Broadening The Economic - Board of Investment · In 2015, we have witnessed a realignment of our...

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Broadening The EconomicHorizon

Annual Report 2015

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08

11

ContentsTable of

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20

24

26

28

Economic ReviewExport of Services

Africa Strategy

Occupation Permit

Doing Business

Global Outreach

Chairman’s Message

Managing Director’s Message

Operational Review

06

5

55

62

313234

36

38

40

42

44

46

48

50

52

Smart City & Real Estate ICT / BPO

Healthcare, Biotech & Life Sciences

Knowledge

Manufacturing

Agro Industry

Freeport

Ocean Economy

Renewable Energy

Financial Services

Creative Industry

Corporate Governance

Financial Statements

Sectoral Overview

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Chairman’s Message

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Chairman’s MessagePrimacy has been given to the economy, as a realignment of our development strategy becomes more and more important to breathe life into an economic model which is at the end of its cycle.

We have witnessed how the Economic Mission Statement kick started a series of actions to achieve the objectives set for 2030. This new vision is firmly anchored in the principle of growth with a strong social impact.

All actions have been directed towards widening the circle of opportunities and empowering citizens at large to participate fully in making Mauritius a better place for the current and future generations. Growth does not serve the national cause if the benefits are restrained to a few. Growth is all about supporting development, creating jobs and achieving tangible improvements in the people’s standard of living.

The mercurial global economic conditions have made policy making, especially for small and open economies like ours, difficult. In spite of that, bold and resolute decisions have been taken to infuse some stability and predictability in our business environment.

Amongst these perpetually shifting dynamics, the influence of the Board of Investment as an investment promotion agency is set to extend well beyond its mandate. The Economic Mission Statement and Vision 2030 have made it clear that the direct involvement of the organisation is required in the operationalisation of several of its components.

A lot of emphasis has been placed on the development of new economic pillars, including Smart Cities where investors, nationals and foreigners will be provided with options for living in sustainable, convenient and enjoyable urban surroundings.

Another prong of our focus is the Africa Strategy which banks on the continent’s progress over the last few years and its potential to sustain this evolution over a long time.

Our small market size has put some limitations on our growth prospects. We must, therefore, secure strong regional partnerships to accede to the next developmental level. Discussions are already at an advanced stage with Ghana, Senegal and Madagascar with a view to creating a conducive and risk-free environment to mobilize private sector investment in Special Economic Zones.

Our ambitions seem disproportionate with our capacity. However, to paraphrase Miguel de Cervantes, in order to attain what seems out of reach, we must set targets far beyond our immediate horizon.

We are at the dawn of an exciting transformation of the economy. The seeds have been planted for decades of growth. We have a proven track record of success regarding all our initiatives, and our new strategy will not deviate from this. We are determined to constantly improve the environment for investors, while pushing back our frontiers to enlarge our market.

Improving the overall business environment is today no longer sufficient on its own to attract investment as we move into higher value-added products and services. It has become important to provide specific attention to the needs of the different sectors of activity of the economy. To this end, BOI has conducted an internal restructuring exercise to better meet the requirements of businesses. We have created several clusters focusing on manufacturing, agro-industry, freeport, ocean economy, renewable energy, technology & services, education, healthcare, amongst others.

The overseas offices are being assisted by our Global outreach team, while the Outward investment team is focusing on the Africa strategy.

BOI acknowledges its responsibility to attract sustainable quality investments that generate jobs which have a social impact for the betterment of people’s lives. Far more than just being an agency to attract FDI, the organisation contributes to the overall economic development of the island. BOI reiterates its determination to be a crucial partner for change, now and in the future.

The Government is providing the organisation with its full support, as witnessed in the 2016/17 Budget. BOI’s institutional role has been vindicated, with enhanced powers to facilitate business which is crucial to investors.

On a final note, I would like to express my warm appreciation for the constant support and contribution extended by the Board Members and the Ministry of Finance and Economic Development throughout 2015, and rely on their usual collaboration for another fruitful year.

Gérard SanspeurChairman

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Economic development could never be restricted to achieving the highest growth rates or attracting the largest inflows of investment. It has always been about improving the standard of living of the population by enhancing its capabilities to do more. The Board of Investment is a strong proponent of progress resulting from a widened circle of opportunities. BOI is, therefore, fully supportive of the direction laid out in Vision 2030. In 2015, we have witnessed a realignment of our economic strategy with shifting global trends and an enhancement of our resilience via the re-apportioning of the burden of growth to various pillars. The core aspect of this strategy, which is underpinned by concerns for sustainable growth, job creation and poverty alleviation, has leaned towards fuelling the growth of existing and new sectors that will generate high employment and kindle innovation. To meet rising challenges and to support the Government in achieving its objectives, BOI has conducted an internal restructuring exercise focused on providing undivided attention to the enablers of growth identified in the Economic Mission Statement. BOI has become a key player in the implementation of the Africa Strategy through the spearheading of several initiatives to secure Government to Government (G-to-G) agreements with African countries. In this regard, discussions are focused on the materialisation and development of Special Economic Zones (SEZs) in Madagascar, Ghana and Senegal.

For greater proximity to markets and investors, BOI opened two overseas offices in Paris and New Delhi, respectively. These offices form an integral part of the organisation’s networking approach. Additionally, several high-level promotional missions were organised in our key markets, notably in India, United Kingdom, France, UAE, Singapore, South Africa and United States, amongst others.

In the region, in collaboration with the Rodrigues Regional Assembly (RRA), BOI hosted the Rodrigues Investment Policy Forum to define the parameters for a Rodrigues Investment Strategy which is designed to boost the development of our 10th district. ICT, renewable energy, tourism and manufacturing constitute sectors that are expected to make a new dawn of prosperity rise over the island.

Indeed, new pillars of growth are emerging. The deed of concession for the Deep Ocean Water Applications (DOWA) project is only the first step in a long journey towards the creation of a vast ocean economy, a most important contributor to national wealth.

During the year under review, BOI has also taken on board the Smart City Scheme, the backbone of the new economic order. Several letters of comfort have already been issued. Moreover, the IRS and RES schemes have been merged into one single Property Development Scheme (PDS) for a more efficient management, a smarter promotion and a rational monitoring of projects. A one-stop shop has also been launched to facilitate the setting-up of companies with a project value of MUR 20 million. The streamlining of other business processes aimed at accelerating the administrative flow has been initiated.

Another scheme which is currently being managed by BOI is the Mauritian Diaspora Scheme which aims at attracting members of the Mauritian diaspora back to the country in order to contribute to its economic development.

Moreover, BOI has provided unwavering support to ministries throughout the year in all respects of policy making, research and in the intensification of economic ties with other nations.

BOI is today one of the most important cogs which drive the intricate machinery to achieve national goals and ambitions. The organisation remains at the service of the investor community, while being committed to endeavouring its very best to making Mauritius a better place.

The strategy of the Government relies on BOI as an important partner for progress to achieve a new era of development. The Regulatory Sandbox License and the authority to issue licenses and permits where there are undue delays are a proof of this confidence placed by the Minister of Finance and Economic Development in the institution’s ability to lead progress.

Finally, I seize this opportunity to thank the Chairman, the Board of Directors and all the staff of BOI for their unflinching support and cooperation and look forward to a re-invigorated spirit for the year 2016.

Ken PoonoosamyManaging Director

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OPERATIONAL REVIEW

12

EconomicReview

World 3.3

1.1

5.0

5.2

3.4

1.8

4.6

5.0

3.1

2.0

4.0

3.8

25.0

20.6

31.4

20.3

25.0

20.8

31.6

20.5

25.2

20.8

32.0

21.3

Growth (%)

Investment(%)

2013 2014 2015

Advanced economies

Developing economies

Sub-Saharan Africa

Growth (%)

Growth (%)

Investment(%)

Investment(%)

500

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

1,000

1,500

2,000

USD

bill

ion

FDI Inflows

Developing Economies

Small Island Developing States (SIDS)

Developed Economies

Transition Economies

World

USD

mill

ion

Ethiopia Mozambique South AfricaNigeria

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

2,000

4,000

6,000

8,000

10,000FDI Inflows in selected African countries

13

Across the globe, a state of low growth, high unemployment and constant failure of policies seem to have become the new normal.

A marked slowdown in Chinese growth, low levels of activity in advanced economies and a deceleration of capital flows in emerging economies have led to highly volatile commodity and stock markets.

FDI Flows

Global FDI inflows increased in 2015, although the magnitude of the changes in FDI has been heterogeneous. For transition economies and Small Island Developing States, FDI flows have in fact declined.

FDI inflows have remained strong in commodity dependent economies in Africa. In 2015, however, FDI in Africa fell from USD 17,900.1 million to USD 17,540.4 million. South Africa and Nigeria registered sharp declines, amongst others.

Global ContextEconomic Review

Source: IMF

United States United States380 300

Hong Kong, China Japan175 129

China China136 128

Ireland Netherlands101 113

Netherlands Ireland73 102

Switzerland Germany69 94

Singapore Switzerland65 70

Brazil Canada65 67

Canada Hong Kong, China49 55

India Luxembourg44 39

Inflows OutflowsUSD billion USD billion

1,157 1,097TotalTotal

2013

3.4

3.6

3.0

3.9

2014 2015 2016

GDP Growth (%)

Manufacturing

Trade

Transportation & Storage

Hospitality

Information & Communication

Financial & Insurance Activities

Construction & Real Estate

Agriculture, Forestry & Fishing

Sectoral Contributionto GDP (%)

3%

15%

12%

6%

7%4%12%

10%

14

Globally, the United States were the principal recipient, as well as being the main provider of FDI, as the US economy continues to grow. Hong Kong and mainland China also received significant amount of inflows.

India, along with China and Brazil, led the pack line for FDI inflows in developing and emerging economies. China also invested heavily abroad, increasingly channelling their investments into the African continent.

The global economic landscape is set to undergo major transformations with Brexit forcing businesses to re-adapt their strategies. Movements of capital will provide significant opportunities for both emerging and advanced economies, in particular those aiming at consolidating their financial services industry.

The situation may be less favourable to the UK nonetheless, and this may have the effect of dragging down UK-centric economies.

Local Context

Mauritius is bearing the brunt of these headwinds, as well as facing internal structural issues, curtailing the economy’s ability to embark on a sustainable growth path. 2015 has been characterised by the exposure of our economic frailties.

Growth has been timid, at 3.0% in 2016. The tourism sector has registered 8.5% growth in 2015, followed by ICT with a 7.0% progression and a 5.3% expansion in financial activities.

In other sectors, growth rates have been more restrained. Growth in construction activities have remained negative, with the consecutive contractions having a severe impact on employment in the sector. The Mauritian manufacturing sector which has been the main engine of our economic development paradigm, has seen its importance decline rapidly over the years.

Investment Growth (%)

2015 2015 20152016 2016 20162014 2014 20142013 2013 2013

-3.3-6.0 -5.2

+6.4+3.3

+0.9+1.8

-2.8

-8.4-7.3

-4.9

+14.7Private Investment Public InvestmentTotal Investment

2013 2014 2015 2016

16

4.9 4.8 4.8 5.3

14.1 12.7 12.6

Private Sector Investment Public Sector Investment

Investment as a % of GDP

2010 2011 2012

2.90

6.50

3.903.50 3.20

1.30

7.60 7.80 8.00 8.00 7.80 7.90

2010 2011 20122013 20132014 20142015 2015

Headline Inflation Rate (%) Unemployment Rate (%)

15

Inflation has remained subdued following low growth, anaemic demand and falling oil prices. At 1.3%, the inflation rate is at historical lows. Unemployment has, on the other hand, increased marginally to 7.9% in 2015.

Investment growth has been negative for several years. Public sector investment growth has been unable to offset successive contractions in private sector investments. This is likely to change as large-scale projects go beyond the design phase and move into the implementation phase.

The investment rate, i.e. the share of investment relative to GDP, has been constantly declining, reaching 17.5% in 2015 in particular as a result of the contractions in investment.

2010 2011 2012 2013 2014 2015

13,948 12,894

20,373

13,766

18,475

Foreign Direct Investment

9,627

North America (100)

Africa (1,465)

Latin America & the Caribbean (64)

Asia & Oceania (804)

Europe (4,781)Construction (112)

Hospitality (779)

Financial & Insurance activities (167)

Real Estate Activities (6,092)

Others (40)

Manufacturing (24)

Foreign Direct Investment

Source: Bank of Mauritius

16

Foreign Direct Investment (FDI) flows have remained more consistent, although a decline is noted in 2015 following tepid global growth rates, latent uncertainties in markets and a strong Mauritian Rupee which have limited the competitiveness of the Mauritian offer.

FDI inflows have remained skewed in real-estate activities. The constant flow of FDI into the sector has benefited the economy in numerous ways over the years, having the singular capacity of pulling several sectors of the economy, notably manufacturing, transport and professional services with positive and wide-ranging spillover effects. The transfer of knowledge in terms of high quality designs, the construction of buildings and urban planning has also been considerable.

Rising interest from investors in manufacturing, healthcare, ICT and hospitality has been noted as well.

Europe remained the principal source of FDI, in particular from France and UK. There was also significant interest expressed by South African investors, particularly in real estate activities.

18

Export of Services

Export of Services

93.7

102.2

97.7

85.2

99.6

MU

R bi

llion

19

Services account for nearly 75% of our GDP, and the general trend has been towards the accelerated tertiarisation of the economy. The Mauritian services sector has managed to attain a healthy degree of diversification over the years and has been able to capitalise on assets such as a skilled and educated work force, a sound financial system, a safe environment and a competitive hospitality sector.

Export of services amounted to MUR 99.6 billion in 2015, and this includes amongst others, tourism, ICT/BPO, healthcare, education and other professional services.

The Board of Investment has been aggressively engaged in developing a conducive environment to attract prominent global players into developing our potential in exports of services. In 2015, participation in several high-level conferences and seminars such as the International Outsourcing Forum in Malaysia, the BIO International Convention 2015 in Philadelphia and the Nasscom BPM Summit in Bangalore have complemented targeted promotional missions to generate interest in the Mauritian offer.

For the future, efforts will be mainly geared towards:

• Diversifying the export basket into more value-added activities such as cloud computing, open source, amongst others;• Developing new markets with an emphasis on Africa and the emerging markets; and• Growing the exporter base (supplier diversification) through more joint ventures, partnerships, alliances and clustering model.

These will be accentuated through pointed sectoral actions, which will improve our performances in ICT/BPO, education and healthcare.

Export of Services

20

Africa Strategy

Review of performance of our key markets

Investment from Africa to MauritiusDuring the period 2010-2015, the cumulative FDI from Africa to Mauritius stood at USD 563 million, making up 20% of the total Mauritian FDI portfolio. 89% of FDI from Africa comes from South Africa.


African Outward Investment Trends from Mauritius

Investment from Africa to Mauritius

Outward Investment from Mauritius to Africa

Cumulative investment from Mauritius to Africa stood at USD 588 million for the period 2010-2015. Mauritian investment in Africa experienced a significant upsurge from 2011 to 2013, with an annual average of USD 138 million being injected in the continent. This was followed by a significant drop in 2014 to USD 94 million. Major factors that contributed to this downward trend included loss of investor confidence in Africa due to the Ebola outbreak and adverse macroeconomic conditions. In 2015, the outward investment from Mauritius to Africa fell further to USD 45 million.


USD

mill

ion

2010 2011 2012 2013 2014 2015

250

200

150

100

50

2010 2011 2012 2013 2014 2015

141

65

143

94

4520

40

60

80

100

120

140

160

100

61

115

188

7570

54

USD

mill

ion

21

22

Network built with various organisations

The involvement of the Africa Centre of Excellence in the Mauritian Africa Strategy

Throughout 2015, the Board of Investment extended its network with its counterparts in Africa by signing an additional Memorandum of Understanding with the Senegalese “Agence Nationale Chargée de la Promotion et de l’Investissement et des Grands Travaux”; hence cumulating a total of 27 bilateral agreements with African Investment Promotion Agencies. In addition, BOI continued to work closely with key resource persons in selected African countries, Chambers of Commerce as well as business associations for market intelligence and project facilitation.

The Africa Centre of Excellence (ACE) provides support to the Government of Mauritius by making recommendations for the National Budget with respect to concrete measures to be initiated. The objectives of such measures are to consolidate the level of G-to-G collaboration between selected African and Mauritian administrative public institutions, strengthen the level of technical cooperation, enable transfer of technology and accelerate the pace of partnerships in sectors of key importance for African countries. Moreover, ACE is also considered as a point of reference for information and business facilitation.

Special Economic Zones (SEZ)

In line with the Government’s strategy, ACE has been playing a pivotal role in assisting in the development of special economic zones (SEZ) in the continent. Amongst the earmarked countries are Ghana, Madagascar and Senegal.

The Ghana SEZ is aimed at promoting service-oriented sectors while the Malagasy SEZ and the Senegalese SEZ are more geared towards developing an industrial zone and a “cargo village”, respectively. ACE, in collaboration with the Mauritius Africa Fund, worked on the SEZ concept papers and these high-scale projects are currently in the pipeline.

Country Weeks

ACE has been hosting country weeks as part of its promotional events as well. The aim of these events is to synergise efforts and reinforce our collaboration with African Investment Promotion Agencies. These events are in line with the strategic objectives of BOI with regard to providing enhanced services to investors and showcasing business opportunities in Africa. In 2015, two country weeks, focusing on Uganda and Djibouti, were held.

Total Outward Investment

Developing Countries

Developed Countries

2010 2011 2012 2013 2014 2015

50

100

150

200

Global Region(in USD million)

DevelopedCountries

DevelopingCountries

Total OutwardInvestment

2010

31 12 47 35 77 15

99 199 139 171 119 53

130 211 186 206 196 68

2011 2012 2013 2014 2015

USD

mill

ion

23

ACE- Extending to other global regions

During the past six years, Mauritian outward investors focused primarily on exploring business opportunities in developing countries. Factors related to this tendency include the euro crisis, the unexplored resource pool in Africa, and higher returns expected on investments. The recurring volatility resulting in significant level of uncertainty and increased commodity risk in developing markets, however, exposes Mauritian investors to less attractive returns. Hence, as a risk mitigation strategy, Mauritian investors should invest in selected countries, providing a lower return but demonstrating stability, in order to have a balanced portfolio.

BOI has, therefore, extended the mandate of ACE for 2016; it now includes promoting outward investment globally, rather than being restricted to the Sub-Saharan African region. The objective is to encourage businessmen to explore other emerging markets which may be attractive investment destinations.


Mauritius - Outward Investment Trends

OccupationPermit

24

Trends in Occupation Permits issued since 2006

2015

2014

French Indian South African Chinese British

32 %

22 %

9 %6 %

20 %

9 % 9 %

33 %

6 % 6 %

Professional Investor Retired Non-Citizen

Self- Employed

82 % 8 % 6 % 3 %

Professional

Investor

Retired Non-Citizen

Self Employed0

1000

2000

3000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Active permits as at 31 December 2015 by category

Top 5 Nationalities as at December 2014 & 2015

25

Occupation PermitAs it aspires to graduate to the league of high-income economies, Mauritius has been actively encouraging foreign talents, know-how and investment into the country. In this vein, the country opened up to foreigners through the introduction of the Occupation Permit Scheme in 2006. This initiative has had a favourable impact on the economic growth, coupled with increased transfer of technology, knowledge, skills, expertise and capital. In addition, the issue of skills mismatch has been addressed to a great extent as the Scheme allowed high-calibre foreign nationals to be recruited in key specialised fields where there was a lack of Mauritian expertise.

It is noteworthy to highlight that Mauritius has witnessed an increase in the number of high-profile foreigners registered under the Scheme, from 2,604 permits issued in 2014 to 2,968 in 2015. Since the introduction of the Scheme in 2006, a total of 20,313 permits have been issued to foreign nationals. The number of active permits as at 31 December 2015 stood at 5,231, of which 82% are under the Professional category. Foreign nationals are mainly employed in such sectors as ICT & media, hospitality & tourism and financial services.

Over the years, our traditional partner has remained France (32%), followed by India (20%), which represent an important source of investment, talent and skills for the Mauritian economy.

26

Doing Business

27

Doing BusinessSeveral actions were undertaken in 2015 with the aim of creating a conducive and enabling business environment that fosters economic growth. In this context, a One-Stop Shop (OSS) has been set up since July 2015 to provide all the necessary support to facilitate investment projects for project values exceeding MUR 20 million. The objective is to help streamline procedures and enable entrepreneurs to apply for business licences, effect payments and collect licences, all under a single roof.

In parallel, the Government of Mauritius has taken a commitment to review the regulatory framework and simplify procedures pertaining to operational licenses. The Board of Investment was mandated to carry out a major overhaul of the regulatory framework. In the first phase of the reforms, import permits issued by the Ministry of Commerce and Industry were reviewed and an omnibus permit for tourism accommodation was introduced. In addition, 44 licenses were exempted from the requirements of a Building and Land use Permit so as to facilitate the setting up of home-based activities by individuals.

Moreover, BOI spearheaded the introduction of a unique identification number for businesses in collaboration with other public sector agencies. As a result, the Business Registration Number (BRN) issued by the Corporate and Business Registration Department is henceforth used as the sole identification number for businesses. This initiative aims mainly at eliminating the need for businesses to re-register with any Public Sector Agency while at the same time enhancing the sharing of information among Government entities.

The construction industry has also undergone considerable progress in 2015, as outlined in the ‘Dealing with Construction Permits’ section of the Doing Business Report of the World Bank.

Bureaucracy remains, however, one of the major drawbacks impacting the growth and future development of the construction sector. Hence, as part of its reform programme, BOI is currently working on simplifying the procedures pertaining to construction-related permits.

In line with the Government’s vision to position the country among the top 15 economies in the Doing Business Report of the World Bank, BOI has devised an action plan targeted towards policy restructuring and is working in close collaboration with stakeholders in both the public and private sectors to implement the reforms.

The set objective for 2016 is to pursue reforms pertaining to the regulatory framework and to launch an e-licensing project which aims at connecting all regulatory agencies on a single online platform such that the application for different types of business licences can be effected on the same platform. Moreover, following the announcements made in the Budget 2016/17, licenses and permits will be processed more rapidly.

Global Outreach

28

Global Outreach

29

In the March 2015 Budget Speech, it was announced that BOI will employ Trade & Investment Managers in strategic cities around the world. To this effect, BOI took the necessary steps to expand its footprint in strategic cities, namely in Europe, India, South Africa, Asia and the US. These overseas offices will help service international investors and buyer communities and ensure visibility in highly competitive markets.

2015 marked the setting up of two BOI representative offices. The Minister of Finance and Economic Development launched the BOI Office in Paris on 23rd of June 2015 and the Right Honourable Prime Minister, Sir Anerood Jugnauth, G.C.S.K., K.C.M.G., Q.C., launched the BOI Office in New Delhi on 30th of October 2015.

Seven Economic Counsellors will be posted in overseas offices in addition to those already serving in Paris, New Delhi and Johannesburg.

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SECTORAL OVERVIEW

32

Smart City&Real Estate

12 projects

10 Letters of Comfort

343 in 31 projects

Real Estate Scheme (before repeal)

Smart City Scheme

IRS and RES under construction

11 Lettersof Approval

Property DevelopmentScheme

33

Smart City & Real Estate2015 witnessed a year of significant growth in terms of regulatory guidance for the development of real estate projects. At the same time, FDI in real estate was at an all-time high with MUR 8.1 billion, an increase attributed mainly to the start of major construction projects.

Major developments driven by BOI include:

The introduction of the Property Development Scheme (PDS) by aligning the Real Estate Scheme (RES) with the Integrated Resort Scheme (IRS);The Smart City Scheme (SCS); and A revised Invest Hotel Scheme (IHS).

In order to give full force to the proposals, three Regulations were promulgated by the Government leading to the creation of the PDS, SCS and revised IHS to stipulate the specificities of projects developed under the three schemes. A set of guidelines has been made available to help investors conform to the current schemes.

Quick Facts

The buyers’ market for IRS and RES units is dominated mainly by France (45%), followed by South Africa (20%) and United Kingdom (9%).

The key challenge for BOI is to maintain the growth momentum of the past years and to develop innovative products while working on enhancing the long-term appeal of luxurious housing market as competitive investment asset classes.

Way Forward

The following new areas of activity are being explored:

real estate management;real estate financing and private property vehicles using collective investment vehicles;real estate ownership structures – especially the growing influence of REITs and REIT-related structures;shared ownership schemes;mixed-use development under the Smart City Scheme to promote the live, work and play concept;central improvement district concept for urban regeneration; andmarina development to boost sailing tourism.

The real estate sector is now looking to hitch its wagon to fast-moving economies such as China, India, Russia and the Middle East. The rapid growth in emerging economies is creating huge potential for the tourism industry and the real estate market to tap into.

•

••

••

•

••

••

ICT / BPO

34

19,100 MUR 2.4billion5.6%7% 650+

Share of GDP

Growth Companies Employment Investment

35

The Government has set out a clear vision to transform the ICT industry into a thriving industry, focused on innovation and creativity while at the same time developing a sustainable and high value-added economy.

The ICT-BPO industry has maintained its development into one of the most significant and promising industries to accelerate the transition of Mauritius from an agriculture and manufacturing-based economy to a service-oriented one. The sector has grown steadily in 2015, with a number of new industry-shaping and foundation-building trends, with its growth fuelled mainly by increasing diversification in the geographical base, industry verticals and adaptation of new service offerings.

The industry is increasingly seeking specialisation in higher value-added activities and margin processes such as financial research, modelling, HR analytics and Healthcare IT, amongst others. Moreover, the gradual adoption of new technologies such as cloud computing, mobility and social media is playing a key role in driving growth of IT services. An embryonic development mass in games and animation technologies has also been noted since last year.

There is also increased market diversification towards non-traditional markets such as Australia, Middle East, Canada and USA as companies are looking beyond existing markets to expand their horizon.

BOI has been a key partner of both the Government and the private sector during the year, participating actively in forum discussions and providing concrete views to help in policy formulation and to devise an appropriate strategy to achieve targets set in terms of infrastructure development, growth, diversification, especially employment creation.

In addition, BOI has aggressively pursued promotional efforts at major events, including Nasscom BPM Summit in Bangalore, as well as engaging in targeted meetings with potential investors to set up operations in Mauritius.

Key Projects in 2015

The Cloud Factory

Cloud Factory is a start-up focused on building future skills and competencies on new technology paradigms in Mauritius – cognitive computing, cloud, big data, IoT, analytics and visualisation, machine learning, amongst others.

Playtouch

The company is engaged in the development of casual games, for all web devices (Mobile, PC, TV & Tablet). Playtouch is the most innovative HTML5 games studio on the market, and is set up in Mauritius with an investment of EUR 400,000, employing 18 people.

EON Reality

It is the world leader in Virtual and Augmented Reality based on knowledge transfer for industry, education, and edutainment. The new Hub shall provide access to state-of-the-art interactive 3D technologies, including a new virtual showroom, training room, project room, development lab, and 3D classroom infrastructure, creating a center of excellence in Mauritius.

Fast Track Committee

In addition, two projects were presented to the committee in 2015, Studio V11 and Outremer Telecom.

Outremer Telecom offers call centre services to Altice Group subsidiaries, and is expected to create 5,000 jobs by 2018 while Studio V11 aims at creating a unique hub of expertise in mobile applications technologies in Mauritius. The company plans to further invest in the development of production studios over the next 3 years and recruit more than 100 engineers.

Quick Facts

Way Forward

The Government has signaled its ambition to become a digital economy. The announcements in the budget aim at consolidating the digital infrastructure, encouraging e-entrepreneurs and accelerating the Government’s transition into the use of e-services.

BOI’s efforts for 2016 will be geared mainly towards diversifying the export basket into more value-added activities with the materialisation of projects in both voice and non-voice BPO activities, shared service and IT outsourcing. New segments such as Remote Infrastructure Management Services, Cloud Computing, Provision of Software as a Service (SAAS), and mobile animation will gain prominence during the year.

Companies are also expected to be engaging in more R&D and go beyond basic research to invest in innovation and new product development. 2016 shall also witness an increased focus on entrepreneurship and start-ups. Moreover, the rapid emergence of new wireless, broadband and media technologies is opening up not just new capabilities, but also new ICT architectures. This will definitely create many opportunities for small, niche companies to exploit. Opportunities also exist for greater collaboration between the burgeoning indigenous technology sector and the multinational companies. This collaboration will allow the country to become a true global economy.

ICT/BPO

36


20,000 MUR 1.7billion4.3%3.4%

Share of GDP Growth Employment Investment


37

The Healthcare and Life Sciences sector has been identified as an integrated sector of immense potential, underpinned by a core group of high value-added activities such as hi-tech medicine, medical tourism, medical education and wellness. Over the past few years, this sector has witnessed rapid growth and has attracted leading multinational companies in niche areas, namely medical academic institutions, manufacturers of medical devices and retailers, biomedical research institutions, hair transplant, plastic surgery and cosmetic dentistry, amongst others.

In view of the numerous opportunities existing in the sector, Mauritius is now positioning itself as a Healthcare and Biomedical Hub for the region with state-of-the-art infrastructure and the broad spectrum of services being offered to cater for the growing healthcare needs of both national and international patients. Mauritius is gradually emerging as a leading medical travel destination and it is estimated that approximately 10,000 foreign patients sought medical treatment in Mauritius in 2015. Of note, more than 50% of the pool of foreign patients came from countries in the region.

The sector is supported by a strong business environment, good air connectivity, cutting-edge medical technologies and a highly qualified and trained pool of healthcare professionals. Having one of the highest literacy rate in Africa, Mauritius boasts highly skilled biochemists, molecular biologists, cosmetic surgeons, cardiac surgeons and urologists providing comprehensive high-end medical care that is new and unique to the region.

Quick Facts


Socota Phoenicia BioPark 2015 witnessed the emergence of the first Biotechnology centre in Mauritius, namely the Socota Phoenicia BioPark. The Socota Phoenicia BioPark is a private sector initiative which houses 5 biotech companies involved in Research and Development activities.

Clinear Research Ltd

To date, 3 Clinical Research Organisations (CROs) have been set up in Mauritius and are conducting clinical trials on diabetes, HIV and cardiovascular diseases, amongst others. Another CRO, Clinear Research Ltd, has been established in November 2015 to carry out clinical trials in collaboration with Parexel. Clinear Research Ltd will be recruiting top-notch professionals, namely molecular biologists and medical practitioners in 2016.

Panacea Pharma

Panacea Pharma, a pharma R&D and manufacturing unit which manufactures phyto, cosmetic and pharma products from plant extracts mainly, expanded its operations in 2015. The group has delocalised its activities from Albion to Socota Phoenicia Biopark, Phoenix, and employs around 12 staff including pharmacists, molecular biologists and biochemists, amongst others. The group will be recruiting more technical staff in 2016 and is currently studying the possibilities to extend its market reach to Europe and Africa.

Way Forward

In its pursuit to transform Mauritius into a high-income economy, the Government is committed to developing and promoting new economic pillars which will broaden the economic space, thus stimulating sustainable growth and development.

In this context, BOI is working in close collaboration with other stakeholders to establish enabling frameworks, such as the consolidation of IP regulations to foster a creative and innovative culture. This will pave the way for the development of value-added activities, such as medical KPO and pharma R&D.

Currently, there are opportunities for the setting up of:

• Multispecialty and super-specialty centres• Specialised diabetes research and treatment centres• Specialised centres for elderly care & rehabilitative medicine• Specialised centres for novel treatments stem-cell therapies• Plastic reconstructive surgery clinics• Clinics for dental surgery and dento-facial orthopaedics• Convalescence and pain clinics providing specialised care to patients suffering from acute and chronic conditions• Wellness centres and health resorts• Residential care homes

The Ministry of Technology, Communication and Innovation (MoTCI) has envisaged setting up a National Biotechnology Cluster (NBC) as a new organisation to foster the development of biotechnology projects in Mauritius, by bringing together the private sector and academia. The creation of the NBC will be driven by the Mauritius Research Council in close collaboration with the Board of Investment and other stakeholders.

Knowledge

38

31,200 MUR 2.3billion4.8%2.5%

556 Training

institutions

10 Publicly

funded tertiary education providers

58 Private tertiary

education providers

2,650 International

students

Share of GDP Growth Employment Investment

39

KnowledgeThe Economic Mission Statement reiterated the ambition to revamp the higher education sector and position Mauritius as a leading provider of quality education in the region. The objective of the Government is to create a vibrant knowledge-based economy, focused on highly specialised skills, professionals of high calibre and researchers who will contribute to knowledge building.

Investment is being channelled into the creation of new university campuses and state-of-the-art infrastructure with a sharp focus on quality education as well as a strong anchor in research. Mauritius is progressively building its reputation as an education hub and is poised to attract educational institutions of high repute.

Several prestigious institutions from Europe such as Ecole Centrales de Nantes, ESSEC Business School, Université Pantheon-Assas and Ecole Nationale Superieure d’Architecture de Nantes are already operating in Mauritius.

Quick Facts


Medine Education Village

The Medine Education Village positions itself as a centre of excellence where the best international tertiary institutions co-exist in their respective fields. Under the ICSIA (International Campus for Sustainable and Innovative Africa) initiative which covers 7 top-notch universities and schools, Université Panthéon-Assas, Ecole Centrale de Nantes and Ecole Nationale Supérieure d’Architecture de Nantes have been TEC accredited and will start offering their respective bachelor degrees in October 2016.

Other leading institutions in business, medical, gastronomy and translation and intercultural fields are currently being sought to expand their activities.

African Leadership College

The African Leadership College has set up a private tertiary educational institution in Beau-Plan Business Park in collaboration with Glasgow Caledonian University from United Kingdom to offer undergraduate programmes. In addition, the institution has already attracted 180 international students from more than 20 African countries. The African Leadership College also plans to construct a residential campus on 50 hectares of land in Pamplemousses.

Way Forward

New measures and policies are also being proposed to enable more international students to study in Mauritius and to secure bilateral and multi-lateral mutual recognition of qualifications. The number of international students choosing Mauritius to pursue their higher studies is on an upward trend. As it is, there are currently more than 2,650 international students from 70 different countries, mainly from India, Nigeria, South Africa, Madagascar, France, Uganda, Kenya, Tanzania, and Zimbabwe, amongst others.

In line with Government’s Vision 2030 to give a strong boost to the higher education sector, BOI will focus on developing new segments and attracting specialised institutions in niche areas, such as executive education, polytechnics institutes, research centres, and academies, amongst others. Moreover, BOI is working towards the promotion of Mauritius as an Education Hub for the export of educational services through the implementation of an internationalisation strategy to attract more international students.

40

Manufacturing

112,200 MUR 3.7billion14.8%

Share of GDP Employment Investment

41

A strong manufacturing sector is important for a resilient economy, and the objective has been set to increase the contribution of the sector to 25% of GDP.

New activities are emerging in the Mauritian manufacturing landscape, providing a new thrust to the industry. These new manufacturing sub-sectors include PET-preforms, acetate sunglasses, footwear and adhesives manufacturing. Such industries are now complementing and consolidating the traditional manufacturing base. Moreover, the outcomes, in terms of knowledge transfer, training and technology transfer will be numerous.

In order to make the most of the opportunities and capitalise on the prospects that present themselves, a targeted investment promotion mission was carried out in the UAE, in November 2015. Companies in the packaging and food processing industries were targeted. Other similar investment promotion missions to South Africa, France, Germany and India have been scheduled for 2016. High value-added sectors such as technical textiles, medical devices, jewellery or watchmaking will be targeted.

BOI has also elaborated a strong ‘aftercare programme’ with the objective of assisting companies in their expansion projects and addressing operational constraints.

Quick Facts


International manufacturing groups such as Empak (Africa) Ltd, (Oman – PET preforms), Technical Mastics (South Africa – Adhesives), Yong Sheng Ltd (South Africa - Footwear) and Optsun Ltd (France – Sunglasses)

have established their operations in Mauritius. Existing manufacturing companies, namely Island Brush Ltd (France – Paint brush) and BGH Ltd (France - Watch Parts), have completed their ambitious expansion projects consisting of land acquisition, construction of new industrial premises and acquisition of new equipment.

These major expansion projects demonstrate the robust presence of foreign-owned manufacturing companies, which are now targeting an increased production capacity, through higher productivity and efficiency.

Way Forward

Several actions to curb the image deficit of the manufacturing sector will be initiated through a communication plan. The elaboration of a new dedicated manufacturing website, brochure and promotional clip are on the agenda.

It is also worth highlighting that important manufacturing projects will be launched in 2016. BOI is already facilitating several projects, considered as strong leads, which will materialise in 2016. Several activities ranging from electrical cables to stationery manufacturing are concerned.

2016 will focus on targeted investment promotion missions and collaborative actions with BOI overseas offices in order to attract high value-added manufacturing companies having an export strategy towards Africa. This has been reiterated in the 2016/17 Budget.

In addition, Mauritius is aiming to become a regional platform for the manufacture, trading and transformation of gold. BOI will actively engage in developing the segment and canvass for reputed global players to set up in Mauritius.

The tax incentives for investment in highly innovative machinery by manufacturing companies mentioned in the budget will also significantly enhance the attraction of Mauritius for high-end manufacturing activities.

Manufacturing

AgroIndustry

42

44,900 MUR 1.9billion3.5%

Share of GDP Employment Investment

43

Agro-IndustryThe year under review has witnessed the endeavour of the Government to promote sustainable agricultural practices through eco-friendly production approaches, such as, bio-farming and zero budget/natural farming, that promote safer produce for high quality nutrition. In this regard, the Ministry and relevant stakeholders have been working towards the development of ‘Bio-farming Development Certificate’ to further encourage the production of bio foods with a package of incentives.


Mauritian tea is today receiving renewed attention and the very presence of Mauristea Investment Company Limited bears testimony to this fact. The company has submitted a business proposal which basically aims at revamping the local tea industry and intends to engage in the establishment of new tea plantations and milling plants to produce green tea and black tea for both domestic and export markets. The company also plans to set up Tea- Houses to popularise Chinese tea-drinking culture. To this effect, it has already kick-started implementation of its project with further investment planned over the next 5 years.

Quick Facts

Way Forward

The challenge of food security is particularly daunting for developing nations such as Mauritius which are net importers of food commodities. Over the years, the Mauritian agricultural food sector has been able to satisfy the food consumption requirements of the population with an overall self-sufficiency of 23%.

With a view to ensuring sustainable development and diversification, investment in value-added activities and technology based production is being encouraged.

BOI has already received an expression of interest for the setting up of a Dairy Project which will contribute towards food security. Fresh milk production is quite limited, with annual production at about 5 million litres. This represents merely 4% of the overall country’s needs for milk and milk by-products.

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Freeport

Volume(Tons)

Value(MUR billion)

United Arab

Emirates

Madagascar Spain Singapore South Africa

1,0235000 2

10,000 4

15,000 6

20,000 8

25,000 10

30,000 1236,019

7,509

1,352

16,444

Top re-export countries in 2015

3,200295,000

m2 0.7%5%

230 23 562,000 61 billion

Share of GDP

New licensees

Growth

Active Operators

NetEmployment

AnnualTrade Volume

(Tons)

Built-up space

AnnualTrade Value

MUR

45

FreeportThe Freeport aims at positioning Mauritius as a leading trading, logistics and distribution hub for the region. The Freeport has proved to be a very important mechanism used to foster export-led industrialisation for the country. The transition to the free zone model will be dynamic, investment-intensive, management-driven and integrated. New activities such as Vault Services, courier services, amongst others, are expected to increase trade flows in the Freeport.

2015 has witnessed an increase of 30% in terms of trade value for the Freeport sector, from MUR 47 billion in 2014 to MUR 61 billion in 2015. This increase is directly attributable to exports of mobile phones, seafood and fish products, and general goods, amongst others. An increase of 3% was also observed in the number of Freeport containers at export from 8,058 in 2014 to 8,282 in 2015.

Quick Facts


In 2015, realised investments amounted to approximately MUR 65 million in the Freeport, with the setting up of two major companies, namely Africasia Electronics dealing in the assembly of television sets and Akriti Jewelcraftz (Mauritius) Private Limited which is involved in the processing of gemstones.

Way Forward

Currently, there are 6 Third-Party Freeport Developers, including Trade Park Mon Trésor, a newly created zone covering an area of around 24 hectares located at the airport.

With a view to further develop the sector, various other initiatives are presently being undertaken by the Mauritius Port Authority with (i) the extension of the existing quay from 560 metres to 800 metres, (ii) the increase in the depth of the channel to 16.5 metres to facilitate berthing of ships which are more than 350 metres long and having a capacity of 9,000 – 10,000 TEUS and, (iii) accommodating ‘large container ships’ by 2017 and (iv) acquisition of two additional cranes to transfer containers.

These developments will help transform Port Louis into a value-added port and logistics platform for the region. On the other hand, Airports of Mauritius (AML) has earmarked 33 hectares of land for the development of Freeport and Logistics facilities.

BOI will be working in close collaboration with all stakeholders to revamp the Freeport into a world-class Free Zone with enhanced advantages to investors. BOI will adopt a targeted approach to conduct investment promotion activities in line with the redefined vision and strategy to attract foreign companies trading in the region to use the competitive facilities offered.

OceanEconomy

46

47

Ocean EconomyOcean Economy contributes approximately 10.3% to national GDP, accounting for an annual value addition of around USD 1 billion. However, excluding coastal tourism, contribution of the ocean economy amounts to 4.4% with two core components, namely seafood-related activities (1.4%) and seaport-related activities (2%).

Employment in the sector (excluding coastal tourism and related activities) amounts to about 14,000, with fishing and seafood processing activities accounting for the bulk of employment. In 2015, local investment, to the tune of MUR 100 million, has been injected in the sector.

The geostrategic location of Mauritius in the south-south trade corridor and its extensive maritime zone of 2.3 km2 provide an array of untapped business opportunities. Consequently, the Government has earmarked the sustainable development of our ocean resources as a priority. To this effect, a Ministry dedicated to the Ocean Economy has been created and necessary steps are being undertaken to unleash the development potential of this emerging economic pillar.


Deep Ocean Water Applications (DOWA) project

Urban Cooling Limited (UCL) proceeded to the landmark signing of a sea concession agreement in December 2015 with the Government in view of implementing the first Deep Ocean Water Applications (DOWA) project in Mauritius. The project, with a total investment of some MUR 3 billion, will use the cooling properties of deep-sea water to develop Sea Water Air Conditioning (SWAC), an innovative green cooling technology to service buildings in the Port-Louis region. SWAC aims at replacing capacity of some 26 MW from the national grid. This pioneer project, which is scheduled for completion by end of 2017, will unleash a wide range of downstream activities that will tap into the nutrient properties of deep sea water for commercial application, including high-end aquaculture, thalassotherapy, premium bottled water, pharmaceuticals and cosmetics, amongst others. The DOWA project has the potential to create an economic sector in its own right in the medium term.

Spirulina production by Green Create Holdings Ltd

Green Create Holdings Ltd, in partnership with the ENL Group, has submitted a proposal to develop a human nutraceutical grade, Spirulina production facility, in the South East of Mauritius. The project will be located on freehold land owned by the ENL Group and will be developed in phases. Total capital investment in the project is estimated at approximately USD 560,000 for Phase 1 and USD 8 million for Phase 2. The promoters have also indicated that around 20 jobs will be created once the project is fully established.

Way Forward

GDP contribution of the Ocean Economy is expected to increase substantially over the next two years with major developments in the field of aquaculture, DOWA and the seaport. The process for acquiring permits and licenses for 9 aquaculture and fishing projects, with required investments of approximately USD 300 million and a potential for 575 jobs, has already been initiated. Moreover, upon completion of the transformational infrastructure development of the port, opportunities for bunkering, transshipment, cruise tourism and other port-related activities will be capitalised in the foreseeable future. Major development in marine services, ocean knowledge and DOWA downstream is also expected over the next 3 years.

48

RenewableEnergy

49

Renewable EnergyAccording to Statistics Mauritius, renewable energy accounted for 20.3% (596.2 GWh) of total electricity generation in 2014 (including Rodrigues island), representing a decrease of 0.3% from 2013. Upon the operationalisation of “Le Bambous” 15 MW solar farm, electricity generated from solar sources increased from 0.1% to 0.8%. Several renewable energy projects have been re-structured after having secured preferential loans under the AFD Green Lending Scheme and are currently under implementation.


Eole Plaines des Roches

The Eole Plaines des Roches project comprises the development of a wind farm project with a total installed capacity of 9.35 MW. This project, which is being executed under a joint venture between France-based renewable energy solutions provider, Quadran, and the Sugar Investment Trust, necessitated investment of around MUR 650 million and will create some 20 direct jobs.

Five solar farms, of 2 MW capacity each, are at different phases in their implementation process. These projects are planned for grid connection during the course of 2016 and have a combined investment value of about MUR 950 million and will create some 40 direct jobs.

The first private-sector-led independent generation unit was operationalised in 2015 with the inauguration of the Super U Centre de Flacq commercial complex. An additional MUR 80 million was injected in this pioneer green building development to equip the complex with an installed solar power generation facility of 1.1 MW, waste water recycling units, thermal insulation and modern air conditioning system. Combined, these innovative assets provide for an annual total energy saving of 5.7 Gwh, thus avoiding the emission of 4,000 tonnes of CO2. This landmark development sets the norm for new private-sector-led ventures in the renewable energy field.

Way Forward

With the Government’s firm commitment to achieving an energy mix comprising 35% of contribution from renewable energy by 2025, major developments are forecasted for 2016. The execution of the 2015 tender for solar farms of 10 to 15 MW capacity will substantially contribute in achieving this target. In addition, future developments aim at capturing new sources of renewable energy, such as waste to energy and marine renewable energies.

It was announced in the 2016/17 Budget speech that the grid capacity of the CEB will be improved from 148 MW to 160 MW. This is in line with Government’s strategy to evolve towards cleaner energy production technology and allow more investors to undertake renewable energy ventures.

FinancialServices

50

51

Financial ServicesOver the last two decades, the financial services sector of Mauritius has developed into one of the main pillars of the economy. The country has forged a strong reputation as a premier international financial centre (IFC), with a growth rate exceeding 5% over the last four years and 12.0% contribution to the Gross Domestic Product (GDP). Over 15,000 highly skilled professionals are directly employed in the financial services industry. Prominent local and international players currently operate in the industry, offering an extensive range of products and services and first-class personalised solutions. Mauritius is internationally recognised as a trusted investment centre for cross-border investments with a proven track record. The island remains committed to tax information exchange, transparency and adherence to best practices as set by leading institutions including the OECD, IMF and other standards-setting bodies.

Key Project in 2015

The Bank of China has expressed interest to conduct banking operations in Mauritius. It will be mainly engaged in corporate banking, expanding deposit-taking, lending, international settlement, trade finance and financial institutional business, proactively conducting cross-border RMB businesses, and endeavoring to grow into a strategic platform for African businesses. The Bank of Mauritius issued a banking license to the Bank of China on 18 March 2016, making the latter the first Chinese bank licensed to conduct banking operations in Mauritius.

Way Forward

The Government is laying much emphasis on the Mauritius International Financial Centre. The vision is to develop Mauritius into a sophisticated and vibrant international Financial Services Centre of substance. The National Stock Exchange of India has signed a Memorandum of Understanding (MOU) with the Stock Exchange of Mauritius, the FSC and the Ministry of Financial Services. This MOU will unlock opportunities for capacity building, surveillance, enforcement and development of an “African Index Listing‟ as well as “NIFTY Listings” in Mauritius. Similar initiatives are underway with the Johannesburg Stock Exchange and the Singaporean Stock Exchange. Moreover, the Stock Exchange of Mauritius has launched the SEM Sustainability Index (SEMSI). SEMSI has an integrated approach and takes into consideration all four key pillars of sustainability (economic, environmental, social and corporate governance). By setting up SEMSI, the SEM took a leading role in creating a more sustainable capital market and became a signatory and Partner Exchange of the United Nation’s Sustainable Stock Exchanges initiative in 2015. The Captive Insurance Act has been introduced to provide the framework for the development of the new Captive Insurance sector, which will also fuel growth and highly paid jobs.

The objective is to diversify into more substance-based activities in the financial services sector. Several fiscal incentives have been announced in the budget to attract regional headquarters, investment banks, and high net worth individuals, amongst others. In addition, a commodities trading platform, ‘Mauritius International Derivatives & Commodities Exchange’ has been announced. These will change the financial services landscape and attract global players into Mauritius to use the country as a platform for activities based in Africa.

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Creative Industry

2012 2013 201420112010

2.6% 2.9%2.7% 3.1% 3.2%

5.8%

6.9%

8.5% 8.2%

6.7%

% Sectoral Real Growth Rate % GDP Contribution

Real Growth Rate & GDP Contribution (%)

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Mauritius has been attracting foreign film productions since 1979 when the first Indian movie was shot. The Mauritian landscape has since gained popularity and to date, some 250 productions have been shot in Mauritius.

The contribution of this sector is currently very nominal. Statistics Mauritius accounts part of the creative industry under the sector “Arts, Entertainment and Recreation”. GDP contribution of Arts, Entertainment and Recreation stood at 3.4% in 2014 and increased slightly to 3.5% in 2015.

The Film Rebate Scheme

The Board of Investment was assigned the administration of the Scheme under Section 28 of the Investment Promotion Act whereby both local and overseas producers would avail themselves of 30% refund on Qualified Production Expenditure (QPE) incurred in Mauritius. The Scheme covers feature films, documentaries, TV productions, serials and commercial productions.

BOI has established a one-stop shop with streamlined procedures to assist film producers in acquiring clearances and authorisation for film shooting as well as in processing their reimbursements under the Film Rebate Scheme. A Film Rebate Committee has also been set up under the chairmanship of BOI to assess and recommend projects to the Managing Director for approval.

Since the implementation of the Film Rebate Scheme, relevant regulations have been amended to adapt to the changing requirements of the global

film industry. Relevant amendments were made to the Investment Promotion (Film Rebate Scheme) Regulations to attract a wider range of productions. The vision of the Government is to revamp the Scheme in order to target top-notch foreign productions with a view to increasing the economic impact and visibility of the destination as well as to encouraging greater local participation.

A total amount of MUR 502.6 million has been realised as Qualifying Production Expenditure with the completion of 28 projects to date. India and South Africa continue to be the main markets but BOI has also registered increased interest from other countries, such as Germany and China.

Job creation per project is estimated to be around 30. In addition to creating direct and indirect jobs, the Film Rebate Scheme has beneficial effects on multiple sectors, namely leisure and hospitality, trade, professional services, transport and logistics and has been an effective tool in boosting the business of SMEs.

Way Forward

Our competitors, such as UK, France, and South Africa, are continuously enhancing their film incentives to attract major international productions. The 2016/17 Budget revamped the Film Rebate Scheme by increasing the rebate for high-end productions. This will significantly enhance the visibility of Mauritius as a cinematographic destination of choice and BOI will capitalize on this enhanced advantage to market the Mauritian destination.

Creative Industry

CorporateGovernance

55

Name of Board Member

Mr. Gérard Sanspeur

Mr. Ramprakash Maunthrooa

Mrs. Shakuntala Devi Jugmohun, O.S.K.

Mr. Soopramanien Kandasamy Pather

Mr. Tamanah Appadu

Dr. Raja Vinesh (Robin) Sannassee

Mr. René Leclézio

Mr. Joël Patron

Mr. Fareed Jaunbocus

Mr. Louis Emmanuel Ng Cheong Tin

Mr. Deepak Benydin

FunctionChairman – Board of InvestmentManaging Director, Enovaconsult Ltd Presently Senior Advisor, Ministry of Finance and Economic Development

Senior AdvisorPrime Minister’s Office

Special Advisor, Ministry of Finance and Economic DevelopmentPresently Senior Advisor, Ministry of Foreign Affairs, Regional Integration & International Trade

Senior Chief ExecutiveMinistry of Housing and Lands

Permanent SecretaryMinistry of Industry, Commerce and Consumer ProtectionPresently Permanent Secretary, Prime Minister’s Office

Associate Professor/Dean of Faculty of Law & ManagementUniversity of Mauritius Presently Professor/Dean of Faculty of Law & Management

Chief Executive OfficerPromotion & Development Ltd

Chief Executive OfficerMaudell Co Ltd

PartnerBDO

Consultant

PresidentFederation of Parastatal Bodies and Other Unions

Date of Assumption of Office

Chairman, from 3rd March 2015

Board Member, from 3rd March 2015










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Corporate GovernanceBOI views good Corporate Governance practices as an integral component of good performance. As a parastatal body wholly owned by the Government, the organisation is committed to fulfilling its mandate in a manner which is consistent with good governance practices, particularly accountability, transparency, responsibility and ethics.

Governing Bodies

The direction, control and accountability of the business of BOI are vested in the Board.

Business is conducted in accordance with the Investment Promotion Act, other relevant statutory provisions and the principles of good governance. All functions are exercised in good faith with due care and diligence, and in the best interest of BOI and its stakeholders.

The Board

The Board is responsible and accountable for the performance and affairs of the organisation. It subscribes to sound Corporate Governance Principles and ensures that the highest standard of business ethics and integrity are maintained.

The Board was composed of the following members:

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Board Committees The Human Capital Committee

The Board, at its 180th Meeting of 26 March 2015, resolved to establish a sub-committee to cater for all Staff and Employment related matters of the BOI. The sub-committee, termed as the Human Capital Committee (HCC), has been set up with the mandate to:

I. Prepare the HR Strategy of the Board of Investment;II. Make recommendations for the appointment of short-term consultants to assist in HR-related matters;III. Make recommendations for recruitment campaigns of Management-level staff and subsequent endorsement of selected candidates;IV. Make recommendations for nominations, salary reviews and promotion exercises;V. Endorse recommendations with respect to decisions pertaining to the Managing Director’s direct reports; andVI. Participate in panel interviews for high-calibre staff at managerial level.

The following Board Members constituted the committee:

1. Mr. Gérard Sanspeur (Chairman)2. Mr. Deepak Benydin3. Mr. Fareed Jaunbocus4. Dr. Raja Vinesh (Robin) Sannassee

The Risk Management & Audit Committee The Risk Management and Audit Committee has been mandated to assist the Board in adhering to its corporate governance principles and oversee the risk management and audit function of the Board of Investment.

The main objectives are to:

I. Oversee matters related to financial reporting, internal control systems, risk management systems and the internal and external audit function;II. Assess the controls and best practices put in place by BOI to mitigate any operational and reputational risks; andIII. Report on the Internal Audit as and when audits are completed.

The following Board Members constituted the Risk Management and Audit Committee:

1. Mr. Louis Emmanuel Ng Cheong Tin – Chairperson2. Mrs. Shakuntala Devi Jugmohun, O.S.K.3. Mr. René Leclézio

Mr. Gérard Sanspeur 680,000

Board Fees Sub-Committee Fees

Director’s Fees

Name of Board MemberBoard Attendance

(9 meetings held in 2015)

Total Fees

45,000 725,000 Attended 9 meetings

Mr. Ramprakash Maunthrooa

250,000 - 250,000 Attended 9 meetings

Mrs. Shakuntala Devi Jugmohun, O.S.K.

250,000 27,000 277,000 Attended 5 meetings


Mr. Tamanah Appadu


Dr. Raja Vinesh (Robin) Sannassee


Mr. René Leclézio 250,000 - 250,000 Attended 7 meetings

Mr. Joël Patron





Mr. Louis Emmanuel Ng Cheong Tin

Mr. Fareed Jaunbocus

Mr. Deepak Benydin

Mr. Soopramanien Kandasamy Pather

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Board Member Attendance to Meetings & Board Members’ Remuneration for the period January 2015 to December 2015

The Management The total remuneration for the Management of BOI amounted to MUR 21.6 million for the year 2015.

Our Employees The Board acknowledges that organisational objectives can be achieved only through its employees. Accordingly, a lot of emphasis is placed upon the human capital by providing a healthy and safe working environment and adopting an equitable and fair approach towards employee’s remuneration benefits.

During the year 2015, BOI recruited 5 officers on contract basis and 12 officers left the organisation.

Remuneration Policy We are an equal opportunity employer and we are committed to attracting and retaining the best people. We believe that our people are the source of our success. We aim at motivating and compensating them by providing a competitive salary package along with related benefits. Priority in recruitment is given to employees within the organisation and selection is based on the principle of meritocracy.

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Remuneration Policy - continuedWe also welcome external candidates for job openings at all levels of the organisation, especially when and where specific skills and expertise are being sought. The individual performance is regularly and objectively measured in line with agreed objectives in order to promote a performance culture while ensuring individual growth and development.

Statement of Director’s Responsibility The Directors of the Board of Investment acknowledge their responsibilities for:

1. Adequate accounting records and maintenance of effective control systems;2. The preparation of financial statements which fairly illustrate the state of affairs of BOI as at the end of financial year and the results of its operations and cash flows for that period and which comply with International Public Sector Accounting Standards (IPSASs); and3. The selection of appropriate accounting policies supported by reasonable and prudent judgments.

The external auditor (i.e. the Director of Audit, National Audit Office) is responsible for reporting on whether the financial statements are fairly presented.

The Directors report that:

1. Adequate accounting records and an effective system of internal controls have been maintained;2. Appropriate accounting policies supported by reasonable and prudent judgments and estimates have been used consistently;3. Applicable accounting standards have been adhered to; and4. The Code of Corporate Governance as applicable to State-Owned Enterprises has been adhered to.

Our Board of Directors The Board is responsible for the overall direction, strategy, performance and management of the organisation. Authority for implementing the Board’s policies is delegated to the Managing Director within certain limits as authorised by the Board.

Operation of the BoardMeetings of the Board are scheduled in advance and Board papers are circulated before the meeting. In order to ensure a synergy between Management and the Board, the Investment Promotion Act provides that the Managing Director is entitled to attend every meeting of the Board. This facilitates the implementation of policy decisions taken by the Board. The views and recommendations of the Board are also sought via e-circulation on operational matters.

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Ethics BOI honours its responsibility in providing an ethical and safe working environment for its personnel. BOI has issued a handbook detailing all its policies and procedures.BOI has subscribed to a medical insurance cover for its entire staff as well as 24-hour insurance cover in case of accidents for its entire staff.BOI has developed a Human Resource Policy Manual that establishes the standard of conduct and ethics for its employees and provides guidance on employees’ professional obligations.BOI has developed and implemented a Gift Policy which details the procedures to be followed in the event corporate gifts are sent to BOI.

EnvironmentBOI is committed to promoting work practices that preserve the environment. Sustainability can only be achieved through a concerted effort to minimize impact on the environment. BOI promotes a work environment with minimal paper utilisation.

Corporate Social Responsibility BOI’s Welfare Committee has established a programme of activities for the welfare of its employees as well as for the community at large.

Health and Safety BOI is committed to providing and maintaining a healthy, safe and secure working environment. It believes in raising awareness of health and safety issues that are imperative in the prevention of accidents and in improving the well-being of its staff.

Operational Risk ManagementInternal Risk Management

Risk Management and Audit Committee

The Risk Management and Audit Committee (RMAC) is a sub-committee of the Board which has been set up to assist the latter in fulfilling its obligations and oversee responsibilities relating to financial reporting, audit process, corporate controls and risk management. The RMAC also makes recommendations to the Board for approval.

Internal Audit

The Board of Investment has appointed PricewaterhouseCoopers (PwC) as internal auditor to provide independent assurance that the organisation’s risk management and governance frameworks as well as its internal control processes are operating effectively. Internal audits are carried out on a quarterly basis by PwC.

61

Information Technology

BOI ensures that IT resources are optimally used to provide the organisation with the information that it needs to achieve its business objectives while minimizing the risk of fraud, corruption and misuse of resources.

Appropriate safeguards and firewalls are in place to protect the intellectual property of BOI against attacks. While providing its employees with up-to-date IT facilities and tools to enable them to operate more efficiently and effectively, BOI has adopted a number of policies and implemented measures to ensure an ethical and lawful use of its infrastructure.

ISO Standards and Certification

BOI has been ISO certified since 2013 and after the ISO Audit Surveillance by SGS in 2015, BOI is maintaining its ISO Certification until October 2016.

External Risk Management

Adopting an Anti-Corruption Policy

As part of its commitment to promote good governance, the Board of Investment has established the Public Sector Anti-Corruption Framework on the advice of the Independent Commission Against Corruption (ICAC).

The Anti-Corruption Framework is considered as the basic tool to entrench the principles of integrity, transparency and accountability and it has been designed to maintain our efforts in the fight against corruption.

The Anti-Corruption Policy sets the tone at the highest level of the organisation for a culture of integrity.

The Anti-Corruption Committee is responsible for developing and coordinating the implementation of the anti-corruption initiatives and programmes within the organisation.

Corruption Risk Management activities have also been carried out in order to recognise and analyse any perception of corruption and develop remedial actions to minimise and manage those risks. These initiatives of the Board of Investment further emphasises our commitment to a zero-tolerance culture against corruption.

NOTESRelated Party TransactionsThere has not been any related party transaction during the year.

Financial Statements

64

REPORT OF THE DIRECTOR OF AUDITTO THE BOARD OF THE BOARD OF INVESTMENT

Report on the Financial Statements

I have audited the accompanying financial statements of the Board of Investment, which comprise the statement of financial position as at 31 December 2015, the statement of financial performance, statement of changes in net assets/equity, statement of cash flows and statement of comparison of budget and actual amount for the year ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Public Sector Accounting Standards and in compliance with the Statutory Bodies (Accounts and Audit) Act, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with International Standards of Supreme Audit Institutions. Those Standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements , whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

In my opinion, the financial statements give a true and fair view of the financial position of the Board of Investment as at 31 December 2015, and of its financial performance, cash flows and budget performance for the year then ended in accordance with International Public Sector Accounting Standards

65

Report on Other Legal and Regulatory Requirements

Management’s Responsibility

In addition to the responsibility for the preparation and presentation of the financial statements described above, management is also responsible for ensuring that the activities, financial transactions and information reflected in the financial statements are in compliance with the laws and authorities which govern them.

Auditor’s Responsibility

In addition to the responsibility to express an opinion on the financial statements described above, my responsibility includes expressing an opinion on whether the activities, financial transactions and information reflected in the financial statements are, in all material respects, in compliance with the laws and authorities which govern them. This responsibility includes performing procedures to obtain audit evidence about whether the agency’s expenditure and income have been applied to the purposes intended by the legislature. Such procedures include the assessment of the risks of material non-compliance.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Opinion on Compliance

Statutory Bodies (Accounts and Audit) Act

I have obtained all information and explanations I have required for the purpose of my audit. In my opinion, in all material respects, the activities, financial transactions and information reflected in the financial statements are in compliance with the Statutory Bodies (Accounts and Audit) Act.

Public Procurement Act

The Board of Investment is responsible for the planning and conduct of its procurement. It is also responsible for defining and choosing the appropriate method of procurement and contract type in accordance with the provisions of the Act and relevant Regulations. My responsibility is to report on whether the provisions of Part V of the Act regarding the Bidding Process have been complied with.

In my opinion, the provisions of Part V of the Act have been complied with as far as it appears from my examination of the relevant records.

K.C TSE YUET CHEONG (MRS)Director of AuditNational Audit OfficeLevel 14 , Air Mauritius CentrePort Louis26 September 2016

STATEMENT OF FINANCIAL POSITION AS AT31 DECEMBER 2015

ASSETS Notes 31 December 2015

MUR

31 December 2014

(Restated)

MUR

Current assets

Cash and cash equivalents 45,649,109 41,814,300

Receivables 3 6,336,637 5,428,195

Prepayments 1,006,995 1,471,459

52,992,741 48,713,954

Non-current assets

Receivables 1,729,111 2,949,869

Investment 10,000 10,000

Property, plant and equipment 4 24,877,946 25,598,130

26,617,057 28,557,999

Total Assets 79,609,798 77,271,953

LIABILITIES

Current liabilities

Payables 35,142,043 36,130,389

Short-term car loan 1,387,723 2,539,241

Employee benefits 1,395,260 1,978,285

37,925,026 40,647,915

Non-current liabilities

Employee benefits 14,237,875 11,135,370

Car loan 1,722,861 2,948,369

Retirement benefits obligations 5 11,143,493 9,623,168

27,104,229 23,706,907

Total Liabilities 65,029,255 64,354,822

Net Assets 14,580,543 12,917,131

NET ASSETS/EQUITY

Accumulated Surplus 6 14,580,543 12,917,131

Total Net Equity 14,580,543 12,917,131

Chairperson Board MemberManaging Director

66

STATEMENT OF FINANCIAL PERFORMANCE FOR YEAR ENDED 31 DECEMBER 2015

Revenue

Notes Year ended 31 December 2015

MUR

Year ended 31 December 2014

(Restated)

MUR

Government grant 169,203,000 183,227,800

Revenue from exchange transactions 7,700,400 5,202,298

Revenue from non-exchange transactions 7 711,000 742,500

Other revenue 8 60,827,255 66,868,897

Total revenue 238,441,655 256,041,495

Expenses

Salaries and employee benefits 9 99,988,190 91,842,586

Other expenses 10 42,225,416 46,986,897

Investment promotion 11 85,567,200 113,083,887

Depreciation 8,997,437 7,856,008

Total expenses 236,778,243 259,769,378

Surplus/(Deficit) for the year 1,663,412 (3,727,883)

STATEMENT OF CHANGES IN NET ASSETS/EQUITYFOR YEAR ENDED 31 DECEMBER 2015

Accumulated Surpluses/

(Deficits)

Balance at 31 December 2013 (19,281,043)

Adjustment - Employee Benefits 2,162,909

Adjustment - Capital Grant 18,158,038

Adjustment - Depreciation 15,605,110

Restated Balance at 1 January 2014 16,645,014

Restated Deficit for the year ended 31 December 2014 (3,727,883)

Restated Balance as at 1 January 2015 12,917,131

Surplus for the year ended 31 December 2015 1,663,412

Balance as at 31 December 2015 14,580,543

67

68

CASH FLOW STATEMENT - FOR THE YEAR ENDED 31 DECEMBER 2015

Year ending 31 December 2015

MUR


(Restated)

MUR

Surplus/(Deficit) 1,663,412 (3,727,883)

Non-cash movements

Depreciation 8,997,437 7,856,008

Increase/(Decrease) in payables (854,507) (13,681,280)

Increase/(Decrease) in provisions relating to employee costs 4,039,803 1,309,664

(Gain)/loss on sale of property, plant and equipment (82,076) (140,500)

Interest received on car loan (7,339)

(Increase)/Decrease in receivables (1,630,742) (818,677)

Net cash flows from operating activities 12,133,327 (9,210,007)

Cash flow from investing activities

Payments for plant and equipment (8,950,131) (1,536,104)

Proceeds from disposal of plant and equipment 754,952 140,500

Interest received on car loan 7,339

Net cash flows from investing activities (8,195,179) (1,388,265)

Cash flow from financing activities

Repayment of long term loan (133,839) (409,888)

Car Loan received from MOF 700,000 1,200,000

Car Loan paid to Staff (700,000) (1,200,000)

Car Loan reimbursed by Staff 3,077,024 2,180,979

Car Loan refunded to MOF (3,077,024) (2,180,979)

Staff Loan disbursed (60,000) (95,000)

Loan reimbursed by Staff 90,500 131,667

Net cash flow from financing activities (103,339) (373,221)

Net increase/(decrease) in cash and cash equivalents 3,834,809 (10,971,493)

Cash and cash equivalents at beginning of year 41,814,300 52,785,793

Cash and cash equivalents at end of year 45,649,109 41,814,300

69

STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNT FOR THE YEAR ENDED 31 DECEMBER 2015

RECEIPTS

Budgeted Amounts Original

MUR

Actual Amounts

MUR

Difference Final Budget

and Actual

MUR

Government Grant 260,300,000 169,203,000 (91,097,000)

Other receipts 3,595,192 3,595,192

Total receipts 260,300,000 172,798,192 (87,501,808)

PAYMENTS

Compensation of Employees 92,800,000 92,853,012 53,012

Personal Emoluments 66,500,000 67,815,925 1,315,925

Other Staff Costs 26,300,000 25,037,087 (1,262,913)

Goods & Services 35,990,000 32,808,656 (3,181,344)

Cost of Utilities 7,100,000 6,433,046 (666,954)

Fuel & Oil 1,000,000 1,047,298 47,298

Rent 15,050,000 12,877,740 (2,172,260)

Office Equipment and Furniture 400,000 - (400,000)

Office Expenses 3,560,000 4,982,727 1,422,727

Maintenance 1,330,000 1,630,746 300,746

Cleaning Services 350,000 426,220 76,220

Publication and Stationery 1,600,000 1,385,981 (214,019)

Fees to Board Members 3,600,000 3,446,000 (154,000)

Training 2,000,000 578,899 (1,421,102)

Other Goods and Services 68,150,000 38,575,199 (29,574,801)

Uniforms 250,000 4,968 (245,032)

Catering 300,000 322,062 22,062

Insurance 600,000 83,302 (516,698)

Advertising 780,072 780,072

Office Renovation 1,634,609 1,634,609

Professional Fees & Consultancy 5,500,000 6,149,409 649,409

Missions & BOI Events 49,500,000 24,983,361 (24,516,639)

Investment Promotion Tool 3,000,000 1,877,976 (1,122,024)

International Advertising 9,000,000 2,739,440 (6,260,560)

Foreign Office Representative 51,360,000 5,639,968 (45,720,032)

Acquisition of non-financial assets 12,000,000 8,263,247 (3,736,753)

260,300,000 178,140,082 (82,159,918)

70

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2015

1. INCORPORATION AND ACTIVITIES

The Board of Investment, a statutory body established under the Investment Promotion Act 2000, is the national investment promotion agency falling under the aegis of the Ministry of Finance and Economic Development. The Board of Investment (BOI) is responsible for the promotion and facilitation of inward investments. The objects of the Board of Investment are:

(a) to stimulate the development, expansion and growth of the economy by promoting Mauritius as an international investment, business and service centre;

(b) to promote and facilitate the development of all forms of investment and business activities;

(c) to formulate investment promotion policies and plans and marketing strategies and undertake promotion to attract foreign and local investments; and

(d) to advise Government on strategies for investment policies, national investment marketing and investment after care, economic and industrial planning and country image building.

2. ACCOUNTING POLICIESThe principal accounting policies adopted by the Board of Investment are listed below :-

2.1. Accounting convention

The financial statements have been prepared in accordance with the International Public Sector Accounting Standards (IPSASs) issued by the International Public Sector Accounting Board (IPSASB) which is a Board of the International Federation of Accountants Committee (IFAC).

2.2. Property, plant and equipment

Property, plant and equipment are stated at cost net of accumulated depreciation.

Depreciation is calculated on the straight-line basis at annual rates estimated to write off the cost of the assets less their estimated residual values over their expected useful lives. The expected useful lives of Property, plant and equipment are as follows:

Motor vehicles 5 to 17 yearsOffice furniture 10 years to 30 yearsOffice equipment 7 years to 15 yearsComputer system & equipment 3 to 18 years

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2.3. Foreign currencies

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of transaction. Monetary assets denominated in foreign currencies are translated using the rate of exchange ruling at the statement of financial position date and gains or losses on translation are included in the statement of financial performance.

2.4. Revenue recognition

Government grantsGovernment grants received as financial support to the Board of Investment are recognised as income and matched with the associated costs which the grant is intended to compensate. Grant used to finance the purchase of fixed assets is amortised over the useful lives of the assets acquired.

2.5 Employee benefits

(i) Retirement benefits

The present value of any funded or unfunded defined benefit obligations is recognised in the statement of financial position as a non-current liability after adjusting for the fair value of plan assets and any unrecognised items based on annual assessment by the actuaries.

(ii) Other employee benefits

The present value of any other employee benefits is recognised in the statement of financial position as a non-current liability.

2.6 Cash and cash equivalent

Cash and cash equivalents comprise cash at bank and in hand. The details are as follows:

1. Cash at bank – Local Bank – MUR 45,029,8132. Cash at bank – State Bank of Mauritius Ltd – Mumbai – MUR 526,520 (INR 1,012,538)3. Cash in hand – MUR 92,776

2.7 Restated figures for the year ended 31 December 2014

The figures for the year ended 31 December 2014 have been restated.

(i) Grant used to finance the purchase of fixed assets is no longer amortised.(ii) The useful lives of property, plant and equipment with zero carrying anount were reviewed resulting in an adjustment of MUR 15,605,110 in

depreciation.(iii) The provision for employee benefits has been reviewed resulting in an adjustment of MUR 2,162,909

2.8 Related Party transaction

There has not been any related party transaction for the year ended 31 December 2015.

72

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2015 (Continued)


MUR


(Restated)

MUR

3 RECEIVABLES

Staff Loan 30,250 65,500

Deposits 2,270,281 1,047,855

Other receivables 2,648,383 1,775,599

Short term car loan 1,387,723 2,539,241

6,336,637 5,428,195

4 PROPERTY, PLANT AND EQUIPMENT Computer

Equipment

Office

Equipment

Motor

Vehicles

Furniture

and Fittings

Computerisation Total

Cost Rs Rs Rs Rs Rs Rs

At 1 January 2015 25,957,526 1,578,941 5,582,749 18,295,008 30,531,768 81,945,992

Additions 3,274,357 95,960 4,127,170 1,452,644 8,950,131

Disposal (321,540) (995,000) (1,316,540)

Written-off (18,081,236) (743,966) (1,305,911) (219,075) (20,350,188)

At 31 December 2015 10,829,107 930,935 8,714,919 18,441,741 30,312,693 69,229,395

Depreciation

At 1 January 2015 (Restated) 21,582,800 1,179,108 2,927,117 10,882,521 19,776,318 56,347,864

Charge for the period 2,335,913 107,216 1,512,875 1,406,993 3,634,440 8,997,437

Disposal (257,232) (398,000) (655,232)

Written-off (18,077,396) (737,815) (1,304,334) (219,075) (20,338,620)

At 31 December 2015 5,584,085 548,509 4,041,992 10,985,180 23,191,683 44,351,449

Carrying amount at 31 December 2015 5,245,022 382,426 4,672,927 7,456,561 7,121,010 24,877,946

Carrying amount at 31 December 2014 (Restated)

4,374,726 399,833 2,655,632 7,412,487 10,755,450 25,598,128

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NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2015 (CONTINUED)

5 RETIREMENT BENEFIT OBLIGATIONS

The staff pension fund is wholly funded by the Board of Investment and is administered by State Insurance Company of Mauritius Ltd. The amounts recognised in

the statement of financial position at end of year are as follows:


MUR


(Restated)

MUR

Amounts recognised in statement of financial position at end of year:

Present value of funded obligation 57,974,874 48,646,656

(Fair value of plan assets) (18,387,718) (20,728,575)

39,587,156 27,918,081

Present value of unfunded obligation - -

Unrecognised actuarial gain/(loss) (27,684,407) (18,294,913)

Liability recognised in statement of financial position at end of year 11,902,749 9,623,168

Amounts recognised in statement of financial performance:

Current service cost 1,826,469 1,638,645

Employee’s Contribution (950,315) (918,596)

Fund expenses 84,634 49,984

Interest cost 3,648,499 3,725,930

(Expected return on plan assets) (1,463,828) (1,583,424)

Actuarial loss/(gain) recognised 559,594 572,105

Past service cost recognised - -

Total included in staff costs 3,705,053 3,484,644

Movements in liability recognised in statement of financial position:

At start of year 9,623,168 7,516,418

Total staff cost as above 3,705,053 3,484,644

(Actuarial reserves transferred in) - -

(Contributions paid by employer) (1,425,472) (1,377,894)

At end of year 11,902,749 9,623,168

Actual return on plan assets: 313,149 1,240,644

Liability recognised in statement of financial position 11,143,493

Add amount paid in 2016 for contributions due in 2015

but not accounted for by SICOM Ltd 759,256

Liability recognised in statement from SICOM Ltd 11,902,749

74

NOTES TO THE FINANCIAL STATEMENTS - 31 December 2015 (CONTINUED)


MUR


(Restated)

MUR

6 ACCUMULATED SURPLUS/(DEFICIT)

Balance at beginning of year 12,917,131 16,645,014

(Deficit)/Surplus for the period 1,663,412 (3,727,883)

Balance at end of year 14,580,543 12,917,131

7 REVENUE FROM NON-EXCHANGE TRANSACTIONS

Processing fee - Storage Permit 711,000 742,500

711,000 742,500

8 OTHER REVENUE

Gain on disposal 82,076 140,500

Sundry receipts 3,207,913 9,699,908

Contribution from NRF

Participation in International Fairs - SME 1,652,444 3,686,970

Other Projects 2,330,032 9,378,406

Film Incentive Framework 53,554,789 43,963,113

60,827,254 66,868,897

75

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2015 (CONTINUED)Year ending 31 December 2015

MUR


(Restated)

MUR

9 SALARIES AND EMPLOYEE BENEFITS

Basic salaries 57,192,733 49,221,985

Overtime 1,353,688 1,311,924

End of year bonus 4,460,203 4,031,389

Performance bonus 3,560,791 10,563,473

Gratuity 9,076,942 6,612,399

Pension 5,267,644 5,176,522

Travelling 6,999,811 7,241,891

Refund of leaves 3,028,792 1,455,363

Passage Benefits 2,673,728 2,336,821

Allowances 6,373,858 3,890,819

99,988,190 91,842,586

10 OTHER EXPENSES

Board and Committee fees 3,541,800 1,900,000

Rent 12,350,883 9,692,092

Office supplies 3,395,895 2,608,477

Telephone, fax and internet 4,265,997 4,186,296

Motor Vehicle expenses 1,643,372 1,559,607

Cleaning charges 426,220 279,291

Advertising 332,122 42,346

Insurance 260,506 263,809

General expenses 4,138,175 4,470,446

Professional fees 5,701,230 14,392,140

Electricity and water charges 2,345,392 2,177,049

Newspapers and publications 76,873 72,782

Postage 26,062 23,792

Repairs and maintenance 1,127,580 1,243,222

Renovation Works 1,784,795

Receivables written-off 176,483

Loss on exchange 2,027,528

Interest charges 4,177 37,738

Training and seminars 627,854 2,010,282

42,225,416 46,986,897

76

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2015 (CONTINUED)


MUR


(Restated)

MUR

11 INVESTMENT PROMOTION

Missions 16,647,755 27,746,517

Investment promotion tools 2,147,528 3,698,621

Seminars 4,460,129 30,577,282

Foreign Offices 3,830,116

Promotional advertising 2,963,779 3,105,790

Hospitality 310,660 305,594

Participation in International Fairs - SME 1,652,444 3,686,970

Film Incentive Framework 53,554,789 43,963,113

85,567,200 113,083,887

10th Floor, One Cathedral Square Building,16, Jules Koenig Street, Port Louis - Mauritius

Tel: +230 203 3800Fax: +230 210 8560

Email : [email protected]

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