meet its contractual obligations and arises principally from the Group’s trade receivables.

The Group has no significant concentration of credit risk as it operates in the retail sector where transactions are mostly carried out on cash basis. The Group has policies in place to ensure that credit sales are made to customers with an appropriate credit history.

In the Company’s separate financial statements, other receivable from one of the subsidiaries amounting to Rs.104,063,829 was impaired as at 31 December 2016.





(c) Liquidity risk

Liquidity 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 includes maintaining sufficient cash and marketable securities, the availability of funding from 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.

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

Within 1 year

After 1 year but before

2 years

After 2 years but

before 5 years

After 5 years TOTAL

Rs Rs Rs Rs RsTHE GROUPAt 31 December 2016Borrowings 38,788,188 23,251,907 42,254,887 135,415,126 239,710,108 Trade and other payables 290,499,615 - - - 290,499,615

At 31 December 2015Borrowings 88,799,994 23,605,162 44,565,001 62,979,179 219,949,336 Trade and other payables 205,557,022 - - - 205,557,022

THE COMPANYAt 31 December 2016Borrowings 23,353,560 7,817,279 37,523,191 135,415,126 204,109,156 Trade and other payables 131,593,207 - - - 131,593,207

At 31 December 2015Borrowings 73,365,366 8,170,534 24,398,667 62,979,179 168,913,746 Trade and other payables 97,992,080 - - - 97,992,080

3.2 Capital risk management

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

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

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




3.2 Capital risk management (cont’d)

The debt-to-adjusted capital ratios at 31 December 2016 and at 31 December 2015 were as follows:

THE GROUP THE COMPANY2016 2015 2016 2015Rs Rs Rs Rs

Total debt 239,710,108 219,949,336 204,109,156 168,913,746 Less: cash in hand and at bank (note 25(b)) (34,642,937) (21,013,571) (16,876,784) (4,902,168)Net debt 205,067,171 198,935,765 187,232,372 164,011,578

Adjusted capital 79,882,658 26,144,027 129,153,832 149,106,090

Debt-to-adjusted capital ratio 2.57:1 7.61:1 1.45:1 1.10:1

There were no changes in the Group’s approach to capital risk management during the year.

3.3 Fair value estimation

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

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

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

4. CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

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 major 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 stated hereunder:-

(i) Revaluation of property, plant and equipment

The Group measures property, plant and equipment at revalued amounts with changes in fair value being recognised in other comprehensive income. The Group appointed independent valuation specialists to determine the value of the property, plant and equipment. As part of the revaluation process, the use of judgement to determine the fair value is necessary. Land is valued on the basis of recently transacted properties in the region. Building is revalued using the depreciated replacement cost method.

(ii) Retirement benefit obligations

The cost of defined benefit pension plans is determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates and future pension increases. Due to the long term nature of these plans, such estimates are subject to significant uncertainty. Any changes in the assumptions will impact the carrying amount of pension obligations. The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash flows 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.



4. CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS (CONT’D)

(iii) Limitation 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.

(iv) Depreciation policies and asset lives and residual values

Property, plant and equipment are depreciated over its useful life taking into account residual values, where appropriate. The residual value of an asset is the estimated net amount that the Group would currently obtain from disposal of the asset, if the asset were already of the age and in condition expected at the end of its useful life. 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, 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.

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 assets at the end of their expected useful lives.

(v) Impairment of available-for-sale financial assets and investments in subsidiaries

The Group follows the guidance of International Accounting Standards (IAS) 39 in 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 and the financial health of and near-term business outlook for the investee, including factors such as industry and sector performance, and operational and financing cash flow.



5. PROPERTY, PLANT AND EQUIPMENT

(a) THE GROUP - 2016Freehold

Land

Buildings and

Improvement to Buildings

Motor Vehicles

Plant and Equipment

Furniture & Fittings Total

Rs Rs Rs Rs Rs RsCOST/DEEMED COST/ VALUATION

At 1 January 2016 105,000,000 122,091,759 6,409,049 135,444,755 39,235,415 408,180,978 Additions - 46,654,788 - 48,367,742 8,827,972 103,850,502 Disposal - - - - (134,250) (134,250)At 31 December 2016 105,000,000 168,746,547 6,409,049 183,812,497 47,929,137 511,897,230

DEPRECIATIONAt 1 January 2016 - 42,926,506 2,074,724 72,470,744 29,979,058 147,451,032 Charge for the year - 4,380,409 1,151,747 15,410,050 2,158,980 23,101,186 Disposal adjustments - - - - (107,400) (107,400)At 31 December 2016 - 47,306,915 3,226,471 87,880,794 32,030,638 170,444,818

NET BOOK VALUEAt 31 December 2016 105,000,000 121,439,632 3,182,578 95,931,703 15,898,499 341,452,412

(b) THE GROUP - 2015Freehold

Land

Buildings and


Motor Vehicles

Plant and Equipment

Furniture & Fittings

Assets in progress Total

Rs Rs Rs Rs Rs Rs RsCOST/DEEMED COST/ VALUATION

At 1 January 2015 65,100,000 81,216,415 5,294,612 132,115,182 37,918,025 4,926,013 326,570,247 Additions - 261,307 1,615,115 3,329,573 1,317,390 10,513,647 17,037,032 Revaluation surplus 39,900,000 25,174,377 - - - - 65,074,377 Transfer from assets in progress - 15,439,660 - - - (15,439,660) - Disposal - - (500,678) - - - (500,678)At 31 December 2015 105,000,000 122,091,759 6,409,049 135,444,755 39,235,415 - 408,180,978

DEPRECIATIONAt 1 January 2015 - 39,294,190 1,632,490 57,299,486 27,851,025 - 126,077,191 Charge for the year - 3,632,316 942,912 15,171,258 2,128,033 - 21,874,519 Disposal adjustments - - (500,678) - - - (500,678)At 31 December 2015 - 42,926,506 2,074,724 72,470,744 29,979,058 - 147,451,032

NET BOOK VALUEAt 31 December 2015 105,000,000 79,165,253 4,334,325 62,974,011 9,256,357 - 260,729,946



5. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

(c) THE COMPANY - 2016Freehold

Land

Buildings and


Motor Vehicles

Plant and Equipment



At 1 January 2016 105,000,000 105,609,733 3,126,416 55,354,338 30,100,399 299,190,886 Additions - 45,502,194 - 25,782,682 2,971,796 74,256,672 Disposals - - - - (134,250) (134,250)At 31 December 2016 105,000,000 151,111,927 3,126,416 81,137,020 32,937,945 373,313,308

DEPRECIATIONAt 1 January 2016 - 41,795,522 1,016,913 46,465,847 27,470,979 116,749,261 Charge for the year - 2,713,531 502,151 1,978,955 827,669 6,022,306 Disposal adjustment - - - - (107,400) (107,400)At 31 December 2016 - 44,509,053 1,519,064 48,444,802 28,191,248 122,664,167


(d) THE COMPANY - 2015Freehold

Land

Buildings and


Motor Vehicles

Plant and Equipment



At 1 January 2015 65,100,000 80,371,846 2,011,979 54,167,342 29,582,561 231,233,728 Additions - 63,510 1,615,115 1,186,996 517,838 3,383,459 Disposals - - (500,678) - - (500,678)Revaluation surplus 39,900,000 25,174,377 - - - 65,074,377 At 31 December 2015 105,000,000 105,609,733 3,126,416 55,354,338 30,100,399 299,190,886

DEPRECIATIONAt 1 January 2015 - 39,282,972 1,224,275 44,280,798 26,514,571 111,302,616 Charge for the year - 2,512,550 293,316 2,185,049 956,408 5,947,323 Disposal adjustment - - (500,678) - - (500,678)At 31 December 2015 - 41,795,522 1,016,913 46,465,847 27,470,979 116,749,261


(e) Land and Buildings were last revalued on 12 August 2015 by an independent valuer, Vyas M. Ramphul, M.R.I.C.S. Valuations were made on the basis of open market value and depreciated replacement cost and 100% of the value was booked in the financial statements. The book values of land & buildings were adjusted to the revalued amounts and the resulting surplus net of deferred tax was credited to revaluation surplus. The fair value of the freehold land was derived using the sales comparison approach and the fair value of the building was derived using the depreciated replacement cost.




(f) Details of the Group’s freehold land and buildings measured at fair value and information about the fair value hierarchy as at 31 December 2016 are as follows:

THE GROUP AND THE COMPANY LEVEL 22016 2015Rs Rs

Freehold land 105,000,000 105,000,000

LEVEL 32016 2015Rs Rs

Buildings 125,133,585 95,076,162

There were no transfers between Level 1 and Level 2 during the year.

(g) The fair value of the land was derived using the sales comparison approach. Sales prices of comparable land in proximity are adjusted for differences in key attributes such as property size. The most significant input to this valuation approach is price per ‘toise’.

Significant movements in estimated price per ‘toise’ in isolation would have resulted in a significantly higher/(lower) fair value.

The fair value of the buildings was determined using the depreciated replacement cost approach that reflects the cost of a market participant to construct assets of comparable utility and age, adjusted for obsolescence.

The construction cost was estimated at Rs.2,000 per ft2 and the depreciated replacement cost was estimated at Rs.1,250 per ft2, after allowing for depreciation and obsolescence.

(h) Bank borrowings are secured on the assets of the Group, including property, plant and equipment.

(i) If buildings were stated on the historical cost basis, the amounts would have been as follows:

(j) Additions include Rs.Nil (2015: Rs1,378,835) of assets under finance leases for the Group and Company.

2015Significant unobservable valuations input Range

Price per toise Rs 61,608 -146,928


Cost 37,379,733 7,322,310 37,379,733 7,322,310 Accumulated depreciation (3,481,984) (3,339,862) (3,481,984) (3,339,862)Net book value 33,897,749 3,982,448 33,897,749 3,982,448




(k) Leased assets included above comprise: THE GROUP THE COMPANY

Motor Vehicles

Plant and Equipment

Furniture & Fittings

Motor Vehicles

Rs Rs Rs Rs2016Cost - capitalised finance leases 3,924,477 57,675,900 5,997,891 2,274,477 Accumulated depreciation (1,783,405) (28,375,267) (2,526,575) (903,405)Net book amount 2,141,072 29,300,633 3,471,316 1,371,072

THE GROUP THE COMPANY Motor

VehiclesPlant and

EquipmentFurniture &

FittingsMotor

VehiclesRs Rs Rs Rs

2015Cost - capitalised finance leases 3,924,477 57,675,900 5,997,891 2,274,477 Accumulated depreciation (951,254) (18,962,044) (1,752,958) (401,254)Net book amount 2,973,223 38,713,856 4,244,933 1,873,223

6. INTANGIBLE ASSETSTHE GROUP THE COMPANY

2016 2015 2016 2015Computer software Rs Rs Rs RsCOSTAt 1 January 3,901,295 3,770,743 2,844,097 2,818,693 Additions 2,415,710 130,552 2,131,510 25,404 At 31 December 6,317,005 3,901,295 4,975,607 2,844,097

AMORTISATIONAt 1 January 2,991,741 2,554,051 2,639,247 2,411,244 Amortisation charge 682,696 437,690 450,498 228,003 At 31 December 3,674,437 2,991,741 3,089,745 2,639,247

NET BOOK VALUEAt 31 December 2,642,568 909,554 1,885,862 204,850



7. INVESTMENTS IN SUBSIDIARY COMPANIESTHE COMPANY

2016 2015Rs Rs

At 1 January 30,005,000 30,005,000 Impairment (note 31) (15,000,000) - At 31 December 15,005,000 30,005,000

(a) The list of the Company’s subsidiaries is as follows:

Name

Class of shares held

Year end

Stated capital

Proportion of

ownership interest

Debt securities

Place of business and

country of incorporation

Main business

Rs Direct

CMPL (Bagatelle) Limitée Ordinary 31 December 15,000,000 100% - Mauritius Retail CMPL (Cascavelle) Limitée Ordinary 31 December 15,000,000 100% - Mauritius Retail CMPL (Mont Choisy) Limitée Ordinary 31 December 5,000 100% - Mauritius No activity

8. INVESTMENTS IN FINANCIAL ASSETS - AVAILABLE-FOR-SALE

THE GROUP AND THE COMPANYLocally Listed

2016 2015Rs Rs

At 1 January 1,148,481 28,140,316 Additions - 4,548,137 Disposals - (31,271,999)Increase/(decrease) in fair value 35,364 (267,973)At 31 December 1,183,845 1,148,481

The fair value of listed available-for-sale financial assets is based on the Stock Exchange quoted price at the close of business at the reporting date.

(a) Available-for-sale financial assets are denominated in Mauritian Rupees.

(b) The table below analyses the fair value hierarchy of the Group’s and the Company’s financial assets.

(c) THE GROUP AND THE COMPANY Level 1 TotalRs Rs

At 31 December 2016Available-for-sale financial assets- Equity securities 1,183,845 1,183,845

At 31 December 2015Available-for-sale financial assets- Equity securities 1,148,481 1,148,481

None of the financial assets are impaired.



9. NON-CURRENT RECEIVABLESTHE COMPANY

2016 2015Subsidiary companies Rs Rs

- Loans to group companies 20,005,000 40,010,000 - Other receivable 46,029,328 95,332,556

66,034,328 135,342,556

The loans are unsecured, carry interest at 7% and have no fixed terms of repayment.

Loan receivable of Rs.20m from one of the subsidiaries was fully impaired during the year.

Other receivable is unsecured, interest free and has no fixed terms of repayment. Other receivables of Rs.104m from one of the subsidiaries were impaired during the year.

(a) The cost of inventories recognised as expense and included in cost of sales amounted to Rs711,274,372 for the Group (2015: Rs682,111,337) and Rs196,495,023 for the Company (2015: Rs219,159,607).

(b) The amount of impairment losses recognised as an expense in profit or loss is Rs15,262,015 for the Group (2015: Rs24,185,809) and Rs1,881,074 for the Company (2015: Rs6,329,131).

(c) Bank borrowings are secured on the assets of the Group including inventories.

10. INVENTORIESTHE GROUP THE COMPANY

2016 2015 2016 2015Rs Rs Rs Rs

Goods for resale 121,859,289 111,737,998 31,534,111 36,493,557



11. TRADE AND OTHER RECEIVABLESTHE GROUP THE COMPANY

2016 2015 2016 2015Rs Rs Rs Rs

Trade receivables 768,352 1,035,470 124,040 538,574 Less: provision for impairment (63,498) - - - Trade receivables - net 704,854 1,035,470 124,040 538,574 Other receivables 43,851,478 27,675,635 17,897,754 7,230,869

44,556,332 28,711,105 18,021,794 7,769,443

Group receivables: - Amount receivable from holding company 199,546 329,975 700,800 298,234 - Amount receivable from subsidiary companies - - 9,562,185 - - Amount receivable from fellow subsidiaries 1,988,416 901,522 930,292 790,681

2,187,962 1,231,497 11,193,277 1,088,915 46,744,294 29,942,602 29,215,071 8,858,358

(a) The carrying amounts of trade and other receivables approximate their fair values.

(b) As at 31 December 2016, Group’s trade receivables of Rs.63,498 were impaired (2015: Rs Nil).

(c) As at 31 December 2016, trade receivables of Rs426,370 (2015: Rs317,847) for the Group and Rs58,868 (2015: Rs12,597) for the Company were past due but not impaired. These relate to certain individuals for whom there is no recent history of default. The ageing analysis of these trade receivables is as follows:

(d) The Group’s trade and other receivables are denominated in Mauritian Rupees.

(e) The other classes within trade and other receivables do not contain impaired assets.

(f) The Group does not hold any collateral as security.

(g) The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above.


Over 3 months 426,370 317,847 58,868 12,597



12. STATED CAPITALNumber of

shares RsTHE COMPANYAt 1 January 2016 2,193,500 21,935,000 Rights issue 14,100,000 141,000,000 At 31 December 2016 16,293,500 162,935,000

At 1 January 2015 and at 31 December 2015 2,193,500 21,935,000

On the 30 June 2016, the company proceeded with a rights issue of 14,100,000 new ordinary shares of Rs.10.00 each at an issue price of Rs.10.00 per share, representing a total amount of Rs.141,000,000.

13. DEFERRED INCOME TAX

(a) Deferred income taxes are calculated on all temporary differences under the liability method at 15% (2015: 15%).

There is a legally enforceable right to offset current tax assets against current tax liabilities and deferred income tax assets and liabilities when the deferred income taxes relate to the same fiscal authority on the same entity. The following amounts are shown in the statement of financial position:

At the end of the reporting period, the Group had unused tax losses of Rs119,687,344 (2015: Rs112,366,278) and the Company had unused tax losses of Rs35,772,504 (2015: Rs21,427,044) available for offset against future profits. No deferred tax asset has been recognised in respect of these tax losses due to unpredictability of future profit streams. The tax losses expire on a rolling basis over 5 years.

(b) The movement on the deferred income tax account is as follows:


Deferred tax assets (8,542,581) (5,678,155) - - Deferred tax liabilities 7,597,212 7,998,135 7,597,212 7,998,135

(945,369) 2,319,980 7,597,212 7,998,135


At 1 January 2,319,980 2,171,192 7,998,135 4,987,232 Credited to profit or loss (note 22(b)) (3,449,777) (3,352,328) (537,741) (408,997)Tax charged to equity (note 24) 184,428 3,501,116 136,818 3,419,900 At 31 December (945,369) 2,319,980 7,597,212 7,998,135



13. DEFERRED INCOME TAX (CONT’D)

(c) The movement in deferred tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same fiscal authority on the same entity, is as follows:

THE GROUP THE COMPANY

(i) Deferred tax assets:

Accelerated tax

depreciation

Retirement benefit

obligations Total

Retirement benefit

obligations TotalRs Rs Rs Rs Rs

At 1 January 2015 (2,580,164) (1,313,463) (3,893,627) (1,077,586) (1,077,586)Credited to equity - (275,042) (275,042) (356,258) (356,258)Credited to profit or loss (2,811,805) (163,390) (2,975,195) (31,865) (31,865)At 31 December 2015 (5,391,969) (1,751,895) (7,143,864) (1,465,709) (1,465,709)Charged to equity - 184,428 184,428 136,818 136,818 Credited to profit or loss (2,796,744) (276,847) (3,073,591) (161,555) (161,555)At 31 December 2016 (8,188,713) (1,844,314) (10,033,027) (1,490,446) (1,490,446)

THE GROUP THE COMPANY

(ii) Deferred tax liabilities:

Accelerated tax

depreciationRevaluation

of assets Total

Accelerated tax

depreciationRevaluation

of assets TotalRs Rs Rs Rs Rs Rs

At 1 January 2015 682,170 5,382,647 6,064,817 682,170 5,382,647 6,064,817 Charged to equity - 3,776,158 3,776,158 - 3,776,158 3,776,158 Credited to profit or loss (124,718) (252,413) (377,131) (124,718) (252,413) (377,131)At 31 December 2015 557,452 8,906,392 9,463,844 557,452 8,906,392 9,463,844 Credited to profit or loss (73,769) (302,417) (376,186) (73,769) (302,417) (376,186)At 31 December 2016 483,683 8,603,975 9,087,658 483,683 8,603,975 9,087,658



14. RETIREMENT BENEFIT OBLIGATIONS THE GROUP THE COMPANY

2016 2015 2016 2015 Rs Rs Rs Rs

Amounts recognised in the statement of financial position:Defined pension benefits (note (a)(ii)) 2,894,181 2,348,185 2,894,181 2,348,185 Other post retirement benefits (note (b)(i)) 9,401,148 9,331,037 7,042,121 7,423,212

12,295,329 11,679,222 9,936,302 9,771,397 Analysed as follows:Non-current liabilities 12,295,329 11,679,222 9,936,302 9,771,397

Total expense:- Defined pension benefits (note (a)(v)) 461,996 388,201 461,996 388,201 - Other post retirement benefits (note (b)(iii)) 2,175,642 1,667,730 1,407,020 790,895

2,637,638 2,055,931 1,869,016 1,179,096

Amount charged/(credited) to other comprehensive income:- Defined pension benefits (note (a)(vi)) 440,442 610,840 440,442 610,840 - Other post retirement benefits (note (b)(iv)) (1,669,981) 1,222,778 (1,352,561) 1,764,216

(1,229,539) 1,833,618 (912,119) 2,375,056

(a) Defined pension benefits

The plan is a defined benefit arrangement with benefits based on final salary. It provides for a pension at retirement and a benefit on death or disablement in service before retirement.

(i) The assets of the fund are held independently and administered by an insurance company.

(ii) The amounts recognised in the statement of financial position are as follows:THE GROUP AND THE COMPANY

2016 2015 Rs Rs

Present value of funded obligations 5,885,019 4,911,015 Fair value of plan assets (2,990,838) (2,562,830)Liability in the statement of financial position 2,894,181 2,348,185

(iii) The movement in the defined benefit obligation over the year is as follows:THE GROUP AND THE COMPANY

2016 2015 Rs Rs

At 1 January 4,911,015 5,947,345 Current service cost 288,678 203,603 Interest cost 363,979 358,007 Actuarial losses 321,347 506,601 Benefits paid - (2,104,541)At 31 December 5,885,019 4,911,015



14. RETIREMENT BENEFIT OBLIGATIONS (CONT’D)

(a) Defined pension benefits (cont’d)

(iv) The movement in the fair value of plan assets for the year is as follows:THE GROUP AND THE COMPANY

2016 2015 Rs Rs

At 1 January (2,562,830) (3,631,537)Net interest income (201,131) (182,850)Actuarial losses 119,095 104,239 Employer contributions (356,442) (966,664)Cost insuring risk benefits 10,470 9,441 Benefits paid - 2,104,541 At 31 December (2,990,838) (2,562,830)

(v) The amounts recognised in profit or loss are as follows:THE GROUP AND THE COMPANY

2016 2015 Rs Rs

Current service cost 288,678 203,603 Net interest cost 162,848 175,157 Cost insuring risk benefits 10,470 9,441 Total included in employee benefit expense (note 19(b)) 461,996 388,201

The total charge was included in ‘administrative expenses’.

(vi) The amounts recognised in other comprehensive income are as follows:THE GROUP AND THE COMPANY

2016 2015Remeasurement on the net defined benefit liability: Rs Rs

Liability experience (gains)/losses (474,034) 359,522 Losses on pension scheme assets 119,095 104,239 Changes in assumptions underlying the present value of the scheme 795,381 147,079

440,442 610,840

(vii) The movement in liability is as follows:THE GROUP AND THE COMPANY

2016 2015 Rs Rs

At 1 January 2,348,185 2,315,808 Total expense 461,996 388,201 Actuarial losses 440,442 610,840 Employer contributions (356,442) (966,664)At 31 December 2,894,181 2,348,185





(viii) The market value of assets is based on the reserves held for the deferred annuity policies for statutory purposes. This asset is a notional value and does not represent the surrender value should the scheme be wound up.

(ix) The expected return on plan assets was determined by considering the expected returns available on the assets underlying the current investment policy.

(x) Expected contributions to post-employment benefit plans for the year ending 31 December 2017 are Rs0.7m.

(xi) Amounts for the current and previous years are as follows:

THE GROUP AND THE COMPANY2016 2015 2014 2013 2012 Rs Rs Rs Rs Rs

Present value of defined benefit obligation 5,885,019 4,911,015 5,947,345 4,964,476 4,136,681 Fair value of plan assets (2,990,838) (2,562,830) (3,631,537) (3,277,365) (2,800,773)Deficit 2,894,181 2,348,185 2,315,808 1,687,111 1,335,908 Experience losses on plan liabilities 321,347 506,601 292,567 151,323 754,515 Experience losses on plan assets 119,095 104,239 136,165 170,727 56,794

(xii) The principal actuarial assumptions used for accounting purposes were:THE GROUP AND THE COMPANY

2016 2015% %

Discount rate 6.00 7.00 Expected return on plan assets 6.00 7.00 Future salary increases 4.00 5.00

(xiii) The actual return on plan assets was Rs82,036 (2015: Rs78,611).

(xiv) Sensitivity analysis on defined benefit obligations to changes in the weighted principal assumptions is:


Increase Decrease 31 December 2016 Rs Rs

Discount rate (1% increase) - 318,340 Future salary growth (1% increase) 377,276 -

31 December 2015 Rs Rs

Discount rate (1% increase) - 266,244 Future salary growth (1% increase) 301,748 -

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

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.





(xv) The Group is exposed to actuarial risks such as longevity risk, interest rate risk, market (investment) risk and salary risk in relation to its pension plan.

- Longevity Risk - The liabilities disclosed are based on the mortality tables A 67/70 and PA(92). Should the experience of the pension plan be less favourable than the standard mortality tables, the liabilities will increase.

- Interest Rate Risk - If bond yields fall, the liabilities would be calculated using a lower discount rate; and would therefore increase.

- Market (Investment) Risk - If the market value of investments falls or returns earned are lower that the discount rate, this will result in a deficit of assets compared to the value of liabilities.

- Salary Risk - If salary increases are higher than assumed in our basis, the liabilities would increase; giving rise to actuarial losses.

(xvi) The funding requirements are based on the pension fund’s actuarial measurement framework set out in the funding policies of the plan.

(xvii) The weighted average duration of the defined benefit obligation is 6 years at the end of the reporting period.

(b) Other post retirement benefits

The Employment Rights Act provides for a lump sum based on years of service and final salary to be paid at retirement.

(i) The amounts recognised in the statement of financial position are as follows:

THE GROUP THE COMPANY2016 2015 2016 2015 Rs Rs Rs Rs

Present value of plan liability 9,401,148 9,331,037 7,042,121 7,423,212

Net liability for retirement obligation recognised 9,401,148 9,331,037 7,042,121 7,423,212

(ii) The movement in the defined benefit obligation over the year is as follows:


At 1 January 9,331,037 6,440,529 7,423,212 4,868,101 Current service cost 1,416,464 1,156,860 829,341 420,680 Interest cost 759,178 510,870 577,679 370,215 Actuarial (gains)/losses (1,669,981) 1,222,778 (1,352,561) 1,764,216 Benefits paid (435,550) - (435,550) - At 31 December 9,401,148 9,331,037 7,042,121 7,423,212




(b) Other post retirement benefits (cont’d)

(iii) The amounts recognised in profit or loss are as follows:THE GROUP THE COMPANY

2016 2015 2016 2015 Rs Rs Rs Rs

Current service cost 1,416,464 1,156,860 829,341 420,680 Interest cost 759,178 510,870 577,679 370,215 Total included in employee benefit expense (note 19(b)) 2,175,642 1,667,730 1,407,020 790,895

Total charge of only Rs1,968,881 (2015: Rs761,073) for the Group was charged to profit or loss as part of the amount was offset against funds received from the previous retailer of CMPL (Bagatelle) Limitée and CMPL (Cascavelle) Limitée.

Total charge is included in ‘administrative expenses’.

(iv) The amounts recognised in other comprehensive income are as follows:


Experience (gains)/losses (1,622,493) 1,222,778 (1,307,569) 1,764,216 Changes in assumptions (47,488) - (44,992) - Actuarial losses (1,669,981) 1,222,778 (1,352,561) 1,764,216

(v) The principal actuarial assumption used for accounting purposes were:

THE GROUP THE COMPANY2016 2015 2016 2015 % % % %

Discount rate 6.00 7.00 6.00 7.00 Future salary increases 4.00 5.00 4.00 5.00

(vi) Sensitivity analysis on defined benefit obligations to changes in the weighted principal assumptions is:

THE GROUP THE COMPANY Increase Decrease Increase Decrease

Rs Rs Rs Rs 31 December 2016Discount rate (1% increase) - 856,416 - 558,427 Future salary growth (1% increase) 1,034,863 - 664,543 -

31 December 2015Discount rate (1% increase) - 887,842 - 635,649 Future salary growth (1% increase) 1,082,506 - 759,979 -

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

(vii) The weighted average duration of the liabilities as at 31 December 2016 is 9 years.



15. TRADE AND OTHER PAYABLES


Trade payables 193,737,325 183,253,534 60,663,511 68,771,073 Accrued expenses and other payables 60,947,301 17,464,103 48,552,379 9,076,451 Amount due to holding company 8,552,635 1,310,845 7,954,638 1,264,845 Amounts due to subsidiary companies - - - 17,595,082 Amounts due to fellow subsidiaries 27,262,354 3,528,540 14,422,679 1,284,629

290,499,615 205,557,022 131,593,207 97,992,080

(a) Trade and other payables are denominated in the following currencies.


MUR 272,069,617 186,955,063 113,163,209 79,390,121 EURO 18,429,998 18,601,959 18,429,998 18,601,959

290,499,615 205,557,022 131,593,207 97,992,080

16. BORROWINGS

THE GROUP THE COMPANY2016 2015 2016 2015

Current Rs Rs Rs Rs

Bank overdrafts 15,596,384 9,194,833 15,596,384 9,194,833 Bank loans - 3,306,418 - 3,306,418 Amount due to holding company (See note (d)) - 56,000,000 - 56,000,000 Obligation under finance leases (see note (h) below) 13,868,382 12,899,515 362,421 336,018

29,464,766 81,400,766 15,958,805 68,837,269

Non-CurrentBank loans (note (g)) 117,000,000 64,184,419 117,000,000 64,184,419 Obligation under finance leases (see note (h) below) 20,328,346 34,196,716 1,144,784 1,507,205

137,328,346 98,381,135 118,144,784 65,691,624

Total borrowings 166,793,112 179,781,901 134,103,589 134,528,893

(a) Bank overdrafts and bank loans are secured on the assets of the Group including property, plant and equipment and inventories (notes 5 and 10).

(b) Leased assets are effectively secured as the rights to the leased assets revert to the lessor in the event of default.(c) The amount due to holding company is unsecured and is repayable on demand. (d) The carrying amounts of borrowings approximate their fair value. (e) The Group’s borrowings are denominated in Mauritian Rupees.



16. BORROWINGS (CONT’D)

(f) The exposure of the Group’s and the Company’s borrowings to interest-rate changes and the contractual repricing dates are as follows:

Within 1 year

After 1 year but before

2 years

After 2 years but

before 3 years

After 3 years but

before 5 years

After 5 years TOTAL

Rs Rs Rs Rs Rs RsTHE GROUP At 31 December 2016Total borrowings 15,596,384 - 1,636,434 14,161,175 101,202,391 132,596,384

At 31 December 2015Total borrowings 68,501,251 3,545,449 3,788,541 8,364,197 48,486,232 132,685,670

THE COMPANYAt 31 December 2016Total borrowings 15,596,384 - 1,636,434 14,161,175 101,202,391 132,596,384

At 31 December 2015Total borrowings 68,501,251 3,545,449 3,788,541 8,364,197 48,486,232 132,685,670

(g) The maturity of non-current bank loan is as follows:THE GROUP THE COMPANY

2016 2015 2016 2015Rs Rs Rs Rs

After one year and before two years - 3,545,449 - 3,545,449 After two years and before three years 1,636,434 3,788,541 1,636,434 3,788,541 After three years and before five years 14,161,175 8,364,197 14,161,175 8,364,197 After 5 years 101,202,391 48,486,232 101,202,391 48,486,232

117,000,000 64,184,419 117,000,000 64,184,419



16. BORROWINGS (CONT’D)

(h) Finance lease liabilities - minimum lease payments:THE GROUP THE COMPANY

2016 2015 2016 2015Rs Rs Rs Rs

Not later than 1 year 15,899,337 15,899,337 464,709 464,709 Later than 1 year and not later than 2 years 15,899,337 15,899,337 464,709 464,709 Later than 2 years and not later than 3 years 5,102,502 18,099,669 370,806 464,709 Later than 3 years and not later than 5 years 445,685 3,347,857 445,685 816,483

37,346,861 53,246,200 1,745,909 2,210,610 Future finance charges on finance leases (3,150,133) (6,149,969) (238,704) (367,387)

Present value of finance lease liabilities 34,196,728 47,096,231 1,507,205 1,843,223

The present value of finance lease liabilities may be analysed as follows:Not later than 1 year 13,868,382 12,899,515 362,421 336,018 Later than 1 year and not later than 2 years 14,910,056 13,868,387 390,901 362,422 Later than 2 year and not later than 3 years 4,990,527 17,079,045 326,120 390,901 Later than 3 years and not later than 5 years 427,763 3,249,284 427,763 753,882

34,196,728 47,096,231 1,507,205 1,843,223

The Group leases motor vehicles, plant and equipment and furniture and fittings under finance leases. The leases have purchase options and renewal rights. Renewals are at the specific entity that holds the lease.

There are no restrictions imposed on the Group by lease arrangements other than in respect of the specific assets being leased.

(i) The effective interest rates at the end of the reporting period were as follows:

THE GROUP THE COMPANY2016 2015 2016 2015 % % % %

Bank overdrafts 6.25-8.25 6.50-8.65 8.25 8.65 Bank loan 6.25 6.65 6.25 6.65 Finance leases 7.50-7.65 7.50-7.65 7.50-7.65 7.50-7.65 Other loan - 7.40 - 7.40

17. DIVIDENDS

THE COMPANY2016 2015 Rs Rs

At 1 January - 1,096,750 Paid during the year - (1,096,750)At 31 December - -



18. OTHER INCOME


Rental income 1,000,786 697,008 885,170 697,008 Profit on disposal of investments in financial assets - 4,255,628 - 4,255,628 Profit on disposal of property, plant and equipment 10,296 17,391 10,296 17,391 Commissions 455,123 449,380 - - Income from advertisement 3,171,283 2,163,585 - - Interest income 405,806 17,050 3,205,810 2,817,058 Dividend income - listed - 77,295 - 77,295 Others 598,446 302,103 - -

5,641,740 7,979,440 4,101,276 7,864,380

19. LOSS BEFORE FINANCE COSTS


Loss before finance costs is arrived at after:Charging:Depreciation on property, plant and equipment- owned assets 12,082,195 11,379,362 5,520,155 5,654,007 - leased assets under finance leases 11,018,991 10,495,157 502,151 293,316 Amortisation of intangible assets 682,696 437,690 450,498 228,003 Employee benefit expense (note 19(b)) 70,430,928 72,428,309 24,333,927 30,466,205

and crediting:Profit on sale of Property, plant & equipment 10,296 17,391 10,296 17,391 Profit on disposal of investments in financial assets - 4,255,628 - 4,255,628



19. LOSS BEFORE FINANCE COSTS (CONT’D)

(a) ADMINISTRATIVE EXPENSES THE GROUP THE COMPANY2016 2015 2016 2015 Rs Rs Rs Rs

Employee benefit expense 70,430,928 72,428,309 24,333,927 30,466,205 Travelling 8,380,450 8,464,857 1,817,989 2,623,956 Operating expenses 23,174,754 21,778,578 6,139,001 5,929,552 Light and heat 29,261,657 30,742,229 5,981,127 7,052,420 Professional fees 5,446,716 3,683,914 4,325,880 2,387,893 Advertising 17,094,553 14,276,612 5,500,424 4,346,270 Rental expenses 39,902,074 36,041,004 1,209,375 1,599,375 Other expenses 17,885,218 16,286,398 6,945,448 7,432,083

211,576,350 203,701,901 56,253,171 61,837,754

(b) EMPLOYEE BENEFIT EXPENSE THE GROUP THE COMPANY2016 2015 2016 2015 Rs Rs Rs Rs

Salaries 64,225,144 67,456,771 21,185,023 27,633,693 Social security costs 3,474,791 3,747,564 1,145,962 1,578,716 Pension costs - defined benefit plans (note 14(a)(v)) 461,996 388,201 461,996 388,201 - Other post-retirement benefits (note 14(b)(iii)) 1,968,881 761,073 1,407,020 790,895 - Defined contribution plan 300,116 74,700 133,926 74,700

70,430,928 72,428,309 24,333,927 30,466,205

20. FINANCE COSTS


Interest expense:- Bank overdrafts (510,711) (687,495) (372,981) (463,829)- Bank loan (5,032,251) (4,769,872) (5,032,251) (4,769,872)- Loan from holding company (3,326,386) (1,840,684) (3,325,294) (1,705,562)- Finance leases (2,999,828) (3,827,216) (128,693) (79,369)

(11,869,176) (11,125,267) (8,859,219) (7,018,632)- Net foreign exchange financing (losses)/gains (54,504) 146,405 (54,504) 146,405

(11,923,680) (10,978,862) (8,913,723) (6,872,227)

21. NET FOREIGN EXCHANGE GAINS/(LOSSES)


The exchange differences (charged)/credited to profit or loss are included as follows:Finance cost (note 20) (54,504) 146,405 (54,504) 146,405 Cost of sales 1,270,364 308,384 1,270,364 308,384



22. CURRENT TAX LIABILITIES


(a) Statement of profit or loss and other comprehensive income

Current tax on the adjusted results for the year at 15% (2015: 15%)

- - - -

Deferred tax (note 13(b)) (3,449,777) (3,352,328) (537,741) (408,997)Taxation credit for the year (3,449,777) (3,352,328) (537,741) (408,997)

(b) The tax on the Group’s and the Company’s loss before taxation differs from the theoretical amount that would arise using the basic tax rate of the Group and the Company as follows:


Loss before tax (91,791,621) (88,383,865) (162,300,664) (15,889,809)

Tax calculated at 15% (2015: 15%) (13,768,743) (13,257,579) (24,345,100) (2,383,471)Income not subject to tax (94) (649,939) (94) (649,939)Expenses not deductible for tax purposes 821,825 465,444 21,660,455 434,094 Adjustment on retirement benefit obligations (20,063) (125,300) - - Tax losses for which no deferred income 9,517,298 10,215,046 2,146,998 2,190,319 Taxation credit (3,449,777) (3,352,328) (537,741) (408,997)

23. LOSS PER SHARE

THE GROUP THE COMPANY2016 2015 2016 2015

Net loss attributable to owners of the company Rs (88,341,844) (85,031,537) (161,762,923) (15,480,812)

Weighted average number of shares in issue 7,113,440 2,155,433 7,113,440 2,155,433

Basic loss per share Rs (12.42) (39.45) (22.74) (7.18)



24. OTHER COMPREHENSIVE INCOME

THE GROUP NoteRevaluation

surplus

Available- for-sale fair

value reserve

Actuarial (losses)/

gains2016 Rs Rs Rs

Increase in fair value of available-for- sale financial assets 8 - 35,364 - Remeasurement of defined benefit obligations - - 1,229,539 Income tax relating to components of other comprehensive income - - (184,428)Other comprehensive income for year 2016 - 35,364 1,045,111

2015Revaluation of land and buildings 5 65,074,377 - - Decrease in fair value of available-for-sale financial assets 8 - (267,973) - Reclassification adjustments on disposal of available-for-sale financial assets included in profit or loss - (1,658,840) - Remeasurement of defined benefit obligations - - (1,833,618)Income tax relating to components of other comprehensive income (3,776,158) - 275,042 Other comprehensive income for year 2015 61,298,219 (1,926,813) (1,558,576)

THE COMPANY NoteRevaluation

surplus

Available- for-sale fair

value reserve

Actuarial (losses)/

gains2016 Rs Rs Rs

Increase in fair value of available-for- sale financial assets 8 - 35,364 - Remeasurement of defined benefit obligations - - 912,119 Income tax relating to components of other comprehensive income - - (136,818)Other comprehensive income for year 2016 - 35,364 775,301

2015Revaluation of land and buildings 5 65,074,377 - - Decrease in fair value of available-for-sale financial assets 8 - (267,973) - Reclassification adjustments on disposal of available-for-sale financial assets included in profit or loss - (1,658,840) - Remeasurement of defined benefit obligations - - (2,375,056)Income tax relating to components of other comprehensive income (3,776,158) - 356,258 Other comprehensive income for year 2015 61,298,219 (1,926,813) (2,018,798)

Available-for-sale fair value reserve Available-for-sale fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets that has been recognised in other comprehensive income until the investments are derecognised or impaired.



25. NOTES TO STATEMENT OF CASH FLOWS


(a) Cash used in operations Rs Rs Rs Rs

Loss before taxation (91,791,621) (88,383,865) (162,300,664) (15,889,809)Adjustments for:Depreciation on property, plant and equipment 5 23,101,186 21,874,519 6,022,306 5,947,323 Amortisation of intangible assets 6 682,696 437,690 450,498 228,003 Impairment of investment in subsidiary - - 15,000,000 - Impairment of loan receivable from subsidiary - - 20,005,000 - Impairment of receivables from subsidiary - - 104,063,829 - Profit on disposal of investments in financial assets 18 - (4,255,628) - (4,255,628)Profit on sale of property, plant & equipment (10,296) (17,391) (10,296) (17,391)Increase in provision for retirement benefit obligations 1,638,886 328,159 1,077,024 212,432 Provision for doubtful debts 63,498 - - - Dividend income 18 - (77,295) - (77,295)Interest income 18 (405,806) (17,050) (3,205,810) (2,817,058)Interest expense 20 11,869,176 11,125,267 8,859,219 7,018,631 Unrealised gains on exchange (155,882) (74,225) (155,882) (74,225)

(55,008,163) (59,059,819) (10,194,776) (9,725,017)Changes in working capital:Inventories (10,121,291) 781,591 4,959,446 9,210,595 Trade and other receivables (16,491,028) (7,964,957) (18,582,550) (2,218,476)Trade and other payables 48,790,296 22,945,509 (2,757,944) (344,110)Cash used in operating activities (32,830,186) (43,297,676) (26,575,824) (3,077,008)

(b) Cash and cash equivalents THE GROUP THE COMPANY2016 2015 2016 2015Rs Rs Rs Rs

Cash in hand and at bank 26,620,637 21,013,571 8,854,484 4,902,168 Loan at call receivable 8,022,300 - 8,022,300 -

34,642,937 21,013,571 16,876,784 4,902,168

(c) Cash and cash equivalents and bank overdrafts include the following for the purpose of the statement of cash flows:


Cash and cash equivalents 34,642,937 21,013,571 16,876,784 4,902,168 Bank overdrafts (15,596,384) (9,194,833) (15,596,384) (9,194,833)Loan payable at call - (56,000,000) - (56,000,000)

19,046,553 (44,181,262) 1,280,400 (60,292,665)

(d) Cash and cash equivalents are denominated in the following currencies:


MUR 16,955,432 (44,292,275) (810,721) (60,403,678)USD 47,721 47,171 47,721 47,171 EURO 2,043,400 63,842 2,043,400 63,842

19,046,553 (44,181,262) 1,280,400 (60,292,665)

(e) Non cash transactionsThe principal non cash transactions are the acquisition of property, plant and equipment using finance leases.



26. SEGMENT INFORMATION

The Group derives its revenue from a single business activity, the retail sector, which it considers as its only segment.

The accounting policies of the operating segment are the same as those described in the summary of significant accounting policies. Compagnie Des Magasins Populaires Limitée evaluates performance on the basis of profit or loss from operations before tax expense.

Retail Total Retail Total31 December 31 December 31 December 31 December

2016 2016 2015 2015Rs Rs Rs Rs

Revenue from external customers 861,124,923 861,124,923 822,741,004 822,741,004

Segment result (85,509,681) (85,509,681) (85,384,443) (85,384,443)Other income 5,641,740 7,979,440 Finance charges (11,923,680) (10,978,862)Loss before taxation (91,791,621) (88,383,865)Taxation 3,449,777 3,352,328 Loss for the year (88,341,844) (85,031,537)

Interest income 405,806 405,806 17,050 17,050 Interest expense (11,869,176) (11,869,176) (11,125,267) (11,125,267)Additions to non-current assets and intangible assets 106,266,212 106,266,212 17,167,584 17,167,584 Segment assets 557,067,926 557,067,926 431,160,307 431,160,307 Segment liabilities 477,185,268 477,185,268 405,016,280 405,016,280 Depreciation and amortisation (23,783,882) (23,783,882) (22,312,209) (22,312,209)

The Group does not derive revenues from foreign countries and its customer base is highly diversified, with no individually significant customer.



27. THREE YEAR FINANCIAL SUMMARY

THE GROUP THE COMPANY2016 2015 2014 2016 2015 2014Rs Rs Rs Rs Rs Rs

Statement of profit or loss and other comprehensive incomeTurnover 861,124,923 822,741,004 606,304,306 240,801,610 270,290,725 261,771,796 Loss before taxation (91,791,621) (88,383,865) (69,075,041) (162,300,664) (15,889,809) (12,387,439)Taxation credit 3,449,777 3,352,328 3,322,527 537,741 408,997 506,485

Loss for the year (88,341,844) (85,031,537) (65,752,514) (161,762,923) (15,480,812) (11,880,954)Other comprehensive income for the year, net of tax 1,080,475 57,812,830 (88,899) 810,665 57,352,608 (88,899)Total comprehensive income for the year (87,261,369) (27,218,707) (65,841,413) (160,952,258) 41,871,796 (11,969,853)

Dividend per share - - 0.50 - - 0.50

Basic loss per share (12.42) (39.45) (30.51) (22.74) (7.18) (5.51)

Weighted average number of shares in issue 7,113,440 2,155,433 2,155,433 7,113,440 2,155,433 2,155,433

Number of shares at Rs10 each 16,293,500 2,193,500 2,193,500 16,293,500 2,193,500 2,193,500

Statement of financial positionNon-current assets 353,821,406 268,466,136 232,666,106 334,758,176 349,142,512 218,493,877 Current assets 203,246,520 162,694,171 159,208,705 77,625,966 50,254,083 85,470,739 Total assets 557,067,926 431,160,307 391,874,811 412,384,142 399,396,595 303,964,616

Capital and reserves 79,882,658 26,144,027 53,362,734 129,153,832 149,106,090 107,234,294 Non-current liabilities 157,220,887 118,058,492 127,511,190 135,678,298 83,461,156 80,685,754 Current liabilities 319,964,381 286,957,788 211,000,887 147,552,012 166,829,349 116,044,568 Total equity and liabilities 557,067,926 431,160,307 391,874,811 412,384,142 399,396,595 303,964,616



28. OTHER RESERVES

Revaluation surplusThe revaluation arises on the revaluation of property, plant and equipment.

Fair value reserveFair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets that has been recognised in other comprehensive income until the investments are derecognised or impaired.

Actuarial gains/(losses) The actuarial gains/(losses) reserve represents the cumulative remeasurement of defined benefit obligation recognised.

29. OPERATING LEASE COMMITMENTS

The Group leases premises under non-cancellable operating lease agreements. The future aggregate minimum lease payments under these operating leases are as follows:


2016 2015Rs Rs

Not later than one year 39,928,042 36,300,992 Later than one year and not later than 5 years 220,857,776 164,284,905 Later than 5 years 60,077,248 102,931,660

320,863,066 303,517,557

The leases have varying terms, escalation clauses and renewal rights. Renewals are at the specific entity that holds the lease.

There are no restrictions imposed on the Group by lease arrangements other than in respect of the specific premises being leased.

30. CONTINGENCIES

At 31 December 2016, the Group had contingent liabilities in respect of bank and other matters arising in the ordinary course of business from which it is anticipated that no material liabilities would arise.

31. SIGNIFICANT TRANSACTIONS AND EVENTS

Impairment losses THE COMPANYIncluded in impairment losses are the following: 2016 2015

Rs Rs

Investment in subsidiaries 15,000,000 - Loan due from subsidiaires 20,005,000 - Non-current receivables 104,063,829 -

139,068,829 -

Impairment of non financial assetsAn impairment of Rs.139m in respect of investment in and loan receivable from one of the company’s subsidiaries was recorded during the year. We have assessed the fair value and the recoverability of the Company’s investments in and loans receivable from its subsidiaries based on discounted cash flow forecasts of the subsidiaries over five years. We evaluated the key assumptions underlying the forecasts through analysis of past year results and discussion with management regarding future plans.



32. RELATED PARTY TRANSACTIONS

THE GROUPHolding

companySubsidiary companies

Fellow subsidiaries

Directors and key

management personnel

Associated companies

2016 Rs. Rs. Rs. Rs. Rs.Statement of profit or lossRemuneration and benefits - - - 5,113,060 - Purchase of goods and services 2,432,002 - 15,510,998 - - Purchase of property, plant and equipment - - 29,358,410 - - Sales of goods 520,032 - 1,558,860 34,195 - Management fees 900,000 - - - - Interest expense 3,328,110 - - - - Interest income 383,599 - - - -

Statement of financial positionAmount owed by related parties 199,546 - 1,988,416 - - Amount owed to related parties 8,552,635 - 27,262,354 - 26,429 Short term loan owed from related parties 8,022,300 - - - -

THE GROUPHolding


Fellow subsidiaries

Directors and key



2015 Rs. Rs. Rs. Rs. Rs.Statement of profit or lossRemuneration and benefits - - - 6,343,518 - Purchase of goods and services 3,960,137 - 14,018,456 - 460,308 Purchase of property, plant and equipment - - 2,123,505 - - Sales of goods 270,450 - 877,071 - - Management fees 900,000 - - - - Interest expense 1,840,684 - - - -

Statement of financial positionAmount owed by related parties 329,975 - 901,522 - - Amount owed to related parties 1,310,845 - 3,528,540 - 80,125 Short term loan owed to related parties 56,000,000 - - - -



32. RELATED PARTY TRANSACTIONS (CONT’D)

THE COMPANYHolding


Fellow subsidiaries

Directors and key



2016 Rs. Rs. Rs. Rs. Rs.Statement of profit or lossRemuneration and benefits - - - 1,440,032 - Purchase of goods and services 2,432,002 - 8,396,648 - - Purchase of property, plant and equipment - - 17,611,560 - - Sales of goods 520,032 - 721,060 - - Management fees 900,000 - - - - Interest expense 3,325,294 - - - - Interest income 383,599 2,800,008 - - -

Statement of financial positionAmount owed by related parties 700,800 55,591,513 930,292 - - Amount owed to related parties 7,954,638 - 14,422,679 - 26,429 Short term loan owed from related parties 8,022,300 - - - - Long term loan owed from related parties - 20,005,000 - - -

Holding company

Subsidiary companies

Fellow subsidiaries

Directors and key



2015 Rs. Rs. Rs. Rs. Rs.Statement of profit or lossRemuneration and benefits - - - 4,910,131 - Purchase of goods and services 2,865,859 - 7,357,089 - 711,194 Purchase of property, plant and equipment - - 1,136,408 - - Sales of goods 271,043 - 722,852 - -

Statement of financial positionAmount owed by related parties 298,234 95,332,556 790,681 - - Amount owed to related parties 1,264,845 17,595,082 1,284,629 - 80,125 Short term loan owed to related parties 56,000,000 - - - - Long term loan owed from related parties - 40,010,000 - - -

(a) The sales and purchases from related parties are made in the normal course of business. Outstanding trade balances at year-end are unsecured, (interest free with exception of loans) and settlement occurs in cash. Short term loan payable is unsecured, is repayable on demand and bears interest within a range of 7.00% to 7.40% (2015: 7.40%) per annum. Short-term loan receivable is unsecured, is repayable on demand and bears interest at 6.25% per annum.

(b) There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 December 2016, the Company has recorded an impairment of receivables of Rs.124m relating to amounts owed by one of its subsidiaries (2015: 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.

(c) Key management personnel compensation THE GROUP THE COMPANY2016 2015 2016 2015Rs Rs Rs Rs

Salaries and short-term employee benefits 5,113,060 6,052,853 1,440,032 4,619,466 Post-employment benefits - 290,665 - 290,665

5,113,060 6,343,518 1,440,032 4,910,131

COMPAGNIE DES MAGASINS POPULAIRES LIMITÉE18, Edith Cavell Street,Port Louis,Mauritius

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ANNUAL REPORT 2016 E - Harel Mallac Group...Annual Report 2016 1 Dear Shareholder, The Board of...

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Transcript of ANNUAL REPORT 2016 E - Harel Mallac Group...Annual Report 2016 1 Dear Shareholder, The Board of...