I N T E G R A T E D R E P O R T 2 0 2 1 - Alteo

INTEGRATED

REPORT

2021

Vision in Motion

Dear Shareholder,

The Board of Directors of Alteo Limited (“Alteo” or the “Company”) is pleased to present to you the Annual Report of the Company for the fi nancial year ended June 30, 2021.

On behalf of the Board of Directors of Alteo, I would like to invite you to join us at the Annual Meeting of the Company.

Date: December 10, 2021

Time: 10:00 a.m.

Place: Alteo Limited Vivéa Business Park Saint Pierre 81430 Mauritius

We look forward to seeing you.

Yours sincerely,

Arnaud Lagesse

Chairperson

Vision, Mission & Values 05 Alteo’s Profile 06 Corporate Information 07 Simplified Group Structure 08 Chairman’s Statement 12 Directors 16 CEO’s Report 18 Executives 22

Sugar 26 Energy 40 Property Development 46

Statutory Disclosures 96 Secretary’s Certificate 102

Independent Auditor’s Report to the Members 106 Statements of Financial Position 112 Statements of Profit or Loss 113 Statements of Other Comprehensive Income 114 Statements of Changes in Equity 115 Statements of Cash Flows 117 Notes to the Financial Statements 118

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GROUP HIGHLIGHTS

OUR CLUSTERS

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

SCOPE, BOUNDARY AND REPORTING CYCLE

Alteo Limited’s Integrated Report 2021 provides material information relating to our strategy and business model, operating context, material risks, performance, prospects and governance. All performance data relates to the 12-month period ended June 30, 2021.

REPORTING PRINCIPLES

Alteo has applied the principles contained in the International Financial Reporting Standards (IFRS), the National Code of Corporate Governance for Mauritius 2016 and the Stock Exchange of Mauritius Listing Rules. This report has been prepared in accordance with the GRI Standards and the International <IR> Framework of the International Integrated Reporting Council (IIRC) has been used as reference.

The presentation of the group's key capitals as well as its business model are available on Alteo's website: http://www.alteogroup.com

MATERIALITY PROCESS

A materiality exercise and a stakeholder engagement were conducted in 2020 and 2021 to review the material topics under the GRI standards. The resulting report is available on Alteo’s website: http://www.alteogroup.com

EXTERNAL AUDIT

The annual independent statutory audit of the Group’s consolidated financial statements was performed by Ernst & Young.

Alteo Limited - Integrated Report 20212 3Integrated Report 2021 - Alteo Limited

4 Alteo Limited - Integrated Report 2021

To be a sustainable regional leader in sugarcane, renewable energy and property development

To responsibly create value through people development, strategic partnerships, innovative thinking, market focus and operational excellence

RESPECTCreate the right environment to nurture respect in each other

INTEGRITYBe our highest possible selves in everything we say or do

SPIRIT OF ENTREPRENEURSHIPHave the audacity to think big and the dare to act

EXCELLENCEOutperform to reach beyond the expected

Integrated Report 2021 - Alteo Limited 5

With a turnover of MUR 9,549 M in 2021 and a capitalisation of MUR 8.2 Bn (USD 195M) on 30 June 2021, Alteo is a key regional player in sugar, energy and property development.

Listed on the Official Market of the Stock Exchange of Mauritius (SEM), Alteo is the largest sugar producer in Mauritius and has a strong foothold in Africa with cane growing in Tanzania and sugar factories in Kenya and Tanzania. In 2020-2021, the Group produced 297,900 tonnes of raw sugar and 65,000 tonnes of premium special sugars.

In addition to its sugar activities, Alteo owns and operates three power plants (two in Mauritius, one in Tanzania) that exported 204.9 GWh to the national grids in 2020-2021. One of the Group’s core objectives is to increase its activities in the energy sector and to become an important player in renewable energy in Mauritius and Africa.

With 15,000 ha of freehold land in Mauritius, Alteo also has extensive experience in the property development sector. The group developed Anahita – a world-renowned luxury residential and golf estate – and launched several successful property developments aimed at the local market. Alteo now focuses on its strategic master plan aimed at creating value from its substantial land asset base through the development of a variety of innovative real estate projects in the east of Mauritius.

exported to the national grids in 2020-2021

tonnes of special sugars

power plants (two in Mauritius, one in Tanzania)

of freehold land in Mauritius

Alteo Limited - Integrated Report 20216

NAME OF COMPANYAlteo Limited

BUSINESS REGISTRATION NUMBERC17150285

REGISTERED OFFICEVivéa Business Park

81430 Saint Pierre, Mauritius

Tel: +230 402 9050

Fax: +230 432 0729

Email address: [email protected]

Website: www.alteogroup.com

EXTERNAL AUDITORSErnst & Young, Ebène, Mauritius

INTERNAL AUDITORSPricewaterhouseCoopers, Mauritius

COMPANY SECRETARYIntercontinental Secretarial Services Ltd

Level 3, Alexander House

35 Cybercity, Ebene 72201, Mauritius

Tel: +230 403 0800

Fax: +230 403 0801

BANKERSAfrAsia Bank Limited

Absa Bank Mauritius Limited

Bank One Limited

SBM Bank (Mauritius) Ltd

The Mauritius Commercial Bank Ltd

LEGAL ADVISERSENSafrica Mauritius

De Speville – Desvaux Chambers

Ahnee-Duval, Law Firm

SHARE REGISTRY & TRANSFER OFFICEMCB Registry & Securities Limited

Sir William Newton Street

Port-Louis, Mauritius

Tel: +230 202 5000

Fax: +230 208 1167

SUGARAlteo Agri Ltd / Alteo Milling Ltd

Union Flacq 41903, Mauritius

Tel: +230 402 33 00/ 650 34 00

Fax: +230 413 2699

Email: [email protected]


ENERGYAlteo Energy Ltd

Union Flacq 41903, Mauritius

Tel: +230 402 33 00/ 650 34 00

Fax: +230 413 2699



PROPERTYAnahita Estates Limited

Vivéa Business Park

St Pierre 81430, Mauritius

Tel: +230 402 90 50

Fax: +230 432 0729



Anahita Residences & Villas Limited/ Anahita Golf Ltd

Beau Champ G.R.S.E. Mauritius

Tel: +230 402 2200

Fax: +230 402 2220


Website: www.anahita.mu


CIEL AGRO LIMITED (“CIEL AGRO”)

IBL LTD

OTHER SHAREHOLDERS (ALL AT ‹5%)


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For a more detailed Group Structure, refer to our Corporate Governance Report.

SUGAR ENERGY


Our Sugar cluster had an excellent year, with improved results in all countries of operations.


Dear Shareholder,

On behalf of the Board, I am pleased to present Alteo’s very first Integrated Report for the financial year ended June 30, 2021.

This report condenses our performance and charts our achievements during a challenging year where we strived to achieve our ambitious objectives despite a constantly evolving socio-economic landscape.

Operating Context and Performance

In a difficult context still deeply marred by the ongoing pandemic, our group managed an even better performance than during the previous exercise mostly thanks to a rejuvenated sugar cluster, a declining interest rate environment and a depreciated Rupee. We thus noted significant improvements in our group revenue (+15%), normalised EBITDA (+82%), profit after tax (8 fold) as well as earnings per share (12 fold) for this financial year, despite an under-par performance from several activities.

Our Sugar cluster had an excellent year, with improved results in all countries of operations. Our Mauritian activities largely benefitted from the strengthening of sugar prices – resulting from an increased global sugar deficit coupled to tighter management costs, the depreciation of the Mauritian Rupee versus the Euro and the US Dollar – as well as from an increase in the production and sale of special sugars. This links directly to the bold strategy adopted by Alteo in recent years to revamp its Mauritian sugar operations with radical cost reductions and a refocusing on high value-added products. In Tanzania, our operations improved on last year’s already good performance with even higher profits that can be explained by a higher production of sugar, better prices on the domestic market as well as a favourable consumable biological asset fair value movement compared to FY20. Better domestic prices also benefitted our Kenyan operations where the factory reliability improved and sugar cane availability stabilised, leading to higher production and sales volumes.

The performance of our Energy cluster was positively impacted by better efficiencies despite a lower offtake for the second year running – the increased demand from the Central Electricity Board (CEB) was offset by the lower exports resulting from the closure of Alteo Refinery Ltd in 2020. Moreover, the cluster’s profit after tax showed a year on year decrease since the FY20 figure included a one-off gain from the sale of Consolidated Energy Co. Ltd’s equipment.

Our Property cluster was the most impacted by the ongoing COVID-19 crisis, with increased losses recorded by Anahita Golf & Spa Resort and Anahita Golf Club. Both entities logged negligible levels of activity during the year under review due to the lengthy border closure and the resulting absence of visitors. Thankfully, this situation was compensated by the sale of 11 serviced plots at Anahita which resulted in higher EBITDA generation.

Outlook

The COVID-19 pandemic will continue its disruptions around the world and our Property cluster will not be spared despite the recent reopening of Mauritian borders. We expect an uptick in activities at the Resort and the Golf in the coming months, but the impact of the last two years will not be easily erased from the books of these two entities. The forecast is brighter with regards to property development since reservations secured are expected to continue to help the cluster’s revenue for FY22.

The excellent performance of our Sugar cluster is expected to continue in the coming months, with stable prices in both Tanzania and Kenya. Regarding the latter, improved sugar cane availability and factory reliability are also inching us closer to the breakeven point.

In Mauritius, the recent announcement by the Government of the introduction of a Biomass Framework setting out a policy for remuneration of bagasse as a source of renewable energy has been met with widespread support. This mechanism was one of the industry’s main expectations and its implementation will be a major step for the future of the Mauritian sugar industry. Moreover, this bold move will not only strengthen the Sugar Industry, but it will also comfort Independent Power Producers (“IPP”) such as Alteo Energy Ltd that rely heavily on the availability of bagasse to produce electricity.


Our Energy cluster’s performance for the next financial year will be dependent on the terms of renewal of the Power Purchase Agreement (“PPA”) between Alteo Energy Ltd and the CEB. Yet, thanks to the Biomass Framework, our cluster can now look to the future with bigger ambitions, such as the development of a 100% biomass power plant that would not only eclipse our venerable 35-year-old turbine’s efficiency, but also greatly contribute to the reduction of our country’s dependency on fossil fuels. Alteo has been committed to green energy for decades now and this commitment has only grown since the successful launch in 2018 of our Helios Beau Champ Photo Voltaic (“PV”) plant, in partnership with Qair. Our group is now looking forward to more investments in this sector, most notably with an additional PV plant as well as an ambitious project that will tap into the trade winds that blow across the east of our island.

Sustainability

Our move towards more renewables is not a passing fancy, it is part and parcel of our vision for the future: the creation of a sustainable Alteo. We have already taken the first steps on this journey – this Integrated Report is testament to that – and the materiality analysis conducted by our teams in Mauritius during FY21 has helped us better understand our value creation process and the impact of our activities on the communities we operate in, as well as on the environment. Much remains to be done, and our next milestone will be the creation of a materiality matrix for our African operations in the coming months. The sustainability agenda of our group is still in its infancy, but we are learning by doing and next year’s report will undoubtedly showcase more progress on this journey.

Acknowledgements

I would like to thank my fellow colleagues on the Board of Directors for their contribution throughout the year. I would specifically like to thank Jan Boullé and Amédée Darga, who both resigned from the Board during the year under review, and to welcome Priscilla Balgobin-Bhoyrul and Hubert Leclézio who graciously accepted to join our Board.

On behalf of Alteo’s Board of Directors, I would also like to express our gratitude to the people of Alteo. As was the case for countless businesses in Mauritius and around the globe, the past couple of years truly tested the mettle of our group and the value of our strategies, but our teams and management eagerly rose to the challenge under the leadership of our current Chief Executive Officer, André Bonieux. He will be leaving a more robust and resilient Alteo at the end of his contract in December 2021 and I wish to thank him for his hard work and dedication these past three years. Finally, it is my pleasure to officially welcome our new Chief Executive Officer, Fabien de Marassé Enouf, who will be taking the helm of Alteo as from January 1, 2022.

Arnaud LagesseChairperson


OUR MOVE TOWARDS MORE RENEWABLES IS NOT A PASSING FANCY, IT IS PART AND PARCEL OF OUR VISION FOR THE FUTURE: THE CREATION OF A

15Integrated Report 2021 - Alteo Limited

All profiles and full directorships can be viewed on: https://www.alteogroup.com/leadership

JEAN-PIERRE DALAISNon-Executive Director

JAN BOULLÉ Non-Executive Director

(Resigned on November 3, 2020)

PATRICK CHATENAYIndependent

Non-Executive Director

DIPAK CHUMMUNNon-Executive Director

ARNAUD LAGESSENon-Executive Chairperson

PRISCILLA BALGOBIN-BHOYRUL

Independent Non-Executive Director

(Appointed on December 11, 2020)

ANDRÉ BONIEUXExecutive Director


P. ARNAUD DALAISNon-Executive Director

JÉRÔME DE CHASTEAUNEUF


AMÉDÉE DARGAIndependent Non-Executive Director

(Resigned on December 9, 2020)

THIERRY LAGESSENon-Executive Director

FABIEN DE MARASSÉ ENOUF

Executive Director

HUBERT LECLÉZIO(Appointed on November 25, 2020)

SHEILA UJOODHAIndependent Non-Executive

Director


The ‘Alteo-nouveau’ is here: a leaner, meaner entity where strategy and activities have been through a wholesale rethinking.


Dear Shareholder, In my final report as Group CEO – I will be leaving at the end of my three-year contract on December 31, 2021 – I am happy to say that the ‘Alteo-nouveau’ is finally here: a leaner, meaner entity where strategy and activities have been through a wholesale rethinking. This has been a few years in the making, but I believe we are now primed for the future. How did we do it? I will get to it shortly.

The sugar prices were on the rise in FY20, and they are even better in FY21. The coming months are thus gearing up to be positive, but this is no surprise: the sugar industry evolves in a cyclic manner, with prices, demand and production rising and falling with almost clockwork-like regularity. We will profit from this positive phase and even expect prices to improve further, before inevitably falling again in the future. The difference now is that we are well and truly prepared to face tougher times. Benefitting from high prices is good, yet the ability to weather low returns and come out unscathed may be more important in the long run. This is what we believe has been achieved for our Mauritian sugar operations thanks to a combination of new strategy – cost-reduction exercises, a focus on special sugars production and a 100% mechanised agricultural production – and impactful public policy – the biomass remuneration framework announced by Government in July 2021.

Allow me here to go beyond FY21 and reflect on the past three years and the revamping of our local sugar operations. The restructuring of our agricultural activities with a focus on intensive mechanisation to drive costs down was not a simple exercise. For the past few years, we have progressively reduced the land under cane cultivation to focus only on areas that are mechanised and value creating. Yet, at the end of our derocking programme in a few years, we will be back to only 1,000 hectares less than in 2018, and all of it 100% mechanised, from plantation to harvest. Our agricultural operations will thus be much more productive - with less than 25% of the workforce it had in 2018 - and less costly too: since FY18, our production costs per ton of cane have dropped by 15 % (from USD 46 to USD 39) and it will drop further in the next five years. This is no mean feat, and it would never have been possible without the dedication and hard work of our teams. They showed grit and character, and for that they have my gratitude and my admiration. Hats off also to Arnaud d’Unienville who has been leading this major transformation.

On the sugar milling side, under the leadership of Sébastien Lavoipierre, we made the tough call to shift our strategy from refined sugar to special sugars. Sébastien and his team have managed the closure process and addressed the challenge of producing special sugars using the refinery’s infrastructure, enabling the group to significantly increase

WELCOME TO


its special sugars production in a relatively short timeframe. This transition was made even more difficult by the nature of our milling operations where the costs are fixed and yet our cane volumes are falling. This is not a healthy model and it requires constant changes by the management.

Our African sugar operations are also on a positive trajectory. TPC Limited had a record breaking FY21, surpassing FY20’s already excellent performance thanks to the careful management of pests in the fields, a stable pricing environment, as well as significantly improved cane yields – a record productivity of 11.64 tonnes of cane per hectare per month. A special word here for our CEO in Tanzania, Marius Jacobs, who is setting the bar in only his first full year occupying this position.

Things are looking up too for Transmara Sugar Company Limited (TSCL), where a combination of stable prices, good weather, improved cane availability and better factory efficiency resulted in a significant increase in production and sales for FY21. Yet, it is safe to say that the past few years have been rough for our Kenyan sugar operations, and one of my focus areas as Group CEO was to help TSCL ‘weather the storm’. As such, the management team in Kenya led by Frederic North-Coombes and the executive team in Mauritius worked hand in hand to clearly define a way ahead and, to their credit, our colleagues in Kenya stuck with this plan through thick and thin. Thus, after three years, an aggressive capital expenditure programme, thousands of e-mails, meetings, and phone calls – production figures were closely monitored and discussed almost daily – I am happy to report that TSCL is now close to a break even, with a clear improvement in its short and medium-term outlook. Here again, I wish to express my appreciation for the hard work of our Kenya team. I have no doubt that a bright future lies ahead for them.

Such a prediction is also easy to make for our Property cluster even though it did not avoid repercussions from the COVID-19 pandemic. Our hotel and our golf suffered with little to no activity for almost two years but thanks to Government aids and investment from our shareholders, we managed to preserve all jobs as well as maintain the quality of our assets. With the full reopening of Mauritian borders in October 2021, we can look ahead with more confidence. Moreover, despite the circumstances, our property development initiatives have not slowed. Au contraire. The Master Plan for the development of our land asset base is ready and, to provide our teams with the means to achieve our ambitious objectives, we have been busy restructuring our cluster for the past few months. Thus, all the land and assets not under agricultural or industrial use is now under the aegis of our property experts who are already planning new projects and activities. These include an innovative smart city concept in the region of Beau Champ, between

Anahita and the Deep River Beau-Champ factory, that will target different segments locally and overseas, and undoubtedly help the growth of Alteo and the development of the East. In addition, we are working on the third phases of our two successful morcellement projects, Mont Piton and Balnéa, both of which will be promoted during FY22. Our property teams are also the now responsible for the restoration and preservation of a significant number of Alteo’s historical and cultural heritage, most notably chimneys and buildings that are more than a century old. As such, I can say that the Property cluster has both the past and the future of Alteo in its hands, and I could not be more confident in the journey ahead.

Our Energy cluster also has an interesting few years to look forward to. We are currently working on the renewal of the Power Purchase Agreement between Alteo Energy Ltd and the Central Electricity Board and are convinced that we will find common ground in the coming months. Our partnership with Qair – with whom we launched our first solar farm in 2018 – is as strong as ever and, together, we are developing solar and wind powered projects for the short to medium term, in line with our vision and the Government’s aim to curb the use of fossil fuels for local electricity production. Yet, while turning our backs on fossil fuel makes perfect sense, and is the right approach to ensure the sustainability of our group, I must admit that it is also linked to the one regret of my tenure as CEO of Alteo: despite all our efforts, we are yet to launch a new power plant to replace our ageing Union Flacq turbines after dropping the coal-bagasse hybrid power plant project. We are now working on a 100% biomass power plant project that shall be more climate-friendly and it is something we will be proud of for decades. I cannot wait to see this project turn to reality.

Final thoughts

A company or group is nothing without its people and my most cherished memories of these past few years are undoubtedly the moments I spent discussing with colleagues from all levels of the company, in Mauritius, in Kenya or in Tanzania, listening to their stories and discovering their work. They showed me what Alteo is really about and for that I will be eternally grateful.

Our group is now embarking on a new leg of its journey in the capable hands of a young and dynamic CEO, and I trust that you, as a shareholder, will be along for the ride.

I will happily be watching and cheering you on from the sidelines.

André BonieuxCEO


AND MY MOST CHERISHED MEMORIES ARE THE MOMENTS I SPENT DISCUSSING WITH COLLEAGUES FROM ALL LEVELS OF THE COMPANY, IN MAURITIUS, IN KENYA OR IN TANZANIA.

A COMPANY OR GROUP IS NOTHING WITHOUT


ANDRÉ BONIEUXGroup CEO of Alteo

(Until December 31st, 2021)

MARIUS JACOBSCEO of TPC Limited

FABIEN DE MARASSÉ ENOUF

Deputy Chief Executive Officer

(Group CEO of Alteo as from January 1st, 2022)

SÉBASTIEN LAVOIPIERRE

COO Industrial Activities

STÉPHANE ISAUTIER

Regional Development Executive

PATRICE LEGRISCOO of Property

Development

All profiles can be viewed on: https://www.alteogroup.com/leadership


JEAN-ROBERT LINCOLN

Group Agricultural Development Executive

FREDERICK NORTH-COOMBESCEO of Transmara Sugar

Company Limited

ARNAUD D’UNIENVILLECOO Agricultural Activities

SOPHIE STRAUSS Human Resources

Executive

DAVID MARTIALCommercial and Business Development Director of Anahita Estates Limited


OUR CLUSTERS

OUR CLUSTERS

MAURITIUS • Alteo Agri Ltd (AAL – 100% Alteo owned company): Owns a total of 15,218 hectares of land in the eastern region of Mauritius. The company cultivates sugar cane over 8,245 hectares of land including some 427 hectares leased from Ferney Ltd. Around 84% of the sugar cane produced by Alteo Agri Ltd is processed by Alteo Milling Ltd and the remaining is processed by Terra Milling Ltd.

MARKET ANALYSIS PERFORMANCE REVIEW SHORT TO MEDIUM-TERM OUTLOOK LONG TERM STRATEGYSugar prices have been heavily influenced by the coronavirus-induced volatility in global commodity markets over the past year which led to significant movements of crude oil prices as well as the Brazilian currency – two key factors for sugar price formation. As from mid-February 2020, sugar prices fell significantly to progressively recover to reach pre-Covid levels as from November 2020.

Since then, on the back of an anticipated global deficit of 3.8m tonnes in 2021-22 (ISO market outlook August 2021), coupled to change in sourcing habits from just in time to just in case, prices on the world market rose sharply to reach USD 20 cent/lb in August 2021.

Adverse weather conditions in the main beet growing regions during the European summer 2020 coupled with aphid infestations in France, where the use of neonicotinoids (a range of pesticides) had been banned, have affected yields substantially and impacted the European sugar market positively. As reported by the European Commission, EU average ex-work prices for sugar reached EUR397 per tonne in June 2021, rising steadily since January’s EUR388 per tonne.

The price in the southern deficit regions of Europe, where most of the Mauritian white refined sugar is sold, was relatively stable over the period and closed at EUR456 per tonne in June 2021.

The Mauritian sugar industry benefited from price recoveries on the world market and depreciation of the Rupee as mentioned above and its total sales revenue for 2020-21 was consequently enhanced compared to the previous campaign. The ex-MSS price for the 2020 crop (financial year 2020-21) was finalised at Rs 14,062 per tonne, a 23% rise over the preceding period when it reached Rs 11,383 per tonne.

Sugar Mauritius

Revenue Normalised EBITDA Profit after tax

Rs’000 Rs’000 Rs’000

2021 2020 2021 2020 2021 2020

Alteo Agri Ltd

853,517 832,680 339,597 (74,150) 438,509 (381,526)

Alteo Milling Ltd

586,179 477,249 123,271 44,633 127,775 90,297

Alteo Refinery Ltd

55,726 349,454 42,526 115,606 86,713 16,822

Others 104,205 101,696 3,645 (10,367) 86,533 (40,665)

1,599,626 1,761,079 509,039 75,722 566,464 (315,072)

• AAL’s and AML’s turnover increased mainly on the back of better prices achieved in FY21 as explained under the market analysis earlier.

• The area harvested by AAL was reduced from 8,829 hectares in FY20 to 8,439 hectares FY21, a 4.4% drop in line with AAL’s strategy to gradually cease the manual cultivation of sugar cane.

• The sugar productivity in fields of AAL was reduced from 7.94 Tonnes Sugar Hectare (TSH) in 2019-2020 to 7.13 TSH in 2020-21. A drop of 10.18% due to unfavourable climatic conditions and above average ratoons age. The crop 2020 was declared an event year.

• Significant costs reductions were achieved in 2020-21 through the ongoing restructuring of AAL’s operations.

• AAL’s EBITDA and profit after tax were further enhanced by a Rs 238m favourable movement in the fair value of consumable biological assets and a reversal of past impairment of bearer biological assets amounting to Rs234m.

• AML’s sugar production totalled 104,050 tonnes in the financial year under review, a decrease of 17,653 tonnes compared to last year.

• As mentioned above, poor agro-climatic conditions prevailing in 2020-21, coupled with cane attrition, resulted in a reduction of 217,754 tonnes in the supply of sugar cane to the mill. This was partly compensated by a higher recovery rate of 9.93% compared to 9.62% in the previous year

• 62,139 tonnes of special sugars were produced during the financial year under review, which was higher than last year by 14,737 tonnes. This growth in the volume of special sugars was a major driver of this year’s profitability.

• In FY21 both AAL and AML earned compensations from the Sugar Insurance Fund as the 2020 crop was declared an event year.

• ARL’s production reached only 15,597 tonnes of refined sugar this year as the operations stopped in August 2020. The results of the refinery were positively impacted by overprovisions linked to the closure of operations

• Results shown under ‘Others’ arose mainly from the operations of Island Fresh Ltd, a poultry farming business, Deep River Beau Champ Milling Company Ltd and Compagnie Usiniere de Mon Loisir Ltee, previously sugar milling businesses which are now dormant, and Alteo Limited, the Group holding company.

• Since June 2021, the world raw sugar price has been on a predominantly upward trajectory, with the August average leaping higher to near USD 20cent/lb. The market structure between futures contracts has an upward leg to the March 2022 No11 position, after which values weaken.

• Most analysts have maintained their bullish positioning in the sugar market, however, ISO outlook for prices remains neutral as fundamentals do not indicate either a lack of supply, an excess of demand or an absence of readily available stock. The current high price environment and costly freight situation is further adding to the global trade challenge.

• In the EU, the 2021-22 production is anticipated at some 15 million tonnes, a substantial improvement over the virus-yellows affected harvest of 2020-21. The rise in world market values after June 2021 could translate into a significant prices rise in 2022, once forward contracted tonnages are consumed.

• In Mauritius, the MSS has recently announced a price estimate of Rs 15,000 per tonne for crop 2021, an improvement over last year largely explained by the depreciation of the Rupee against the main hard currencies and the increase in the price of sugar on the world market, which stood approximately at USD 20cent/lb in September 2021.

• Mauritius has signed preferential agreements with China and India, which will benefit the MSS and the industry. The quotas will increase gradually over the next 5 years to reach 50,000 tons and 40,000 tons quotas respectively which should support growth in special sugar volumes.

• In the last National Budget, the Government announced the implementation the biomass framework with a bagasse remuneration of Rs3.5 per Kwh which is equivalent to Rs3,300 per ton sugar accruing to planters and producers. This policy is a bold move towards securing the sustainability of the cane industry in Mauritius and should favourably affect the revenues of AAL and AML as from the next financial year.

• The sugar productivity in our fields is expected to be higher than the previous crop, however accrued sugar production will be lower due to a reduction in the harvested area.

MAURITIUS

To ensure the long-term viability of its Mauritian sugar operations, Alteo Agri Ltd aims at increasing its productivity and enhancing its processes to reduce production costs. To achieve these objectives, the following initiatives are ongoing:

• Ceasing cane cultivation in low yielding manually planted, maintained, and harvested fields

• De-rocking and preparing 150 hectares of cultivable land for mechanisation every year

• Pursuing investments in the mechanisation of all agricultural activities and implementation of best management practices by means of precision farming

• Re-organising management structures and workforce to adapt to mechanisation strategy

• Developing agricultural diversification projects

• Prioritising the production of special sugars and developing further the range of value-added direct consumption sugars, including an organic sugars range

• Developing other derivatives from sugar cane by-products

• Reorganising procurement structures to source key field and factory consumables directly from manufacturers and reduce input costs

• Continued support to G2G preferential tariff and quota agreements to supply special sugars

SUGAR CLUSTER (Mauritius, Tanzania, Kenya)

In line with its vision to become a sustainable regional leader in the sugar cane industry, Alteo has adopted a strategy consisting of:

• The continuous improvement of the efficiency of its processes and operations to reduce production costs and gain competitiveness in increasingly volatile markets;

• Revenue diversification through the development of new revenue streams from sugar cane by-products and innovation towards new added value end-user products, including:

• Optimising the use of bagasse and cane trash as renewable energy sources and inputs for its Energy operations;

• Creating more value from the transformation of molasses into downstream products and;

• Moving towards more value-added products such as premium direct consumption sugars;

• Market diversification through investments in high potential growth markets; and

• Collaboration with national regulators to help shape policies that will ensure the regional sugar industry’s sustainability.


MARKET ANALYSIS PERFORMANCE REVIEW SHORT TO MEDIUM-TERM OUTLOOK LONG TERM STRATEGYSugar prices have been heavily influenced by the coronavirus-induced volatility in global commodity markets over the past year which led to significant movements of crude oil prices as well as the Brazilian currency – two key factors for sugar price formation. As from mid-February 2020, sugar prices fell significantly to progressively recover to reach pre-Covid levels as from November 2020.

Since then, on the back of an anticipated global deficit of 3.8m tonnes in 2021-22 (ISO market outlook August 2021), coupled to change in sourcing habits from just in time to just in case, prices on the world market rose sharply to reach USD 20 cent/lb in August 2021.

Adverse weather conditions in the main beet growing regions during the European summer 2020 coupled with aphid infestations in France, where the use of neonicotinoids (a range of pesticides) had been banned, have affected yields substantially and impacted the European sugar market positively. As reported by the European Commission, EU average ex-work prices for sugar reached EUR397 per tonne in June 2021, rising steadily since January’s EUR388 per tonne.

The price in the southern deficit regions of Europe, where most of the Mauritian white refined sugar is sold, was relatively stable over the period and closed at EUR456 per tonne in June 2021.

The Mauritian sugar industry benefited from price recoveries on the world market and depreciation of the Rupee as mentioned above and its total sales revenue for 2020-21 was consequently enhanced compared to the previous campaign. The ex-MSS price for the 2020 crop (financial year 2020-21) was finalised at Rs 14,062 per tonne, a 23% rise over the preceding period when it reached Rs 11,383 per tonne.

Sugar Mauritius


Rs’000 Rs’000 Rs’000

2021 2020 2021 2020 2021 2020

Alteo Agri Ltd

853,517 832,680 339,597 (74,150) 438,509 (381,526)

Alteo Milling Ltd

586,179 477,249 123,271 44,633 127,775 90,297

Alteo Refinery Ltd

55,726 349,454 42,526 115,606 86,713 16,822

Others 104,205 101,696 3,645 (10,367) 86,533 (40,665)

1,599,626 1,761,079 509,039 75,722 566,464 (315,072)

• AAL’s and AML’s turnover increased mainly on the back of better prices achieved in FY21 as explained under the market analysis earlier.

• The area harvested by AAL was reduced from 8,829 hectares in FY20 to 8,439 hectares FY21, a 4.4% drop in line with AAL’s strategy to gradually cease the manual cultivation of sugar cane.

• The sugar productivity in fields of AAL was reduced from 7.94 Tonnes Sugar Hectare (TSH) in 2019-2020 to 7.13 TSH in 2020-21. A drop of 10.18% due to unfavourable climatic conditions and above average ratoons age. The crop 2020 was declared an event year.

• Significant costs reductions were achieved in 2020-21 through the ongoing restructuring of AAL’s operations.

• AAL’s EBITDA and profit after tax were further enhanced by a Rs 238m favourable movement in the fair value of consumable biological assets and a reversal of past impairment of bearer biological assets amounting to Rs234m.

• AML’s sugar production totalled 104,050 tonnes in the financial year under review, a decrease of 17,653 tonnes compared to last year.

• As mentioned above, poor agro-climatic conditions prevailing in 2020-21, coupled with cane attrition, resulted in a reduction of 217,754 tonnes in the supply of sugar cane to the mill. This was partly compensated by a higher recovery rate of 9.93% compared to 9.62% in the previous year

• 62,139 tonnes of special sugars were produced during the financial year under review, which was higher than last year by 14,737 tonnes. This growth in the volume of special sugars was a major driver of this year’s profitability.

• In FY21 both AAL and AML earned compensations from the Sugar Insurance Fund as the 2020 crop was declared an event year.

• ARL’s production reached only 15,597 tonnes of refined sugar this year as the operations stopped in August 2020. The results of the refinery were positively impacted by overprovisions linked to the closure of operations

• Results shown under ‘Others’ arose mainly from the operations of Island Fresh Ltd, a poultry farming business, Deep River Beau Champ Milling Company Ltd and Compagnie Usiniere de Mon Loisir Ltee, previously sugar milling businesses which are now dormant, and Alteo Limited, the Group holding company.

• Since June 2021, the world raw sugar price has been on a predominantly upward trajectory, with the August average leaping higher to near USD 20cent/lb. The market structure between futures contracts has an upward leg to the March 2022 No11 position, after which values weaken.

• Most analysts have maintained their bullish positioning in the sugar market, however, ISO outlook for prices remains neutral as fundamentals do not indicate either a lack of supply, an excess of demand or an absence of readily available stock. The current high price environment and costly freight situation is further adding to the global trade challenge.

• In the EU, the 2021-22 production is anticipated at some 15 million tonnes, a substantial improvement over the virus-yellows affected harvest of 2020-21. The rise in world market values after June 2021 could translate into a significant prices rise in 2022, once forward contracted tonnages are consumed.

• In Mauritius, the MSS has recently announced a price estimate of Rs 15,000 per tonne for crop 2021, an improvement over last year largely explained by the depreciation of the Rupee against the main hard currencies and the increase in the price of sugar on the world market, which stood approximately at USD 20cent/lb in September 2021.

• Mauritius has signed preferential agreements with China and India, which will benefit the MSS and the industry. The quotas will increase gradually over the next 5 years to reach 50,000 tons and 40,000 tons quotas respectively which should support growth in special sugar volumes.

• In the last National Budget, the Government announced the implementation the biomass framework with a bagasse remuneration of Rs3.5 per Kwh which is equivalent to Rs3,300 per ton sugar accruing to planters and producers. This policy is a bold move towards securing the sustainability of the cane industry in Mauritius and should favourably affect the revenues of AAL and AML as from the next financial year.

• The sugar productivity in our fields is expected to be higher than the previous crop, however accrued sugar production will be lower due to a reduction in the harvested area.

MAURITIUS

To ensure the long-term viability of its Mauritian sugar operations, Alteo Agri Ltd aims at increasing its productivity and enhancing its processes to reduce production costs. To achieve these objectives, the following initiatives are ongoing:

• Ceasing cane cultivation in low yielding manually planted, maintained, and harvested fields

• De-rocking and preparing 150 hectares of cultivable land for mechanisation every year

• Pursuing investments in the mechanisation of all agricultural activities and implementation of best management practices by means of precision farming

• Re-organising management structures and workforce to adapt to mechanisation strategy

• Developing agricultural diversification projects

• Prioritising the production of special sugars and developing further the range of value-added direct consumption sugars, including an organic sugars range

• Developing other derivatives from sugar cane by-products

• Reorganising procurement structures to source key field and factory consumables directly from manufacturers and reduce input costs

• Continued support to G2G preferential tariff and quota agreements to supply special sugars

SUGAR CLUSTER (Mauritius, Tanzania, Kenya)

In line with its vision to become a sustainable regional leader in the sugar cane industry, Alteo has adopted a strategy consisting of:

• The continuous improvement of the efficiency of its processes and operations to reduce production costs and gain competitiveness in increasingly volatile markets;

• Revenue diversification through the development of new revenue streams from sugar cane by-products and innovation towards new added value end-user products, including:

• Optimising the use of bagasse and cane trash as renewable energy sources and inputs for its Energy operations;

• Creating more value from the transformation of molasses into downstream products and;

• Moving towards more value-added products such as premium direct consumption sugars;

• Market diversification through investments in high potential growth markets; and

• Collaboration with national regulators to help shape policies that will ensure the regional sugar industry’s sustainability.

• Alteo Milling Ltd (AML – 76.5% Alteo owned company): Operates a sugar mill with a crushing capacity of 8,500 tonnes of cane per day (TCD) equivalent to an annual crushing capacity of 1,450,000 tonnes. The mill sources sugar cane from AAL (50%), other corporate planters (20%) and small planters (30%) from its factory area. Out of an average annual sugar production of 105,000 tonnes, 40,000 tonnes come in the form of plantation white sugar for refining, while direct consumption sugars or special sugars account for 65,000 tonnes. The plantation white sugar is transferred by AML to Omnicane Operations Ltd.

• Alteo Refinery Ltd (ARL – 53.4% Alteo owned company): Closed its operations on 6 August 2020 as part of industry wide reform measures to address the declining trend in sugar cane production nationally and the resulting excess refining capacities. ARL currently rents its warehouse to the Mauritius Sugar Syndicate (MSS) for storage of plantation white sugar and its production equipment to AML for the production of special sugars.


Alteo embarked on an ambitious derocking exercise to annually transform 150 ha of ‘manual’ fields into 100% mechanised fields.

WITHIN OUR AGRICULTURAL ACTIVITIES

MAURITIUS

Trapped between the proverbial hammer and anvil, Mauritian sugar producers such as Alteo have been plagued for decades by high local production costs versus fluctuating prices on world and European markets. Alteo’s solution: “Doing more, with less.” While this may sound like a simple statement, it has become the mantra, the guiding principle of our agricultural operations in Mauritius for the past three years, helping us reduce drastically our costs while improving our productivity in a relatively short time span.

The efforts of our teams were vindicated when Alteo Agri recorded operational profits for FY21, a first since Alteo’s creation in 2012, all thanks to its two-pronged strategy: increasing our productivity and focusing on mechanised precision agriculture.

As a context, when this ambitious plan was put into motion during FY18, production cost was estimated at USD 46.6 per ton cane, with 1990 employees (including permanent and seasonal workers), 10,000 ha under cane production and less than half this area fully mechanised. What changed? First, all employees who wished to leave the company were provided with an optional voluntuntarily departure scheme that recognised their contribution to Alteo over the years. This allowed for a complete rethinking of our resource allocation and further motivated our full-on foray into mechanised precision agriculture since we were short of the number of employees needed to manage fields that required manual (and cost-intensive) intervention. At the same time, Alteo invested massively in new equipment to plant, maintain and harvest cane while also embarking on an ambitious derocking exercise: annually transforming 150 ha of ‘manual’ fields into 100% mechanised fields.

The results of this strategy cannot be understated: 960 permanent and seasonal workers are now employed by Alteo Agri Ltd, the area under cane has dropped to 8,000 ha (almost all of it fully mechanised) and, more importantly,

the cost of production has now reached USD 39.5, 15% less than in FY18. The endgame is to increase the area under cane cultivation while achieving a production cost of USD 30 by FY26, a 35% decrease since the start of the project, and the teams are well underway to reaching this target.

In time, this will make Alteo more competitive and allow us to weather significant price fluctuations on the world and European sugar markets. Yet, the ambitions of our agricultural teams do not stop there, for they have already set their sights on their next target: a strategic replantation campaign to improve yields. The transformation of Alteo is well and truly on track.

• TPC Limited (TPC – 45% Alteo effective interest): Cultivates sugar cane, produces and sells sugar, electricity, and molasses on the domestic market. TPC has leasehold rights on some 16,000 hectares of land, of which 8,000 hectares are under irrigated sugar cane cultivation. It operates a 4,800 Tons of cane per day (TCD) mill which sources its entire sugarcane supply from the estate. Further, TPC produces electricity to power its factory, operations, housing and irrigation networks, and exports the surplus to the grid.

TANZANIA

MARKET ANALYSIS PERFORMANCE REVIEW SHORT TO MEDIUM-TERM OUTLOOK LONG TERM STRATEGY• Sugar prices in Tanzania decreased slightly at the

start of the financial year but then recovered well as from December 2020 further increasing towards the end of the financial year. The result was that TPC achieved a marginal increase in the year-on-year average price. The stable supply of sugar in the market from improved local production coupled with appropriate amounts of imports to fill the gap sugar season, has continued to ensure this stable pricing environment. The stable Tanzanian Shilling has also played its role to support this low inflationary environment.

• As in the preceding three years, the sugar producers were tasked with importing sugar during the gap season. This year, licenses amounting to a total of 50,000 tonnes were issued by Government via the Sugar Board of Tanzania in the final quarter of the financial year.

• The Tanzanian market remained protected from the low world sugar prices as a result of the 35% import duty and controlled import volumes which were licensed by Government.

• The sustained market stability and Government investment drives has resulted in significant investments to increase local sugar production from both incumbent and new investors to the industry in Tanzania. These investments will likely result in Tanzania being self-sufficient in sugar in the medium to longer term resulting in a more competitive industry than has been the case before.

• The COVID-19 pandemic had a limited impact both on consumption and production in Tanzania as the country remained open as in the prior year with no enforced lockdowns during the pandemic.

Tanzania Revenue Normalised EBITDA Profit after tax

Rs’000 Rs’000 Rs’000

2021 2020 2021 2020 2021 2020

TPC Limited

3,739,895 3,192,243 2,126,806 1,506,288 1,219,142 881,817

SML & SIL - - 130,227 79,017 14,185 (20,759)

3,739,895 3,192,243 2,257,033 1,585,305 1,233,327 861,058

• Through the combined impact of a volume increase of 5% and a price increase of 2.3% in USD and a weaker Mauritian Rupee, the turnover of TPC increased substantially in financial year 2020-21.

• Sugar production increased as cane yields recovered from 119 tonnes per hectare in the prior year to 133 tonnes per hectare as a result of improved climatic conditions, resulting in a lower water table, and better treatment protocols of the Yellow Sugarcane Aphid (YSA) which had weighed negatively on the cane growth in the prior year. The achieved yields for the year reflected the best ever recorded yield productivity at 11.64 tonnes of cane per hectare per month.

• Cane yields have continued their strong performance at the start of the 2021-22 season with the best ever yields achieved as at the end of September 2021. The sustained investments in better irrigation, higher fertilisation and improved YSA controls bode well for the season although the lower rainfall during the long rains and prevalence of YSA may have adverse impacts later in the season.

• Cane quality and sucrose content have also been in line with high levels achieved in the financial year 2020-21 with the factory performing in line with expectations.

• As a result of the good start to the year, it is expected that sugar production will be higher in financial year 2021-22.

As Tanzania is likely to remain a deficit sugar market in the short term, Alteo’s strategy for its Tanzanian sugar business is to continue to grow its sugar supply to the domestic market, while creating further added value from sugar cane by-products. The cornerstone of its strategic priorities is the sustainable management of natural resources to ensure simultaneous business health and wellbeing of local communities living on the estate. These include:

• Sustained investment in water supply security with new boreholes to maintain and improve cane yields, while at the same time ensuring sustainable use of underground water resources;

• Sustained investment to convert flood irrigation areas to semi solid and drip irrigation systems to improve efficiency of water use (i.e, increased water productivity);

• Continued development of 440 hectares for new sugar cane cultivation through soil reclamation in regions of relatively high salinity and sodicity;

• Phased introduction of mechanical harvesting and evaluation of its impact on production costs and cane yields, in anticipation of rising labour costs and more stringent environmental legislation towards cane burning;

• Phased investments in the factory to stabilize crushing rate, improve efficiencies and treat effluents; and

• Continuing the feasibility study of an investment in a distillery to generate additional value from molasses to produce Extra Neutral Alcohol (ENA) for the domestic market.


• Sucrière des Mascareignes Limited (SML – 60% Alteo owned company) and Sukari Investment Company Limited (SIL – 60% Alteo effective interest): Alteo’s investment in TPC is held through SML, a management and intermediary holding company and SIL, an intermediary holding company.

MARKET ANALYSIS PERFORMANCE REVIEW SHORT TO MEDIUM-TERM OUTLOOK LONG TERM STRATEGY• Sugar prices in Tanzania decreased slightly at the

start of the financial year but then recovered well as from December 2020 further increasing towards the end of the financial year. The result was that TPC achieved a marginal increase in the year-on-year average price. The stable supply of sugar in the market from improved local production coupled with appropriate amounts of imports to fill the gap sugar season, has continued to ensure this stable pricing environment. The stable Tanzanian Shilling has also played its role to support this low inflationary environment.

• As in the preceding three years, the sugar producers were tasked with importing sugar during the gap season. This year, licenses amounting to a total of 50,000 tonnes were issued by Government via the Sugar Board of Tanzania in the final quarter of the financial year.

• The Tanzanian market remained protected from the low world sugar prices as a result of the 35% import duty and controlled import volumes which were licensed by Government.

• The sustained market stability and Government investment drives has resulted in significant investments to increase local sugar production from both incumbent and new investors to the industry in Tanzania. These investments will likely result in Tanzania being self-sufficient in sugar in the medium to longer term resulting in a more competitive industry than has been the case before.

• The COVID-19 pandemic had a limited impact both on consumption and production in Tanzania as the country remained open as in the prior year with no enforced lockdowns during the pandemic.

Tanzania Revenue Normalised EBITDA Profit after tax

Rs’000 Rs’000 Rs’000

2021 2020 2021 2020 2021 2020

TPC Limited

3,739,895 3,192,243 2,126,806 1,506,288 1,219,142 881,817

SML & SIL - - 130,227 79,017 14,185 (20,759)

3,739,895 3,192,243 2,257,033 1,585,305 1,233,327 861,058

• Through the combined impact of a volume increase of 5% and a price increase of 2.3% in USD and a weaker Mauritian Rupee, the turnover of TPC increased substantially in financial year 2020-21.

• Sugar production increased as cane yields recovered from 119 tonnes per hectare in the prior year to 133 tonnes per hectare as a result of improved climatic conditions, resulting in a lower water table, and better treatment protocols of the Yellow Sugarcane Aphid (YSA) which had weighed negatively on the cane growth in the prior year. The achieved yields for the year reflected the best ever recorded yield productivity at 11.64 tonnes of cane per hectare per month.

• Cane yields have continued their strong performance at the start of the 2021-22 season with the best ever yields achieved as at the end of September 2021. The sustained investments in better irrigation, higher fertilisation and improved YSA controls bode well for the season although the lower rainfall during the long rains and prevalence of YSA may have adverse impacts later in the season.

• Cane quality and sucrose content have also been in line with high levels achieved in the financial year 2020-21 with the factory performing in line with expectations.

• As a result of the good start to the year, it is expected that sugar production will be higher in financial year 2021-22.

As Tanzania is likely to remain a deficit sugar market in the short term, Alteo’s strategy for its Tanzanian sugar business is to continue to grow its sugar supply to the domestic market, while creating further added value from sugar cane by-products. The cornerstone of its strategic priorities is the sustainable management of natural resources to ensure simultaneous business health and wellbeing of local communities living on the estate. These include:

• Sustained investment in water supply security with new boreholes to maintain and improve cane yields, while at the same time ensuring sustainable use of underground water resources;

• Sustained investment to convert flood irrigation areas to semi solid and drip irrigation systems to improve efficiency of water use (i.e, increased water productivity);

• Continued development of 440 hectares for new sugar cane cultivation through soil reclamation in regions of relatively high salinity and sodicity;

• Phased introduction of mechanical harvesting and evaluation of its impact on production costs and cane yields, in anticipation of rising labour costs and more stringent environmental legislation towards cane burning;

• Phased investments in the factory to stabilize crushing rate, improve efficiencies and treat effluents; and

• Continuing the feasibility study of an investment in a distillery to generate additional value from molasses to produce Extra Neutral Alcohol (ENA) for the domestic market.


YEAR FOR TPC!A RECORD-BREAKING

The TPC Board approved a multiyear, multimillion-dollar project to improve drainage infrastructure.

The TPC Board approved

drainage infrastructure.

TPC’s sugarcane yields, historically the backbone of its strong financial results, made a strong recovery after a difficult 2019/20 season where a deadly combination of increasing Yellow Sugarcane Aphid (YSA) infestations and disruptively high rainfalls led to the lowest cane yields in six years. Whilst it remains difficult to assign the exact impact on yields for each of these two negative influences, it is thought that the exceptionally long rainy season led to record high water table across large parts of the estate. This meant that the cane was under stress for a significant part of the growing season and these stress conditions provided a fertile ground for the YSA pest to flourish and expand to unprecedented levels across the estate.

As the YSA pest was a relatively new challenge in Tanzania, and Alteo for that matter, management was researching, experimenting, and executing new and known measures at a rapid pace. Various consultants, industry contacts and experience from other parts of the world were considered. In the short term it was however clear that a targeted, chemical treatment campaign would be the only way to limit the damage whilst at the same time various longer term integrated pest management approaches were being studied. The adage of measuring that what you want to manage was no more visible than in this case. A substantial amount of work was invested in creating reliable and effective scouting procedures that ultimately went a long way to produce the required data to better understand the pest and the most effective treatment protocols. Whilst the final solution to eradicate the pest from TPC has not yet been found, great strides have been and are continued to be made in this regard.

It should however also be pointed out that the reduction in infestation levels would not have been as successful without the benefit of a drop in water table levels. Although the normalization of rainfall in the region resulted in this reduction, the importance of improving drainage infrastructures in and around the fields became extremely apparent. The last 5 years had seen annual flooding episodes as extreme weather conditions seemingly become the new normal. As a consequence, the TPC Board approved a multiyear, multimillion-dollar project to improve drainage infrastructure including, crucially, improvements of the river dike on the western boundary of TPC which had experienced multiple events of either overflowing or being breached in each of the last 5 years. During FY21, TPC decided to invest in the purchase of earth-moving equipment to enable the commencement of necessary drainage works on the high priority areas which had been identified in an in-depth study conducted by a specialized consultancy firm.

In the absence of disruptive rainfall events, the water table dropped to normal levels, resulting in lower YSA infestation levels and the stage was set for a return to ‘normalised’ TPC yields, thus improving profitability. FY21 did not disappoint in this regard and, in fact, led to numerous firsts with, most

importantly, the best ever cane productivity at 11.64 tons cane per hectare per month. With more cane and the second-best sucrose levels (over the same 6 years), the factory team was able to test the recent investments on the crushing capacity successfully at the designed capacity of 220 Tons Cane per Hour for short periods of time, reaching the highest ever season average of 197 TCH. With the increase in sugar production of more than 12%, a similar increase in sales of sugar followed. The resultant revenue increase, coupled with an increase in standing cane valuation (based on further increase in cane production foreseen in the following year) confirmed the significant impact of cane yields on TPC profitability as the company reached its highest ever Profit After Tax (in reporting currency of TZS).

Looking forward, the scope in maintaining and even improving such high cane yield seems daunting but at the same time exciting and achievable. With the last available horizontal expansion opportunity of 400 ha being completed within the next three years, the introduction of technological innovations such as precision farming in combination with even more investments in varietal improvements, efficient irrigation, integrated pest management activities, increased sustainable exploitation of the aquifer and the advancement of mechanized cane harvest, should bode well to offset the likely challenges of mother nature (more adverse weather and further expansion of pests such as YSA) and a reduction in surface water availability in the region.

TANZANIA

• Transmara Sugar Company Limited (TSCL – 31% Alteo effective interest): Operates a 4,000 tonnes of cane per day (TCD) sugar mill in Kenya’s Transmara region and supplies the domestic sugar market. It also markets sugar cane by-products including molasses and bagasse briquettes. TSCL sources its sugar cane entirely from out-growers located within a 30-km radius of its factory and provides a wide range of extension services to the local sugar cane farmers’ community.

KENYA

MARKET ANALYSIS PERFORMANCE REVIEW SHORT TO MEDIUM-TERM OUTLOOK LONG TERM STRATEGYGood meteorological conditions led to optimal cane growing conditions over the period. The government mills remained structurally underfunded and in poor shape to produce sugar optimally; on the opposite, Kenyan private millers progressively opted for a reinforced relationship with their growers’ communities and started assist small-scale growers to plant, fertilise and harvest. Consequently, a record crop was expected for 2021.

More coherent government support, limiting the over-export of COMESA sugars into the country, mitigated market volatility experienced in the past. Sugar prices remained fairly stable and consistently above previous year figures with an average increase of 6% year on year.

The COVID-19 pandemic has had a limited impact both on sugar consumption and production in Kenya as most of the privately owned millers managed to keep their operations running during the curfew period.

Kenya Revenue Normalised EBITDA Profit after tax

Rs’000 Rs’000 Rs’000

2021 2020 2021 2020 2021 2020

Transmara Sugar Company Limited

2,730,641 1,911,900 384,228 82,297 (31,126) (323,758)

SML & TIL - - (15,484) (15,296) (82,254) (103,401)

2,730,641 1,911,900 368,744 67,001 (113,380) (427,159)

• The increase in turnover and EBITDA was mainly driven by higher production and sales volumes while a higher average sugar price was also achieved in financial year 2020-21.

• 18% more cane was crushed due to improved cane availability and better factory efficiency in the year under review. As such, the 27% increase in sugar produced (from 72,549 tonnes to 92,375 tonnes) was a result of the higher amount of cane crushed and a better overall sugar recovery rate of 10.28% against 9.51% in the previous financial year due to a more mature cane at harvest.

• Sugar prices were 2% higher on average in USD, mainly driven by a lower import volume into Kenya from neighbouring countries. Turnover and EBITDA growth was further boosted by a depreciating Mauritian Rupee.

• Finance costs dropped with a lower average overdraft utilisation during the year.

• TSCL’s results were however adversely impacted by a punitive tax regime with the recently introduced minimum tax on turnover.

• Losses shown under SML and TIL represent administrative expenses incurred by TIL and finance costs incurred by SML on debt contracted to finance its investment in TSCL. These dropped in line with a declining LIBOR over the financial year.

• Cane availability has now stabilised as there is sufficient cane to operate the mill at optimum capacity. The current sugar cane yields achieved by out-growers are much higher than expected and comforts the management in committing to further investments to increase cane transport capacity and ramp up the volume of cane crushed.

• The mill reliability and performance has shown a marked improvement during financial year 2020-21 and is continuing to improve. A recent factory reliability audit has been undertaken and various improvements have been made and are planned for the financial year 2021-22.

• The start to financial year 2021-22 has been encouraging so far and TSCL’s performance should continue to improve in the context described above.

Kenya is a deficit sugar market with the annual consumption shortfall sourced from neighbouring COMESA countries and the world market. The domestic market is expected to continue to grow as a result of both the relatively high population growth rate and the rising per capita consumption. Alteo’s strategy is to continue to improve TSCL’s competitiveness by increasing production and sales volumes to achieve economies of scale as follows:

• Continued investment in cane development by actively supporting out-growers, both financially and technically to increase sugar cane availability in the region. The strengthening of the relationship between TSCL and the out-grower community is essential to the success of this project.

• Cascading an extensive training program to the outgrowers’ community.

• Improving the efficiency of TSCL’s activities and driving production costs down to lessen exposure to price volatility and competition from other producers on the Kenyan market.

• Collaborating with national regulators to help shape policies that will ensure the sugar industry’s longer-term sustainability.

• Exploring the possibility of expanding further into value-added activities, via a bagasse co-generation power plant.


• Sucrière des Mascareignes Limited (SML – 60% Alteo owned company) and Transmara Investment Limited (TIL – 60% Alteo effective interest): Alteo’s investment in TSCL is held through SML, a management and intermediary holding company and TIL, an intermediary holding company.

MARKET ANALYSIS PERFORMANCE REVIEW SHORT TO MEDIUM-TERM OUTLOOK LONG TERM STRATEGYGood meteorological conditions led to optimal cane growing conditions over the period. The government mills remained structurally underfunded and in poor shape to produce sugar optimally; on the opposite, Kenyan private millers progressively opted for a reinforced relationship with their growers’ communities and started assist small-scale growers to plant, fertilise and harvest. Consequently, a record crop was expected for 2021.

More coherent government support, limiting the over-export of COMESA sugars into the country, mitigated market volatility experienced in the past. Sugar prices remained fairly stable and consistently above previous year figures with an average increase of 6% year on year.

The COVID-19 pandemic has had a limited impact both on sugar consumption and production in Kenya as most of the privately owned millers managed to keep their operations running during the curfew period.

Kenya Revenue Normalised EBITDA Profit after tax

Rs’000 Rs’000 Rs’000

2021 2020 2021 2020 2021 2020


2,730,641 1,911,900 384,228 82,297 (31,126) (323,758)

SML & TIL - - (15,484) (15,296) (82,254) (103,401)

2,730,641 1,911,900 368,744 67,001 (113,380) (427,159)

• The increase in turnover and EBITDA was mainly driven by higher production and sales volumes while a higher average sugar price was also achieved in financial year 2020-21.

• 18% more cane was crushed due to improved cane availability and better factory efficiency in the year under review. As such, the 27% increase in sugar produced (from 72,549 tonnes to 92,375 tonnes) was a result of the higher amount of cane crushed and a better overall sugar recovery rate of 10.28% against 9.51% in the previous financial year due to a more mature cane at harvest.

• Sugar prices were 2% higher on average in USD, mainly driven by a lower import volume into Kenya from neighbouring countries. Turnover and EBITDA growth was further boosted by a depreciating Mauritian Rupee.

• Finance costs dropped with a lower average overdraft utilisation during the year.

• TSCL’s results were however adversely impacted by a punitive tax regime with the recently introduced minimum tax on turnover.

• Losses shown under SML and TIL represent administrative expenses incurred by TIL and finance costs incurred by SML on debt contracted to finance its investment in TSCL. These dropped in line with a declining LIBOR over the financial year.

• Cane availability has now stabilised as there is sufficient cane to operate the mill at optimum capacity. The current sugar cane yields achieved by out-growers are much higher than expected and comforts the management in committing to further investments to increase cane transport capacity and ramp up the volume of cane crushed.

• The mill reliability and performance has shown a marked improvement during financial year 2020-21 and is continuing to improve. A recent factory reliability audit has been undertaken and various improvements have been made and are planned for the financial year 2021-22.

• The start to financial year 2021-22 has been encouraging so far and TSCL’s performance should continue to improve in the context described above.

Kenya is a deficit sugar market with the annual consumption shortfall sourced from neighbouring COMESA countries and the world market. The domestic market is expected to continue to grow as a result of both the relatively high population growth rate and the rising per capita consumption. Alteo’s strategy is to continue to improve TSCL’s competitiveness by increasing production and sales volumes to achieve economies of scale as follows:

• Continued investment in cane development by actively supporting out-growers, both financially and technically to increase sugar cane availability in the region. The strengthening of the relationship between TSCL and the out-grower community is essential to the success of this project.

• Cascading an extensive training program to the outgrowers’ community.

• Improving the efficiency of TSCL’s activities and driving production costs down to lessen exposure to price volatility and competition from other producers on the Kenyan market.

• Collaborating with national regulators to help shape policies that will ensure the sugar industry’s longer-term sustainability.

• Exploring the possibility of expanding further into value-added activities, via a bagasse co-generation power plant.


TSCL’S TARGET!

TSCL can now shift its focus from cane development to cane haulage capacity and factory efficiency.

One of the key elements of Transmara Sugar Company’s long-term strategy is to improve its activities’ efficiency and drive production costs down, so as to lessen exposure to price volatility and competition from other producers on the market. In more direct terms, this translates to crushing 1,200,000 tons of cane each year, thus reaching the mill’s full capacity.

Over the past three seasons, cane availability has been secured thanks to intensive development in zones with high cane growing potential. As such, extensive soil and aerial surveys were conducted, confirming the adequate cane production potential of the area. In parallel, TSCL has been investing in people and infrastructure to support cane development by local out-growers and to transfer agricultural best practices. This has resulted in the development of more than 4,500 hectares of cane per annum and today, more than 16,000 hectares under cane are being cultivation by 18,000 outgrowers – and they are all achieving commendable yields and financial returns.

TSCL can now shift its focus to cane haulage capacity and factory efficiency to reach the milestone of 1 million tons of cane crushed in FY22.

The undulating to rolling topography of the Transmara region, coupled with a long-term average rainfall of 1,850mm per annum, makes cane haulage a challenge. Moreover, traditional infield loading and transport equipment proved too damaging for cane stools, thus reducing cane ratoon yields. The solution? The company implemented rigs of self-loading trailers pulled by high powered 4x4 tractors, a system that significantly reduces infield damage and improves versatility, even in challenging climatic conditions. FY22 will see the acquisition of the last batch of tractors and trailers that will enable TSCL to reach the mill’s crushing capacity.

On the mill side, a series of technical audits have been commissioned to identify and address the main structural and operational bottlenecks. A 3-year investment plan was established and various improvements have been made following these audits. The mill performance has already shown a marked improvement in the new financial year, with 18% more cane crushed to date.

As such, Transmara Sugar Company is well on track to achieve its target of 1,200,000 ton of cane crushed per year, thanks to key investments and measures implemented. Yet, the success of this operation rests on the people in place and their capacity to work as a team. Alteo is confident that Transmara Sugar Company, with a very competent on-site team strategically backed by members of the corporate office, is well placed to reinforce its leading position as a Kenyan sugar producer.

KENYA

MARKET ANALYSIS PERFORMANCE REVIEW SHORT TO MEDIUM-TERM OUTLOOK LONG TERM STRATEGYBetween 2019 and 2020 calendar years, total electricity generated in Mauritius decreased by 11%, from 3,237 GWh to 2,882 GWh while peak demand decreased by 2.6%. (Figures from Energy And Water Statistics - 2020) This decrease results from the current COVID-19 pandemic since many hotels and other businesses did not operate during extended periods in FY21.

Total electricity generated in Mauritius in 2020 was from the following sources:

59.2% of the total electricity produced in Mauritius was generated by Independent Power Producers, such as Alteo, and the remaining by the Central Electricity Board (CEB).

The National Budget 2021-2022 announced a remuneration of Rs3.50/KWh of bagasse energy exported to CEB for sugar cane planters and producers as part of a Biomass Remuneration Framework. This bold measure taken by Government was a major step towards securing the sustainability of the cane industry in Mauritius, hence preserving the future availability of bagasse for electricity generation.

Through partnerships with renowned international firms, the renewables sector continues to represent a crucial avenue of growth for Alteo’s Energy cluster with a 100% biomass thermal project already presented to the CEB. The 2021-2022 National Budget speech set the challenging target of generating 60% of the national electricity from renewable sources by 2030. It also announced the launch of a Request For Proposals for a 40MW wind farm and for hybrid renewable projects to replace coal energy. Alteo, in collaboration with its partners, intends to respond to these tenders.

Alteo’s commitment to greener energy production solutions extends to the Group’s operations in Eastern Africa, a region where access to electricity is still relatively limited. As stated in the International Energy Agency (IEA) December 2020 Electricity Market Report, the African electricity sector remains characterised by its large geography, limited interconnection and trade, improving electrification and prevailing system adequacy issues. Moreover, according to the IEA’s World Energy Investment 2020 report, investment in Africa remains dominated by renewables. The continent thus represents further growth opportunities for Alteo’s Energy cluster.


Rs’000 Rs’000 Rs’000

2021 2020 2021 2020 2021 2020

Alteo Energy Ltd

711,815 638,307 126,468 97,961 37,027 (11,586)

Consolidated Energy Ltd

- - (985) (4,071) (590) 59,449

Share of results of Helios Beau Champ Ltd

- - - - 4,383 11,495

711,815 638,307 125,483 93,890 40,820 59,358

• The performance of AEnL was favourably impacted by better efficiencies despite less bagasse availability due to a lower cane tonnage and a lower offtake from Alteo Refinery Ltd (ARL) following its closure in 2020.

• Overall energy production at AEnL decreased from 181.3 GWh to 177.0 GWh in financial year 2020-21 with the lower offtake from ARL being only partly compensated by a slightly higher offtake from CEB.

• Sugar cane tonnage for crop 2020 was lower than crop 2019, as such, bagasse energy production decreased from 91.5 GWh to 81.1 GWh.

• Cane trash energy production was at par with the comparative year and remained relatively low – pending the release of the Biomass Remuneration Framework which is expected to create the necessary environment to enable the scaling up of this energy source.

• Coal energy production in 2020-21 was at par with last year at 89.7GWh.

• The availability of the power plant for the year under review was 98.4%, a slight decline against the previous year.

• The KWh produced per tonne of bagasse ratio increased from 241 to 244 mainly due to better bagasse quality with reduced mill throughput while the KWh to tonne of coal ratio increased from 1,326 to 1,388 due to more stable demand from the CEB.

• Helios Beau Champ Limited exported 16.3 GWh to CEB in financial year 2020-21 with an average availability of 99.75%.

• Consolidated Energy Co Ltd has ceased its operations since December 2018 upon the expiry of its Power Purchase Agreement (PPA). In the comparative year it benefitted from non-recurring gains from the sale of its equipment.

• AEnL’s PPA ends in December 2021 and the company has engaged in discussions with the CEB to extend it until the new 100% biomass power plant project materializes.

• AEnL’s future financial performance will depend on the terms of renewal of the PPA.

• Alteo intends to bid on several energy projects but none of these are expected to influence the performance of the cluster over the next financial year given the lead time for the development of such projects.

The strategy for the cluster is to sustainably and efficiently transform available energy sources into electricity while furthering its transition into renewable energy sources. Alteo has the ambition to develop further into renewable energy sources through a 100% biomass thermal project as well as wind and solar projects in Mauritius and East Africa.

• In line with that strategy, the Group has been investigating alternative sources of biomass. It intends to participate actively in the future development of this segment in Mauritius and to collaborate with the relevant authorities on the preparation of the Biomass Remuneration Framework announced in the 2021-2022 National Budget speech.

• In Kenya, preliminary studies have been launched on a 100% bagasse fueled power plant project and are progressing.

• In Tanzania, TPC aims towards the continuous development of biomass production onsite to increase electricity production for the grid, coupled with investments to reduce internal consumption.

• Alteo Energy Ltd (AEnL – 65.10% Alteo owned company): Operates a 41 MW biomass/coal power plant at Union Flacq, Mauritius. The company supplies steam and electricity to Alteo Milling Ltd and exports an annual average of 170 GWh to the national grid. It generates more than half of its production from bagasse and cane trash that are renewable energy sources.


MARKET ANALYSIS PERFORMANCE REVIEW SHORT TO MEDIUM-TERM OUTLOOK LONG TERM STRATEGYBetween 2019 and 2020 calendar years, total electricity generated in Mauritius decreased by 11%, from 3,237 GWh to 2,882 GWh while peak demand decreased by 2.6%. (Figures from Energy And Water Statistics - 2020) This decrease results from the current COVID-19 pandemic since many hotels and other businesses did not operate during extended periods in FY21.

Total electricity generated in Mauritius in 2020 was from the following sources:

59.2% of the total electricity produced in Mauritius was generated by Independent Power Producers, such as Alteo, and the remaining by the Central Electricity Board (CEB).

The National Budget 2021-2022 announced a remuneration of Rs3.50/KWh of bagasse energy exported to CEB for sugar cane planters and producers as part of a Biomass Remuneration Framework. This bold measure taken by Government was a major step towards securing the sustainability of the cane industry in Mauritius, hence preserving the future availability of bagasse for electricity generation.

Through partnerships with renowned international firms, the renewables sector continues to represent a crucial avenue of growth for Alteo’s Energy cluster with a 100% biomass thermal project already presented to the CEB. The 2021-2022 National Budget speech set the challenging target of generating 60% of the national electricity from renewable sources by 2030. It also announced the launch of a Request For Proposals for a 40MW wind farm and for hybrid renewable projects to replace coal energy. Alteo, in collaboration with its partners, intends to respond to these tenders.

Alteo’s commitment to greener energy production solutions extends to the Group’s operations in Eastern Africa, a region where access to electricity is still relatively limited. As stated in the International Energy Agency (IEA) December 2020 Electricity Market Report, the African electricity sector remains characterised by its large geography, limited interconnection and trade, improving electrification and prevailing system adequacy issues. Moreover, according to the IEA’s World Energy Investment 2020 report, investment in Africa remains dominated by renewables. The continent thus represents further growth opportunities for Alteo’s Energy cluster.


Rs’000 Rs’000 Rs’000

2021 2020 2021 2020 2021 2020

Alteo Energy Ltd

711,815 638,307 126,468 97,961 37,027 (11,586)

Consolidated Energy Ltd

- - (985) (4,071) (590) 59,449

Share of results of Helios Beau Champ Ltd

- - - - 4,383 11,495

711,815 638,307 125,483 93,890 40,820 59,358

• The performance of AEnL was favourably impacted by better efficiencies despite less bagasse availability due to a lower cane tonnage and a lower offtake from Alteo Refinery Ltd (ARL) following its closure in 2020.

• Overall energy production at AEnL decreased from 181.3 GWh to 177.0 GWh in financial year 2020-21 with the lower offtake from ARL being only partly compensated by a slightly higher offtake from CEB.

• Sugar cane tonnage for crop 2020 was lower than crop 2019, as such, bagasse energy production decreased from 91.5 GWh to 81.1 GWh.

• Cane trash energy production was at par with the comparative year and remained relatively low – pending the release of the Biomass Remuneration Framework which is expected to create the necessary environment to enable the scaling up of this energy source.

• Coal energy production in 2020-21 was at par with last year at 89.7GWh.

• The availability of the power plant for the year under review was 98.4%, a slight decline against the previous year.

• The KWh produced per tonne of bagasse ratio increased from 241 to 244 mainly due to better bagasse quality with reduced mill throughput while the KWh to tonne of coal ratio increased from 1,326 to 1,388 due to more stable demand from the CEB.

• Helios Beau Champ Limited exported 16.3 GWh to CEB in financial year 2020-21 with an average availability of 99.75%.

• Consolidated Energy Co Ltd has ceased its operations since December 2018 upon the expiry of its Power Purchase Agreement (PPA). In the comparative year it benefitted from non-recurring gains from the sale of its equipment.

• AEnL’s PPA ends in December 2021 and the company has engaged in discussions with the CEB to extend it until the new 100% biomass power plant project materializes.

• AEnL’s future financial performance will depend on the terms of renewal of the PPA.

• Alteo intends to bid on several energy projects but none of these are expected to influence the performance of the cluster over the next financial year given the lead time for the development of such projects.

The strategy for the cluster is to sustainably and efficiently transform available energy sources into electricity while furthering its transition into renewable energy sources. Alteo has the ambition to develop further into renewable energy sources through a 100% biomass thermal project as well as wind and solar projects in Mauritius and East Africa.

• In line with that strategy, the Group has been investigating alternative sources of biomass. It intends to participate actively in the future development of this segment in Mauritius and to collaborate with the relevant authorities on the preparation of the Biomass Remuneration Framework announced in the 2021-2022 National Budget speech.

• In Kenya, preliminary studies have been launched on a 100% bagasse fueled power plant project and are progressing.

• In Tanzania, TPC aims towards the continuous development of biomass production onsite to increase electricity production for the grid, coupled with investments to reduce internal consumption.

• Helios Beau Champ Limited (Helios – 49% Alteo owned company): A joint venture with Qair (Mauritius) Ltd, operates a 9 MW photovoltaic farm at Beau Champ, Mauritius, since December 2018. It exports its average annual production of 16GWh to the national grid.

• TPC Limited (TPC – 45% Alteo effective interest): Operates a 17 MW bagasse power plant generating steam and electricity for its sugar processing requirements and electricity for its entire irrigation network needs. It exports its average surplus of 15 GWh to the Tanzanian national grid. For financial reporting purposes, this activity is aggregated with TPC’s sugar operations.


FOR ALTEO ENERGY LTD

The Union Flacq power plant is extremely reliable,

with an average annual availability of 98% over the

last few years.

Alteo Energy Ltd is an Independent Power Producer (IPP) and, as such, has a Power Purchase Agreement (PPA) with the Central Electricity Board (CEB) in Mauritius that mainly ensures that (a) the national electricity grid will be provided with a stable source throughout the length of the contract and, (b) that the electricity produced will be bought by the CEB at an agreed price for the duration of the contract. Such agreements have been the norm for all IPPs in Mauritius and Alteo Energy Ltd’s current PPA is coming to an end on December 31, 2021. A brief conversation with Sébastien Lavoipierre, Chief Operating Officer of Alteo’s Industrial Activities, walks us through the renewal process and highlights the next milestones for Alteo’s Energy cluster.

When did our PPA with the CEB begin and when does it end?

Alteo Energy Ltd’s power plant has been in operation since the mid-80s and there has been an agreement with the CEB since then. However, when the second power plant was built, a new PPA was signed on August 5, 1997, and lasted to December 21, 2018. It was then extended to December 31, 2021, with updated terms, and we are presently negotiating another extension with the CEB.

What are the key points of this PPA and its extension?

Our current PPA is what is commonly called a ‘take or pay agreement’. In essence, this means that the CEB has agreed to take a precise amount of electricity from us for the national grid or compensate us for the shortfall. Our current PPA allows for the annual purchase of 170 Gwh of electricity produced from bagasse, cane trash and coal by the CEB. We are looking to a 3-5 year extension on nearly the same terms as the current agreement.

Why ask for a 5-year renewal instead of a longer (or shorter) period?

The current PPA only allows for maximum extension of 5 years. In line with government’s strategy to develop renewable energy and move away from coal, Alteo aims to replace the existing plant with a more efficient one operating on biomass only, thus helping decrease the country’s dependency on fossil fuels.

What is the future for our Union Flacq power plant?

Alteo Energy’s power plant in Union Flacq consists of 2 units, respectively aged 23 and 37 years old. Yet, despite a venerable combined age of 60, the power plant is extremely reliable with an average annual availability of 98% over the last few years. However, it cannot run forever and, more importantly, it runs on coal during the off-season.

Thus, in line with our group’s commitment and vision, we responded to the Request for Information regarding renewable energy projects launched in March 2021 by the CEB with a proposal for a 100% biomass power plant in Union Flacq to replace our ageing plant. This state-of-the-art project would use more efficient technology than our current power plant and would burn bagasse, cane trash, wood, and selected green waste all year long to produce electricity from renewable sources only. As such, this project and the future of our Union Flacq plant are dependent on the recently announced Biomass Framework and its power to drive the development of local biomass sources. We believe that the potential for change and growth is here and that, in the next few years, all existing power plants will be replaced by more modern, efficient and clean equivalents.

PROPERTY DEVELOPMENT• Anahita Estates Limited (AEL - a 100% Alteo owned company): Promotes, markets and sells off-plan properties and serviced plots within

the Anahita Integrated Resort Scheme (IRS) and other real estate projects of Alteo, mainly in the East of Mauritius. Over the past decade, AEL has successfully positioned Anahita as one of the most renowned and highly regarded IRS developments in Mauritius. At the time of writing, AEL had sold 86% of Anahita’s inventory (280 residential units out of 325).

MARKET ANALYSIS PERFORMANCE REVIEW SHORT TO MEDIUM-TERM OUTLOOK LONG TERM STRATEGY• The financial year 2020-21 was deeply marked by

the COVID-19 crisis, during which a mandatory quarantine was imposed to anyone wishing to travel to Mauritius.

• The crisis escalated to a total closure of the borders from March to May 2021 following the second COVID-19 contamination wave in Mauritius.

• With almost no revenue generation for more than a year, this situation resulted in a major crisis for the tourism and golf sectors in Mauritius.

• Indeed, hotel operations were limited to local guests and a small number of establishments opted to operate as quarantine centres for foreign travellers coming to Mauritius.

• The effects of the crisis were mitigated by Government support, notably the Wage Assistance Scheme (WAS), which limited the number of redundancies in the country and the risk of definitive closure of tourism and hospitality operators during this period.

• The Mauritian property market nevertheless remained active despite the very low tourist arrivals in Mauritius, which may be explained by low-interest rate environment, by the attractiveness of real estate as a secure investment during uncertain times and a depreciating currency.

• Property sales at national level to international investors reached 421 transactions in 2020-21 with an average purchase price of Rs 27m.

• The minimum investment level in property developments to be eligible for permanent residence permit having decreased from USD 500,000 to USD 375,000 has boosted international sales, especially for entry-level products such as apartments and townhouses (59% of acquisitions in 2020-21) priced around USD 375,000.

• Predictions for tourist arrivals are more encouraging for 2021-22 with a government target of 600,000 tourists. As from 1 October 2021, the Mauritian government opened borders without quarantine for travellers vaccinated against COVID-19 . Moreover, numerous airlines resumed operations in October 2021.

• Nevertheless, the situation remains fragile due to the lack of predictability regarding the evolution of the virus or the sanitary conditions in our main source markets.

Property Revenue Normalised EBITDA Profit after tax

Rs’000 Rs’000 Rs’000

2021 2020 2021 2020 2021 2020

Anahita Estates Limited

832,595 870,362 340,470 134,710 255,902 82,660

Anahita Golf Ltd 23,682 81,784 (24,347) 8,009 (50,869) (18,305)

Alteo Properties Ltd

1,625 4,698 (251) 4,854 (392) 9,578

Share of results of Anahita Residences & Villas Ltd

- - - - (67,986) (29,968)

857,901 956,844 315,872 147,573 136,655 43,965

• AEL’s turnover comprised revenue in relation to the progress of construction works on villas sold off-plan, as well as revenue arising from the sale of serviced plots (i.e. for which deeds of sale were signed during the year under review).

• AEL completed 11 sales of serviced land plots within Anahita during the financial year against 5 sales of serviced land and 5 sales of off-plan villas in the comparative year. This was the main driver for EBITDA growth for the year. Profitability was further improved by savings in marketing costs (linked to travel and events restrictions) and a drop in finance costs as a result of an accelerated debt servicing.

• However sales finalisations remained a challenge during the year and several confirmed reservations have been postponed to financial year 2021-22 due to delays in contract signing. These should be converted into sales by December 2021.

• Despite AEL’s encouraging performance, the Property cluster had a challenging 2020-21 year as a result of the COVID-19 crisis and the closure of the Mauritian borders to the rest of the world as from March 2020. ARVL and AGL experienced a very limited level of activity during the year and posted significant losses. However, the management of both companies reacted proactively and implemented several measures to minimise costs and reduce the negative impact of the crisis.

• The most adverse impact on the cluster has been felt at ARVL. On top of the very challenging operational results, losses have been increased by unrealised foreign exchange losses of Rs 44m. Cost containment measures and the Government’s Wage Assistance Scheme (WAS) have provided some support to the company so far. However, additional shareholder financing of Rs 100m was received during the year and the company has applied for further financing at the Mauritius Investment Corporation. This application was still under way at the time of writing. At the end of the financial year, ARVL also decided to put on sale the 24 Junior Suites it owns in the Amalthea neighbourhood, while preserving this inventory by entering into a 10-year rental agreement with the future buyers. The sale of these suites is expected to significantly reduce the company’s debt level.

• The golf activities of AGL have also directly suffered from the lack of tourists especially at ARVL and Four Seasons Resort Mauritius. Additional financing from commercial banks and shareholders has also been required to support the company and the WAS has helped to meet part of salary costs. Here as well, management implemented immediate measures to reduce operational costs and to attract more local golfers through special offers and regular golf events to minimise losses.

• In relation to marketing and property sales prospects to date, AEL has 3 off-plan villas and 4 plots of serviced land reserved with deposits which are expected to materialise in 2021-22 if no significant delays are experienced.

• Sales of residential developments Mont Piton 2 and Balnea 2 will be processed in 2021-22 and 2022-23, positively impacting on the performance of the cluster.

• The reopening of the borders without quarantine for vaccinated travellers as from October 2021 is expected to improve the performance of the companies of the cluster over the financial year, especially with potential buyers who have not been able to visit Mauritius since the start of the COVID-19 crisis in 2020.

• ARVL’s performance for 2021-22 remains uncertain and will depend on the willingness of tourists to travel to Mauritius when the country opens. The Resort is expected to face tough competition from local hotels as well as from other destinations over the world. Registered bookings for the 2021-2022 high season remain however encouraging and the number of flights and seats is increasing regularly.

• AGL’s performance will continue to be heavily dependent on the occupancy rate of the two resorts located within Anahita (ARVL and Four Seasons at Anahita). While waiting for the complete opening of the borders and the return of golf tourists, AGL continues to be active in the local market with a programme of regular golf events and attractive offers for local golfers.

• Following the development of a strategic master plan for Alteo’s land in 2019, the property development team is actively working on new projects which will be launched in the coming years. The sites earmarked for these projects are the areas surrounding Anahita and Beau Champ, Trou d’Eau Douce and Mont Piton. The AEL team is more specifically working on the future phases of development in the Anahita region, which will be launched in financial year 2022-23. This new endeavour will integrate residential, commercial and leisure components.

• With the perspective of improved connectivity for the Eastern region resulting from new roadworks, the Property cluster has been restructuring its operations to achieve better alignment with its longer-term strategy of becoming a leading property developer in the East. This involves an added focus on the domestic market while proposing innovative development concepts and expanding into new services. As part of this restructuring, Alteo Agri Ltd has entrusted the management of some strategic non-agricultural land assets to the Property Cluster. The aim of this new structure is to enable a more focused and dynamic management of these assets by property development specialists. The Property Cluster is also responsible for the preservation and rehabilitation of Alteo’s historical sites for which an agreed yearly budget has been earmarked.


• Anahita Residences & Villas Limited (ARVL – a 50% Alteo owned company): A joint venture with CIEL Limited. It operates Anahita Golf & Spa Resort and offers the rental of private residential properties and property management services to Anahita homeowners.

• Anahita Golf Ltd (AGL – a 87,77% Alteo owned company): Owns and manages the 18-hole championship golf course, the pro-shop and the clubhouse located at Anahita. AGL’s performance is directly linked to Anahita Golf & Spa Resort’s, Four Seasons Resort at Anahita’s and surrounding hotels’ performance, and in particular the capture ratio of golf players from within its pool of clients.

MARKET ANALYSIS PERFORMANCE REVIEW SHORT TO MEDIUM-TERM OUTLOOK LONG TERM STRATEGY• The financial year 2020-21 was deeply marked by

the COVID-19 crisis, during which a mandatory quarantine was imposed to anyone wishing to travel to Mauritius.

• The crisis escalated to a total closure of the borders from March to May 2021 following the second COVID-19 contamination wave in Mauritius.

• With almost no revenue generation for more than a year, this situation resulted in a major crisis for the tourism and golf sectors in Mauritius.

• Indeed, hotel operations were limited to local guests and a small number of establishments opted to operate as quarantine centres for foreign travellers coming to Mauritius.

• The effects of the crisis were mitigated by Government support, notably the Wage Assistance Scheme (WAS), which limited the number of redundancies in the country and the risk of definitive closure of tourism and hospitality operators during this period.

• The Mauritian property market nevertheless remained active despite the very low tourist arrivals in Mauritius, which may be explained by low-interest rate environment, by the attractiveness of real estate as a secure investment during uncertain times and a depreciating currency.

• Property sales at national level to international investors reached 421 transactions in 2020-21 with an average purchase price of Rs 27m.

• The minimum investment level in property developments to be eligible for permanent residence permit having decreased from USD 500,000 to USD 375,000 has boosted international sales, especially for entry-level products such as apartments and townhouses (59% of acquisitions in 2020-21) priced around USD 375,000.

• Predictions for tourist arrivals are more encouraging for 2021-22 with a government target of 600,000 tourists. As from 1 October 2021, the Mauritian government opened borders without quarantine for travellers vaccinated against COVID-19 . Moreover, numerous airlines resumed operations in October 2021.

• Nevertheless, the situation remains fragile due to the lack of predictability regarding the evolution of the virus or the sanitary conditions in our main source markets.

Property Revenue Normalised EBITDA Profit after tax

Rs’000 Rs’000 Rs’000

2021 2020 2021 2020 2021 2020


832,595 870,362 340,470 134,710 255,902 82,660

Anahita Golf Ltd 23,682 81,784 (24,347) 8,009 (50,869) (18,305)


1,625 4,698 (251) 4,854 (392) 9,578

Share of results of Anahita Residences & Villas Ltd

- - - - (67,986) (29,968)

857,901 956,844 315,872 147,573 136,655 43,965

• AEL’s turnover comprised revenue in relation to the progress of construction works on villas sold off-plan, as well as revenue arising from the sale of serviced plots (i.e. for which deeds of sale were signed during the year under review).

• AEL completed 11 sales of serviced land plots within Anahita during the financial year against 5 sales of serviced land and 5 sales of off-plan villas in the comparative year. This was the main driver for EBITDA growth for the year. Profitability was further improved by savings in marketing costs (linked to travel and events restrictions) and a drop in finance costs as a result of an accelerated debt servicing.

• However sales finalisations remained a challenge during the year and several confirmed reservations have been postponed to financial year 2021-22 due to delays in contract signing. These should be converted into sales by December 2021.

• Despite AEL’s encouraging performance, the Property cluster had a challenging 2020-21 year as a result of the COVID-19 crisis and the closure of the Mauritian borders to the rest of the world as from March 2020. ARVL and AGL experienced a very limited level of activity during the year and posted significant losses. However, the management of both companies reacted proactively and implemented several measures to minimise costs and reduce the negative impact of the crisis.

• The most adverse impact on the cluster has been felt at ARVL. On top of the very challenging operational results, losses have been increased by unrealised foreign exchange losses of Rs 44m. Cost containment measures and the Government’s Wage Assistance Scheme (WAS) have provided some support to the company so far. However, additional shareholder financing of Rs 100m was received during the year and the company has applied for further financing at the Mauritius Investment Corporation. This application was still under way at the time of writing. At the end of the financial year, ARVL also decided to put on sale the 24 Junior Suites it owns in the Amalthea neighbourhood, while preserving this inventory by entering into a 10-year rental agreement with the future buyers. The sale of these suites is expected to significantly reduce the company’s debt level.

• The golf activities of AGL have also directly suffered from the lack of tourists especially at ARVL and Four Seasons Resort Mauritius. Additional financing from commercial banks and shareholders has also been required to support the company and the WAS has helped to meet part of salary costs. Here as well, management implemented immediate measures to reduce operational costs and to attract more local golfers through special offers and regular golf events to minimise losses.

• In relation to marketing and property sales prospects to date, AEL has 3 off-plan villas and 4 plots of serviced land reserved with deposits which are expected to materialise in 2021-22 if no significant delays are experienced.

• Sales of residential developments Mont Piton 2 and Balnea 2 will be processed in 2021-22 and 2022-23, positively impacting on the performance of the cluster.

• The reopening of the borders without quarantine for vaccinated travellers as from October 2021 is expected to improve the performance of the companies of the cluster over the financial year, especially with potential buyers who have not been able to visit Mauritius since the start of the COVID-19 crisis in 2020.

• ARVL’s performance for 2021-22 remains uncertain and will depend on the willingness of tourists to travel to Mauritius when the country opens. The Resort is expected to face tough competition from local hotels as well as from other destinations over the world. Registered bookings for the 2021-2022 high season remain however encouraging and the number of flights and seats is increasing regularly.

• AGL’s performance will continue to be heavily dependent on the occupancy rate of the two resorts located within Anahita (ARVL and Four Seasons at Anahita). While waiting for the complete opening of the borders and the return of golf tourists, AGL continues to be active in the local market with a programme of regular golf events and attractive offers for local golfers.

• Following the development of a strategic master plan for Alteo’s land in 2019, the property development team is actively working on new projects which will be launched in the coming years. The sites earmarked for these projects are the areas surrounding Anahita and Beau Champ, Trou d’Eau Douce and Mont Piton. The AEL team is more specifically working on the future phases of development in the Anahita region, which will be launched in financial year 2022-23. This new endeavour will integrate residential, commercial and leisure components.

• With the perspective of improved connectivity for the Eastern region resulting from new roadworks, the Property cluster has been restructuring its operations to achieve better alignment with its longer-term strategy of becoming a leading property developer in the East. This involves an added focus on the domestic market while proposing innovative development concepts and expanding into new services. As part of this restructuring, Alteo Agri Ltd has entrusted the management of some strategic non-agricultural land assets to the Property Cluster. The aim of this new structure is to enable a more focused and dynamic management of these assets by property development specialists. The Property Cluster is also responsible for the preservation and rehabilitation of Alteo’s historical sites for which an agreed yearly budget has been earmarked.


DRBC decommissioned factory, at Beau Champ, is a key part of Alteo’s smart city projet.

ALTEO’S GROWTH ENGINE

This smart city will transform the region and usher in a new era of growth.

Our aim is not to launch an all-out development campaign for the region, but rather to respond intelligently to the needs of the market by shepherding innovative and distinctive projects that add value to the destination.

Alteo’s Master Plan for the region has identified immediate opportunities to deliver quality projects for local and foreign investors. The Master Plan aims at maximising the potential of the group’s significant land bank in Mauritius – 15,000 ha of freehold land between Mon Loisir and Grande-Rivière-Sud-Est. Moreover, the management of all our non-agricultural assets has now been entrusted to our Property cluster, thus empowering specialists to look at the best possible way of creating value from our land assets as well as from our heritage sites.

We are already in advanced stages of development for the first phases of this exciting strategy, most notably with our brand-new smart city project at Beau Champ, plans for which were officially provided to the Economic Development Board in September 2021. Spread over 100 ha between Grand-Rivière-Sud-Est and Beau Champ village, this smart city will transform the region and usher in a new era of growth. 50% of the surface area of this new project will be devoted to residential developments while the other half, which includes the decommissioned Deep River Beau Champ factory, will be transformed for non-residential, commercial, leisure and community use.

This is a monumental undertaking that will fuel Alteo’s growth on the medium to long term and our teams are primed to take on this challenge. The true test of their skill will be the ability to reenergise property development in the region

without losing the uniqueness that makes the charm of the East and distinguishes it from other parts of the island, but our teams have already proven their worth with successful developments such as Anahita, Mont Piton and Balnea.

Besides, this smart city project is only the tip of the iceberg, with other ambitious plans in the pipeline, such as the development of the strip between Trou d’Eau Douce and Bel Air, or the long-awaited project that will highlight the exceptional Beau Rivage site. Yet, our aim is not to launch an all-out development campaign for the region, but rather to respond intelligently to the needs of the market by shepherding innovative and distinctive projects that add value to the destination. This is the Alteo way.

ALTEO’S RISK MANAGEMENT ENABLES THE GROUP TO BETTER ASSESS THE OPERATING CONTEXT FOR EACH OF ITS CLUSTERS AND THUS ADOPT A CAUTIONARY APPROACH FOR ITS INVESTMENTS AND OPERATIONS. THE FOLLOWING RISKS AND THEIR MITIGATING ACTIONS ARE CLUSTER-SPECIFIC.

For Group-level risk assessment, please refer to pages 79 to 85 of the Corporate Governance Report.


RISKS AND MITIGATING ACTIONS

Businesses Risks Actions taken/link to strategy

All Global sugar market conditions and sugar price volatility

• Improved efficiency and cost control• Lobbying for G2G preferential quotas and tariffs• Diversification into higher value sugar products• Geographical diversification of markets• Diversification of revenue streams by optimising revenues

from sugar cane byproducts

All Continuous increase in labour costs • Accelerate mechanisation of field activities and factory automation initiatives

All Deadlock with trade unions on collective agreements

• Communicate with all stakeholders to inform them of the cyclical nature of the industry

Alteo Milling Ltd

Reduction in sugar cane supply from planters resulting in idle capacity

• Intensify our planters’ support service programme• Collaborate with Government and international experts on the

development and implementation of a Biomass Framework



Risks Actions taken/link to strategy

Unfavorable Government approach leading to detrimental industry development, imports and pricing policies

• Constantly engaging with the Sugar Board of Tanzania and the Government on appropriate investment policies that will ensure continued and sustainable growth of the sugar industry in the country.

Climatic events (including floods) resulting in financial loss

• Maintaining clear flood paths and successful execution of drainage masterplan approved by the Board to allow water to pass swiftly through the estate with minimum damage to fields and infrastructure

• Adequate disaster recovery plan in place• Insure risk where possible

Substantial increase in the incidence of pests and diseases, especially Yellow Sugarcane Aphid (YSA)

• Close monitoring of infestation levels• Prompt and targeted treatment using proven methodologies whilst also

testing biological control initiatives• Planting tolerant varieties

More stringent regulations on occupational health, safety and environment (OHSE)

• Regular review of reported incidents and assessments of efficacy of established control protocols through both internal and external resources to achieve continuous improvement in OHSE risks

• Improvements to factory effluents treatment through successful completion of Wetlands project approved by Board.

Ability to attract and retain management competencies

• Defining and creating the right environment that will ensure attraction and retention of high calibre management resources

• Adequate succession planning• Train and recruit competent local resources• Delocalisation of some activities through centralization initiatives where

feasible. • Appropriate and timely engagement with authorities to allow for smooth

obtainment of work permits for skilled foreign staff

Political risk • Business Continuity Plan in place to promptly react to crisis situations• Political risk and violence insurance covers in place

Availability of water for irrigation • Regular review of water sources to establish sustainable use patterns • Engagement with authorities to ensure legally established water rights

are respected and maintained by all stakeholders, especially within TPC Limited water source tributaries

• Investments in boreholes to further secure water supply• Investments in irrigation systems to increase water usage efficiency



Risks Actions taken/link to strategy

Unfavorable Government policies leading to excessive imports and sugar price volatility

• Constantly engaging with the Kenyan Sugar Directorate on issues relating to sugar import policies

• Close monitoring of the domestic market• Continuous investments to increase scale, efficiency, and lower

production costs, to be less exposed to the import price parity

Lack of sugar cane supply • Building long term, trust-based relationships with local farmers by providing agricultural extension services through the decentralisation of agricultural operations

• Developing a reliable database of out-growers and using Geographical Information Systems (GIS) to monitor area under cane and generate an accurate harvest planner

Intensification of competition on the market with:• The setting up of new mills in the

region and country-wide; and• The privatisation or leasing of state-

owned mills.

• Continuous investments to increase scale, efficiency, and lower production costs, to be less exposed to competitive forces

Political risk • Business Continuity Plan in place to promptly react to crisis situations• Political risk and violence insurance covers in place

Ability to attract and retain management competencies

• Creating the right environment to be able to attract high-calibre management resources

• Adequate succession planning

Excess carry over cane leading to:• Discouraged farmers and causing

them to uproot cane; and• Social tensions/tensed relationship

with farmers – emphasised during an election year.

• Ongoing investments to enhance factory reliability and to increase transport capacities

• Prioritising contracted and mature cane• Regular and effective communication channels with the farmers

community




Alteo Energy Ltd Uncertainty relating to the terms of the renewal of AEnL’s PPA ahead of December 2021

• Request for 5-year extension made to CEB• Actively engaging with the CEB

Government’s goal of achieving no coal generated electricity by 2030

• Alignment of Alteo’s strategy with the National strategy

• New 100% biomass power plant proposed to the CEB

Viability of new 100% biomass power plant project

• Investigating alternative sources of green fuel for the plant

• Working with relevant authorities to develop and implement the Biomass Remuneration Framework

Increasing costs of inputs • Coal charges are passed through to CEB• Tariff is indexed to CPI

Mechanical breakdown • Preventive maintenance• Renewal of equipment and major

overhauls upon renewal of PPAs• Insurance covers

Lower availability of bagasse • Working in partnership with the sugar cluster and Alteo Planter’s Service to enhance the planters’ assistance program

Abiding to environmental regulations

• Close monitoring of effluents and regular submission of reports to Ministry of Environment as per Environmental Impact Assessment (EIA)

Helios Beau Champ Limited Equipment breakdown resulting in downtime

• Preventive maintenance• Insurance covers

Growing vegetation causing shade on panels

• Regular maintenance on vegetation

TPC Limited Non-renewal of PPA or new PPA with less favorable terms

• Management is engaging well in advance with the distributor to anticipate the renewal of the PPA and preserve current terms.





No visits from potential buyers due to prolonged closure of Mauritian borders

• Strengthened digital presence to boost visibility and reach potential prospects

• Regular communications with homeowners and leads• Commercial actions on the local market (Mauritians and expatriates)

Inclusion of Mauritius on the European Commission black list and Financial Action Task Force monitoring list

• Optimal level of compliance and due diligence• Collaboration with authorities to reassure stakeholders of good

governance practices in Mauritius and within Alteo

Fierce competition in real estate sales in the IRS/RES/PDS luxury segments and other schemes (Smart City, G+2)

• Focus on serviced land offer and uniqueness of the Anahita destination and lifestyle

• Diverse product offering, targeted sales & marketing initiatives• Special attention paid to Anahita homeowners to maximise

repeater sales

Indebtedness level: cash-flow Management

• Implementation of strict operational cost-containment measures• Robust cash-flow monitoring

Foreign exchange risk on sales • Sales are mostly denominated in rupees to limit the impact of foreign exchange differences

• Use of hedging instruments for sales denominated in foreign currencies

Anahita Residences & Villas Limited

Impact of COVID-19 crisis on tourist arrivals

• Cost containment measures• Strategic review of the business model to generate new

sustainable revenue sources• Financial measures to manage temporary cash flow issues

Foreign exchange risk affecting the competitiveness of Mauritius as a destination

• Market and revenue diversification

Air connectivity (poor financial state of airline operators)

• On-going discussions with the relevant authorities, through the Association des Hôteliers et Restaurateurs de l’Ile Maurice (AHRIM), to improve air access and tourism policies following the opening of borders

Increasing competition from “sharing economy” business models, such as Airbnb, as well as the holiday property rental sector in Mauritius

• Continuous investment in services and experiences• Optimisation of direct sales and use of digital technology• New holiday rental activity managed by the Resort to diversify its

offer

Anahita Golf Ltd

Increasing competition – Opening up of new golf courses around the island

• Keep the level of the golf course at its best in order to distinguish it from others and provide an exceptional experience to the players

• Achieve more synergies with the Resort and the property development arm to increase the visibility of the golf

Over dependence on resorts within Anahita

• Actions to reach a wider market of players locally but also guests staying in other hotels on the East coast


STATEMENT OF COMPLIANCE(Section 75(3) of the Financial Reporting Act 2004)

Name of Public Interest Entity: ALTEO LIMITED

Reporting Period: July 1, 2020 to June 30, 2021

We, the directors of Alteo Limited confirm that to the best of our knowledge, Alteo Limited has complied with all of its obligations and requirements under the Code of Corporate Governance.

Arnaud Lagesse Patrick Chatenay


CORPORATE GOVERNANCE REPORT 2021

The Board of Alteo Limited (hereinafter referred to as “Alteo” or the “Company”) is pleased to present the Company’s Corporate Governance Report for the financial year ended June 30, 2021.

INTRODUCTION

The governance of Alteo and its subsidiaries (the “Group”) is principally guided by the provisions of the Companies Act 2001 (as amended), its Constitution, its Board Charter and the National Code of Corporate Governance for Mauritius (2016) (the “Code”).

Alteo is further governed by the Listing Rules of the Stock Exchange of Mauritius Ltd (“SEM”) as its shares are listed on the Official List of the SEM, and the Company falls under the definition of a Public Interest Entity (“PIE”) pursuant to section 2 of the Financial Reporting Act 2004. In line with the aforementioned Act, the wholly-owned subsidiaries of Alteo, namely Alteo Agri Ltd, Alteo Properties Ltd and Anahita Estates Limited, have adopted the principles of the Code and have not reported on corporate governance where their holding company has, as far as possible, already applied the principles of the Code.

STATEMENT OF ACCOUNTABILITIES AND GROUP CORPORATE STRUCTURE

Alteo is headed by an effective Board of Directors (the “Board”) which is collectively accountable and responsible for the performance, affairs and overall corporate governance of the Group. The Board, assisted by its Committees, ensures that the necessary safeguards are applied as recommended by the Code to ensure that the principles of integrity and the highest ethical standards are upheld by all who serve the Company and its stakeholders.

The Group corporate structure of Alteo is available on its website (https://www.alteogroup.com/).

PRINCIPLE 1: GOVERNANCE STRUCTURE

The Board seeks to maintain strong corporate governance structures and processes by working within a clearly defined governance framework, which enables the delivery of sustainable growth to all shareholders and other stakeholders. The governance framework has established a Board Committee structure that supports and assists the Board in discharging its duties through a more comprehensive evaluation of specific issues, followed by well-considered recommendations to the Board, as set out below. The Board ultimately assumes responsibility for leading and controlling the organisation.

SHAREHOLDERS

AUDIT & RISK COMMITTEE

EXTERNAL AND INTERNAL AUDITORS

CORPORATE GOVERNANCE, NOMINATION, REMUNERATION &

ETHICS COMMITTEE

BOARD OF DIRECTORS

CEO

EXECUTIVES


(CONT’D)

PRINCIPLE 1: GOVERNANCE STRUCTURE (CONT’D)

The Board is also responsible for compliance with all legal and regulatory requirements and recognises the need to adapt and improve the principles and practices in light of their experience, regulatory requirements and investor expectation.

The Board has approved its Charter, the Group’s Code of Ethics, appropriate job descriptions of the key senior governance positions, an organisational chart and a statement of accountabilities, which are all regularly reviewed in line with the strategy of the Group.

Key Governance Positions

The Board of Directors

The key functions of the Board include inter alia:

• providing direction for the Group;

• assuming responsibility for leading and controlling the Group and meeting all legal and regulatory requirements;

• monitoring the effectiveness of the Group’s governance practices and making changes as needed;

• overseeing the conduct of the Group’s business, to evaluate whether the business is being properly managed at all levels;

• reviewing and, where appropriate, approving risk policy, financial statements, annual budgets, business plans and Committees’ reports;

• overseeing major capital expenditure, acquisitions and divestments;

• ensuring the precision and integrity of the Group’s accounting and financial reporting systems, including the independent external audit;

• overseeing the process of disclosure and communication;

• selecting, compensating and monitoring key executives and overseeing management succession planning; and

• ensuring that the appropriate systems of control are in place to prevent any malpractices.

Main role of the Chairperson of the Board

The main role of the Chairperson of the Board includes:

• setting the Board’s agenda and ensuring that adequate time is available for discussion of all agenda items, in particular strategic issues;

• ensuring that Board meetings are chaired in an effective manner;

• promoting a culture of openness and debate by facilitating the effective contribution of Non-Executive Directors in particular and ensuring constructive relations between Executive and Non-Executive Directors;

• ensuring that the Directors receive accurate, timely and clear information;

• ensuring effective communication with shareholders; and

• ensuring that the Directors continually update their skills and the knowledge and familiarity with the Company required to fulfil their role both on the Board and Board Committees.

Chairperson and Chief Executive Officer (“CEO”)

The roles of the Chairperson and the CEO of Alteo are fulfilled by separate persons and are clearly defined. This division of responsibilities ensures a balance of authority and power, with no individual Director having unrestricted decision-making authority.

Mr. André Bonieux, the Group CEO, also serves as Chairperson of Alteo Agri Ltd, Alteo Energy Ltd, Alteo Refinery Ltd, Alteo Milling Ltd, Consolidated Energy Co. Ltd, Alteo Properties Ltd, Anahita Golf Ltd, Anahita Residences & Villas Limited, Transmara Sugar Company Limited and TPC Limited. However, each of these subsidiaries has a full time Chief Operations Officer and Mr. Bonieux’s role as Chairperson of the said subsidiaries is separate from his role as the Group CEO.

As Chairperson of the above-mentioned subsidiaries, Mr. Bonieux bears the primary responsibility for the working of the respective boards by ensuring effectiveness in all aspects of their role, including ensuring the flow of information between the boards of the subsidiaries and their respective management, promoting a culture of openness and debate at the boards, overseeing the Group’s corporate governance and conduct, and promoting high standards in respect thereof.

The Board of Alteo is aware that the Code provides that there should be a clear division between the role of Chairperson and CEO. The Board considers that the current structure at the level of Alteo Agri Ltd, Alteo Energy Ltd, Alteo Refinery Ltd, Alteo Milling Ltd, Consolidated Energy Co. Ltd, Alteo Properties Ltd, Anahita Golf Ltd, Anahita Residences & Villas Limited, Transmara Sugar Company Limited and TPC Limited is optimal and that there is a separation of responsibilities between the leadership of the respective boards and the Executives responsible for managing the


latter companies’ business. The Board is of the opinion that it is able to benefit from a Chairperson with expertise in Alteo’s business for Alteo Agri Ltd, Alteo Energy Ltd, Alteo Refinery Ltd, Alteo Milling Ltd, Consolidated Energy Co. Ltd, Alteo Properties Ltd, Anahita Golf Ltd, Anahita Residences & Villas Limited, Transmara Sugar Company Limited and TPC Limited, who is knowledgeable about the businesses of the Group, and is thereby better able to guide discussions.

The Board believes that there is sufficient balance of power and authority given the composition, structure and processes of the current boards of its subsidiaries. The Board retains the right to review the status, as and when circumstances change.

Framework of effective control of the Board

The Board provides entrepreneurial leadership to the Company and the Group within a framework of prudent and effective controls, which enables risk to be assessed and managed.

Constitution

Alteo’s Constitution is available on its website. The Constitution is in conformity with the provisions of the Companies Act 2001 and the Listing Rules of the SEM. There are no clauses of the Constitution deemed material enough for special disclosure.

Board Charter

With a view to clearly define the duties, roles and responsibilities of the Board, a board charter has been adopted. The Board Charter incorporates the best practices recommended by the National Code of Corporate Governance 2016 and it is available on the website of the Company. The Board is responsible to, as far as practicable, annually review its charter and update it as needed to adjust to new business needs and any regulatory changes.


(CONT’D)

PRINCIPLE 2: THE STRUCTURE OF THE BOARD AND ITS COMMITTEES

The Company has a unitary Board of Directors which is led by a Chairperson who is elected from the Directors. The Board is committed to uphold the highest governance standards in the performance of its duty. As at June 30, 2021, Alteo’s Board had 12 members and was composed of 3 Independent Non-Executive Directors, 2 full-time salaried Executive Directors and 7 Non-Executive Directors. Mr. Amédée Darga, an Independent Non-Executive Director, having been a director of Alteo for more than 9 years, resigned during the year under review. Mr. Jan Boullé has also resigned as a Non-Executive Director of the Company during the year under review and was replaced by Mr. Hubert Leclézio. The directors as at June 30, 2021 and the changes in directorships are as follows:

Name of Directors Type of Director Other position(s) held

Arnaud LAGESSE (appointed on April 2, 2018)Mauritian


Chairperson of the Board; and Member of the Corporate Governance, Nomination, Remuneration & Ethics Committee

Priscilla BALGOBIN-BHOYRUL(appointed on December 11, 2020)Mauritian

IndependentNon-Executive Director

Member of the Audit & Risk Committee

André BONIEUX(appointed on December 13, 2018)Mauritian

ExecutiveDirector

Chief Executive Officer

Jan BOULLÉ(appointed on April 2, 2018 and resigned on November 3, 2020) Mauritian


-

Patrick CHATENAY(appointed on January 8, 2019) French

IndependentNon-Executive Director

Chairperson of the Corporate Governance, Nomination, Remuneration & Ethics Committee

Dipak CHUMMUN(appointed on December 13, 2018) Mauritian


Member of the Audit & Risk Committee

Jean-Pierre DALAIS (appointed on April 2, 2018) Mauritian


Member of the Corporate Governance, Nomination, Remuneration & Ethics Committee

P. Arnaud DALAIS (appointed on April 2, 2018) Mauritian


-

Amédée DARGA (appointed on April 2, 2018 and resigned on December 9, 2020) Mauritian

IndependentNon-ExecutiveDirector

Chairperson of the Audit & Risk Committee

Jérôme DE CHASTEAUNEUF (appointed on April 2, 2018) Mauritian


Member of the Audit & Risk Committee; and of the Nomination, Remuneration & Ethics Committee


Name of Directors Type of Director Other position(s) held

Fabien DE MARASSÉ ENOUF (appointed on April 2, 2018) Mauritian

ExecutiveDirector

Chief Finance Executive

Thierry LAGESSE (appointed on April 2, 2018) Mauritian


-

Hubert LECLEZIO(appointed on November 25, 2020)Mauritian

Non-Executive Director -

Sheila UJOODHA (appointed on March 27, 2019) Mauritian

IndependentNon-ExecutiveDirector

Member of the Audit & Risk Committee until December 11, 2020

Appointed as Chairperson of the Audit & Risk Committee on December 11, 2020

The full profiles of the Directors are available on the Company’s website. Short profiles of the current Directors are as follows:

ARNAUD LAGESSENon-Executive Chairperson

(Born in 1968)

Appointed as Director in April 2018 and Chairperson of the Board on June 22, 2018.

Experience and Skills:

Mr. Arnaud Lagesse is the Group CEO of IBL Ltd. He is one of the Mauritian private sector’s most prominent leaders and is known to drive IBL Group with innovative and challenging undertakings. In 2016, he initiated the merger of GML Investissement Ltée and Ireland Blyth Limited and created the new entity IBL Ltd which thus became the n°1 group in Mauritius and 2nd largest group in the region excluding South Africa.

Directorships in other listed companies:

• IBL Ltd

• Phoenix Beverages Limited

• Phoenix Investment Company Limited

PRISCILLA BALGOBIN-BHOYRULIndependent Non-Executive Director

(Born in 1975)

Appointed in December 2020.


Priscilla obtained her LLB (Hons) in 1997 from the London School of Economics and Political Science and was called to the Bar of England and Wales in 1998 and to the Mauritian Bar in 1999. She has also followed the Authentic Leadership Development Program at Harvard Business School. Priscilla is a Senior Partner at Dentons (Mauritius) LLP and her areas of practice include corporate, civil and employment law. A large part of her legal practice comprises of cross-border transactions into Africa or India. She has a keen interest for Fintech and Compliance matters.


None


(CONT’D)

PRINCIPLE 2: THE STRUCTURE OF THE BOARD AND ITS COMMITTEES (CONT’D)

ANDRE BONIEUXExecutive Director (Born in 1958)



Mr. Bonieux is the Group CEO of Alteo and he was previously a Senior Partner of PwC Mauritius. Having worked in the Finance Sector in the UK and Mauritius for over 39 years, he has extensive knowledge of the sugar industry through a number of consulting and advisory assignments over the years, particularly in energy and corporate restructurings. He is an Associate Chartered Accountant of England and Wales and holds a BA Honours in Economics, Politics and Sociology from the University of Hull, UK.


None

DIPAK CHUMMUNNon-Executive Director

(Born in 1967)



Mr. Chummun is the Group Chief Finance Officer of IBL Ltd. Prior to this role in Mauritius, Dipak had 25 years’ international experience in management consulting, corporate and investment banking, finance and strategy. He has held senior country, regional and group roles with Standard Chartered, Barclays, Emirates NBD and Deutsche Bank in London, Hong Kong, Dubai, Singapore and Frankfurt. He is a Fellow of the Institute of Chartered Accountants in England and Wales (ICAEW) and holds a Bachelors’ degree in Computer Science from the University of Manchester. He has previously served on the International Advisory Board of the ICAEW in the UK and currently serves as a director on the Economic Development Board in Mauritius.


None

PATRICK CHATENAYIndependent Non-Executive Director

(Born in 1951)

Appointed in January 2019.


Mr. Chatenay founded ProSunergy Limited, a company based in the United Kingdom which provides strategy consulting services to the sugar and bio-energy industry, in 2008. He has worked in the sugar industry since 1985 and has held executive positions in France, Spain, Chile and Brazil. Mr. Chatenay holds a BA in Economics, an MSc in Econometrics and a BA in English from the University of Paris-Nanterre, a Public Administration Diploma from the Political Science Institute of Paris and an MBA from Columbia University in New York.


None

P. ARNAUD DALAIS Non-Executive Director

(Born in 1955)

Appointed in April 2018.


Mr. P.A. Dalais is the Chairman of CIEL Limited and has played an active role at the level of the Mauritian private sector assuming the chairmanship of a number of organisations among which Business Mauritius from 2015 to 2017. Having been the Group Chief Executive of Alteo from November 1991 to June 2015, Mr. P.A. Dalais has a deep knowledge of the Group at large and of the cane industry in general, both locally and internationally.


• CIEL Limited

• Sun Limited


JEAN-PIERRE DALAIS Non-Executive Director

(Born in 1964)



Mr. J.P. Dalais joined CIEL Group in January 1992 and is the Group Chief Executive of CIEL Group since January 2017, overseeing all Group operations. He was formerly an Executive Director at CIEL and graduated with an MBA from the International University of America, San Francisco.


• Sun Limited

• CIEL Limited

• Phoenix Beverages Limited (“Alternate Director”)

JÉRÔME DE CHASTEAUNEUF Non-Executive Director

(Born in 1966)



Mr. de Chasteauneuf is the Group Finance Director of CIEL since 2017. He has been involved in the sugar industry for several years and serves on the board of Alteo Agri Ltd as Director since 2014. He is currently Chairman of Sucrière des Mascareignes Limited and is present on boards of Alteo subsidiaries. He is a Chartered Accountant of England and Wales and holds a BSc Honours in Economics from the London School of Economics and Political Science, UK (1989).


• CIEL Limited

• Harel Mallac & Co. Ltd

• Sun Limited

FABIEN DE MARASSÉ ENOUF Executive Director

(Born in 1977)



Fabien de Marassé Enouf is the Chief Finance Executive of Alteo Group and has over 15 years of experience in the finance field. Having previously been a Senior Manager within the Corporate Finance practice of PwC, he has advised clients across a variety of sectors on business valuations, M&A, finance raising projects and has regularly been involved in stock market related transactions. He holds a Bcom (Accounting and Finance) from Curtin University, Australia and is a member of the Institute of Chartered Accountants in England and Wales.


None

THIERRY LAGESSE Non-Executive Director

(Born in 1953)



Thierry Lagesse is an entrepreneur, who amongst others launched a Direct To Home satellite television company in the Indian Ocean Islands. Thierry Lagesse was also involved in building up the textile industry in Mauritius in the 1980s. He serves as a director on the boards of several listed companies on the Stock Exchange of Mauritius.


• IBL Ltd

• Lux Island Resorts Ltd

• Phoenix Beverages Limited

• The United Basalt Products Ltd

• Phoenix Investment Company Limited


(CONT’D)


HUBERT LECLEZIONon-Executive Director

(Born in 1968)

Appointed in November 2020.


Mr. Leclézio holds a Scientific DEUG and a Master’s in Information Systems and Management. In 2008, he graduated with an MBA from Heriot-Watt University. After 15 years as Chief Information Officer, Hubert Leclézio joined GML in 2011 as Business Development Executive before being appointed Head of Business Development – M&A at IBL Ltd in 2016. Currently heading the Mergers and Acquisitions Department of IBL Group, Hubert Leclézio is a member of the Board of Directors and Chairman of several IBL companies. He is a member of the Mauritius Institute of Directors. Hubert Leclézio also serves on the board of TPC Limited since 2014 and is the alternate director to Mr. Arnaud Lagesse on Sucrière des Mascareignes Limited, Sukari Investment Company Limited, Transmara Investment Limited and Transmara Sugar Company Limited.


None

SHEILA UJOODHAIndependent Non-Executive Director

(Born in 1971)

Appointed in March 2019.


Mrs. Ujoodha is the Chief Executive Officer of the Mauritius Institute of Directors, with 22 years of hands-on experience in internal audit, risk management, corporate governance and process improvement on both the local and international market. She was previously the Managing Director of SmarTree Consulting Ltd and Chief Risk & Audit Executive of Rogers and Cim Group. She holds a BSc (Hons) in Accounting. As a fellow member of the Association of Chartered Certified Accountants and the Mauritius Institute of Directors (MIoD), Mrs. Ujoodha ’s membership extends to the Mauritius Institute of Professional Accountants. She is presently the Chairperson the Audit Committee Forum (ACF) and the Directors Forum. She also holds independent non-executive directorship at SmarTree Consulting Ltd and Innodis Ltd, where she chairs the Audit & Risk Committee.


• Innodis Ltd

The Board has 3 independent Directors who have no relationship with the Company. The Corporate Governance, Nomination, Remuneration & Ethics Committee has considered the guidelines of the Code and the provisions of the Companies Act 2001 with regard to the determination of whether a director is independent or not. Mr. Amédée Darga, who had served as an Independent Director of Alteo Limited and Alteo Agri Ltd, the current and previous holding companies of Alteo Group respectively, for more than 9 years, no longer qualified as an Independent Director. Mr. Amédée Darga therefore resigned as a director of the Company with effect from December 9, 2020. At the recommendation of the Corporate Governance, Nomination, Remuneration & Ethics Committee Mrs. Balgobin-Bhoyrul was appointed as an Independent Non-Executive Director of the Company at the previous annual meeting of the shareholders of the Company on December 11, 2020.

The Board reviews its size on an annual basis, and considers the present size as appropriate for the current scope and nature of the Group’s operations. The Board believes that there is sufficient balance of power and authority given the composition, structure and processes of its current Board. In a step towards increasing gender diversity, the Corporate Governance, Nomination, Remuneration & Ethics Committee had recommended the appointment of another female director in replacement of Mr. Amédée Darga.

The day-to-day operational decisions are made by Executive Directors, with the support of the officers of the Company. They are responsible for the operational performance and implementation of the strategy defined by the Board.


The list of officers of the Group is provided in the table below, and their individual profiles are available on Alteo’s website.

Officers Position Role & Responsibilities

André Bonieux Group CEO of Alteo Responsible for, inter alia, the development and execution of the plans and strategy set by the Board; Provides leadership and direction to executives and acts as a liaison point between the Board and the executives; Assists the Board in enhancing market share, profitability and return on investment.

Fabien de Marassé Enouf Chief Finance Executive Responsible for finance raising, investment appraisal, capital allocation and mergers & acquisitions activities within the Group. Responsibilities also include development of financial, risk and operational strategy, financial stakeholder reporting, investor relations and monitoring of risk management and control systems designed to preserve the Group assets.

Stéphane Isautier Regional Development Executive

Responsible for leading the Group’s initiatives to become a regional player in the sugarcane industry. Also responsible for coordinating and providing support to the regional operations based in Kenya and Tanzania.

Marius Jacobs CEO of TPC Limited Responsible for the overall management of the company. Accountable for proposing and implementing strategies for development and sustainable operations. Another key aspect of the role is to ensure that the company operates harmoniously in the Tanzanian cultural context and in compliance with legal and administrative frameworks.

Sébastien Lavoipierre COO Industrial Activities

Responsible for the overall management of the companies of the industrial cluster. Sets up overall strategic direction, priorities and drives the performance of each entity.

Patrice Legris COO of Property Cluster

Responsible for the overall management of the companies in the property cluster. Sets up overall strategic direction, priorities and monitors project performance. Assists the board of directors of the companies in enhancing market share, profitability and return on investment by guiding and leading the Executive Management team in their operational responsibilities.

Jean-Robert Lincoln Group Agricultural Development Executive

Provides expertise, innovative research, support and development knowhow in the agricultural field across the Group’s Mauritian, Kenyan and Tanzanian operations. Also responsible for identifying, scoping, and studying opportunities of extending Alteo’s agricultural projects abroad, focusing on Eastern Africa.

Arnaud d’Unienville COO Agricultural Activities

Responsible for the overall management of the agricultural cluster in Mauritius. Also accountable for setting out strategic direction, priorities and monitoring projects’ performance while leading the cluster’s management team to achieve the set objectives.


(CONT’D)

Officers Position Role & Responsibilities

David Martial Commercial and Business Development Director of Anahita Estates Limited

Heads the Sales, Marketing and Business Development departments of the Property cluster. Works on development projects for Alteo.

Frederick North-Coombes CEO of Transmara Sugar Company Limited

Responsible for implementing the strategy and vision of the company and accordingly leads the management team to achieve the company’s objectives in a way that meets the needs of investors, local farmers, employees and the Transmara community at large. Another key aspect of the role is to interact with various stakeholders and entities addressing matters relating to the Kenyan sugar industry.

Sophie Strauss Human Resources Executive

Leads the human resource strategy for the Group and supports functional heads in accelerating business excellence. This is achieved by focusing on building organisational capabilities, maintaining employee engagement and thus driving efficiency.

Company Secretary

Intercontinental Secretarial Services Limited (the “Company Secretary”), a suitably qualified, competent and experienced Company Secretary has been appointed and appropriately empowered to fulfil duties and provide assistance to the Board of Alteo.

The Company Secretary ensures that the Company is at all times complying with its Constitution, terms of reference, applicable laws, rules and regulations. All Directors have access to the advice and services of the Company Secretary who is responsible for providing detailed guidance to the Chairperson and the Directors as to their fiduciary duties, responsibilities and powers.

The Company Secretary also assists the Chairperson and the Board in implementing and strengthening good governance practices and processes with a view to enhancing long-term stakeholders’ value. The Company Secretary administers, attends and prepares minutes of all Board meetings, Board Committee meetings and Shareholders’ meetings.

The Board is of the opinion that the Company Secretary possesses the requisite competence and knowledge to carry out the duties of a company secretary.

Board Meetings

The Board’s work is mainly performed within the framework of Board meetings through which the Directors are kept

up-to-date on the status and development of the Group’s operations and receive reports and the recommendations of the Audit & Risk Committee and of the Corporate Governance, Nomination, Remuneration & Ethics Committee.

The Board of Alteo generally meets on a quarterly basis and at any additional time, as may be required. The Directors are provided with the agenda and documents for the Board/Committee meetings in a timely manner and in an appropriate form and quality for them to perform their duties to required standards.

A quorum of 7 Directors is currently required for a Board meeting of Alteo. In case of equality of votes, the Chairperson does not have a casting vote.

A Director of Alteo who has declared his interest shall not vote on any matter relating to the transaction or proposed transaction in which he is interested, and shall not be counted in the quorum present for the purpose of that decision.

The minutes of the proceedings of each Board meeting are taken by the Company Secretary and are entered in the minutes book of the Company. The minutes of each Board meeting are submitted for approval at the next Board meeting and these are then signed by the Chairperson and the Company Secretary as true reflections of the proceedings of the meetings.



Board members and attendance during the year under review

The Directors’ attendance was as follows:

Name of Directors Board Attendance

Arnaud LAGESSE 4/4

Priscilla BALGOBIN-BHOYRUL (Appointed on December 11, 2020)

2/2

André BONIEUX 4/4

Jan BOULLÉ (Resigned on November 3, 2020)

1/1

Patrick CHATENAY 4/4

Dipak CHUMMUN 4/4

Jérôme DE CHASTEAUNEUF 4/4

Fabien DE MARASSÉ ENOUF 4/4

P. Arnaud DALAIS 4/4

Jean-Pierre DALAIS 4/4

Amédée DARGA (Resigned on December 9, 2020)

2/2

Thierry LAGESSE 4/4

Hubert LECLEZIO (Appointed on November 25, 2020)

3/3

Sheila UJOODHA 4/4

Committees

To support the efficient and effective organisation of its duties, the Board of Directors has set up 2 permanent Committees, namely (i) an Audit & Risk Committee and (ii) a Corporate Governance, Nomination, Remuneration & Ethics Committee (the “Committees”). The Board has delegated certain roles and responsibilities to these Committees, which then report to the Board on matters discussed, and make recommendations for the Board’s decision. These Committees operate within defined terms of reference, and independently of the Board. For each Board Committee, the roles and responsibilities are defined in its Terms of Reference, which is duly approved by the Board and reassessed on an annual basis. The said Terms of Reference are available at the office of the Company Secretary and can also be accessed on Alteo’s website.

The Chairpersons of the above-mentioned Board Committees report on the proceedings of the Committees at each Board meeting of the Company and the Committees regularly recommend actions to the Board. However, the ultimate responsibility and decision on all matters lie with the Board.

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


(CONT’D)


The composition and key responsibilities of Alteo’s Committees are as follows:

Audit & Risk Committee

The members of the Audit & Risk Committee (“ARC”) combine a wide range of financial and commercial expertise together with a sound understanding of the Company’s business which are needed to undertake their duties. They are therefore considered by the Board to be competent in the Company’s sector.

Objectives and Functions

• monitoring of the integrity of the financial statements of the Company and the Group and any formal announcements relating to the Company’s and Group’s financial performance, before submission to the Board;

• recommendation to the Board of the condensed unaudited quarterly financial statements;

• review of the effectiveness of the Company’s and Group’s internal control and risk management systems;

• monitoring and review of the effectiveness of the Company’s and Group’s internal audit function;

• approval of the appointment and/or termination of the internal auditors;

• monitoring and supervision of the effective function of the internal audit;

• monitoring of the objectivity and independence of the external auditors;

• recommendation to the Board on the appointment, re-appointment, removal of the external auditors and their fees;

• reviewing of the external auditors’ management letter;

• developing and monitoring an Information Policy; and

• conducting investigations into any matters within its scope of responsibilities.

Composition 4 members consisting of 2 Independent Non-Executive Directors (“INED”) and 2 Non-Executive Directors (“NED”).Quorum: 2 members

Chairperson: • Mr. Amédée Darga (INED)

(Resigned on December 9, 2020)

• Mrs. Sheila Ujoodha (INED) (Appointed on December 9, 2020)

Other Committee members:• Mrs. Priscilla Balgobin-Bhoyrul (INED)

(Appointed on March 26, 2021)

• Mr. Jérôme De Chasteauneuf (NED)

• Mr. Dipak Chummun (NED)

• Mrs. Sheila Ujoodha (INED) (until December 9, 2020 after which Mrs. Ujoodha was appointed as the Chairperson of the ARC)

Attendees by invitation when appropriate:• Mr. André Bonieux (Chief Executive Officer and Executive

Director)

• Mr. Fabien de Marassé Enouf (Chief Finance Executive and Executive Director)

• External Auditors

• Internal Auditors

Attendance during the year under review was as follows:

Name of Directors Attendance to Audit & Risk Committee

Mr. Amédée Darga (Resigned on December 9, 2020) 3/3

Mrs. Sheila Ujoodha 6/6

Mrs. Priscilla Balgobin-Bhoyrul(Appointed on March 26, 2021) 2/2

Mr. Jérôme de Chasteauneuf 6/6

Mr. Dipak Chummun 6/6


Corporate Governance, Nomination, Remuneration & Ethics Committee

Objectives and Functions

• making recommendations to the Board on all corporate governance provisions to be adopted so that the Board remains effective and follows prevailing corporate governance principles;

• in its role as Nomination Committee, reviewing the structure, size and composition of the Board, identifying and recommending to the Board possible appointees as Directors, making recommendations to the Board on matters relating to appointment or re-appointment of Directors and succession plans for Directors whilst assessing the independence of the Independent Non-Executive Directors;

• in its role as Remuneration Committee, determining and developing the Company’s and Group’s general policy on executive and senior management remuneration and making recommendations to the Board on all the essential components of remuneration whilst determining the adequate remuneration to be paid to Directors, Executives and senior management; and

• in its role as Ethics Committee, helping to define the code of conduct underpinning corporate behaviour applicable to senior management and employees, making recommendations or giving an opinion on initiatives aimed at promoting best practices in this area, and ensuring that the Group’s values and rules of good conduct are respected. It also reviews the Code of Ethics, as required.

Composition:4 members consisting of 1 Independent Non- Executive Director (“INED”) and 3 Non-Executive Directors (“NED”).

Quorum: 2 members

Chairperson:

• Mr. Patrick Chatenay (INED)

Other Committee members:

• Mr. Arnaud Lagesse (NED)

• Mr. Jean-Pierre Dalais (NED)

• Mr. Jérôme de Chasteauneuf (NED)

Attendees by invitation when appropriate:

• Mr. André Bonieux (Chief Executive Officer and Executive Director)

Attendance during the year under review was as follows:

Name of Director Attendance of the Corporate Governance, Nomination, Remuneration & Ethics Committee

Mr. Patrick Chatenay 3/3

Mr. Arnaud Lagesse 3/3

Mr. Jean-Pierre Dalais 3/3

Mr. Jérôme de Chasteauneuf 3/3


(CONT’D)


Board of Subsidiaries

The Corporate Governance, Nomination, Remuneration & Ethics Committee of Alteo reviews all new appointments on the boards of its subsidiaries prior to recommending them to Alteo’s Board. Skills, knowledge, industry experience, diversity and independence are important factors that are considered prior to recommending any appointment.

The Corporate Governance, Nomination, Remuneration & Ethics Committee of Alteo also assumes the responsibility for succession planning at the subsidiary level which is a systematic effort and process of identifying and developing candidates for key positions over time to ensure the continuity of management and leadership across the Group. The Corporate Governance, Nomination, Remuneration & Ethics Committee regularly reviews the Board compositions of Alteo’s subsidiaries to ensure that there is a balance of skills, knowledge and experience in each subsidiary’s Board of directors.

Changes in the board structure of Alteo’s subsidiaries are shown in the Statutory Disclosures.

The successor of Mr. André Bonieux, Mr. Fabien de Marassé Enouf, was announced on September 22, 2021. He will act as Deputy CEO between September 22, 2021 and December 31, 2021, and will officially take the position of Group CEO as from January 1, 2022.

The Directors of the respective subsidiaries of Alteo are listed in the Statutory Disclosures of this Report.

PRINCIPLE 3: DIRECTOR APPOINTMENT PROCEDURES

The composition of the boards of Alteo and its subsidiaries is reviewed by the Corporate Governance, Nomination, Remuneration & Ethics Committee, in its role as nomination committee, to ensure that the Group’s boards have the appropriate combination of expertise and experience, and collectively possess the necessary competencies for effective functioning and informed decision-making. The said Committee is also responsible for identifying and recommending potential directors to the Board and to the boards of its subsidiaries. Gender balance remains an important aspect of the overall diversity, and is a factor that the Board takes into consideration for nominations.

Directors of Alteo are elected by the shareholders at the annual general meeting and are up for election every year. The Board also acknowledges the requirement to ensure

that all Non-Executive Directors are fully aware of the annual workload to be committed to Alteo. Therefore, an estimate of the amount of work, which shall be dedicated annually to the Group is communicated to each newly appointed Non-Executive Director to the Board of Alteo.

Succession Planning

During the year under review, the Corporate Governance, Nomination, Remuneration & Ethics Committee has considered succession planning at Board level whilst ensuring that the latter comprises Independent Non-Executive Directors who have the necessary capability, skills and experience to objectively challenge executive management, and to ensure continuity on the Board. The Board composition of the Company and its subsidiaries is reviewed annually and needful is done where any changes are required. Succession planning remains an area of focus of the Corporate Governance, Nomination, Remuneration & Ethics Committee.

Mr. Bonieux’s service contract with the Company will expire on December 31, 2021 and after due deliberations, Mr. Fabien de Marassé Enouf has been selected by the Corporate Governance, Nomination, Remuneration and Ethics Committee and recommended to the Board to be Mr. Bonieux’s successor as from January 1, 2022. The Board trusts that Mr. Fabien de Marassé Enouf considerable experience within the Group will be valuable in enabling the Group to achieve its strategic objectives. In the ensuing period, Messrs. Bonieux and Fabien de Marassé Enouf will work closely together to ensure a smooth transition.

Induction and Orientation

On appointment to the Board and any Committees, new Directors receive an induction pack (including inter alia Alteo’s Constitution, Code of Ethics and Group policies). The Company conducts an orientation programme for new Directors to familiarise them with the business activities of the Group, its strategic direction and corporate governance practices.

Professional Development

Furthermore, the Board considers that its members should be continuously developing themselves. To this effect, the Board believes that its members should not be prohibited from serving on boards of other organisations provided that each Director has a duty to act in the best interests of the Company and is expected to ensure that his/her other responsibilities do not impinge on his/her responsibilities as a Director of Alteo. The Directors receive periodical reports to ensure that they are updated and kept abreast of the development and market conditions of the businesses of the Group.


PRINCIPLE 4: DIRECTOR DUTIES, REMUNERATION AND PERFORMANCE

Code of Ethics and Business Conduct

The Board is committed to the highest standards of ethical and professional integrity, based on a fundamental belief that business should be conducted honestly, fairly and legally whilst preserving the environment. The Group therefore has a Code of Ethics and Business Conduct (the “Code of Ethics”), available on the Company’s website, which is reviewed annually by the Board of Alteo. The Board regularly monitors and evaluates compliance with its Code of Ethics. During the year under review, the Corporate Governance, Nomination, Remuneration & Ethics Committee has reviewed and updated the Code of Ethics. The Group’s Code of Ethics is supplemented by a whistleblowing policy. The aforesaid policy has been disseminated to employees of the Group through the Company’s e-learning platform and through an e-learning module prepared in collaboration with Transparency Mauritius.

Conflict of Interest

Each Director has a duty under the Companies Act 2001 to avoid a situation in which he or she has or can have a direct or indirect interest that conflicts or possibly may conflict with the interests of the Company. Written records of the interests of the Directors and their closely related parties in shares of Alteo are kept in a Register of Directors’ Interests. Accordingly, as soon as a Director becomes aware that he/she is interested in a transaction, or that his/her holdings or his/her associates’ holdings have changed, this should be reported to the Company in writing. The Company Secretary then ensures that the Register of Interests is updated accordingly and is available to shareholders upon written request to the Company Secretary.

All new Directors are required to notify in writing to the Company Secretary their direct and/or indirect holdings in shares of Alteo. The Directors of Alteo should also use their best endeavours to abide by the absolute prohibition principles and notification requirements of the Model Code on Securities Transactions by Directors as stipulated in Appendix 6 of the Listing Rules of the SEM.

Alteo has set up a procedure whereby any Director wishing to deal in the shares of the Company should first notify the Chairperson of the Company and receive a dated written acknowledgement prior to any dealings. In his own case, the Chairperson of the Company should first notify the Board at a Board meeting and receive a dated written acknowledgement prior to dealing. In an endeavour to provide additional guidance to the Directors, officers and senior management of the Group on dealings in the shares of the Company, the Board has adopted a Securities

Dealings Code, which can be accessed on Alteo’s website. Alteo also has in place a Conflict of Interest and Related Party Transactions Policy to which the Directors abide by in cases of conflicts of interest and related party transactions.

The Directors, officers and senior management of the Group are strictly prohibited from dealing in the shares of Alteo at any time when in possession of unpublished price-sensitive information, or for the period of one month prior to the publication of the Company’s quarterly and yearly results and to the announcement of dividends and distributions to be paid or passed, as the case may be, and ending on the date of such publications/announcements. Moreover, Directors, officers and senior management of the Group are required to observe the insider trading laws at all times even when dealing in securities within permitted trading periods. Alteo’s Securities Dealings Code provides guidance to the Directors, officers and senior management of the Group on the permitted trading periods.

The Directors, Officers and senior management of the Group have also been informed of their responsibilities in disclosing to the Company any acquisition or disposal in the Company’s securities, pursuant to the Company’s Securities Dealings Code, the Securities Act 2005 and the Listing Rules of the SEM.

The Directors and Officers of the Group having direct and/or indirect interests in the ordinary shares of the Company at June 30, 2021 were as follows:

Directors Direct Number of

Shares

Indirect Number of

Shares

Arnaud Lagesse - 3,274,567

André Bonieux 21,089 -

Priscilla Balgobin-Bhoyrul - -

Patrick Chatenay - -

Dipak Chummun - -

Jean-Pierre Dalais 18,648 -

P. Arnaud Dalais 632,128 -

Jérôme de Chasteauneuf - -

Fabien de Marassé Enouf - -

Hubert Leclézio 2,689 68,547

Thierry Lagesse 35,764 2,964,212

Sheila Ujoodha - -


(CONT’D)

PRINCIPLE 4: DIRECTOR DUTIES, REMUNERATION AND PERFORMANCE (CONT’D)

Officers Direct Number

of Shares

Indirect Number

of Shares

Arnaud d’Unienville - -

Stéphane Isautier - -

Marius Jacobs - -

Sébastien Lavoipierre - 18,000

Patrice Legris - -

Jean-Robert Lincoln 14,421 -

David Martial - -

Frederick North-Coombes - -

Sophie Strauss - -

None of the above Directors and Officers had any interest in the equity of the subsidiaries of Alteo.

Directors and Officers Indemnities and Insurance

A Directors’ and Officers’ liability insurance policy has been subscribed to by the Company. The policy provides cover for the risks arising out of the acts or omissions of the Directors and Officers of the Company. The cover does not provide insurance against fraudulent, malicious or wilful acts or omissions.

Information Technology Governance

The Group Information Technology and Security Policy (the “ITS Policy”) (for Mauritius operations) for the governance of its information strategy, information technology and information security has been adopted by the Board in September 2020. The Board has delegated the ultimate responsibility for the effective implementation of the ITS Policy to Alteo’s Audit and Risk Committee which oversees the ITS Policy and reports to the Board on pertinent matters in this regard as may be required. The Head of IT and Innovation for the Group is the ITS Policy Guardian and is responsible for the review, update and overseeing the compliance and implementation of the policy within the Group. The ITS Policy Guardian commits for the effective implementation of the ITS Policy across the Group and

adherence to the rules and guidelines through its respective IT staff. Employees of the Group and third-party providers who process information within or for the Group and interact with its information systems must also comply with the ITS Policy.

Right of access to information

In performing their functions, the Board members have unrestricted access to the records of the Company. They also have the right to seek independent professional advice at the expense of the Company to enable them to discharge their responsibilities at their utmost abilities.

Board Evaluation

The Corporate Governance, Nomination, Remuneration & Ethics Committee took note of the main areas identified for improvement and/or discussion and has taken appropriate measures to act on the results of the evaluation by recognising the strengths and addressing the weaknesses of the Board.

The Corporate Governance, Nomination, Remuneration & Ethics Committee took note of the main areas identified for improvement and/or discussion and has taken appropriate measures to act on the results of the evaluation by recognising the strengths and addressing the weaknesses of the Board

Remuneration

Remuneration of Executive Directors, Officers and Senior Management

The Board endeavours to ensure that the Executive Directors, Officers and senior management are provided with appropriate incentives to improve the Group’s performance and that their remunerations are directly correlated to their personal contribution to the success of the Group, whilst being in accordance with market rates.

The Board has delegated to the Corporate Governance, Nomination, Remuneration & Ethics Committee the responsibility of determining the adequate remuneration to be paid to the Non-Executive Chairperson of the Board, the Independent Non-Executive Directors, the Non-Executive Directors, the Executive Directors, Officers and the senior management.

The Group’s underlying philosophy is to set remuneration at an appropriate level to attract, retain and motivate high calibre personnel and directors. The level of remuneration of Executive Directors, Officers and key management personnel is determined by various factors including Group performance, industry conditions and the individual’s


performance towards meeting targets for the year under review.

The remuneration structure for Executive Directors, Officers and key management personnel consists of base salary, variable bonus, pension, medical schemes and/or other benefits. Executive Directors do not perceive any additional directors’ fees.

The total remuneration paid to the Executive Directors during the financial year under review is as follows:

Name of Executive Director Total Remuneration for the financial year

2020/2021 (MUR)

André BonieuxChief Executive Officer

15,938,730

Fabien de Marassé Enouf Chief Finance Executive

9,913,460

Remuneration of Non-Executive Directors

The Remuneration Committee is responsible to recommend to the Board the fees for the Non-Executive Directors every year, based on market and industry conditions.

The Non-Executive Directors do not receive remuneration in the form of share options or bonuses associated with the Company’s performance and Alteo has no employee share option plan.

There is no long-term incentive plan in place for the Directors of the Company.

In addition to the Board Service fixed fees, the Directors who are Board Committee members receive a further fixed fee for Committee services, with the Chairperson of each Board Committee being remunerated at a higher rate.

The Corporate Governance, Nomination, Remuneration & Ethics Committee has reviewed the directorship fees for the Company. The reviewed fees were recommended to the Board of the Company and approved at a Board meeting held in June 2021, subject to the approval of the shareholders at the next annual meeting of the shareholders of the Company to be held in December 2021.

For the remuneration and benefits received, or due and receivable, by the Directors from the Company and its subsidiaries as at June 30, 2021, please refer to the Statutory Disclosures.

The Board and Board Committees’ fees at June 30, 2021 and the proposed fees for the financial year ending June 30, 2022 are as follows:

Fees paid2020/2021

Proposed fees2021/2022

Board Service

Chairperson’s fee Rs 825,000 Rs. 900,000

Independent and Non-Executive Director’s fee

Rs 275,000 Rs. 325,000

Audit & Risk Committee Service

Chairperson’s fee Rs 275,000 Rs 300,000

Member’s fee Rs 165,000 Rs 180,000

Corporate Governance, Nomination, Remuneration & Ethics Committee Service

Chairperson’s fee Rs 137,500 Rs 150,000

Member’s fee Rs 82,500 Rs 90,000

Additional fees

Premium fee for independent Directors

- Rs 100,000


(CONT’D)

PRINCIPLE 4: DIRECTOR DUTIES, REMUNERATION AND PERFORMANCE (CONT’D)

Remuneration and benefits paid for the financial year ended June 30, 2021 were as follows:

Directors (except Executive Directors)

Category Fixed Fee

Audit & Risk Committee

Fees

Corporate Governance, Nomination,

Remuneration & Ethics

Committee Fees

TOTAL

(Rs) (Rs) (Rs) (Rs)

Arnaud Lagesse * Chairperson 825,000 - 82,500 907,500

Priscilla Balgobin-Bhoyrul (Appointed on December 11, 2020)

INED 160,417 55,000 - 215,417

Jan Boullé * (Resigned on November 3, 2020)

NED 91,667 - - 91,667

Patrick Chatenay INED 275,000 - 137,500 412,500

Dipak Chummun * NED 275,000 165,000 - 440,000

P. Arnaud Dalais NED 275,000 - - 275,000

Jean-Pierre Dalais ** NED 275,000 - 82,500 357,500

Jérôme de Chasteauneuf ** NED 275,000 165,000 82,500 522,500

Amédée Darga (Resigned on December 9, 2020)

INED 114,583 114,584 - 229,167

Thierry Lagesse NED 275,000 - - 275,000

Hubert Leclézio* (Appointed on November 25, 2020)

NED 183,333 - - 183,333

Sheila Ujoodha(Appointed as Chairperson of the Audit & Risk Committee on December 9, 2020)

INED 275,000 220,000 - 495,000

Total 3,300,000 719,583 385,000 4,404,583

* Fees were paid to IBL Ltd

** Fees were paid to CIEL Corporate Services Limited


PRINCIPLE 5: RISK GOVERNANCE AND INTERNAL CONTROL

Internal control and risk management

Alteo’s internal control framework supports the execution of its strategy, promotes operational effectiveness and ensures regulatory compliance. The foundation for internal control is set by the Group’s risk management framework, financial controls, internal audit and supporting policies.

The activities related to internal control and risk management are part of Alteo’s management practices and integrated into the Group’s business and planning processes. They are intended to ensure correct, reliable, complete and timely financial reporting and management information, and endorse ethical values and good corporate governance practices.

Each process owner is responsible for the continuous development and improvement of the established procedures, including controls and risk management. The Risk Officer has the responsibility to arrange and lead Alteo’s risk management. Internal audit assures the efficiency of risk management in business operations.

The Board maintains full control and direction over appropriate strategic, financial, operational and compliance issues and has put in place an organisational structure with formal delegated authorities and clear operating processes. The Board has empowered the Audit & Risk Committee to ensure that risk management and internal controls are adequate to promote transparency and good governance practices across the various lines of activity. In discharging its responsibility towards the Board, the Audit & Risk Committee relies upon the reports of the internal auditors and management to monitor the adequacy of the Group’s risk management and internal controls.

In its effort to strengthen Alteo’s risk management framework, the Audit & Risk Committee has mandated PricewaterhouseCoopers Ltd (PwC) to conduct a risk identification and assessment exercise across the Group covering all clusters. An updated Group Risk Register was produced which includes inherent risks, mitigating controls, residual risks, actions to be taken in order to address unacceptable level of residual risks and the responsible person.

PRINCIPLE 5: RISK GOVERNANCE AND INTERNAL CONTROL

Internal control and risk management

Alteo’s internal control framework supports the execution of its strategy, promotes operational effectiveness and ensures regulatory compliance. The foundation for internal control is set by the Group’s risk management framework, financial controls, internal audit and supporting policies.

The activities related to internal control and risk management are part of Alteo’s management practices and integrated into the Group’s business and planning processes. They are intended to ensure correct, reliable, complete and timely financial reporting and management information, and endorse ethical values and good corporate

Each process owner is responsible for the continuous development and improvement of the established procedures, including controls and risk management. The Risk Officer has the responsibility to arrange and lead Alteo’s risk management. Internal audit assures the efficiency of risk management in business operations.

appropriate strategic, financial, operational and compliance issues and has put in place an organisational structure with formal delegated authorities and clear operating processes.


(CONT’D)

PRINCIPLE 5: RISK GOVERNANCE AND INTERNAL CONTROL (CONT’D)

The Group’s key risks are listed below:

Cluster Description Country Mitigating controls Rating Management comments

Risk 1 Sugar Under-utilisation of milling/refining capacities due to reduced supply of cane.

Mauritius A more proactive strategy adopted by Alteo Planters Services Ltd, the services arm of Alteo Milling Ltd, with its “à la carte” services provided to out-growers to minimise cane abandonment. Adapting refining equipment to the production of higher value-added special sugars.

20 The declining trend in the supply of cane from within the factory area of Alteo Milling Ltd and at national level is expected to persist. However, the relatively high share of estate grown cane controlled by the Group provides some level of security.

Risk 2 Sugar Water availability for irrigation.

Tanzania Significant investments in ground water extraction (boreholes), more efficient irrigation equipment and monitoring of the water table are ongoing. Conversion to less water intensive irrigation systems (drip and semi-solid irrigation systems).

16 The increasing population around the region of TPC Ltd results in pressures on the limited water availability. This situation may adversely affect irrigation activities over the medium to long term.

Risk 3 Sugar Inability to mill all contracted cane at the optimum age.

Kenya Additional investments to improve the factory reliability and to increase transport capacities. Regular monitoring of the cane availability using satellite imagery. Adjustments to the cane development program are also ongoing based on latest available yields data.

16 This is considered an emerging risk now that the cane supply has been stabilised. An ageing cane situation may result in a deteriorating relationship with out-growers (loss of trust), breach of the terms of the cane growing contracts and recovery risks regarding advances made to out-growers.

Risk 4 Sugar Cost pressures impacting on the Sugar cluster performance as a going concern.

Mauritius Ongoing reduction in the area of high cost manually cultivated and harvested fields. Focus on field mechanisation initiatives (i.e. derocking, mechanised planting and harvesting as well as mechanised cultivation activities such as weeding and fertilisation) and factory automation initiatives. Ongoing implementation of restructuring initiatives. Contracts are established with key suppliers to ensure competitive pricing of supplies. Achieving economies of scale through centralised procurement structure.

20 Ongoing implementation of 3-year turnaround plans for agricultural and milling operations in Mauritius to generate additional revenue and reduce cost of production. Significant cost reductions have been achieved to date. On the other hand, the depreciating rupee and increasing freight and logistics costs are expected to adversely impact operations.

Risk 5 Sugar Global sugar market conditions and sugar price volatility affecting performance.

All Geographical diversification of markets (in terms of production sites and export markets where Mauritius has a competitive edge). Diversification into higher value-added products which are less sensitive to global market conditions. Diversification of income sources by optimising revenues from by-products (cane trash, bagasse and molasses).

20 Global and European market conditions continue to improve with a persisting global sugar deficit. Price levels in Mauritius are further supported by the weaker rupee. The Mauritius Sugar Syndicate pursues its strategy of developing new markets for higher value-added sugars and has successfully negotiated preferential access to the Chinese and Indian markets for special sugars. The implementation of a biomass remuneration framework as announced in the last National Budget will further help to stabilise revenues for producers in Mauritius. In Tanzania and Kenya, price levels have been more stable than observed in the past.



The Group’s key risks are listed below:


Risk 1 Sugar Under-utilisation of milling/refining capacities due to reduced supply of cane.

Mauritius A more proactive strategy adopted by Alteo Planters Services Ltd, the services arm of Alteo Milling Ltd, with its “à la carte” services provided to out-growers to minimise cane abandonment. Adapting refining equipment to the production of higher value-added special sugars.

20 The declining trend in the supply of cane from within the factory area of Alteo Milling Ltd and at national level is expected to persist. However, the relatively high share of estate grown cane controlled by the Group provides some level of security.

Risk 2 Sugar Water availability for irrigation.

Tanzania Significant investments in ground water extraction (boreholes), more efficient irrigation equipment and monitoring of the water table are ongoing. Conversion to less water intensive irrigation systems (drip and semi-solid irrigation systems).

16 The increasing population around the region of TPC Ltd results in pressures on the limited water availability. This situation may adversely affect irrigation activities over the medium to long term.

Risk 3 Sugar Inability to mill all contracted cane at the optimum age.

Kenya Additional investments to improve the factory reliability and to increase transport capacities. Regular monitoring of the cane availability using satellite imagery. Adjustments to the cane development program are also ongoing based on latest available yields data.

16 This is considered an emerging risk now that the cane supply has been stabilised. An ageing cane situation may result in a deteriorating relationship with out-growers (loss of trust), breach of the terms of the cane growing contracts and recovery risks regarding advances made to out-growers.

Risk 4 Sugar Cost pressures impacting on the Sugar cluster performance as a going concern.

Mauritius Ongoing reduction in the area of high cost manually cultivated and harvested fields. Focus on field mechanisation initiatives (i.e. derocking, mechanised planting and harvesting as well as mechanised cultivation activities such as weeding and fertilisation) and factory automation initiatives. Ongoing implementation of restructuring initiatives. Contracts are established with key suppliers to ensure competitive pricing of supplies. Achieving economies of scale through centralised procurement structure.

20 Ongoing implementation of 3-year turnaround plans for agricultural and milling operations in Mauritius to generate additional revenue and reduce cost of production. Significant cost reductions have been achieved to date. On the other hand, the depreciating rupee and increasing freight and logistics costs are expected to adversely impact operations.

Risk 5 Sugar Global sugar market conditions and sugar price volatility affecting performance.

All Geographical diversification of markets (in terms of production sites and export markets where Mauritius has a competitive edge). Diversification into higher value-added products which are less sensitive to global market conditions. Diversification of income sources by optimising revenues from by-products (cane trash, bagasse and molasses).

20 Global and European market conditions continue to improve with a persisting global sugar deficit. Price levels in Mauritius are further supported by the weaker rupee. The Mauritius Sugar Syndicate pursues its strategy of developing new markets for higher value-added sugars and has successfully negotiated preferential access to the Chinese and Indian markets for special sugars. The implementation of a biomass remuneration framework as announced in the last National Budget will further help to stabilise revenues for producers in Mauritius. In Tanzania and Kenya, price levels have been more stable than observed in the past.


(CONT’D)


Risk 6 Sugar Ability to attract and retain management competencies to support our business development objectives.

Tanzania & Kenya

Creating the right environment to attract high calibre management resources. Adequate succession planning. Training and recruiting competent local resources. Constant engagement with authorities to allow for smooth obtention of work permits for skilled expatriate staff. Strategy of delocalisation of selected support services to Mauritius in the short to medium term.

15 East African operations have been able to implement their respective recruitment strategies within a more conducive regulatory environment.

Risk 7 Sugar Breakdown of major industrial assets.

All Preventive maintenance of key assets. Contingency and backup measures in place. On-site storage of critical parts as much as possible where sourcing lead time is longer (Kenya and Tanzania). Adequacy of insurance covers reviewed regularly.

16 No major events to report. A review of insurance covers is ongoing.

Risk 8 Sugar Unfavourable government policy decisions/regulatory environment (market and industry regulations). Political risks.

All Engage with the relevant Government authorities and regulators to achieve better import/export regulations, better control of illicit sugar and support for the industry when necessary. Support Government initiatives to integrate industry into the broader economy. Insurance covers for political risk and violence. Business continuity plan in place to promptly react to crisis situations.

12 In Mauritius, the introduction of the biomass remuneration framework has finally been announced by the Government. This is a major step towards securing the future sustainability of the cane industry. In Tanzania and Kenya, improved Government control over illicit sugar has stabilised price. No major political risk event to report.

Risk 9 Property Delay in property sales resulting into cash flow pressures, lower contributions towards fixed costs and debt servicing.

Mauritius Close monitoring of cash flows of Anahita Estates Limited following the recent restructuring of the company’s debt. Engage with the relevant Government authorities and regulators to address regulatory bottlenecks.

20 The Covid-19 crisis has resulted in delays in sales finalisation. The delay in the implementation of amendments to the IRS legal framework which will allow for a higher quota of serviced land to be sold may adversely affect future sales pace at Anahita Estates Limited.

Risk 10 Sugar Compliance with safety regulations and labour /environmental laws and regulations.

All Health & Safety officers and consultants to ensure compliance with health & safety requirements in the workplace. Regular compliance audits undertaken. Equipment certification by a registered professional engineer. Adequate insurance covers for industrial accidents.

18 An emerging risk has been identified at Transmara Sugar Company Limited pertaining to the excess bagasse production and potential consequences to the environment. A technical study is ongoing to propose solutions to address this situation.

Risk 11 All Foreign exchange risk. All Centralised treasury function, supported by external treasury advisors, to manage the risks associated with foreign exchange fluctuations for the sale of sugar and property and dividend up streaming. Promoting property sales in rupee when possible. Within the energy cluster, this risk is mitigated through tariff indexation mechanisms within the Power Purchase Agreements.

16 Forex availability on the market has been stretched at times during the year. However, the Group’s treasury has enabled prompt supply of currency as and when needed. The recent depreciation of the rupee has generally been beneficial to the Group’s sugar operations but has resulted into unrealised forex losses on Euro denominated debt within the property cluster.




Risk 6 Sugar Ability to attract and retain management competencies to support our business development objectives.

Tanzania & Kenya

Creating the right environment to attract high calibre management resources. Adequate succession planning. Training and recruiting competent local resources. Constant engagement with authorities to allow for smooth obtention of work permits for skilled expatriate staff. Strategy of delocalisation of selected support services to Mauritius in the short to medium term.

15 East African operations have been able to implement their respective recruitment strategies within a more conducive regulatory environment.

Risk 7 Sugar Breakdown of major industrial assets.

All Preventive maintenance of key assets. Contingency and backup measures in place. On-site storage of critical parts as much as possible where sourcing lead time is longer (Kenya and Tanzania). Adequacy of insurance covers reviewed regularly.

16 No major events to report. A review of insurance covers is ongoing.

Risk 8 Sugar Unfavourable government policy decisions/regulatory environment (market and industry regulations). Political risks.

All Engage with the relevant Government authorities and regulators to achieve better import/export regulations, better control of illicit sugar and support for the industry when necessary. Support Government initiatives to integrate industry into the broader economy. Insurance covers for political risk and violence. Business continuity plan in place to promptly react to crisis situations.

12 In Mauritius, the introduction of the biomass remuneration framework has finally been announced by the Government. This is a major step towards securing the future sustainability of the cane industry. In Tanzania and Kenya, improved Government control over illicit sugar has stabilised price. No major political risk event to report.

Risk 9 Property Delay in property sales resulting into cash flow pressures, lower contributions towards fixed costs and debt servicing.

Mauritius Close monitoring of cash flows of Anahita Estates Limited following the recent restructuring of the company’s debt. Engage with the relevant Government authorities and regulators to address regulatory bottlenecks.

20 The Covid-19 crisis has resulted in delays in sales finalisation. The delay in the implementation of amendments to the IRS legal framework which will allow for a higher quota of serviced land to be sold may adversely affect future sales pace at Anahita Estates Limited.

Risk 10 Sugar Compliance with safety regulations and labour /environmental laws and regulations.

All Health & Safety officers and consultants to ensure compliance with health & safety requirements in the workplace. Regular compliance audits undertaken. Equipment certification by a registered professional engineer. Adequate insurance covers for industrial accidents.

18 An emerging risk has been identified at Transmara Sugar Company Limited pertaining to the excess bagasse production and potential consequences to the environment. A technical study is ongoing to propose solutions to address this situation.

Risk 11 All Foreign exchange risk. All Centralised treasury function, supported by external treasury advisors, to manage the risks associated with foreign exchange fluctuations for the sale of sugar and property and dividend up streaming. Promoting property sales in rupee when possible. Within the energy cluster, this risk is mitigated through tariff indexation mechanisms within the Power Purchase Agreements.

16 Forex availability on the market has been stretched at times during the year. However, the Group’s treasury has enabled prompt supply of currency as and when needed. The recent depreciation of the rupee has generally been beneficial to the Group’s sugar operations but has resulted into unrealised forex losses on Euro denominated debt within the property cluster.


(CONT’D)


Risk 12 All Cyber security risks. All Investments in adequate IT security hardware and software (firewalls, antivirus and email advance threat protections). Signed service agreements with cyber security consultants for regular reviews of actual IT security systems. Proper backups of Group data offsite. Regular upgrading of antivirus and firewall.

16 No major events to report.

Risk 13 All Black swan events / Covid-19 crisis

All Crisis management plans in place. 20 The Covid-19 crisis has further impacted the property cluster this year and particularly Anahita Residences & Villas Limited and Anahita Golf Ltd. Management is securing short term financing plans for both operations.

Risk 14 Sugar Natural disasters such as floods, droughts and cyclones resulting in loss of revenue due to damage to crops and assets.

All Mauritius – Operations are covered for excessive rainfall, cyclones and droughts by the crop insurance cover under the Sugar Insurance Fund Act. Kenya and Tanzania – Operations are insured where possible. Disaster Recovery plans in place to limit impact.

16 Mauritius – Crop 2020 has been declared as an event year and adequate insurance compensation has been received. Tanzania – A minor flooding episode has been recorded in April 2021. A Drainage Master Plan that will include improvements to the river dike along the estate is being implemented.

PRINCIPLE 6: REPORTING WITH INTEGRITY

Alteo has applied the Reporting Principles of the Global Reporting Initiative (GRI) Standards for defining report content. In particular, the Materiality Principle was applied to identify material sustainability (i.e., economic, social and environmental) topics, including the Sustainable Development Goals (SDGs). Typically, a material topic is found at the intersection of ‘the significance on its economic, social and environmental impacts’ and ‘the influence it has on stakeholder assessments and decisions’. The latter requires application of Principle 8 of the Code, which is discussed below.

The materiality analyses have been completed for all operations in Mauritius, and the results are given in a standalone report. Given the ongoing impacts of the COVID-19 pandemic, the materiality analyses could not be completed for operations in Tanzania and Kenya. Nevertheless, a plan is being developed to complete the outstanding materiality analyses. The Detailed Clusters Review provides highlights of financial and non-financial performance, with supplementary information found on the Company’s website.

The materiality analyses have identified a number of disclosures or performance indicators for tracking economic, social and environmental impacts. The emphasis is now on putting in place a robust data management system with clear protocols for consistent and accurate data collection, based on a data gap analysis that emanated from

the materiality analysis. While the focus will be initially on Mauritius, standardization of the data management system will be escalated across all geographical locations in the next 2 years. This time period accounts for variances in data collection approaches, need for human and institutional capacity development and investments in monitoring equipment. Once a robust data management system is in place, the focus can then shift to establishing meaningful targets for material topics in order to institutionalize forward-looking planning and reporting – i.e., to provide an outlook of future development trajectories. For indicators that are already collected and verified using a robust protocol, the setting of targets will begin, taking into account the sustainability context in which operations are taking place and expected to take place in the foreseeable future.

Health and Safety

The Group aims to act as a good employer in providing and maintaining a safe and healthy work environment for all its employees. The objective of the Group is the optimisation of work efficiency and the prevention of accidents at work, through the implementation of safety standards in all its operations across the Group.

Community Engagement and Environment

The Group is fully committed to Corporate Social and Environmental Responsibility (CSER) activities. The Group believes that growth should not be at the expense of the




Risk 12 All Cyber security risks. All Investments in adequate IT security hardware and software (firewalls, antivirus and email advance threat protections). Signed service agreements with cyber security consultants for regular reviews of actual IT security systems. Proper backups of Group data offsite. Regular upgrading of antivirus and firewall.

16 No major events to report.

Risk 13 All Black swan events / Covid-19 crisis

All Crisis management plans in place. 20 The Covid-19 crisis has further impacted the property cluster this year and particularly Anahita Residences & Villas Limited and Anahita Golf Ltd. Management is securing short term financing plans for both operations.

Risk 14 Sugar Natural disasters such as floods, droughts and cyclones resulting in loss of revenue due to damage to crops and assets.

All Mauritius – Operations are covered for excessive rainfall, cyclones and droughts by the crop insurance cover under the Sugar Insurance Fund Act. Kenya and Tanzania – Operations are insured where possible. Disaster Recovery plans in place to limit impact.

16 Mauritius – Crop 2020 has been declared as an event year and adequate insurance compensation has been received. Tanzania – A minor flooding episode has been recorded in April 2021. A Drainage Master Plan that will include improvements to the river dike along the estate is being implemented.

environment and remains sensitive to the climatic change to which the globe is subject.

Charitable Donations and Political Contributions

The amounts of charitable and political donations made by the Group during the year under review are disclosed in the Statutory Disclosures.

PRINCIPLE 7: AUDIT

Internal audit

Alteo’s internal audit function has been outsourced to PricewaterhouseCoopers Ltd (“PwC”), which carries out both value enhancement and value protection audits. Value enhancement audits aim to ensure the efficiency of the Group’s operations. Value protection audits are intended to assess the effectiveness of internal controls and the risk management within the Group.

As internal auditors, PwC has unrestricted access to the records, management and employees of all operating units of the Group. They report regularly to the Audit & Risk Committee and have a constructive line of communication with Group management.

The internal audit plan is determined through a risk-based approach and mapped to the Group’s business risks. The plan is approved by the Audit & Risk Committee and regularly reviewed to account for significant changes to the risk landscape.

In line with its mandate to be a trusted advisor to the business, PwC discusses its findings with management and provides insight into, and support to the development of risk mitigation action plans. Regular follow-ups are performed to assess the status of implementation of these action plans. Reports detailing internal audit findings are submitted and presented to the Audit & Risk Committee.

The areas reviewed by the internal auditors during the financial year 2020/21 were as follows:

Sugar and Energy clusters• Close of books and reporting (Mauritius)

• Working capital management (Mauritius)

• Information Technology General Control (Mauritius)

• Weighbridge Operations (Mauritius)

• Health & Safety (Mauritius)

• Follow up report (Mauritius)

• IT General Controls (Kenya)

• Farmers’ Accounts (Kenya)

• Follow up of previous recommendations (Kenya)

• Farmers’ Accounts and Payments (Kenya)

• Cane Movements (Fields to Mill), Sugar Movement (Mill to Customer) (Kenya)

• Factory Maintenance, Sales and Revenue (Tanzania)


(CONT’D)

PRINCIPLE 7: AUDIT (CONT’D)

Property cluster

• Project cost management

Alteo Group

• Payroll Insourcing

The Audit & Risk Committee reviews the effectiveness of the internal audit function on an ongoing basis. This is achieved, in part, by reviewing and discussing the reports presented to it at each meeting.

The Audit & Risk Committee also assesses the independence and objectivity of the internal audit function and has satisfied itself as to its independence.

There have been no restrictions placed over the right of access of the internal auditor to the records, management or employees of the Group.

PwC’s three-year contract for provision of internal auditing services ended in June 2021. The Audit & Risk Committee has therefore recommended that a limited tender be launched for internal audit services for the Group.

External Auditors

Ernst & Young was appointed as the statutory auditor of the Company after the last tender exercise conducted in September 2017. Following the year-end audit, the Audit & Risk Committee assessed the effectiveness of the external auditor. The assessment took into account the views of Officers and senior management with regard to the auditor’s resources, objectivity, character, knowledge, organisation, judgements and quality of reporting.

Based on the independence, objectivity and effectiveness of the audit firm, the Audit & Risk Committee concluded that Ernst & Young had performed their audit effectively, efficiently and to a high quality.

Accordingly, the Audit & Risk Committee has recommended to the Board that Ernst & Young be re-appointed as statutory auditor of the Company for the year ending June 30, 2022. The tenure of the statutory auditors is for one year, subject to annual re-assessment and re-appointment at the annual meeting of the Company.

The Audit & Risk Committee has met with the external auditor without management’s presence to discuss on challenges encountered, critical accounting policies,

judgements and estimates. Ernst & Young has also provided tax advisory services to Alteo for the financial year ended June 30, 2021. Management does not believe that the provision of this non-audit service compromises the independence of the external auditor and instead considers that unnecessarily restricting the provision of non-audit services would have an unintended, adverse effect on the underlying quality of the audit through restrictions in knowledge and skills. Upon the recommendation of the Audit & Risk Committee, the Board has approved a policy for non-audit fees, which aims to limit the fees paid to external auditors for non-audit services in order to ensure their independence.

Audit fees of Ernst & Young for the audit of the Company and the Group for the financial year ended June 30, 2021 are found in the Statutory Disclosures.

PRINCIPLE 8: RELATIONS WITH SHAREHOLDERS AND OTHER KEY STAKEHOLDERS

In supporting the process of materiality analysis, Alteo has carried out a market chain mapping exercise to identify the key stakeholders, including shareholders, which add value to its operations. This stakeholder mapping exercise has been completed for all the clusters in Mauritius and Tanzania. Following the last reporting cycle, a total of 126 persons representing organizations across 13 stakeholder groups in Mauritius were engaged in dialogues regarding their expectations and concerns regarding the sustainability and value creation proposition of Alteo. The results of focus discussion groups were included in the materiality analyses. It is understood that a similar process will be completed in Tanzania and Kenya with the timing depending on the evolution of the Covid-19 situation.


Holding Structure

The holding structure of Alteo as at June 30, 2021 is as follows:

20.96%CIEL AGRO LIMITED

(“CIEL AGRO”)

27.64%IBL LTD

51.40%OTHERS

ALTEO LIMITED

The shareholders holding more than 5% of the share capital of Alteo at the date of reporting (the “Key Shareholders”) are:

• IBL Ltd (“IBL”), with 27.64% made up of 88,033,272 shares; and

• CIEL Agro Limited, “(previously known as CIEL Agro & Property Limited and herein “CIEL AGRO”), with 20.96% made up of 66, 755, 354 shares.

The Key Shareholders have appointed representatives on Alteo’s Board of Directors who actively participate in Board discussions and decision-making, thereby ensuring that their relevant interests in Alteo are safeguarded.

Common Directors

The names of the common Directors for the year under review are as follows:

Directors ALTEO CIEL AGRO IBL

Arnaud Lagesse *

P. Arnaud Dalais

Jean-Pierre Dalais

Jérôme de Chasteauneuf

Thierry Lagesse

*Chairperson

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


(CONT’D)

PRINCIPLE 8: RELATIONS WITH SHAREHOLDERS AND OTHER KEY STAKEHOLDERS (CONT’D)

Share Analysis

The table below shows the Share Ownership Spread, Shareholder Category Profile and major Shareholders as at June 30, 2021.

Range of shareholding

Range of Shareholders Number of Shareholders

% of Shareholders

Number of Shares held

% of Shareholding

1 - 500 1032 25.74 164,341 0.05

501 - 1000 341 8.51 270,631 0.08

1001 – 5000 913 22.77 2,416,508 0.76

5001 – 10,000 447 11.15 3,264,340 1.02

10,001 – 50,000 810 20.20 19,264,571 6.05

50,001 – 100,000 211 5.26 14,524,066 4.56

100,001 – 250,000 144 3.60 22,032,779 6.93

250001 -500,000 54 1.35 19,047,042 5.98

Over 500,000 57 1.42 237,507,842 74.57

Total 4,009 100.00 318,492,120 100.00

Over 500,000

250,001 - 500,000

100,001 - 250,000

50,001 - 100,000

10,001 - 50,000

5,001 - 10,000

1,001 - 5,000

1 - 500

0 10 20 30 40 50 60 70 80

501 - 1,000

COMPARISON BETWEEN RANGE OF SHAREHOLDERS AND SHAREHOLDING

% of shareholders % of shareholding

0.05%

0.08%

0.76%

1.02%

5.85%

5%

4%

1%

23%

23%

9%

1%

0%

0%

1%11%

20%6%

5%

7%

6%

1%75%


The breakdown of category of shareholders is as follows:

Category Number of Shareholders

Number of Shares Held

% holding

Individuals 3,417 79,392,556 24.93

Insurance and Assurance Companies 23 11,254,343 3.54

Investment and Trust Companies 102 17,755,243 5.57

Pensions and Provident Funds 62 22,400,215 7.03

Other Corporate bodies 405 187,689,763 58.93

Total 4,009 318,492,120 100.00

Share Registry and Transfer Office

Alteo’s Share Registry and Transfer Office is administered by MCB Registry & Securities Limited. For any queries regarding an account and/or change in name or address, and/or questions about lost share certificates, share transfers or dividends, shareholders are invited to contact the Share Registry and Transfer Office.

Shareholders’ Agreement

To the best knowledge of the Company and of the Board of Directors, there has been no such agreement between or amongst any of its shareholders for the year under review.

Investor Relations

The Board places great importance on an open and transparent communication with all shareholders. The Board also endeavours to keep the shareholders regularly informed on matters affecting the Company.

Alteo communicates to its shareholders through its Annual Report, the publication of unaudited quarterly and audited abridged financial statements of the Group, dividend declarations, press announcements and the Annual Meeting of shareholders, which all shareholders are encouraged to attend. Those information are also available in the ‘Investors’ section of the Company’s website.

The Company’s website www.alteogroup.com is also an important means of effectively communicating with all stakeholders and keeping them abreast of developments within the Group. Indeed, all publications of unaudited quarterly and audited abridged financial statements of the Group as well as dividend declaration and press announcements, are uploaded on the Company’s website in a timely manner.

Alteo further engages with its stakeholders through social media platforms (Facebook, LinkedIn, Instagram, Twitter and YouTube) keeping them up to date with latest developments within the Group.

Shareholders’ Meetings

The decision-making rights of shareholders are exercised at shareholders’ meetings. The last Annual Meeting of Alteo was held on December 11, 2020 at 10.00 hours at Alteo’s head office at Vivéa Business Park, Saint Pierre, where a power point presentation was also shared with the shareholders in attendance, outlining Alteo’s performance during the year and highlighting the Group’s outlook for the financial year 2020/2021.

In accordance with Alteo’s Constitution, the quorum for a meeting of the shareholders of the Company is at least five (5) members present in person or proxy together holding shares representing at least 30% of the total voting rights. In case of equality of votes at a shareholders’ meeting, the chairperson of the meeting is not entitled to a casting vote.

The next Annual Meeting of Alteo Limited will be held on December 10, 2021.


(CONT’D)


Shareholders’ Calendar

The Company has planned the following forthcoming events:

November 2021 Publication of first quarter results to September 30, 2021

November 2021 Mailing of the Notice of Annual Meeting 2021

December 2021 Declaration of an interim dividend*

December 2021 Annual Meeting of the shareholders

January 2022 Payment of the interim dividend

February 2022 Publication of half-year results to December 31, 2021

May 2022 Publication of third quarter results to March 31, 2022

June 2022 Declaration of a final dividend*

July 2022 Payment of the final dividend

September 2022 Publication of abridged end-of-year results to June 30, 2022

* Subject to the approval of the Board of Directors.

Dividend Policy

There is no formal dividend policy which has been determined by the Board. In determining the level of dividend, the Board considers a number of factors, which include but are not limited to:

• the level of available distributable reserves in the Company;

• future cash commitments and investment needs to sustain the long-term growth prospects;

• potential growth and strategic opportunities; and

• the level of dividend cover.

Alteo, being the holding company of the Group, derives its distributable reserves from dividends paid by subsidiaries. The level of distributable reserves is reviewed by the Board and aims to maintain distributable reserves that provide adequate cover for dividend payments.

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

For the year under review, Alteo declared an interim dividend of 32 cents per share which was paid on or about January 14, 2021 and a final dividend of 40 cents per share was paid on or about July 30, 2021.


Share Price Information

Period July 1, 2020 – June 30, 2021

The share price of Alteo increased by 69% from Rs. 15.25 at July 1, 2020 to Rs. 25.80 at June 30, 2021 with the Semdex increasing by 12 % for the same period.

Alteo v/s Semdex

30/6/2131/5/2130/4/2131/3/2128/2/2131/1/2131/10/20 30/11/20 31/12/2030/9/2031/8/2031/7/2060.00

80.00

100.00

120.00

140.00

160.00

180.00

200.00

Semdex Alteo

Alteo’s stakeholders other than its shareholders include its employees, partners and clients, as well as the communities where it carries out its operations.


(CONT’D)


Agreements

The following agreements have been entered into by the Company;

• Service agreements with related companies, namely Ciel Corporate Services Ltd, IBL Ltd and IBL Management Ltd, for the provision of legal, company secretarial services and strategic support to the companies of the Group;

• Treasury agreements with Azur Financial Services Limited for the provision of cash management services, treasury advisory services and foreign exchange & money market brokerage services to Alteo;

• Management agreements for the provision of strategic guidance, support and assistance with regard to management, financial, legal, human resources and communication matters to the major subsidiaries of Alteo; and

• Service agreement with Intercontinental Secretarial Services Ltd for the provision of company secretarial services to Alteo Limited and Alteo Agri Ltd.

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

Related Party Transactions

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

Furthermore, in compliance with the Listing Rules of the SEM, shareholders of the Company are informed of related party transactions through the issue of cautionary announcements and circulars.

Chairperson of the Corporate Governance, Company Secretary

Nomination, Remuneration & Ethics Committee

September 22, 2021

Alteo Limited - Integrated Report 202192 Integrated Report 2021 - Alteo Limited 93

(CONT’D)

Alteo - Group Structure

CIEL Agro Limited20.96%

Alteo Agri Ltd

ALTEO LIMITED

IBL Ltd27.64%

Other Shareholders51.40%

SchoenfeldCo. Ltd

Island BasketLtd*

Compagnie dela Vigie Ltee**

SenaDevelopment

Ltd*

SociétéBeauregard

Island FreshLtd

Alteo Astonfield

Solar Limited**

AMCOSolutionsLimited

Helios BeauChamp Limited

RefinestLimited

EasternEnergy

CompanyLimited

UsinestLimited

AlteoRefinery Ltd

ConsolidatedEnergyCo. Ltd.

Deep RiverBeau Champ

MillingCompany

Ltd

100% 42.03%

100%100% 85.72%100%57.97% 100% 50%

64.23%

49%

32.5%

32.5%

13.13% 50.63%

61.72% 64.23%

80%

* Incorporated on 12 August 2020 ** In liquidation


Anahita EstatesLimited

Alteo EnergyLtd

Domaine deL’Etoile Ltd

SukariInvestmentCompanyLimited

TPC Limited

AnahitaResidences & Villas Limited

Alteo MillingLtd

TransmaraInvestment

Limited

TransmaraSugar

CompanyLimited

Sucrière desMascareignes

Limited

AlteoProperties

Ltd

Alteo NewEnergy Ltd

Alteo Planters

Services Ltd

Anahita GolfLtd

Anahita Centre

for Excellence

Limited

GallerieAdamah

CompagnieUsinière de Mon

Loisir Ltée

100%

100% 87.77% 50%

100% 100%

50%

50%

100% 50% 65.10% 76.50% 50% 60%

100%

75%

100%

51%


The Directors are pleased to present the Annual Report of Alteo Limited (the “Company”) for the year ended June 30, 2021.

NATURE OF BUSINESS

Alteo Limited is an investment company engaged in the following main activities:

• Sugar cane growing and milling and other agricultural activities in Mauritius, Kenya and Tanzania;

• Sugar refining activities;

• Operating a bagasse and coal based power generation plant for the supply of electricity to the national grid of the Central Electricity Board; and

• Property development, hospitality and leisure.

DIRECTORS

The persons who held office as Directors of the Company as at June 30, 2021 are:

Arnaud Lagesse (Chairperson)

Priscilla Balgobin-Bhoyrul

André Bonieux

Patrick Chatenay

Dipak Chummun

Jean- Pierre Dalais

P. Arnaud Dalais

Jérôme De Chasteauneuf

Fabien de Marassé Enouf

Thierry Lagesse

Hubert Leclézio

Sheila Ujoodha

The Directors of the subsidiaries are disclosed in the Statutory Disclosures.

AUDITOR’S REPORT AND ACCOUNTS

The auditor’s report is set out prior to the Company’s and Group’s Financial Statements.

DIRECTORS’ SERVICE CONTRACTS

Mr. Fabien de Marassé Enouf has a service contract with Alteo with no expiry terms. Mr. André Bonieux has a 3-year service contract with the Company which will expire on December 31, 2021.


DIRECTORS’ REMUNERATION AND BENEFITS

Remuneration and benefits paid and payable by the Company and its subsidiaries for the year ended June 30, 2021 were as follows:

2021 2020Directors of the Company Rs RsExecutive Directors 25,852,190 24,028,321

Non-Executive Directors 4,404,583 2,557,500

Independent Non-Executive Directors 1,352,084 1,237,500

Directors of the Subsidiaries

Executive Directors 57,045,437 51,986,233

Non-Executive Directors 22,474,563 20,393,870

Donations made during the year

The Group The Company

2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000Political - - - -

Charitable 5,975 9,095 - 100

Total 5,975 9,095 - 100

Fees payable to Auditors

The Group The Company

2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000

Audit fees paid to:

EY (External auditor) 8,728 9,016 1,311 300

Fees paid for other services:

PwC (Internal auditor) 2,091 1,298 - -

PwC – Other Services 4,479 3,444 - 75

BDO Financial Services Ltd 275 - 275 -

KPMG – other services 851 - - -

EY – Other Services 2,238 1,230 50 125

The Board expresses its appreciation and thanks to all those involved for their contribution during the year. Approved by the Board of Directors on September 22, 2021 and signed on its behalf by:

Arnaud Lagesse Patrick Chatenay Chairperson Director


(CONT’D)

STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE PREPARATION OF FINANCIAL STATEMENTS

Directors acknowledge their responsibilities for:

i. Adequate accounting records and maintenance of effective internal control systems;

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

iii. The selection of appropriate accounting policies supported by reasonable and prudent judgements.

The external auditors are responsible for reporting on whether the financial statements are fairly presented.

The Directors report that:

i. Adequate accounting records and an effective system of internal controls and risk management have been maintained;

ii. Appropriate accounting policies supported by reasonable and prudent judgments and estimates have been used consistently;

iii. International Financial Reporting Standards have been fully adhered to.

iv. The Code of Corporate Governance has been adhered to in all material aspects.

ON BEHALF OF THE BOARD

Arnaud Lagesse Patrick Chatenay Chairperson Director

Date: 22 September 2021


STATUTORY DISCLOSURES

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

Directorships of Subsidiaries as at June 30, 2021

Alteo Agri Ltd

• Robert BAISSAC

• André BONIEUX

• Jean Pierre DALAIS

• Jérôme DE CHASTEAUNEUF

• Fabien DE MARASSÉ ENOUF

• Arnaud LAGESSE

• Hubert LECLÉZIO

The following changes occurred during the year under review:

• Hubert LECLÉZIO was appointed as Director on November 25, 2020

• Jan BOULLÉ resigned as Director on November 11, 2020

Alteo Energy Ltd

• André BONIEUX

• Dipak CHUMMUN


• Sébastien LAVOIPIERRE

• Yougendranath KISSOONDARY

• Marie Joseph Benoit LAGESSE

• Thierry LAGESSE

• Gilbert LEGRAND

• Heymant SONOO

Alteo Milling Ltd

• André BONIEUX

• Suttea Buruthsing BISSESSUR

• Dipak CHUMMUN



• Thierry LAGESSE


• Danraj RAM

Alteo Planters Services Ltd

• André BONIEUX





• André BONIEUX


• Jean-Claude BÉGA resigned as Director on September 8, 2020

Alteo Refinery Ltd

• Deevendra CALLY


• Thierry LAGESSE


• Jean RIBET

• André BONIEUX

Anahita Centre for Excellence Limited

• Jean-Pierre DALAIS

• Patrice LEGRIS



• André BONIEUX

• Preetee RAMDIN



• Christine MAROT


• Jean Claude BÉGA resigned as Director on September 8, 2020.

• Christine MAROT was appointed as Director on September 8, 2020.

Anahita Golf Ltd


• Preetee RAMDIN

• André BONIEUX


(CONT’D)

Anahita Golf Ltd (cont’d)




• Jérôme DE CHASTEAUNEUF was appointed as Director on December 12, 2020.

• P. Arnaud DALAIS resigned as Director on December 12, 2020.

Compagnie Usinière de Mon Loisir Ltée

• André BONIEUX

• Thierry LAGESSE


• Vidyanand JEETOOA

• Gajandranath MUTTY

Consolidated Energy Co. Ltd

• William AH SUE


• André BONIEUX

• Gilbert Bernadin LEGRAND

• Philippe LABRO

• Thierry LAGESSE


• Jean RIBET

Deep River-Beau Champ Milling Company Limited


• André BONIEUX

• Thierry LAGESSE


• Suttea Buruthsing BISSESSUR

• Jean RIBET

• Danraj RAM

Eastern Energy Company Limited


• André BONIEUX

• Jean RIBET

Island Basket Ltd


• Patrick KOENIG

• Arnaud D’UNIENVILLE

• Pierre NOEL

Island Fresh Ltd


• Patrick KOENIG

• Arnaud D’UNIENVILLE

• Dominique ROUSSET

Refinest Limited


• André BONIEUX

• Clément REY

• Jean RIBET

Schoenfeld Co. Ltd

• André BONIEUX

• Thierry LAGESSE

Société Beauregard

• Jean Claude BÉGA

• P. Arnaud DALAIS

• Patrick DE LABAUVE D’ARIFAT

• Thierry LAGESSE

Sucrière des Mascareignes Limited



• Philippe LABRO

• Arnaud LAGESSE

• Thierry LAGESSE

• Xavier THIEBLIN

• André BONIEUX

• Hubert LECLÉZIO (Permanent alternate director to Arnaud LAGESSE)



• Alexis DUVAL resigned as Director on March 18, 2021.

• Hubert LECLÉZIO was appointed as Director on March 18, 2021.

Sukari Investment Company Limited



• Philippe LABRO

Sukari Investment Company Limited (cont’d)

• Arnaud LAGESSE

• Thierry LAGESSE


• Xavier THIEBLIN

• André BONIEUX

• Philippe CHAUDRU DE RAYNAL


• Alexis DUVAL resigned as Director on March 18, 2021.

• Philippe CHAUDRU DE RAYNAL was appointed as Director on March 18, 2021.

TPC Limited


• André BONIEUX

• Alexis DUVAL

• Philippe LABRO

• Hubert LECLÉZIO

• Mohamed Adam NYASAMA


• Hamza JOHARI

Sukari Investment Company Limited, represented by Mr. Stéphane ISAUTIER


• Philippe CHAUDRU DE RAYNAL was appointed as Director on March 01, 2021.

Transmara Investment Limited



• André BONIEUX

• Philippe LABRO

• Arnaud LAGESSE

• Thierry LAGESSE

• Xavier THIEBLIN




• Stéphane ISAUTIER


• André BONIEUX

• Philippe LABRO

• Arnaud LAGESSE

• Jatin MALDE

• Mukuntkumar S. MALDE

• Mahul J. SHAH

• Shashikant S. SHAH


• Robert BAISSAC resigned as Director on November 22, 2019

• Stéphane ISAUTIER was appointed on April 7, 2020

Usinest Limited


• André BONIEUX

• Clément REY

• Jean RIBET


YEAR ENDED JUNE 30, 2021In our capacity as Company Secretary of Alteo Limited (hereinafter referred to as the "Company"), we hereby confirm that, to the best of our knowledge and belief, the Company has filed with the Registrar of Companies, for the financial year ended June 30, 2021, all such returns as are required for a company under the Companies Act 2001.

Intercontinental Secretarial Services Ltd Company Secretary



INDEPENDENT AUDITOR’S REPORTTO THE MEMBERS OF ALTEO LIMITED

REPORT ON THE AUDIT OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

Opinion

We have audited the consolidated and separate financial statements of Alteo Limited (the “Company”) and its subsidiaries (the “Group”) set out on pages 106 to 111 which comprise the consolidated and separate statements of financial position as at June 30, 2021, and the consolidated and separate statements of profit or loss and other comprehensive income, consolidated and separate statements of changes in equity and consolidated and separate statements of cash flows for the year then ended, and notes to the consolidated and separate financial statements, including significant accounting policies.

In our opinion, the consolidated and separate financial statements give a true and fair view of the consolidated and separate financial position of Group and Company as at June 30, 2021, and of its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with the Companies Act 2001 and the Financial Reporting Act 2004.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the consolidated and Separate Financial Statements section of our report. We are independent of the Group and the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) and other independence requirements applicable to performing audits of financial statements of the Group and Company and in Mauritius. We have fulfilled our other ethical responsibilities in accordance with the IESBA Code and in accordance with other ethical requirements applicable to performing audits of the Group and Company and in Mauritius. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated and separate financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the consolidated and separate financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated and separate financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated and separate financial statements.

The Key Audit Matters applies to the audit of the consolidated financial statements.

Fair value of consumable biological assets

Refer to note 16 to the consolidated financial statements

Key Audit Matter How the matter was addressed in the audit

We identified the carrying amount of consumable biological assets (the standing cane) as a key audit matter because of the significant degree of judgement involved in the fair valuation of these assets which are valued at fair value less cost to sell.

Our procedures in relation to assessing the carrying amount of consumable biological assets included: Understanding how management determines the fair value measurement of consumable biological assets;

• Reviewing the mathematical accuracy of the cashflow forecast and checking the internal consistency of the model;

• Comparing costs required to bring the standing cane to maturity against costs incurred in field maintenance and in the industrial process to assess their reasonableness and obtaining supporting evidence from management where estimated costs are lower than historical costs;

• Evaluating the reasonableness of the main inputs used in the valuation models, for example by validating the future price of sugar against available market data and, where relevant (e.g. by geography), taking into consideration the supporting measures expected to be provided to the industry;

• Evaluating the reasonableness of estimates and completeness of costs used in the valuation models with reference to the historical performance and latest budgets and medium-term plans approved by management; and

• Performing sensitivity analysis on the significant inputs to assess the impact of changes in key inputs on the valuations.

As set out in note 16 to the consolidated financial statements, the carrying amount of the Group’s consumable biological assets as at June 30, 2021 amounted to Rs 3,069 million. The carrying amount is determined based on the expected selling price of sugar, inclusive of supporting measures expected to be provided to the industry, subtracting the costs required to bring the standing cane to maturity as well as other costs necessary to bring the ultimate product, sugar, to the end customer.


REPORT ON THE AUDIT OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (CONTINUED)

The Key Audit Matters applies to the audit of the consolidated financial statements (Continued).

Valuation of investment properties

Refer to notes 6 to the consolidated financial statements


The Group owns land that is included under investment properties. They represent 9% of total assets on the statement of financial position, at Rs 2,808m as at June 30, 2021.

• We evaluated the qualifications and competence of the external valuers. We also read the terms of engagement of the contract between the valuers and the Group’s subsidiaries to determine whether there were any matters that might have affected their objectivity or limited the scope of their work.

• We assessed the scope of work of the external valuers, and the review and acceptance of the valuations reported by them.

• We considered the valuation methodologies used against those applied by other valuers for similar property types. We also considered other alternative valuation methods to corroborate the values. Where the values were outside the expected range, we undertook further procedures to understand the effect of additional factors and, when necessary, held further discussions with the valuers.

• We also considered the adequacy of the disclosures in the financial statements, in describing the inherent degree of subjectivity and key assumptions in the estimates as applicable. This includes the relationships between the key unobservable inputs and fair values.

The land included under investment properties is stated at fair value based on independent external valuations.

The valuation process involves significant judgement in determining the appropriate valuation methodology to be used, and in estimating the underlying assumptions to be applied. The valuations are based on sales comparable methods and the valuer’s knowledge on property valuation. A change in the assumptions can have a significant impact on the valuation. Given the significance of the above, we have considered it as a key audit matter.




The Key Audit Matter applies to the audit of separate financial statements.

Valuation of investment in subsidiaries, associates and joint ventures of the Company.

Refer to notes 8, 9 and 10 to the separate financial statements of the Company.


The Company has investments in subsidiaries, associates and joint ventures, which are all carried at fair value in its stand-alone financial statements.

Our procedures in relation to assessing the fair value of subsidiaries, associates and joint ventures included:

• Understanding how management determines the fair value of the subsidiaries, associates and joint ventures;

• Evaluating the design and implementation of the controls over the valuation process;

• Reviewing the mathematical accuracy of the cashflow forecasts and checking the internal consistency of the models;

• Assessing the reliability of management’s budgets and forecasts by comparing prior year forecasts against actual performance in the current year;

• Through the involvement of our valuation specialists, challenging and evaluating the reasonableness of the main inputs used in the valuation models, for example, growth rates, discount rates and projected capital investments.

• We also performed sensitivity analysis on the significant inputs to assess the impact of the changes in key inputs on the valuations.

• We reviewed the disclosures in the financial statements with respect to valuations, the key assumptions used by management and the reporting of sensitivity variations.

The Company holds investments for which the fair value measurement has been determined using valuation models where the value is affected by input data that cannot be verified by observable market data. These financial instruments are categorised as Level 3 under the fair value hierarchy per IFRS 13.

Valuation techniques for these underlying investments are subjective in nature and involve various assumptions. The use of different valuation techniques and assumptions, often based on unobservable inputs, could produce significantly different estimates of fair value. Specific audit focus is needed to assess the valuation of these fair value assets as well as the quality of the associated disclosures on the valuation of the subsidiaries, associates and joint ventures.

Given the significance of the above, we have considered it as a key audit matter.



Other Information

The directors are responsible for the other information. The other information comprises the information included in the document titled “Alteo Limited and its subsidiaries Annual Report for the year ended June 30, 2021”, which includes the Corporate Governance Report, Statutory Disclosures and Secretary’s Certificate as required by the Companies Act 2001, which we obtained prior to the date of this report, and the other elements of the Integrated Report, which is expected to be made available to us after that date. Other information does not include the consolidated or the separate financial statements and our auditor’s report thereon.

Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Corporate Governance Report

The Directors are responsible for preparing the Corporate Governance Report. Our responsibility under the Financial Reporting Act 2004 is to report on the compliance with the Code of Corporate Governance (‘’the Code’’) disclosed in the annual report and assess the explanations given for non-compliance with any requirement of the Code. From our assessment of the disclosures made on corporate governance in the annual report, the Group has, pursuant to section 75 of the Financial Reporting Act 2004, complied with the requirements of the Code.

Responsibilities of the Directors for the Consolidated and Separate Financial Statements

The directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act 2001 and the Financial Reporting Act 2004, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and separate financial statements, the directors are responsible for assessing the Group and Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intends to liquidate the Group and the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements




Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements (Continued)

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

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

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

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

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

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

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

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.



Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements (Continued)

Use of our report

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Companies Act 2001

We have no relationship with or interests in the Company other than in our capacity as auditor, tax advisors and dealings in the ordinary course of business.

We have obtained all the information and explanations we have required.

In our opinion, proper accounting records have been kept by the Company as far as it appears from our examination of those records.

ERNST & YOUNG DARYL CSIZMADIA, C.A. (S.A).

Ebène, Mauritius Licensed by FRC



STATEMENTS OF FINANCIAL POSITIONJUNE 30, 2021

THE GROUP THE COMPANY Notes 2021 2020 2021 2020

ASSETS Rs'000 Rs'000 Rs'000 Rs'000 Non-current assetsProperty, plant and equipment 5 18,368,154 17,830,995 1,160 1,063 Investment properties 6 2,808,175 2,855,563 - - Intangible assets 7 1,966,461 1,906,281 - - Right-of-use assets 36 340,534 127,611 37,520 21,620 Investment in subsidiaries 8 - - 24,333,365 22,785,373 Investment in joint ventures 9 15,347 18,878 99,635 39,975 Investment in associates 10 22,776 23,606 6,263 5,750 Financial assets at fair value through OCI 11 4,318 9,127 - - Financial assets at amortised cost 13 231,931 213,288 206,658 203,947 Employee benefit assets 23 15,471 606 - - Deferred tax assets 14 28,678 66,595 - -

23,801,845 23,052,550 24,684,601 23,057,728 Current assetsInventories 15 2,088,733 1,818,289 - - Consumable biological assets 16 3,069,580 2,383,372 - - Trade and other receivables 17 1,619,613 1,619,533 16,487 233,342 Contract assets 18 53,866 81,353 - - Current tax assets 19 3,797 3,502 - - Cash and cash equivalents 35(b) 532,255 1,017,474 387,245 205,193

7,367,844 6,923,523 403,732 438,535 Total assets 31,169,689 29,976,073 25,088,333 23,496,263 EQUITY AND LIABILITIESEquity and reservesShare capital 20 21,855,045 21,855,045 21,855,045 21,855,045 Revaluation and other reserves 21 (5,373,619) (5,611,971) 1,185,568 (372,597)Retained earnings /(accumulated losses) 527,976 (412,002) 192,509 149,451 Equity attributable to equity holders 17,009,402 15,831,072 23,233,122 21,631,899 Non-controlling interests 1,651,147 1,411,637 - - Total equity 18,660,549 17,242,709 23,233,122 21,631,899 Non-current liabilitiesLoans and borrowings 22 4,697,562 5,099,158 980,147 1,463,858 Contract liabilities 26 26,488 39,258 - - Deferred income 24 206,052 231,052 - - Employee benefit liabilities 23 1,108,739 1,291,051 - - Deferred tax liabilities 14 1,189,123 998,420 - -

7,227,964 7,658,939 980,147 1,463,858 Current liabilitiesTrade and other payables 25 1,821,430 1,847,301 31,527 98,554 Contract liabilities 26 490,013 561,034 - - Deferred income 24 26,907 34,492 - - Loans and borrowings 22 2,586,319 2,427,947 708,929 231,575 Derivative financial instruments 12 122,823 74,593 7,211 - Current tax liabilities 19 106,287 58,990 - 309 Dividends payable 27 127,397 70,068 127,397 70,068

5,281,176 5,074,425 875,064 400,506 Total liabilities 12,509,140 12,733,364 1,855,211 1,864,364 Total equity and liabilities 31,169,689 29,976,073 25,088,333 23,496,263

The financial statements have been approved for issue by the Board of Directors on 23 September 2021

Arnaud Lagesse Patrick ChatenayDirector Director

The notes on pages 118 to 202 form an integral part of these financial statements.Independent auditor's report on pages 106 to 111.


STATEMENTS OF PROFIT OR LOSSYEAR ENDED JUNE 30, 2021


Rs’000 Rs’000 Rs’000 Rs’000

Revenue 28 9,549,122 8,286,946 56,949 55,128

Dividend income 29 611 636 389,679 363,963

Normalised earnings before interest, taxation, depreciation and amortisation 29 3,576,172 1,969,491 354,265 310,030

Other income and expenses 33 187,930 76,532 - -

Earnings before interest, taxation, depreciation and amortisation 3,764,102 2,046,023 354,265 310,030

Release of deferred income 24 33,669 34,359 - -

Depreciation and amortisation of property, plant and equipment and right of use assets 5, 36 (811,089) (728,079) (8,882) (7,902)

Earnings before interest, taxation, impairment of assets and allowance for expected credit losses 2,986,682 1,352,303 345,383 302,128

Reversal of impairments of assets/ (Impairment of assets and allowance for expected credit losses) 41 218,550 (31,832) - -

Earnings before interest and taxation 3,205,232 1,320,471 345,383 302,128

Finance income 32(a) 26,028 8,470 14,018 13,873

Finance costs 32(b) (476,963) (511,846) (87,185) (83,819)

Share of results of joint ventures 9 (63,603) (18,516) - -

Share of results of associates 10 2,523 3,512 - -

Profit before taxation 2,693,217 802,091 272,216 232,182

Taxation 19 (829,329) (579,942) 156 (309)

Profit for the year 1,863,888 222,149 272,372 231,873

Attributable to:

- Equity holders 1,158,973 (102,340) 272,372 231,873

- Non-controlling interests 704,915 324,489 - -

1,863,888 222,149 272,372 231,873

Basic and diluted earnings per share 34 3.64 (0.32) 0.86 0.73

The notes on pages 118 to 202 form an integral part of these financial statements.

Independent auditor’s report on pages 106 to 111.


STATEMENTS OF OTHER COMPREHENSIVE INCOMEYEAR ENDED JUNE 30, 2021


Rs’000 Rs’000 Rs’000 Rs’000


Other comprehensive income:

Items that will not be reclassified to profit or loss:

Remeasurements of post employment benefit obligations 23 167,620 (163,510) - -

Deferred tax on remeasurement of post employment benefit obligations 14(b) (450) (1,807) - -

Revaluation surplus on land 5 - 336,015 - -

Change in fair value of financial assets at fair value through OCI 11 (4,809) (185) - -

Change in fair value of investments 8, 9, 10 - - 1,558,165 678,677

Items that may be reclassified subsequently to profit or loss

Currency translation differences 187,851 259,338 - -

Net cash flow hedges 12 (4,296) - - -

Share of other comprehensive loss of associates and joint ventures 9, 10 (11,947) (30,464) - -

Other comprehensive income for the year 333,969 399,387 1,558,165 678,677

Total comprehensive income for the year 2,197,857 621,536 1,830,537 910,550

Attributable to:

- Equity holders 1,406,656 224,790 1,830,537 910,550


2,197,857 621,536 1,830,537 910,550




STATEMENTS OF OTHER COMPREHENSIVE INCOMEYEAR ENDED JUNE 30, 2021


Rs’000 Rs’000 Rs’000 Rs’000



Items that will not be reclassified to profit or loss:

Remeasurements of post employment benefit obligations 23 167,620 (163,510) - -

Deferred tax on remeasurement of post employment benefit obligations 14(b) (450) (1,807) - -

Revaluation surplus on land 5 - 336,015 - -

Change in fair value of financial assets at fair value through OCI 11 (4,809) (185) - -

Change in fair value of investments 8, 9, 10 - - 1,558,165 678,677

Items that may be reclassified subsequently to profit or loss

Currency translation differences 187,851 259,338 - -

Net cash flow hedges 12 (4,296) - - -

Share of other comprehensive loss of associates and joint ventures 9, 10 (11,947) (30,464) - -

Other comprehensive income for the year 333,969 399,387 1,558,165 678,677

Total comprehensive income for the year 2,197,857 621,536 1,830,537 910,550

Attributable to:

- Equity holders 1,406,656 224,790 1,830,537 910,550


2,197,857 621,536 1,830,537 910,550



STATEMENTS OF CHANGES IN EQUITYYEAR ENDED JUNE 30, 2021THE GROUP Attributable to equity holders

NotesShare capital

Revaluation and other reserves

Retained earnings

/(accumulated losses) Total

Non- controlling interests

Total equity

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

At July 1, 2020 21,855,045 (5,611,971) (412,002) 15,831,072 1,411,637 17,242,709 Total comprehensive income for the year:

Profit for the year - - 1,158,973 1,158,973 704,915 1,863,888 Other comprehensive income - 247,683 - 247,683 86,286 333,969 Transfer of fair value reserve of land at fair value 21 - (9,331) 9,331 - - - Change in ownership without loss of control - - 988 988 (988) - Increase in share capital of subsidiary - - - - 1,969 1,969

Dividends 27 - - (229,314) (229,314) (552,672) (781,986)

At June 30, 2021 21,855,045 (5,373,619) 527,976 17,009,402 1,651,147 18,660,549

At July 1, 2019 21,855,045 (5,898,206) (178,571) 15,778,268 1,542,646 17,320,914

Total comprehensive income for the year:

Loss for the year - - (102,340) (102,340) 324,489 222,149

Other comprehensive income - 327,130 - 327,130 72,257 399,387

Transfer of fair value reserve of land at fair value 21 - (40,867) 40,867 - - -

Transfer of actuarial reserve to retained earnings - (28) 28 - - -

Decrease in share capital of subsidiary - - - - (43,986) (43,986)

Dividends 27 - - (171,986) (171,986) (483,769) (655,755)

At June 30, 2020 21,855,045 (5,611,971) (412,002) 15,831,072 1,411,637 17,242,709




STATEMENTS OF CHANGES IN EQUITYYEAR ENDED JUNE 30, 2021

THE COMPANY NotesShare capital


Retained earnings Total

Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2020 21,855,045 (372,597) 149,451 21,631,899


Profit for the year - - 272,372 272,372

Other comprehensive income 8, 9, 10 - 1,558,165 - 1,558,165

Dividends 27 - - (229,314) (229,314)

At June 30, 2021 21,855,045 1,185,568 192,509 23,233,122

At July 1, 2019 21,855,045 (1,051,274) 89,564 20,893,335



Other comprehensive loss 8, 9, 10 - 678,677 - 678,677

Dividends 27 - - (171,986) (171,986)

At June 30, 2020 21,855,045 (372,597) 149,451 21,631,899




STATEMENTS OF CHANGES IN EQUITYYEAR ENDED JUNE 30, 2021

THE COMPANY NotesShare capital


Retained earnings Total

Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2020 21,855,045 (372,597) 149,451 21,631,899



Other comprehensive income 8, 9, 10 - 1,558,165 - 1,558,165

Dividends 27 - - (229,314) (229,314)

At June 30, 2021 21,855,045 1,185,568 192,509 23,233,122

At July 1, 2019 21,855,045 (1,051,274) 89,564 20,893,335



Other comprehensive loss 8, 9, 10 - 678,677 - 678,677

Dividends 27 - - (171,986) (171,986)

At June 30, 2020 21,855,045 (372,597) 149,451 21,631,899



STATEMENTS OF CASH FLOWSYEAR ENDED JUNE 30, 2021


Operating activities Rs’000 Rs’000 Rs’000 Rs’000

Cash generated from / (used in) operations 35(a) 2,790,110 1,895,882 (15,375) (53,870)

Interest received 8,795 8,452 14,018 13,873

Interest paid (490,461) (527,281) (87,471) (83,802)

Taxation paid 19(a) (626,252) (568,664) (153) -

Net cash generated from / (used in) operating activities 1,682,192 808,389 (88,981) (123,799)

Investing activities

Purchase of property, plant and equipment 5 (665,167) (403,050) (561) (175)

Payment of blue print costs (6,660) (304) - -

Addition to right of use assets (3,046) - - -

Proceeds on disposal of land 236,025 407,799 - -

Proceeds from sale of property, plant and equipment 22,673 138,706 - -

Purchase of bearer plants 5 (200,581) (144,749) - -

Repayment from financial assets at fair value at amortised cost - - 12,526 -

Dividends received from financial assets at fair value through OCI 611 629 - -

Addition in joint ventures 9 (50,000) - (50,000) -

Advance to subsidiaries - - (89,043) (111,421)

Dividends received 2,522 5,045 592,600 164,860

Net cash generated from / (used in) investing activities (663,623) 4,076 465,522 53,264

Financing activities

Proceeds from borrowings 35(d) 1,044,135 1,306,998 - -

Repayment of borrowings 35(d) (838,723) (1,196,839) (50,000) -

Repayment of shareholders’ loan - (4,543) - -

Proceeds from shareholders’ loan - 6,401 - 8,157

Share issue/ (buy-back) 1,969 (43,986) - 36,668

Lease liabilities principal payments 35(d) (52,022) (57,118) (7,940) (7,520)

Dividends paid to non-controlling interests (699,598) (348,139) - -

Dividends paid to company’s shareholders 27 (171,985) (213,390) (171,985) (213,390)

Net cash (used in) / generated from financing activities (716,224) (550,616) (229,925) (176,085)

Increase / (decrease) in cash and cash equivalents 302,345 261,849 146,616 (246,620)

Increase / (decrease) in cash and cash equivalents

At July 1, (714,557) (940,897) 31,444 278,312

Increase / (decrease) 302,345 261,849 146,616 (246,620)

Exchange difference (17,463) (35,509) 8,169 (248)

At June 30, 35(b) (429,675) (714,557) 186,229 31,444




NOTES TO THE FINANCIAL STATEMENTSYEAR ENDED JUNE 30, 2021

1. GENERAL INFORMATION

Alteo Limited (the “Company”) is a limited liability Company listed on the Stock Exchange of Mauritius, incorporated on September 13, 2017 and domiciled in Mauritius. The address of its registered office is Vivéa Business Park, Saint Pierre. These financial statements will be submitted for consideration and approval at the forthcoming Annual Meeting of Shareholders of the Company.

The consolidated financial statements of Alteo Limited and its subsidiaries (collectively, the “Group”) for the year ended June 30, 2021 were authorised for issue in accordance with a resolution of the directors on September 22, 2021.

The Group is principally engaged in the growing and milling of sugar cane, the production of electricity and the construction of villas.

The COVID-19 pandemic will have lasting effects on all the operations of the Group. The property cluster has been the most impacted to date. Significant business interruptions are expected for the resort, golf club and property sales going forward. The impact of the pandemic on Alteo’s main sugar export markets is uncertain at this stage. East African operations have not been impacted to date.

2. ACCOUNTING POLICIES

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

(a) Basis of preparation

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

The financial statements include the consolidated financial statements of the parent Company and its subsidiaries (the “Group”), and the separate financial statements of the parent Company. The financial statements are presented in Mauritian rupees and all values are rounded to the nearest thousand (Rs’000), except when otherwise indicated.

Where necessary, comparative figures have been amended to conform with changes in presentation in the current year.

The financial statements are prepared under the historical cost convention, except for:

(i) Land measured at fair value.

(ii) Financial assets at fair value through OCI measured at fair value.

(iii) Consumable biological assets measured at fair value less cost to sell.

(iv) Derivative financial instruments at fair value through profit or loss measured at fair value.

(v) Investment properties measured at their fair value.

(vi) Investment in subsidiaries, joint ventures and associates in the separate financial statements of the Company measured at their fair value.

The Group has prepared the financial statements on the basis that it will continue to operate as a going concern.

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



2. ACCOUNTING POLICIES (CONT’D)

(b) Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at June 30, 2021. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:

- Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee.

- Exposure, or rights, to variable returns from its involvement with the investee.

- The ability to use its power over the investee to affect its returns.

Generally, there is the presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

- The contractual arrangement(s) with the other vote holders of the investee.

- Rights arising from other contractual arrangements.

- The Group’s voting rights and potential voting rights.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of OCI are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of the subsidiaries to bring their accounting policies in line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

A change in ownership interest of a subsidiary, without loss of control, is accounted for as equity transaction.

If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value.

(c) Amendments to published Standards effective in the reporting period

The Group applied for the first-time certain standards and amendments, which are effective for annual periods beginning on or after 1 July 2021. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

Amendments to IFRS 3: Definition of a Business

The amendment to IFRS 3 Business Combinations clarifies that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that, together, significantly contribute to the ability to create output. Furthermore, it clarifies that a business can exist without including all of the inputs and processes needed to create outputs. These amendments had no impact on the consolidated financial statements of the Group, but may impact future periods should the Group enter into any business combinations.




(c) Amendments to published Standards effective in the reporting period (cont’d)

Amendments to IFRS 7, IFRS 9 and IAS 39 Interest Rate Benchmark Reform

The amendments toIFRS7, IFRS 9 and IAS 39 Financial Instruments: Recognition and Measurement provide a number of reliefs, which apply to all hedging relationships that are directly affected by interest rate benchmark reform. A hedging relationship is affected if the reform gives rise to uncertainty about the timing and/or amount of benchmark-based cash flows of the hedged item or the hedging instrument. These amendments have no impact on the consolidated financial statements of the Group as it does not have any interest rate hedge relationships.

Amendments to IAS 1 and IAS 8 Definition of Material

The amendments provide a new definition of material that states, “information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users. These amendments had no impact on the financial statements of, nor is there expected to be any future impact to the Group.

Conceptual Framework for Financial Reporting issued in March 2021

The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the IASB in developing standards, to help preparers develop consistent accounting policies where there is no applicable standard in place and to assist all parties to understand and interpret the standards. This will affect those entities which developed their accounting policies based on the Conceptual Framework. The revised Conceptual Framework includes some new concepts, updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts. These amendments had no impact on the consolidated financial statements of the Group.

Amendments to IFRS 16 Covid-19 Related Rent Concessions

On May 28 2020, the IASB issued Covid-19. Related Rent Concessions - amendment to IFRS 16 Leases. The amendments provide relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the Covid-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a Covid-19 related rent concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from the Covid-19 related rent concession the same way it would account for the change under IFRS 16, if the change were not a lease modification.

The amendment was intended to apply until June 30 2021, but as the impact of Covid-19 pandemic is continuing, on March 31 2021, the IASB extended the period of application of the practical expedient to June 30 2022. The amendment applies to annual reporting periods beginning on or after Arpil 1 2021. However, the Group has not received Covid-19 related rent concessions but plans to apply the practical expedient if it becomes applicable within the allowed period of application.




(d) Standards issued but not yet effective

The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group’s financial statements are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.

Interest Rate Benchmark Reform- Phase 2 - Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Jan 1, 2021

Reference to the Conceptual Framwork - Amendments to IFRS 3 Jan 1, 2022

Property, Plant and Equipment: Proceeds before Intended Use - Amendments to IAS 16 Jan 1, 2022

Onerous Contracts - Costs fo Fulfilling a Contract - Amendments to IAS 37 Jan 1, 2022

AIP IFRS 1 First-time Adoption of International Financial Reporting Standards - Subsidiary as a first-time adopter Jan 1, 2022

AIP IFRS 9 Financial instruments - Fees in the ‘10 per cent’ test for derecognition of financial liabilities Jan 1, 2022

AIP IAS 41 Agriculture - Taxation in fair value measurements Jan 1, 2022

IFRS 17 Insurance Contracts Jan 1, 2023

Classification of Liabilities as Current or Non-current-Amendments to IAS 1 Jan 1, 2023

Sale or Contribution of Assets between as investor and its Associate or Joint Venture - Amendments to IFRS 10 and IAS 28 Postponed indefinitely

Covid-19 – Related Rent Concessions beyond 30 June 2021 – Amendment to IFRS 16 April 1, 2021

Definition of Accounting Estimates – Amendments to IAS 8 Jan 1, 2023

Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2 Jan 1, 2023

No new and amended standars and interpretations are expected to have a significant impact on the financial statements of the Group.

(e) Financial assets

(i) Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss (FVPL).

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under IFRS 15.

In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model.

The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will results from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortised cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measured at fair value through OCI are held within a business model with the objective of both holding to collect contractual cash flows and selling.




(e) Financial assets (cont’d)

(i) Initial recognition and measurement (cont’d)

Purchases or sale of financial assets that require delivery of asset within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset.

(ii) Subsequent measurement

For the purposes of subsequent measurement, financial assets are classified in three categories:

- Financial assets at amortised cost (debt instruments)

- Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)

- Financial assets at fair value through profit or loss

Financial assets measured at amortised cost (debt instruments)

Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

The Group’s financial assets at amortised cost include cash and cash equivalents, trade and other receivables and non-current loan to farmers and related companies included under financial assets at amortised cost.

Financial assets designated at fair value through OCI (equity instruments)

Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments designated at fair value through OCI when they meet the definition of equity under IAS 32 Financial Instruments: Presentation and are not held for trading. The classification is determined on a instrument-by-instrument basis.

Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as dividend income in the statements of profit or loss when the right of payment has been established, except when the Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment.

The Group elected to classify irrevocably its listed and non-listed equity investments under this category.

Financial assets measured at fair value through profit or loss (FVPL)

Financial assets at fair value through profit or loss are carried in the statements of financial position at fair value with net changes in fair value recognised in the statements of profit or loss.

The Group holds no financial assets at fair value through profit or loss.




(e) Financial assets (cont’d)

(iii) Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:

- The rights to receive cash flows from the asset have expired; or

- The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of its continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

(iv) Impairment

The Group recognises an allowance for expected credit losses (ECLs) for financial assets at amortised cost. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that results from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.




(f) Financial liabilities

(i) Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.

(ii) Subsequent measurement

For purposes of subsequent measurement, financial liabilities are classified in two categories:

- Financial liabilities at fair value through profit or loss

- Financial liabilities at amortised cost (loans and borrowings)

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9.

Gains or losses on liabilities held for trading are recognised in the statements of profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied. The Group has not designated any financial liability at fair value through profit or loss.

Financial liabilities measured at amortised cost (loans and borrowings)

After initial recognition, loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statements of profit or loss. This category generally applies to loans and borrowings, including bank overdraft.




(f) Financial liabilities (cont’d)

(iv) Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statements of profit or loss.

(g) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statements of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

(h) Derivative financial instruments and hedge accounting

Initial recognition and subsequent measurement

The Group uses derivative financial instruments, such as forward currency contracts and cross currency swap transactions to hedge its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

For the purpose of hedge accounting, hedges are classified as Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognised firm commitment.

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.

The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:

- There is an ‘economic relationship’ between the hedged item and the hedging instrument.

- The effect of credit risk does not ‘dominate the value changes’ that result from that economic relationship.

- The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.

Hedges that meet all the qualifying criteria for hedge accounting are accounted for as described below:

Cash flow hedges

The effective portion of the gain or loss on the hedging instrument is recognised in OCI in the cash flow hedge reserve, while any ineffective portion is recognised immediately in the statements of profit or loss. The cash flow hedge reserve is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item.




(h) Derivative financial instruments and hedge accounting (cont’d)

Cash flow hedges (cont’d)

The Group uses forward currency contracts and cross currency swaps as hedges of its exposure to foreign currency risk in forecast transactions and firm commitments,. The ineffective portion is recognised as net foreign exchange gain or loss. Refer to note 12 for more details.

The amounts accumulated in OCI are accounted for, depending on the nature of the underlying hedged transaction. If the hedged transaction subsequently results in the recognition of a non-financial item, the amount accumulated in equity is removed from the separate component of equity and included in the initial cost or other carrying amount of the hedged asset or liability. This is not a reclassification adjustment and will not be recognised in OCI for the period. This also applies where the hedged forecast transaction of a non-financial asset or non-financial liability subsequently becomes a firm commitment for which fair value hedge accounting is applied.

For any other cash flow hedges, the amount accumulated in OCI is reclassified to profit or loss as a reclassification adjustment in the same period or periods during which the hedged cash flows affect profit or loss.

If cash flow hedge accounting is discontinued, the amount that has been accumulated in OCI must remain in accumulated OCI if the hedged future cash flows are still expected to occur. Otherwise, the amount will be immediately reclassified to profit or loss as a reclassification adjustment. After discontinuation, once the hedged cash flow occurs, any amount remaining in accumulated OCI must be accounted for depending on the nature of the underlying transaction as described above.

(i) Foreign currencies

(i) Functional and presentation currency

The Group’s financial statements are presented in Mauritian Rupees (Rs or MUR), which is also the Company’s functional currency. For each entity, the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency. The Group uses the direct method of consolidation and on disposal of a foreign operation, the gain or loss that is reclassified to profit or loss reflects the amount that arises from using this method.

(ii) Transactions and balances

Transactions in foreign currencies are initially recorded at their respective functional currency spot rates at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies, that is, Tanzanian shillings (TZS) and Kenyan shillings (KSH), are retranslated at the functional currency spot rate of exchange ruling at the reporting date.

Differences arising on settlement or translation of monetary items are recognised in profit or loss with the exception of monetary items are designated as part of the hedge of the Group’s net investment of a foreign operation. These are recognised in other comprehensive income until the net investment is disposed of, at which time, the cumulative amount is reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those monetary items are also recorded in other comprehensive income.




(i) Foreign currencies (cont’d)

(ii) Transactions and balances (cont’d)

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the date of the transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of gain or loss on change in fair value of the item. (i.e., translation differences on items whose fair value gain or loss is recognised in other comprehensive income or profit or loss are also recognised in other comprehensive income or profit or loss, respectively).

(iii) Group companies

On consolidation, the assets and liabilities of foreign operations are translated into Mauritian rupees at the rate of exchange prevailing at the reporting date and their statements of profit or loss are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on translation for consolidation are recognised in OCI. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is reclassified to profit or loss.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the spot rate of exchange at the reporting date.

(j) Impairment of non-financial assets

The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.

The Group bases its impairment calculation on most recent detailed budgets and forecast calculations, which are prepared separately for each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. A long-term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations are recognised in the statements of profit or loss in expense categories consistent with the function of the impaired asset, except for properties previously revalued with the revaluation taken to OCI. For such properties, the impairment is recognised in OCI up to the amount of any previous revaluation.




(j) Impairment of non-financial assets (cont’d)

For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statements of profit or loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.

Goodwill is tested for impairment annually as at June 30, and when circumstances indicate that the carrying value may be impaired.

Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.

Intangible assets with indefinite useful lives are tested for impairment annually as at June 30, at the CGU level, as appropriate, and when circumstances indicate that the carrying value may be impaired.

(k) Taxation

Current income tax

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in countries where the Group operates and generate taxable income.

Current income tax relating to items recognised directly in equity and not in the statements of profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Value added tax

Revenues, expenses and assets are recognised net of the amount of value added tax except:

• where the value added tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the value added tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• for receivables and payables that are stated with the amount of value added tax included.

The net amount of value added tax recoverable from, or payable to, the taxation authority is included as part of other receivables or payables in the statements of financial position.

Corporate Social Responsibility

The Corporate Social Responsibility (‘’CSR’’) was legislated by Government in July 2009. In terms of the legislation, the Group is required to allocate 2% of its chargeable income of the preceding financial year to Government approved CSR projects.

The required CSR charge for the current year is recognised as taxation expense in the statements of profit or loss. The net amount of CSR fund payable to the taxation authority is included as current tax liabilities in the statements of financial position.




(l) Dividend

The Company recognises a liability to pay a dividend when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the Company’s constitution, a distribution is authorised when it is approved by the Board of Directors. A corresponding amount is recognised directly against equity.

(m) Provision

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources that can be reliably estimated will be required to settle the obligation and reliable estimate cane be made of the obligation. The expense relating to a provision is presented in the statements of profit or loss net of any reimbursement.

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

The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate (EIR). The amount of provision is recognised in profit or loss.

(n) Fair value measurement

The Group measures financial instruments such as derivatives and equity investments and non-financial assets such as land, consumable biological assets and investment properties, at fair value at each reporting date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability.

or

• In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Group, in the most advantageous market for the asset or liability.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.




(n) Fair value measurement (cont’d)

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities

• Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

• Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

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

For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

Management determines the policies and procedures for recurring fair value measurement, such as land, consumable biological assets, investment properties and unquoted equity investment. Management is comprised of the Chief Finance Executive and chief finance officers.

External valuers are involved for valuation of significant assets, such as land and investment properties. Involvement of external valuers is determined annually by Management after discussion with and approval by the Group’s Audit Committee. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained. Valuers are normally rotated every three years. Management decides, after discussions with the Group’s external valuers, which valuation techniques and inputs to use for each case.

At each reporting date, Management analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Group’s accounting policies. For this analysis, Management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.

Management, in conjunction with the Group’s external valuers, also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.

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

(o) Leases

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Group as a lessee

The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.




(o) Leases (cont’d)

Group as a lessee

i) Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and accumulated impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the initial measurement of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:

• Plant and machinery 3 to 15 years

• Motor vehicles and other equipment 3 to 5 years

• Building 3 to 5 years

If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment.

ii) Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate.

Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

The Group’s lease liabilities are included in loans and borrowings.

iii) Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

Group as a lessor

Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in other operating income in the statement of profit or loss due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.



3. RISK MANAGEMENT

The Group’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Group’s operations. The Group’s principal financial assets include loans to farmers and related companies, trade and other receivables, and cash and cash equivalent that derive directly from its operations. The Group also holds investment in equity instruments and enters into derivative transactions.

3.1 Risk factors

The Group’s activities expose it to market risk (including interest rate risk, currency risk and price risk), credit risk and liquidity risk. The Group’s senior management overseas the management of these risks. The Group’s senior management ensures that the Group’s financial risk activities are governed by appropriate policies and procedures and that the risks are identified, measured and managed in accordance with the Group’s policies and risk objectives. All derivatives activities for risk management purpose are carried out by specialist teams that have the appropriate skills, experience and supervision. The Board of Directors reviews and agrees the policies for managing each of these risks, which are summarised below:

(a) Market risk

Market risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market places. Market risk comprises of three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, trade and other receivables, investment in equity instruments and derivative financial instruments.

(i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term debt obligations with floating interest rates.

The Group manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Group’s policy is to maintain borrowings at fixed rates of interest of not more than 50%.

THE GROUP THE COMPANY

2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000

Floating interest rate Other loans 5,468,025 5,867,215 201,016 195,433

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected with an effect of a 0.5% (2020: 0.5%) possible movement up or down with all other variables held constant. The impact on the Group’s profit before tax is affected through the impact on floating rate borrowings, as follows:


2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000

Effect on profit before tax with an

increase / decrease of 0.5% in interest rate 27,340 24,988 1,005 977



3. RISK MANAGEMENT

The Group’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Group’s operations. The Group’s principal financial assets include loans to farmers and related companies, trade and other receivables, and cash and cash equivalent that derive directly from its operations. The Group also holds investment in equity instruments and enters into derivative transactions.

3.1 Risk factors

The Group’s activities expose it to market risk (including interest rate risk, currency risk and price risk), credit risk and liquidity risk. The Group’s senior management overseas the management of these risks. The Group’s senior management ensures that the Group’s financial risk activities are governed by appropriate policies and procedures and that the risks are identified, measured and managed in accordance with the Group’s policies and risk objectives. All derivatives activities for risk management purpose are carried out by specialist teams that have the appropriate skills, experience and supervision. The Board of Directors reviews and agrees the policies for managing each of these risks, which are summarised below:

(a) Market risk

Market risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market places. Market risk comprises of three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, trade and other receivables, investment in equity instruments and derivative financial instruments.

(i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term debt obligations with floating interest rates.

The Group manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Group’s policy is to maintain borrowings at fixed rates of interest of not more than 50%.


2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000

Floating interest rate Other loans 5,468,025 5,867,215 201,016 195,433

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected with an effect of a 0.5% (2020: 0.5%) possible movement up or down with all other variables held constant. The impact on the Group’s profit before tax is affected through the impact on floating rate borrowings, as follows:


2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000

Effect on profit before tax with an

increase / decrease of 0.5% in interest rate 27,340 24,988 1,005 977


3. RISK MANAGEMENT (CONT’D)

3.1 Risk factors (cont’d)

(a) Market risk (cont’d)

(ii) Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates primarily relates to the Group’s operating activities (where revenue or expense is denominated in foreign currency) and the Group’s net investments in foreign subsidiaries.

The Group manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12-month period for hedges of forecasted sales and purchases. When a derivative is entered into for the purpose of being a hedge, the Group negotiates the terms of the derivative to match the terms of the hedged exposure. For hedges of forecast transactions, the derivative covers the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

The Group hedges its exposure to fluctuations on the translation into MUR of its foreign activities by using foreign currency swaps and forwards.

The currency profile is as follows:


2021Financial

assetsFinancial liabilities

Financial assets

Financial liabilities

Rs’000 Rs’000 Rs’000 Rs’000

MUR 1,328,799 4,656,487 24,662,408 1,720,603

EUR 138,269 84,817 - -

USD 148,020 968,877 - -

GBP 5,828 - - -

TZN 282,140 1,529,335 - -

KES 433,806 1,967,802 - -

ZAR 1,583 20,816 - -

2,338,445 9,228,134 24,662,408 1,720,603


2020Financial

assetsFinancial liabilities

Financial assets

Financial liabilities

Rs’000 Rs’000 Rs’000 Rs’000

MUR 1,242,164 5,249,671 23,472,630 1,793,987

EUR 253,497 95,923 - -

USD 589,946 989,349 - -

GBP 3,348 147 - -

TZN 208,680 1,179,634 - -

KES 509,980 1,926,596 - -

ZAR 638 7,679 - -

2,808,253 9,448,999 23,472,630 1,793,987

Financial assets include trade and other receivables, cash and cash equivalent, financial assets at amortised cost, financial assets at fair value through OCI but exclude prepayments amounting to Rs 49.6m (2020: Rs 50.169m) for the Group and Rs 1.1m (2020: Rs 950k) for the Company. Financial liabilities include loans and borrowings, trade and other payables and derivative financial instruments.






(ii) Currency risk (cont’d)

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in EUR, USD, TZN and KES with an effect of a 5% (2020: 5%) possible movement up or down of the currency against the MUR with all other variables held constant. The impact on the Group’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The Group’s exposure to foreign currency changes for all other currencies is not material.

THE GROUP

2021 2020

Change in rate

Impact on pre-tax profit

Change in rate


Rs’000 Rs’000

EUR +10% 5,508 +5% 7,879

USD +5% (38,067) +5% (19,970)

GBP +20% 1,172 +5% 160

TZN +10% (138,577) +5% (48,548)

KES +5% (80,737) +5% (70,831)

ZAR +25% (7,479) +5% (352)

(iii) Equity price risk

The Group and the Company’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Group and the Company manage the equity price risk through diversification. The Group and the Company’s Board of Directors reviews and approves all equity investment decisions.

Sensitivity analysis

Sensitivity analysis of these investments in non-listed equities is as follows:

THE GROUP

LEVEL 3

At June 30, 2021, the Group holds Rs 3.4m (2020: Rs 8.4m) unquoted financial assets at fair value through OCI. The fair value has been valued on a net assets basis based on latest available financial statements. Had the fair value increased / decreased by 1%, (2020: 1%), the fair value of unquoted financial assets at FVOCI would increase/decrease by Rs 34k (2020: Rs 84k).






(ii) Currency risk (cont’d)

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in EUR, USD, TZN and KES with an effect of a 5% (2020: 5%) possible movement up or down of the currency against the MUR with all other variables held constant. The impact on the Group’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The Group’s exposure to foreign currency changes for all other currencies is not material.

THE GROUP

2021 2020

Change in rate


Change in rate


Rs’000 Rs’000

EUR +10% 5,508 +5% 7,879

USD +5% (38,067) +5% (19,970)

GBP +20% 1,172 +5% 160

TZN +10% (138,577) +5% (48,548)

KES +5% (80,737) +5% (70,831)

ZAR +25% (7,479) +5% (352)

(iii) Equity price risk

The Group and the Company’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Group and the Company manage the equity price risk through diversification. The Group and the Company’s Board of Directors reviews and approves all equity investment decisions.


Sensitivity analysis of these investments in non-listed equities is as follows:

THE GROUP

LEVEL 3

At June 30, 2021, the Group holds Rs 3.4m (2020: Rs 8.4m) unquoted financial assets at fair value through OCI. The fair value has been valued on a net assets basis based on latest available financial statements. Had the fair value increased / decreased by 1%, (2020: 1%), the fair value of unquoted financial assets at FVOCI would increase/decrease by Rs 34k (2020: Rs 84k).





(iii) Equity price risk (cont’d)

Sensitivity analysis (cont’d)

THE COMPANY

The sensitivity below is for investment in subsidiaries, joint ventures and associates measured at fair value through OCI.

LEVEL 3

Fair value at June 30, 2021

Valuation approach

Key unobservable inputs

Range of unobservable

inputsSensitivity of the input to fair

value

Rs’000 % Rs’000

Sugar 21,873,135 DCF Discount rate 9.19% - 16.66% 5% (156,300)

(5%) 246,528

Revenue growth 3.0% - 5.9% 5% 93,016

(5%) (88,464)

Energy 457,123 DCF Discount rate 8.60% 5% (25,446)

(5%) (9,857)

Revenue growth 2% 5% 4,205

(5%) (4,674)

Property 2,109,004 DCF Discount rate 10.31% - 12.91% 5% (13,716)

(5%) 3,975

Revenue growth 3.5% - 5.0% 5% 6,090

(5%) (5,897)

Fair value at June 30, 2020

Valuation approach

Key unobservable inputs



value

Rs’000 % Rs’000

Sugar 20,364,812 DCF Discount rate 10.92% - 16.62% 5% (259,523)

(5%) 280,203

Revenue growth 3.5% - 5.3% 5% 70,227

(5%) (68,310)

Energy 419,366 DCF Discount rate 10.44% 5% (6,879)

(5%) 7,587

Revenue growth 3.5% - 5.3% 5% 4,991

(5%) (4,832)

Property 2,046,920 DCF Discount rate 9.74% - 12.04% 5% (11,965)

(5%) 13,050

Revenue growth 3.5% - 5.3% 5% 8,943

(5%) (8,576)

(iv) Commodity price risk

The Group is affected by the price volatility of certain commodities. Its sugar operations are ultimately exposed to the sugar price on the world market, and particularly the EU market. The EU sugar market conditions have deteriorated over the year and have experienced higher volatility since the abolition of production quotas for EU beet sugar producers on October 1, 2017. The Group mitigates this risk through a strategy of diversification of markets and revenue sources.






(iv) Commodity price risk (cont’d)


The table below summarises the impact of increases / (decreases) in the price of sugar on the Group. The analysis is based on the assumption that the price of sugar had increased / decreased by 8% (2020: 8%).

THE GROUP

Impact on profit or loss Impact on equity

2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000

Price of sugar 366,521 293,813 366,521 293,813

Limitation of sensitivity analyses

Sensitivity analyses in respect of market risk demonstrate the effect of a change in a key assumption while other assumptions remain unchanged. In reality, there is a correlation between the assumptions and other factors. It should also be noted that these sensitivities are non-linear, and larger or smaller impacts should not be interpolated or extrapolated from these results.

Sensitivity analyses do not take into consideration that the Group’s assets and liabilities are managed. Other limitations include the use of hypothetical market movements to demonstrate potential risk that only represent the Group’s view of possible near-term market changes that cannot be predicted with any certainty.

(b) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s trade and other receivables and cash and cash equivalents.

For the sugar and energy sectors, the Group has a concentration of credit risk since its main debtors are the Mauritius Sugar Syndicate and the Central Electricity Board. The Group does not expect any losses from non-performance of these debtors since they are reputable government institutions and settlement of invoices are done within 30 days.

The maximum exposure to credit risk is summarised as follows:


2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000

Trade and other receivables 1,569,913 1,569,364 15,387 232,392

Contract assets 53,866 81,353 - -

Cash and cash equivalents 532,255 1,017,474 387,245 205,193

2,156,034 2,668,191 402,632 437,585

Farmers loans and trade and other receivables

Customer credit risk is managed based on the Group’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored.

An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns. The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions.






(iv) Commodity price risk (cont’d)


The table below summarises the impact of increases / (decreases) in the price of sugar on the Group. The analysis is based on the assumption that the price of sugar had increased / decreased by 8% (2020: 8%).

THE GROUP

Impact on profit or loss Impact on equity

2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000

Price of sugar 366,521 293,813 366,521 293,813

Limitation of sensitivity analyses

Sensitivity analyses in respect of market risk demonstrate the effect of a change in a key assumption while other assumptions remain unchanged. In reality, there is a correlation between the assumptions and other factors. It should also be noted that these sensitivities are non-linear, and larger or smaller impacts should not be interpolated or extrapolated from these results.

Sensitivity analyses do not take into consideration that the Group’s assets and liabilities are managed. Other limitations include the use of hypothetical market movements to demonstrate potential risk that only represent the Group’s view of possible near-term market changes that cannot be predicted with any certainty.

(b) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s trade and other receivables and cash and cash equivalents.

For the sugar and energy sectors, the Group has a concentration of credit risk since its main debtors are the Mauritius Sugar Syndicate and the Central Electricity Board. The Group does not expect any losses from non-performance of these debtors since they are reputable government institutions and settlement of invoices are done within 30 days.

The maximum exposure to credit risk is summarised as follows:


2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000

Trade and other receivables 1,569,913 1,569,364 15,387 232,392

Contract assets 53,866 81,353 - -

Cash and cash equivalents 532,255 1,017,474 387,245 205,193

2,156,034 2,668,191 402,632 437,585

Farmers loans and trade and other receivables

Customer credit risk is managed based on the Group’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored.

An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns. The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions.




(b) Credit risk (cont’d)

Generally, trade receivables are written-off if past due for more than one year and are not subject to enforcement activity. The Group does not hold collateral as security on these balances. Farmers’ loans comprise principal and accrued interest and are generally repaid over 3 crop cycle which varies between 3 to 5 years. A significant portion of these loans are not yet due for recovery through the first crop cycle. Management have estimated expected credit loss rate to be based on unrecovered loans after the third crop cycle.

Set out below is the information about the credit risk exposure on the farmers’ loans and trade receivables and other receivables using a provision matrix:

Trade receivables

June 30, 2021Less than

30 days 31 to 60 days 61 to 90 days Over 90 days Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Expected credit loss rate 0% 0% 0% 51%Estimated total gross carrying amount at default 26,835 4,730 2,418 18,228 52,211

Expected credit loss - - - (9,351) (9,351)

Net carrying amount 26,835 4,730 2,418 8,877 42,860

Farmers’ loansJune 30, 2021 Within 24

monthsBetween 24 and

36 monthsBetween 36 and

48 months Over 48 months Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000Expected credit loss rate 6% 5% 17% 43%Estimated total gross carrying amount at default 64,328 139,822 88,809 62,900 355,859 Expected credit loss (3,636) (6,372) (15,451) (27,012) (52,471)


ECL on farmers’ loans amounting to Rs (14.6)m m and Rs 20.4 m have been allocated to financial assets at amortised cost (note 13) and trade and other receivables (note 17) respectively.

Other receivables

Rs’000

Expected credit loss rate 19%

Estimated total gross carrying amount at default 146,671

Expected credit loss (27,874)

Net carrying amount 118,797






Trade and other receivables

June 30, 2020Less than 30

days 31 to 60 days 61 to 90 days Over 90 days Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Expected credit loss rate 0% 0% 0% 76%

Estimated total gross carrying amount at default 8,974 7,306 379 17,715 34,374


Net carrying amount 8,974 7,306 379 4,261 20,920

Farmers’ loans

June 30, 2020Within 24




Rs’000 Rs’000 Rs’000 Rs’000 Rs’000


Estimated total gross carrying amount at default 185,745 111,195 44,766 23,204 364,910

Expected credit loss (9,843) (14,203) (20,891) (19,003) (63,940)


ECL on farmers’ loans amounting to Rs 16.5m and Rs 46.2m have been allocated to financial assets at amortised cost (note 13) and trade and other receivables (note 17) respectively.

Other receivables

Rs’000





Except for the above, the Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history and to limit the amount of credit exposure to any one financial institution.






Trade and other receivables

June 30, 2020Less than 30

days 31 to 60 days 61 to 90 days Over 90 days Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000


Estimated total gross carrying amount at default 8,974 7,306 379 17,715 34,374


Net carrying amount 8,974 7,306 379 4,261 20,920

Farmers’ loans

June 30, 2020Within 24




Rs’000 Rs’000 Rs’000 Rs’000 Rs’000


Estimated total gross carrying amount at default 185,745 111,195 44,766 23,204 364,910

Expected credit loss (9,843) (14,203) (20,891) (19,003) (63,940)


ECL on farmers’ loans amounting to Rs 16.5m and Rs 46.2m have been allocated to financial assets at amortised cost (note 13) and trade and other receivables (note 17) respectively.

Other receivables

Rs’000





Except for the above, the Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history and to limit the amount of credit exposure to any one financial institution.




(c) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivery of cash or another financial asset.

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

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

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

THE GROUPLess than

1 yearBetween 1 and 2 years

Between 2 and 5 years Over 5 years Total

At June 30, 2021 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Money market deal 44 - - - 44

Bank overdraft 961,886 - - - 961,886

Trade and other payables 1,821,430 - - - 1,821,430

Bank loans 1,046,260 758,084 2,271,831 429,920 4,506,095

Debentures* 571,920 47,120 1,041,760 - 1,660,800

Shareholders’ loan 1,304 31,229 - - 32,533

Derivative financial instruments 122,823 - - - 122,823

Lease liabilities 92,429 76,755 148,536 113,557 431,277

Total 4,618,096 913,188 3,462,127 543,477 9,536,888

THE GROUPLess than




Money market deal 99,997 - - - 99,997

Bank overdraft 1,632,034 - - - 1,632,034

Trade and other payables 1,847,301 - - - 1,847,301

Bank loans 587,296 501,543 2,772,593 243,825 4,105,257

Debentures* 124,400 571,920 1,088,880 - 1,785,200

Shareholders’ loan - - 29,927 - 29,927

Derivative financial instruments 74,593 - - - 74,593


Total 4,432,587 1,118,770 3,946,202 304,288 9,801,847

*Debentures include Rs 210m (2020: Rs 285m) of interests.

Bank loans are indicated at their carrying amount per the statement of financial position as they carry variable interest rates.





(c) Liquidity risk (cont’d)

THE COMPANYLess than




Debentures 571,920 47,120 1,041,760 - 1,660,800

Loans at call 201,016 - - - 201,016


Trade and other payables 31,527 - - - 31,527

Total 812,376 55,276 1,052,825 10,926 1,931,403





Debentures 124,400 571,920 1,088,880 - 1,785,200

Loans at call 171,412 - - - 171,412

Bank overdraft 2,338 - - - 2,338



Total 404,529 574,536 1,090,298 9,824 2,079,187

3.2 Capital risk management

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

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

Consistently with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt over total equity and net debt. Net debt is calculated as total debt (as shown in ‘the statements of financial position) less cash and cash equivalents. Adjusted capital comprises all components of equity (i.e. share capital, retained earnings and reserves).

The gearing ratios at June 30, 2021 and at June 30, 2020 were as follows:


2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000

Total loans and borrowings 7,283,881 7,527,105 1,689,076 1,695,433

Less: cash and cash equivalent (532,255) (1,017,474) (387,245) (205,193)

Net debt 6,751,626 6,509,631 1,301,831 1,490,240

Equity 18,660,549 17,242,709 23,233,122 21,631,899

Gearing ratio 0.27 0.27 0.05 0.06

The Group is not subject to externally imposed capital requirements.

No changes were made in the objectives, policies or processes for managing capital during the years ended June 30, 2021 and 2020.





(c) Liquidity risk (cont’d)





Debentures 571,920 47,120 1,041,760 - 1,660,800

Loans at call 201,016 - - - 201,016



Total 812,376 55,276 1,052,825 10,926 1,931,403





Debentures 124,400 571,920 1,088,880 - 1,785,200

Loans at call 171,412 - - - 171,412

Bank overdraft 2,338 - - - 2,338



Total 404,529 574,536 1,090,298 9,824 2,079,187

3.2 Capital risk management

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

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

Consistently with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt over total equity and net debt. Net debt is calculated as total debt (as shown in ‘the statements of financial position) less cash and cash equivalents. Adjusted capital comprises all components of equity (i.e. share capital, retained earnings and reserves).

The gearing ratios at June 30, 2021 and at June 30, 2020 were as follows:


2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000

Total loans and borrowings 7,283,881 7,527,105 1,689,076 1,695,433

Less: cash and cash equivalent (532,255) (1,017,474) (387,245) (205,193)

Net debt 6,751,626 6,509,631 1,301,831 1,490,240

Equity 18,660,549 17,242,709 23,233,122 21,631,899

Gearing ratio 0.27 0.27 0.05 0.06

The Group is not subject to externally imposed capital requirements.

No changes were made in the objectives, policies or processes for managing capital during the years ended June 30, 2021 and 2020.


4. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Other disclosures relating to the Group’s exposure to risks and uncertainties includes risk management in note 3.

In the process of applying the Group’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements. The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

4.1 Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including third party transaction values, earnings, net asset value or discounted cash flows, whichever is considered to be appropriate. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions relating to these factors could affect the reported fair value of financial instruments. See note 3.1(a)(iii) for further disclosures.

4.2 Impairment assessment of goodwill

The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in note 2(j). The calculation used pre-tax cash flow based on financial budgets approved by management covering a 5-year period and an assumed yearly growth rate. The discount rate calculation is based on the specific circumstances of the Group and its operating segments and is derived from its weighted average cost of capital (WACC). Further explanation are detailed in note 7(a)(ii).

4.3 Biological assets

(a) Bearer biological assets

Bearer biological assets, included in property, plant and equipment are depreciated over their useful life. The actual life of the bearers are assessed annually, taking into account the life cycle of the ratoons, yields, estimated price of sugar and a discount rate. The carrying amount of bearer biological assets at June 30, 2021 is Rs 696m (2020: Rs 376m).



4. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES (CONTINUED)

4.3 Biological assets (cont’d)

(b) Consumable biological assets - Standing canes

The fair value of consumable biological assets has been arrived at by discounting the present value of expected net cash flows from standing canes at the relevant market determined pre-tax rate. At June 30, 2021, consumable biological assets amounted to Rs 3,070m (2020: Rs 2,383m).

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

4.4 Asset lives and residual values

Property, plant and equipment are depreciated over its useful life taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In reassessing assets lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as historical experience, future market conditions, the remaining life of the asset and projected disposal values. Consideration is also given to the extent of current profits and losses on the disposal of similar assets. Assets such as property, plant and equipment and intangible assets are considered for impairment when there is an indication. Refer to note 5 for futher disclosures.

Factors taken into consideration in reaching such a decision include the economic viability of the asset itself and where it is a component of a larger economic unit, the viability of that unit itself.

4.5 Pension benefits

The cost of the defined benefit pension plans and other post-employment medical benefits and the present value of the pension obligation are determined using actuarial valuations. An actuarial valuation involves making assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The Group has both funded and unfunded obligations. For the funded obligations, the Group participates in the Sugar Industry Pension Fund, the IBL Pension Fund and CIEL Group Segregated Pension Fund, registered under the Private Pension Fund Act, the assets of which are held independently. The pension plans are funded from payments from the employees and the Group, taking into account the recommendations of an independent actuary, namely SWAN Life Ltd. The unfunded liability relates to employees who are entitled to retirement gratuities payable under the Workers’ Right Act 2019. The pension scheme is a defined benefit scheme. Refer to note 23 for further disclosures.



4. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES (CONTINUED)

4.3 Biological assets (cont’d)

(b) Consumable biological assets - Standing canes

The fair value of consumable biological assets has been arrived at by discounting the present value of expected net cash flows from standing canes at the relevant market determined pre-tax rate. At June 30, 2021, consumable biological assets amounted to Rs 3,070m (2020: Rs 2,383m).

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

4.4 Asset lives and residual values

Property, plant and equipment are depreciated over its useful life taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In reassessing assets lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as historical experience, future market conditions, the remaining life of the asset and projected disposal values. Consideration is also given to the extent of current profits and losses on the disposal of similar assets. Assets such as property, plant and equipment and intangible assets are considered for impairment when there is an indication. Refer to note 5 for futher disclosures.

Factors taken into consideration in reaching such a decision include the economic viability of the asset itself and where it is a component of a larger economic unit, the viability of that unit itself.

4.5 Pension benefits

The cost of the defined benefit pension plans and other post-employment medical benefits and the present value of the pension obligation are determined using actuarial valuations. An actuarial valuation involves making assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The Group has both funded and unfunded obligations. For the funded obligations, the Group participates in the Sugar Industry Pension Fund, the IBL Pension Fund and CIEL Group Segregated Pension Fund, registered under the Private Pension Fund Act, the assets of which are held independently. The pension plans are funded from payments from the employees and the Group, taking into account the recommendations of an independent actuary, namely SWAN Life Ltd. The unfunded liability relates to employees who are entitled to retirement gratuities payable under the Workers’ Right Act 2019. The pension scheme is a defined benefit scheme. Refer to note 23 for further disclosures.


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

4.6 Fair value of land included in property, plant and equipment and investment properties

The Group carries its investment properties at fair value, with changes in fair value being recognised in the statement of profit or loss. In addition, it measures land in property plant ane equipment at revalued amounts with changes in fair value being recognised in the statements of other comprehensive income. The Group engaged independent valuation specialists to determine fair value as at June 30, 2021. For investment properties, the valuer used a valuation technique based on open-market value and income capitalisation method. Refer to note 5 and 6 for further disclosures.

4.7 Provision for expected credit losses

The Group uses a provision matrix to calculate expected credit losses (ECLs) for trade and other receivables and farmers’ loans. The provision rates are based on days past due for groupings of various customer/ farmer segments that have similar loss patterns.

The provision matrix is initially based on the Group’s historical observed default rates. The Group will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. For instance, if forecast area under cultivation (i.e. expected tonnage) or sugar prices are expected to deteriorate over the next year which can lead to an increased number of defaults of farmers, the historical default rates are adjusted. At each reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future. Refer to notes 13 and 17 for further disclosures.

4.8 Deferred tax on investment properties

For the purposes of measuring deferred tax liabilities or deferred tax assets arising from investment properties, the directors reviewed the Group’s investment property portfolio and concluded that none of the Group’s investment properties are held under a business model whose objective is to consume substantially all of the economic benefits embodied in the investment properties over time, rather than through sale. Therefore, in determining the Group’s deferred taxation on investment properties, the directors have determined that the presumption that the carrying amounts of investment properties measured using the fair value model are recovered entirely through sale is not rebutted. As a result, the Group has not recognised any deferred taxes on changes in fair value of investment properties as the Group is not subject to any capital gain taxes on disposal of its investment properties.

4.9 Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs of disposing of the asset. The value-in-use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the performance of the assets of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. The key assumptions used to determine the recoverable amount for the different CGUs, including a sensitivity analysis, are disclosed and further explained in Note 41.




4.10 Consolidation of entities in which the Group holds less than a majority of voting right

The Group considers that it controls TPC Limited and Transmara Sugar Company Limited even though it owns less than 50% of the voting right. This is because the Group has the power over the investees in that it has existing rights that give it the ability to direct the relevant activities and also the power over the investees to affect the amounts of the Group’s returns. Refer to note 8 for futher disclosures.

4.11 Revenue recognition - sale of villas

The Group concluded that revenue from construction and sale of villas is to be recognized over time because the villa sold has no alternative use for the customer since the Group cannot contractually direct it to a third party. Control to the customer passes over time and the customer takes final delivery of the villa at the end of the construction. The Group has an unconditional right to payment at the end of each stage of construction. Therefore, the percentage of completion method is utilised to recognise revenue on long-term contracts.

As the contract progresses, a provision for maintenance is made to be used during the defect liability period. Such a provision is assessed by management and is based on the risk element of individual contract.

In accordance with the accounting policy when it is probable that the total contract cost will exceed total contract revenue, management makes its best forecast of such costs and the total expected loss on the contract is recognised as an expense immediately. Refer to note 28 for further disclosures.

4.12 Deferred tax assets

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority.The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Refer to note 14 for further disclosures.




4.10 Consolidation of entities in which the Group holds less than a majority of voting right

The Group considers that it controls TPC Limited and Transmara Sugar Company Limited even though it owns less than 50% of the voting right. This is because the Group has the power over the investees in that it has existing rights that give it the ability to direct the relevant activities and also the power over the investees to affect the amounts of the Group’s returns. Refer to note 8 for futher disclosures.

4.11 Revenue recognition - sale of villas

The Group concluded that revenue from construction and sale of villas is to be recognized over time because the villa sold has no alternative use for the customer since the Group cannot contractually direct it to a third party. Control to the customer passes over time and the customer takes final delivery of the villa at the end of the construction. The Group has an unconditional right to payment at the end of each stage of construction. Therefore, the percentage of completion method is utilised to recognise revenue on long-term contracts.

As the contract progresses, a provision for maintenance is made to be used during the defect liability period. Such a provision is assessed by management and is based on the risk element of individual contract.

In accordance with the accounting policy when it is probable that the total contract cost will exceed total contract revenue, management makes its best forecast of such costs and the total expected loss on the contract is recognised as an expense immediately. Refer to note 28 for further disclosures.

4.12 Deferred tax assets

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority.The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Refer to note 14 for further disclosures.


4.13 Leases- estimating the incremental borrowing rate

The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary’s functional currency). The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary’s stand-alone credit rating).

4.14 Uncertain tax position

There are some uncertainties in respect of the interpretation of the complex tax regulations and changes in tax laws on foreign withholding tax and deemed interest that the Group has adopted. The Group has applied its judgement and where applicable, obtained concurrence on the different interpretations adopted from their tax advisors. In so doing, the Group has considered as to whether acceptance by the taxation authorities is probable; or the decision to apply the ‘most likely amount’ or ‘expected value’ method to reflect the uncertainty.




5. PROPERTY, PLANT AND EQUIPMENT

THE GROUP Freehold

land

Buildings on leasehold

landAgricultural equipment

Motor vehicles

Plant and machinery

Power generation

plantFurniture and

equipmentComputer equipment

Land improvement and derocking

project Golf course Bearer plants

Expansion project and

work in progress Total

Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000

COST AND VALUATION

At July 1, 2020 11,636,510 2,928,577 746,311 1,588,790 4,741,940 1,805,854 351,765 79,929 543,947 377,492 1,486,564 144,196 26,431,875

Additions 8,599 78,545 32,578 271,425 86,574 - 6,815 5,434 59,226 - 200,581 115,971 865,748

Disposals (22,513) - (15,520) (7,917) (2,576) (213) (6,740) (138) - - - (2,874) (58,491)

Transfers to right-of-use - - (46,489) 37,240 (16,000) - - - - - - (15,132) (40,381)

Fully depreciated assets - - - - - - - - - - (444,714) - (444,714)

Exchange difference 713 104,809 - 75,779 194,131 - 17,069 4,421 - - 37,922 10,899 445,743

At June 30, 2021 11,623,309 3,111,931 716,880 1,965,317 5,004,069 1,805,641 368,909 89,646 603,173 377,492 1,280,353 253,060 27,199,780

ACCUMULATED DEPRECIATION

At July 1, 2020 - 1,103,309 525,344 1,208,844 2,354,680 1,697,316 280,498 63,017 257,329 - 1,110,543 - 8,600,880

Charge for the year - 78,923 31,791 147,021 238,981 72,485 16,297 6,921 21,804 135,203 - 749,426

Disposals - - (14,907) (7,887) (1,897) - (6,722) (138) - - - - (31,551)

Transfers - - (4,649) 18,197 (9,425) - - - - - - - 4,123


Reversal of impairment (note 41) - (2,870) - - (11,533) - - - - - (234,148) - (248,551)

Exchange difference - 24,601 - 58,316 84,771 - 13,821 3,511 - - 16,993 - 202,013

At June 30, 2021 - 1,203,963 537,579 1,424,491 2,655,577 1,769,801 303,894 73,311 279,133 - 583,877 - 8,831,626

NET BOOK VALUE

At June 30, 2021 11,623,309 1,907,968 179,301 540,826 2,348,492 35,840 65,015 16,335 324,040 377,492 696,476 253,060 18,368,154



5. PROPERTY, PLANT AND EQUIPMENT

THE GROUP Freehold

land



Motor vehicles

Plant and machinery

Power generation

plantFurniture and







COST AND VALUATION

At July 1, 2020 11,636,510 2,928,577 746,311 1,588,790 4,741,940 1,805,854 351,765 79,929 543,947 377,492 1,486,564 144,196 26,431,875

Additions 8,599 78,545 32,578 271,425 86,574 - 6,815 5,434 59,226 - 200,581 115,971 865,748

Disposals (22,513) - (15,520) (7,917) (2,576) (213) (6,740) (138) - - - (2,874) (58,491)

Transfers to right-of-use - - (46,489) 37,240 (16,000) - - - - - - (15,132) (40,381)



At June 30, 2021 11,623,309 3,111,931 716,880 1,965,317 5,004,069 1,805,641 368,909 89,646 603,173 377,492 1,280,353 253,060 27,199,780


At July 1, 2020 - 1,103,309 525,344 1,208,844 2,354,680 1,697,316 280,498 63,017 257,329 - 1,110,543 - 8,600,880

Charge for the year - 78,923 31,791 147,021 238,981 72,485 16,297 6,921 21,804 135,203 - 749,426

Disposals - - (14,907) (7,887) (1,897) - (6,722) (138) - - - - (31,551)

Transfers - - (4,649) 18,197 (9,425) - - - - - - - 4,123


Reversal of impairment (note 41) - (2,870) - - (11,533) - - - - - (234,148) - (248,551)


At June 30, 2021 - 1,203,963 537,579 1,424,491 2,655,577 1,769,801 303,894 73,311 279,133 - 583,877 - 8,831,626

NET BOOK VALUE

At June 30, 2021 11,623,309 1,907,968 179,301 540,826 2,348,492 35,840 65,015 16,335 324,040 377,492 696,476 253,060 18,368,154



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

THE GROUP Freehold

land



Motor vehicles

Plant and machinery

Power generation

plant

Furniture and







COST AND VALUATION

At July 1, 2019 12,740,340 2,749,011 697,402 1,609,372 5,185,704 1,802,303 367,368 79,410 508,290 377,492 1,299,127 152,479 27,568,298

Impact on adoption of IFRS 16 - - - (228,586) - - - - - - - - (228,586)

12,740,340 2,749,011 697,402 1,380,786 5,185,704 1,802,303 367,368 79,410 508,290 377,492 1,299,127 152,479 27,339,712

Additions 1,640 5,995 61,769 65,405 33,410 3,338 600 2,530 35,657 - 144,749 192,706 547,799

Disposals (100,072) (43,197) (12,860) (25,433) (767,313) - (531) (372) - - - - (949,778)

Revaluation surplus 336,015 - - - - - - - - - - - 336,015

Transfers - 75,403 - 65,590 47,279 213 22,778 2,594 - - - (213,857) -

Transfers to investment properties (1,342,124) - - - - - - - - - - - (1,342,124)

Fully depreciated assets - - - - (28,664) - (61,229) (10,195) - - - - (100,088)


At June 30, 2020 11,636,510 2,928,577 746,311 1,588,790 4,741,940 1,805,854 351,765 79,929 543,947 377,492 1,486,564 144,196 26,431,875


At July 1, 2019 - 1,040,845 502,913 1,200,519 2,811,058 1,624,831 307,587 63,434 237,875 - 968,627 - 8,757,689


- 1,040,845 502,913 1,047,881 2,811,058 1,624,831 307,587 63,434 237,875 - 968,627 - 8,605,051

Charge for the year - 75,628 35,290 112,415 233,371 72,485 15,905 5,538 19,454 - 123,956 - 694,042

Disposals - (43,197) (12,859) (24,347) (767,243) - (499) (372) - - - - (848,517)



At June 30, 2020 - 1,103,309 525,344 1,208,844 2,354,680 1,697,316 280,498 63,017 257,329 - 1,110,543 - 8,600,880

NET BOOK VALUE

At June 30, 2020 11,636,510 1,825,268 220,967 379,946 2,387,260 108,538 71,267 16,912 286,618 377,492 376,021 144,196 17,830,995




THE GROUP Freehold

land



Motor vehicles

Plant and machinery

Power generation

plant

Furniture and







COST AND VALUATION

At July 1, 2019 12,740,340 2,749,011 697,402 1,609,372 5,185,704 1,802,303 367,368 79,410 508,290 377,492 1,299,127 152,479 27,568,298


12,740,340 2,749,011 697,402 1,380,786 5,185,704 1,802,303 367,368 79,410 508,290 377,492 1,299,127 152,479 27,339,712

Additions 1,640 5,995 61,769 65,405 33,410 3,338 600 2,530 35,657 - 144,749 192,706 547,799

Disposals (100,072) (43,197) (12,860) (25,433) (767,313) - (531) (372) - - - - (949,778)

Revaluation surplus 336,015 - - - - - - - - - - - 336,015

Transfers - 75,403 - 65,590 47,279 213 22,778 2,594 - - - (213,857) -

Transfers to investment properties (1,342,124) - - - - - - - - - - - (1,342,124)



At June 30, 2020 11,636,510 2,928,577 746,311 1,588,790 4,741,940 1,805,854 351,765 79,929 543,947 377,492 1,486,564 144,196 26,431,875


At July 1, 2019 - 1,040,845 502,913 1,200,519 2,811,058 1,624,831 307,587 63,434 237,875 - 968,627 - 8,757,689


- 1,040,845 502,913 1,047,881 2,811,058 1,624,831 307,587 63,434 237,875 - 968,627 - 8,605,051

Charge for the year - 75,628 35,290 112,415 233,371 72,485 15,905 5,538 19,454 - 123,956 - 694,042

Disposals - (43,197) (12,859) (24,347) (767,243) - (499) (372) - - - - (848,517)



At June 30, 2020 - 1,103,309 525,344 1,208,844 2,354,680 1,697,316 280,498 63,017 257,329 - 1,110,543 - 8,600,880

NET BOOK VALUE

At June 30, 2020 11,636,510 1,825,268 220,967 379,946 2,387,260 108,538 71,267 16,912 286,618 377,492 376,021 144,196 17,830,995




THE COMPANYFurniture and

equipmentComputer equipment Total

Rs'000 Rs'000 Rs'000COST AND VALUATIONAt July 1, 2020 70 1,418 1,488 Additions 475 86 561 At June 30, 2021 545 1,504 2,049 DEPRECIATIONAt July 1, 2020 13 412 425 Charge for the year 145 319 464 At June 30, 2021 158 731 889 NET BOOK VALUEAt June 30, 2021 387 773 1,160

Furniture and equipment

Computer equipment Total

Rs'000 Rs'000 Rs'000COST AND VALUATIONAt July 1, 2019 - 1,313 1,313 Additions 70 105 175 At June 30, 2020 70 1,418 1,488 DEPRECIATIONAt July 1, 2019 - 106 106 Charge for the year 13 306 319 At June 30, 2020 13 412 425 NET BOOK VALUEAt June 30, 2020 57 1,006 1,063

(a) Cost and valuation(i) Freehold land has been valued by Ramiah-Isabel Consultancy Ltd, chartered land valuers, in June 2020 based on sales comparable.

The revaluation surplus was credited to revaluation reserve. The Directors consider that the Rs 11.6bn carrying of land is equivalent to its fair value as the underlying market conditions have not changed considerably from those present in June 2020. The main key input to fair value land was price per Hectare

(ii) Borrowings are secured by floating charges on the asset of the Group, including property, plant and equipment (note 22).(iii) The depreciation charge for the year has been recognised in the statements of profit or loss.(iv) If the freehold land was stated on the historical cost basis, the amounts would be as follows:

2021 2020THE GROUP Rs'000 Rs'000At July 1, 5,487,961 5,545,527 Additions 8,599 1,640 Disposals (14,048) (59,206)At June 30, 5,482,512 5,487,961

Freehold land2021 2020

Level 2 Rs'000 Rs'000FAIR VALUE

At June 30, 11,623,309 11,636,510

(v) Bearer plants represent replantation expenditure for canes that have an expected life cycle of 4 years and 9 years for TPC Limited and Alteo Agri Ltd respectively, as they would normally generate 4 - 9 years of crop harvest. Such biological assets are measured at cost (direct costs incurred including cost of purchase if any) less any accumulated depreciation and any accumulated impairment losses.

(vi) In 2020, management has performed an exercise to identify land that would be used for future land development. Consequently, all land earmarked for future development had been transferred under investment properties.




THE COMPANYFurniture and

equipmentComputer equipment Total

Rs'000 Rs'000 Rs'000COST AND VALUATIONAt July 1, 2020 70 1,418 1,488 Additions 475 86 561 At June 30, 2021 545 1,504 2,049 DEPRECIATIONAt July 1, 2020 13 412 425 Charge for the year 145 319 464 At June 30, 2021 158 731 889 NET BOOK VALUEAt June 30, 2021 387 773 1,160

Furniture and equipment

Computer equipment Total

Rs'000 Rs'000 Rs'000COST AND VALUATIONAt July 1, 2019 - 1,313 1,313 Additions 70 105 175 At June 30, 2020 70 1,418 1,488 DEPRECIATIONAt July 1, 2019 - 106 106 Charge for the year 13 306 319 At June 30, 2020 13 412 425 NET BOOK VALUEAt June 30, 2020 57 1,006 1,063

(a) Cost and valuation(i) Freehold land has been valued by Ramiah-Isabel Consultancy Ltd, chartered land valuers, in June 2020 based on sales comparable.

The revaluation surplus was credited to revaluation reserve. The Directors consider that the Rs 11.6bn carrying of land is equivalent to its fair value as the underlying market conditions have not changed considerably from those present in June 2020. The main key input to fair value land was price per Hectare

(ii) Borrowings are secured by floating charges on the asset of the Group, including property, plant and equipment (note 22).(iii) The depreciation charge for the year has been recognised in the statements of profit or loss.(iv) If the freehold land was stated on the historical cost basis, the amounts would be as follows:

2021 2020THE GROUP Rs'000 Rs'000At July 1, 5,487,961 5,545,527 Additions 8,599 1,640 Disposals (14,048) (59,206)At June 30, 5,482,512 5,487,961

Freehold land2021 2020

Level 2 Rs'000 Rs'000FAIR VALUE

At June 30, 11,623,309 11,636,510

(v) Bearer plants represent replantation expenditure for canes that have an expected life cycle of 4 years and 9 years for TPC Limited and Alteo Agri Ltd respectively, as they would normally generate 4 - 9 years of crop harvest. Such biological assets are measured at cost (direct costs incurred including cost of purchase if any) less any accumulated depreciation and any accumulated impairment losses.

(vi) In 2020, management has performed an exercise to identify land that would be used for future land development. Consequently, all land earmarked for future development had been transferred under investment properties.



(b) Accounting policy

Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses, except for land. Such cost includes the cost of replacing part of the property and plant and equipment . When significant parts of property, plant and equipment are required to be replaced at intervals, the Group recognises such parts as individual assets with specific useful lives and depreciates them separately. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

Land is measured at fair value. Independent valuations are performed every 2 years and management makes an assessment of revaluation of land to ensure that the fair value of a revalued asset does not differ materially from its carrying amount. A revaluation surplus is recorded in OCI and credited to the revaluation surplus in equity. However, to the extent that it reverses a revaluation deficit of the same asset previously recognised in profit or loss, the increase is recognised in profit or loss. A revaluation deficit is recognised in the statements of profit or loss, except to the extent that it offsets an existing surplus on the same asset recognised in the revaluation surplus.

Expansion projects and work in progress relate to expenditure on plant and machinery and are not depreciated because they are not yet available for use. They are transferred to property, plant and equipment once they become available for use.

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

Leasehold buildings 2% - 5%Agricultural equipment 5% - 20%Motor vehicles 10% - 25%Plant and machinery 5% - 20%Power generation plant 4% - 10%Furniture and equipment 4% - 20%Computer equipment 25%Land improvement and land derocking project 4%Bearer plants 11.1% - 16.7%

Freehold land and golf course are not depreciated.The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively, if appropriate, at the end of each reporting period.

Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal.

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

6. INVESTMENT PROPERTIESTHE GROUP

2021 2020THE GROUP Level 2 Level 3 Total TotalFAIR VALUE Rs'000 Rs'000 Rs'000 Rs'000At July 1, 2,785,519 70,044 2,855,563 1,646,386 Transfer from property, plant and equipment (note 5) - - - 1,342,124 Transfer to inventories - - - (133,747)Disposal (2,736) (31,071) (33,807) - Fair value movement (note 33) - (13,581) (13,581) 800 At June 30, 2,782,783 25,392 2,808,175 2,855,563

(i) No direct operating expenses were incurred on the investment properties during the year. Rental income derived from investment properties have been disclosed in note 36.

(ii) Investment properties classified at level 2 of the fair value hierarchy have been revalued by Ramiah-Isabel Consultancy Ltd in June 2021 based on sales comparable. The main key input to fair value land was price per Hectare.

(iii) Investment properties classified at level 3 of the fair value hierarchy have been revalued using the income capitalisation method based on the lease rental income generated by the property using a discount rate of 5.85%.Had the discount rate increased / decreased by 1%, the fair value of investment properties classified at level 3 of the fair value hierarchy would have increased / decreased by Rs 704k (2020: Rs 151k).

(iv) Borrowings are secured by floating charges on the asset of the Group, including investment properties (note 22).



6. INVESTMENT PROPERTIES (CONT'D)

(iv) Land on which development works have begun with a view to sell have been transferred to inventories last year.

(v) The Group has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

(a) Accounting policy

Investment properties consist of land and building, held to earn rentals or for capital appreciation or both, and not occupied by the Group, are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are carried at fair value, representing sales comparable determined by external valuers. Changes in fair values are included in the statements of profit or loss in the period in which they arise.

The Group engaged independent valuation specialists to determine the fair values of investment properties as at June 30, 2021. The valuers used a valuation technique based on sales comparable.

Investment properties are derecognised either when they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of derecognition.

Transfers are made to (or from) investments properties only when there is a change in use.

7. INTANGIBLE ASSETS

THE GROUP

Land Conversion

Rights

Goodwill on acquisition of

subsidiary Total

COST Rs'000 Rs'000 Rs'000

At July 1, 2020 974,052 932,229 1,906,281

Exchange differences - 60,180 60,180

At June 30, 2021 974,052 992,409 1,966,461

IMPAIRMENT

At June 30, 2021 - - -

NET BOOK VALUE

At June 30, 2021 974,052 992,409 1,966,461

THE GROUP

Land Conversion

Rights


subsidiary Total


At July 1, 2019 974,052 828,840 1,802,892


At June 30, 2020 974,052 932,229 1,906,281

IMPAIRMENT

At June 30, 2020 - - -

NET BOOK VALUE

At June 30, 2020 974,052 932,229 1,906,281

Borrowings are secured by fixed charges on the assets of the Group, including Land Conversion Rights.



6. INVESTMENT PROPERTIES (CONT'D)

(iv) Land on which development works have begun with a view to sell have been transferred to inventories last year.

(v) The Group has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.


Investment properties consist of land and building, held to earn rentals or for capital appreciation or both, and not occupied by the Group, are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are carried at fair value, representing sales comparable determined by external valuers. Changes in fair values are included in the statements of profit or loss in the period in which they arise.

The Group engaged independent valuation specialists to determine the fair values of investment properties as at June 30, 2021. The valuers used a valuation technique based on sales comparable.

Investment properties are derecognised either when they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of derecognition.

Transfers are made to (or from) investments properties only when there is a change in use.

7. INTANGIBLE ASSETS

THE GROUP

Land Conversion

Rights


subsidiary Total


At July 1, 2020 974,052 932,229 1,906,281


At June 30, 2021 974,052 992,409 1,966,461

IMPAIRMENT

At June 30, 2021 - - -

NET BOOK VALUE

At June 30, 2021 974,052 992,409 1,966,461

THE GROUP

Land Conversion

Rights


subsidiary Total


At July 1, 2019 974,052 828,840 1,802,892


At June 30, 2020 974,052 932,229 1,906,281

IMPAIRMENT

At June 30, 2020 - - -

NET BOOK VALUE

At June 30, 2020 974,052 932,229 1,906,281

Borrowings are secured by fixed charges on the assets of the Group, including Land Conversion Rights.


7. INTANGIBLE ASSETS (CONT'D)


Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is the fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected in profits in the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statements of profit or loss in the expense category consistent with the function of the intangible asset.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Intangible assets of the Group, all have indefinite useful lives

(i) Land Conversion Rights

The reform of the sugar industry in the years 2000 necessitated redundancy payments in the form of cash and serviced land, as well as capital expenditure for capacity expansion and optimisation. These capital expenditure investments and expenses have been financed by debt. In order to assist the repayment of these debts, Government granted a tax exemption to the sugar industry when converting agricultural land into residential land in the form of Land Conversion Rights (“LCRs”). These LCRs are granted by the Mauritius Cane Industry Authority (MCIA) based on the qualifying costs incurred by an entity. The LCRs are assumed to have an indefinite useful life according to Sugar Industry Efficiency Act.

LCR is recognised as a non-current asset and is initially measured at fair value at the date on which the Company is entitled to receive those rights, that is when there is reasonable assurance that the LCR will be received and all the attached conditions will be complied with.

When the LCR relates to capital expenditure, the related grant is recognised as a deferred income in non-current liabilities and is released on a straight line basis over the expected useful life of the related asset.

LCRs are tested annually for impairment. When the carrying amount of the asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount.

LCRs are derecognised upon disposal (i.e. the date the recipient obtains control), used internally for converting agricultural land into residential land for land projects or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the LCR is included in the statements of profit or loss.

The carrying amount of Land Conversion Rights has been determined based on sales comparable.

The following table shows the key unobservable input used in the valuation model.

TypeKey unobservable

inputsUnobservable

inputSensitivity of the input to fair

value

2021 Rs'000

Land Conversion Rights Discount rate 8% +1% (40,000)

-1% 42,446 2020

Land Conversion Rights Discount rate 8% +1% (52,000)

-1% 138,914




(a) Accounting policy (cont'd)

(ii) Goodwill

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

Goodwill is tested annually for impairment. Goodwill is allocated to cash-generating units for the purpose of impairment testing.

Cash-generating unit 2021 2020

Rs'000 Rs'000 Transmara Sugar Company Limited 992,409 932,229

The carrying amount of goodwill has been determined based on fair value calculation. The calculation used post-tax cash flow based on financial budgets approved by management covering a 5-year period. A yearly growth rate of 5.9% (2020: 5.3%) has been assumed. The post-tax discount rate applied represents the current market assessment of the risks specific to each CGU, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the CGU and is derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Group's investors. The cost of debt is based on the interest-bearing borrowings the Group is obliged to service. The discount rate used is 15.99% (2020: 16.4%).

The key assumptions used for preparing the cash flow forecasts are based on management's past experience of the industry and the ability of the cash generating unit to at least maintain its market share as well as stable local and international economic conditions.

The following table shows the key unobservable inputs used in the valuation model.

Type

Key unobservable

inputsRange of unobservable


value

2021 Rs'000

Goodwill Growth rate 5.9% +10% 90,055

(10%) (80,108)

Discount rate 15.99% +5% (81,266)

(5%) 88,692

2020


(10%) (56,740)

Discount rate 16.4% +5% (69,709)

(5%) 75,497

8. INVESTMENT IN SUBSIDIARIES

THE COMPANY 2021 2020

Level 3 Rs'000 Rs'000

At July 1, 22,785,373 22,042,843

Share buy back* - (36,668)

Transfer from financial assets** (note 13) - 14,263

Fair value movement 1,547,992 764,935

At June 30, 24,333,365 22,785,373

*In 2020, the Company performed a share buy-back exercise in three of its subsidiaries, namely Alteo Refinery Ltd, Alteo Energy Ltd and Eastern Energy Company Limited.

**In 2020, the Company capitalised its shareholder loan in Anahita Estates Limited during the year.

The directors have assessed the fair value of the investment in subsidiaries using a discounted cash flow method. The sensitivity analysis has been disclosed in note 3.1(a)(iii).




(a) Accounting policy (cont'd)

(ii) Goodwill

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

Goodwill is tested annually for impairment. Goodwill is allocated to cash-generating units for the purpose of impairment testing.

Cash-generating unit 2021 2020

Rs'000 Rs'000 Transmara Sugar Company Limited 992,409 932,229

The carrying amount of goodwill has been determined based on fair value calculation. The calculation used post-tax cash flow based on financial budgets approved by management covering a 5-year period. A yearly growth rate of 5.9% (2020: 5.3%) has been assumed. The post-tax discount rate applied represents the current market assessment of the risks specific to each CGU, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the CGU and is derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Group's investors. The cost of debt is based on the interest-bearing borrowings the Group is obliged to service. The discount rate used is 15.99% (2020: 16.4%).

The key assumptions used for preparing the cash flow forecasts are based on management's past experience of the industry and the ability of the cash generating unit to at least maintain its market share as well as stable local and international economic conditions.

The following table shows the key unobservable inputs used in the valuation model.

Type

Key unobservable

inputsRange of unobservable


value

2021 Rs'000


(10%) (80,108)

Discount rate 15.99% +5% (81,266)

(5%) 88,692

2020


(10%) (56,740)

Discount rate 16.4% +5% (69,709)

(5%) 75,497

8. INVESTMENT IN SUBSIDIARIES


Level 3 Rs'000 Rs'000

At July 1, 22,785,373 22,042,843

Share buy back* - (36,668)

Transfer from financial assets** (note 13) - 14,263

Fair value movement 1,547,992 764,935

At June 30, 24,333,365 22,785,373

*In 2020, the Company performed a share buy-back exercise in three of its subsidiaries, namely Alteo Refinery Ltd, Alteo Energy Ltd and Eastern Energy Company Limited.

**In 2020, the Company capitalised its shareholder loan in Anahita Estates Limited during the year.

The directors have assessed the fair value of the investment in subsidiaries using a discounted cash flow method. The sensitivity analysis has been disclosed in note 3.1(a)(iii).


8. INVESTMENT IN SUBSIDIARIES (CONT'D)

(a) The following companies are subsidiaries of Alteo Limited:

2021 2020 2021 & 2020

Effective percentage holding

Effective percentage holding

CompanyType of shares held

Stated capital Activity

held directly

held indirectly

held directly

held indirectly

% held by non-controlling

interestsDirect holding

. Alteo Agri Ltd Ordinary Rs'000 1,822,653 Sugar cane growing 100.00 - 100.00 - -

. Alteo Energy Ltd Ordinary Rs'000 161,248 Energy production 65.10 - 65.10 - 34.90

. Alteo Milling Ltd Ordinary Rs'000 416,917 Sugar cane milling 76.50 - 76.50 - 23.50

. Alteo Properties Ltd Ordinary Rs'000 1,000

Real estate services 100.00 - 100.00 - -

. Alteo Refinery Ltd Ordinary Rs'000 474,000 Sugar refining 32.50 20.87 32.50 20.87 46.63

. Anahita Estates Limited Ordinary Rs'000 1,314,084

Real estate development 100.00 - 100.00 - -

. Consolidated Energy Co. Ltd. Ordinary Rs'000 21,000

Energy production 13.13 31.25 13.13 31.25 55.62

. Eastern Energy Company Limited Ordinary Rs'000 50

Investment holding 61.72 - 61.72 - 38.28

. Refinest Limited Ordinary Rs'000 45,600 Investment holding 64.23 - 64.23 - 35.77

.

Sucrière des Mascareignes Limited Ordinary USD'000 28,971

Investment holding 60.00 - 60.00 - 40.00

. Usinest Limited Ordinary Rs'000 39 Investment holding 65.19 - 65.19 - 34.81

Indirect holding

. Alteo New Energy Ltd Ordinary Rs'000 1 Dormant - 65.10 - 65.10 34.90

. Alteo Planters Services Ltd Ordinary Rs'000 25

Planters services - 76.50 - 76.50 23.50

. Anahita Centre for Excellence Limited Ordinary Rs'000 25

Vocational and professional training - 100.00 - 100.00 -

. Anahita Golf Ltd Ordinary Rs'000 872,634 Golf club - 87.77 - 87.77 12.23

. Compagnie de la Vigie Ltée Ordinary Rs'000 25 Dormant - 85.72 - 85.72 14.28

.

Compagnie Usinière de Mon Loisir Ltée

Ordinary Rs'000 163,454 Dormant - 70.80 - 70.80 29.20

.

Deep River Beau Champ Milling Company Ltd Ordinary Rs'000

111,053 Dormant - 51.38 - 51.38 48.62

. Island Basket Ltd Ordinary Rs'000 1 Farming - 100.00 - - -

. Island Fresh Ltd Ordinary Rs'000 25 Poultry farming - 100.00 - 100.00 -

. Schoenfeld Co. Ltd Ordinary Rs'000 25 Real estate holding - 100.00 - 100.00 -

. Sena Development Ltd Ordinary Rs'000 1,413,561

Investment holding - 57.97 - 57.97 42.03

. Société Beauregard - 100.00 - 100.00 -

. Sukari Investment Company Limited Ordinary USD'000 9,936


. TPC Limited Ordinary TShs'000 3,326,897

Sugar cane growing and milling - 45.00 - 45.00 55.00

. Transmara Investment Limited Ordinary USD'000 46,164


. Transmara Sugar Company Limited Ordinary KShs'000 444,860

Sugar cane milling - 30.60 - 30.60 69.40




(b) The financial statements of all above subsidiaries included in the Group financial statements, are co-terminus with those of the Company. Except for TPC Limited and Transmara Sugar Company Limited, which are incorporated in the Republic of Tanzania and Kenya respectively, all the subsidiaries are incorporated in the Republic of Mauritius.

(c) The Group considers that it controls TPC Limited and Transmara Sugar Company Limited even though it owns less than 50% of the voting right. This is because the Group has the power over the investees in that it has existing rights that give it the ability to direct the relevant activities and also the power over the investees to affect the amounts of the Group’s returns.

(d) Details of subsidiaries with material non-controlling interests:

Name

Profit / (loss) allocated to

non-controlling interests

during the year

Accumulated non-controlling

interests at June 30,

Rs'000 Rs'000

2021

TPC Limited 670,529 1,582,340

Transmara Sugar Company Limited (21,602) 376,505

2020

TPC Limited 484,999 1,405,589


(e) Summarised financial information on subsidiaries with material non-controlling interests

(i) Summarised statement of financial position:

TPC Limited

Transmara Sugar

Company Limited

2021 Rs'000 Rs'000

Non-current assets 2,671,416 1,988,548

Current assets 3,310,850 657,708

Non-current liabilities (1,858,777) (662,850)

Current liabilities (1,246,507) (1,440,892)

Total equity 2,876,982 542,514

Equity holders 1,294,642 166,009

Non-controlling interests 1,582,340 376,505

2,876,982 542,514




(b) The financial statements of all above subsidiaries included in the Group financial statements, are co-terminus with those of the Company. Except for TPC Limited and Transmara Sugar Company Limited, which are incorporated in the Republic of Tanzania and Kenya respectively, all the subsidiaries are incorporated in the Republic of Mauritius.

(c) The Group considers that it controls TPC Limited and Transmara Sugar Company Limited even though it owns less than 50% of the voting right. This is because the Group has the power over the investees in that it has existing rights that give it the ability to direct the relevant activities and also the power over the investees to affect the amounts of the Group’s returns.

(d) Details of subsidiaries with material non-controlling interests:

Name

Profit / (loss) allocated to

non-controlling interests

during the year

Accumulated non-controlling

interests at June 30,

Rs'000 Rs'000

2021

TPC Limited 670,529 1,582,340


2020

TPC Limited 484,999 1,405,589


(e) Summarised financial information on subsidiaries with material non-controlling interests

(i) Summarised statement of financial position:

TPC Limited

Transmara Sugar

Company Limited

2021 Rs'000 Rs'000





Total equity 2,876,982 542,514

Equity holders 1,294,642 166,009


2,876,982 542,514



(e) Summarised financial information on subsidiaries with material non-controlling interests (cont'd)

(i) Summarised statement of financial position (cont'd):

TPC Limited

Transmara Sugar

Company Limited

2020 Rs'000 Rs'000





Total equity 2,555,616 546,312

Equity holders of parent 1,150,027 167,171


2,555,616 546,312

(ii) Summarised statement of profit or loss and other comprehensive income of TPC Limited:

2021 2020

Rs'000 Rs'000

Revenue 3,739,895 3,192,243

Operating expenses, including depreciation Rs 165,889k (2020: Rs 193,332). (1,868,860) (1,903,469)

Other income 24,029 29,090

Finance costs, including interest expense Rs 76,729 (2020: Rs 52,302k). (76,729) (52,302)

Profit before tax 1,818,335 1,265,562

Taxation (599,192) (383,745)

Profit for the year (continuing operations) 1,219,143 881,817

Profit for the year:

- attributable to equity holders 548,614 396,818

- attributable to non-controlling interests 670,529 484,999

1,219,143 881,817


- attributable to equity holders 532 5,658

- attributable to non-controlling interests 650 6,915

1,182 12,573

Total comprehensive income:

- attributable to equity holders 549,146 402,476

- attributable to non-controlling interests 671,179 491,914

1,220,325 894,390

Dividend paid to non-controlling interests (270,065) (240,563)

Net cash inflow from operating activities 1,502,990 770,237

Net cash outflow from investing activities (435,311) (206,273)

Net cash outflow from financing activities (957,724) (825,757)

Net cash inflow / (outflow) 109,955 (261,793)





(iii) Summarised statement of profit or loss and other comprehensive income of Transmara Sugar Company Limited:

2021 2020

Rs'000 Rs'000

Revenue 2,730,641 1,911,900

Operating expenses, including depreciation Rs 216,875 (2020: Rs 187,109k). (2,584,221) (2,066,402)


Finance costs, including interest expense Rs 171,446 (2020: 176,754k). (173,765) (179,078)

Profit/(loss) before tax 25,108 (283,890)

Taxation (56,235) (39,868)

Loss for the year (continuing operations) (31,127) (323,758)

Loss for the year:

- attributable to equity holders (9,525) (99,070)

- attributable to non-controlling interests (21,602) (224,688)

(31,127) (323,758)

Total comprehensive loss:



(31,127) (323,758)

Net cash inflow /(outflow) from operating activities 255,246 (33,708)


Net cash (outflow) / inflow from financing activities (153,586) 42,774

Net cash outflow (80,310) (128,331)

(f) Accounting policy

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

The Company

Investment in subsidiaries is initially measured at cost and subsequently measured at fair value with unrealised gains or losses recognised in OCI and credited in the fair value reserves until the investment is derecognised, at which time, the cumulative gain or loss is transferred from fair value reserves to retained earnings.

The Group

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.





(iii) Summarised statement of profit or loss and other comprehensive income of Transmara Sugar Company Limited:

2021 2020

Rs'000 Rs'000

Revenue 2,730,641 1,911,900

Operating expenses, including depreciation Rs 216,875 (2020: Rs 187,109k). (2,584,221) (2,066,402)


Finance costs, including interest expense Rs 171,446 (2020: 176,754k). (173,765) (179,078)

Profit/(loss) before tax 25,108 (283,890)

Taxation (56,235) (39,868)

Loss for the year (continuing operations) (31,127) (323,758)

Loss for the year:



(31,127) (323,758)

Total comprehensive loss:



(31,127) (323,758)

Net cash inflow /(outflow) from operating activities 255,246 (33,708)


Net cash (outflow) / inflow from financing activities (153,586) 42,774

Net cash outflow (80,310) (128,331)


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

The Company

Investment in subsidiaries is initially measured at cost and subsequently measured at fair value with unrealised gains or losses recognised in OCI and credited in the fair value reserves until the investment is derecognised, at which time, the cumulative gain or loss is transferred from fair value reserves to retained earnings.

The Group

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.


8. INVESTMENT IN SUBSIDIARIES (CONT’D)

(f) Accounting policy (cont’d)

The Group (cont’d)

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

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

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

Transactions with non-controlling interests

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

Disposal of subsidiaries

When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in fair value reserve are not transferred to retained earnings.

9. INVESTMENT IN JOINT VENTURES

THE GROUP THE COMPANY2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 18,878 67,455 39,975 120,404

Additions during the year 50,000 - 50,000 -

Share of loss for the year (63,603) (18,516) - -

Share of movement in other reserves (11,116) (30,061) - -

Fair value movement - - 9,660 (80,429)

At June 30, (5,841) 18,878 99,635 39,975

Investment in joint ventures is analysed as follows:

Equity instruments 15,347 18,787 99,635 39,975

Trade and other payables* (21,188) - - -

(5,841) 18,787 99,635 39,975



9. INVESTMENT IN JOINT VENTURES (CONT’D)

During the year, the Company and Group injected Rs 50m in Anahita Residences & Villas Limited.

*The Group also has a legal or constructive obligation to make good of the liabilities of the joint ventures. This obligation is recognised in trade and other payables in the statements of financial position.

(a) The Company has effective interest in the following joint ventures. The financial statements used for all joint ventures are in respect of the year ended June 30, 2021.

Name Activity 2021 2020

Direct Direct

% %

Helios Beau Champ Limited Solar energy 49.00 49.00

Domaine de l’Etoile Ltd Leisure 50.00 50.00

Anahita Residences & Villas Limited Hospitality 50.00 50.00

(b) The following amounts represent the assets, liabilities, revenue and results of the joint ventures:

Helios Beau Champ Limited

Domaine de l’Etoile

Ltd

Anahita Residences

& Villas Limited

2021 Rs’000 Rs’000 Rs’000

Non-current assets 352,430 360 560,386

Current assets 42,511 243 35,615

Non-current liabilities (394,795) - (430,771)

Current liabilities (37,357) (6,513) (134,536)

Equity (37,211) (5,910) 30,694

Carrying amount of the investment (18,233) (2,955) 15,347

Helios Beau Champ Limited

Domaine de l’Etoile

Ltd

Anahita Residences

& Villas Limited

2020 Rs’000 Rs’000 Rs’000

Non-current assets 372,606 424 555,883

Current assets 26,280 1,474 19,475

Non-current liabilities (398,463) - (344,365)

Current liabilities (20,577) (7,648) (167,737)

Equity (20,154) (5,750) 63,256

Carrying amount of the investment (9,875) (2,875) 31,628




(b) The following amounts represent the assets, liabilities, revenue and results of the joint ventures (cont’d):

Summarised statement of profit or loss and other 2021 2020

comprehensive income of Helios Beau Champ Limited Rs’000 Rs’000 Revenue 61,073 56,624 Cost of sales, including depreciation Rs 20,176k (2020: Rs 20,232k) (26,361) (25,533)Other operating income 215 9,613 Operating expenses (1,405) (2,603)Finance costs, including interest expense Rs 22,837k (2020: Rs 21,380k) (22,837) (12,090)Profit before tax 10,685 26,011 Taxation (1,739) (2,552)Profit for the year (continuing operations) 8,946 23,459 Other comprehensive loss for the year (26,002) (56,122)Total comprehensive loss for the year (continuing operations) (17,056) (32,663)Share of profit for the year 4,384 11,495

Summarised statement of profit or loss and other 2021 2020comprehensive income of Domaine de L’Etoile Ltd Rs’000 Rs’000 Revenue - 2,182 Cost of sales - (1,383)Operating expenses, including depreciation Rs 64k (2020: Rs 64k) (121) (846)Finance costs, including interest expense Rs 36k (2020: Rs27k) (36) (39)Loss profit before tax (157) (86)Loss for the year (continuing operations) (157) (86)Total comprehensive loss for the year (continuing operations) (157) (86)Share of loss for the year (79) (43)

Summarised statement of profit or loss and other 2021 2020comprehensive income of Anahita Residences & Villas Limited Rs’000 Rs’000 Revenue 33,503 305,781 Cost of sales (37,254) (238,948)Operating expenses, including depreciation Rs 33,360k (2020: Rs 29,646k) (136,178) (96,098)Other income 23,138 28,383 Finance costs, including interest expense Rs 19,024k (2020: Rs 21,044k) (19,024) (46,940)Loss before tax (135,815) (47,822)Taxation - (12,113)Loss for the year (continuing operations) (135,815) (59,935)Other comprehensive income/(loss) for the year 3,252 (5,123)Total comprehensive loss for the year (continuing operations) (132,563) (65,058)Share of loss for the year (67,908) (29,968)

(c) Accounting policyA joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. The considerations made in determining joint control are similar to those necessary to determine control over subsidiaries.The CompanyInvestment in joint ventures are initially measured at cost and subsequently measured at fair value, with unrealised gains or losses recognised in the statements of other comprehensive income and credited to the fair value reserves until the investment is derecognised, at which time, the cumulative gain or loss is transferred from fair value reserves to retained earnings.The GroupThe Group’s investment in its joint venture is accounted for using the equity method. Under the equity method, the investment in a joint venture is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group’s share of net assets of the joint venture since the acquisition date. Goodwill relating to the joint venture is included in the carrying amount of the investment and is not tested for impairment separately.




(c) Accounting policy (cont’d)

The Group (cont’d)

The statements of profit or loss reflect the Group’s share of the results of operations of the joint venture. Any change in OCI is presented as part of the Group’s OCI. In addition, when there has been a change recognised directly in the equity of the joint venture, the Group recognises its share of any changes, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and the joint venture are eliminated to the extent of the interest in the joint venture.

The aggregate of the Group’s share of profit or loss of a joint venture is shown on the face of the statements of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the joint venture.

When the Group’s share of losses exceeds its interests in a joint venture, the Group discontinues recognising further losses, unless it has a legal or constructive obligation to make payments on behalf of the joint venture.

The financial statements of the joint ventures are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group.

After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its joint venture. At each reporting date, the Group determines whether there is objective evidence that the investment in the joint venture is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the joint venture and its carrying value, and then recognises the loss within ‘Share of results of joint venture’ in the statements of profit or loss.

Upon loss of the joint control over a joint venture, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the joint venture upon loss of joint control and the fair value of the retained investment and proceeds from disposal is recognised in the statements of profit or loss.

10. INVESTMENT IN ASSOCIATES


Rs’000 Rs’000 Rs’000 Rs’000

(a) Share of net assets 22,776 23,606 - -

(b) At July 1, 23,606 25,541 5,750 11,580

Share of profit for the year 2,523 3,512 - -

Dividends (2,522) (5,045) - -

Movement in reserves (831) (402) - -

Fair value movement - - 513 (5,830)

At June 30, 22,776 23,606 6,263 5,750

(c) Information unaudited financial statements presented in aggregate for the associates that are not individually significant:

2021 2020

Rs’000 Rs’000

Non-current assets 3,880 5,216

Current assets 44,787 47,191

Current liabilities (12,128) (15,355)

Non-current liabilities (2,962) (1,653)

Net assets 33,577 35,399

Share of net assets of the associates 22,776 23,606

Revenue 23,673 49,090

Profit for the year 6,158 8,047

Total comprehensive income for the year 4,179 7,089

Group’s share of profit for the year - continuing operations 2,523 3,512

Group’s share of other comprehensive loss for the year (832) (402)

Group’s share of total comprehensive income for the year 1,691 3,110


NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2021

10. INVESTMENT IN ASSOCIATES (CONT'D)

(d) The following companies are associates of Alteo Limited:

Name Year end Nature of activitiesCountry of

incorporation Proportion of

effective ownership

2021 %

AMCO Solutions Ltd (formely Alcohol & Molasses Export Limited) June 30 Logistics & procurement Mauritius 42.03

Galerie Adamah Fine Arts Ltd June 30 Art gallery Mauritius 50.00

2020

Alcohol & Molasses Export Limited June 30 Logistics & procurement Mauritius 42.03

Galerie Adamah Fine Arts Ltd June 30 Art gallery Mauritius 50.00

(e) Reconciliation of the above summarised financial information to the carrying amount recognised in the financial statements:

NameNet assets at July 1,

Profit the year Adjustment* Dividend

Other comprehensive

incomeNet assets at June 30,

Ownership interest

Interest in associates Goodwill

Carrying value

Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 Rs'000 % Rs'000 Rs'000 Rs'000

2021

AMCO Solutions Ltd (formely Alcohol & Molasses Export Limited) 15,902 6,968 - (6,000) (1,976) 14,894 42.03 6,260 7,173 13,433

Galerie Adamah Fine Arts Ltd 19,497 (811) - - - 18,686 50.00 9,343 - 9,343

Total 35,399 6,157 - (6,000) (1,976) 33,580 15,603 7,173 22,776

2020

Alcohol & Molasses Export Limited 22,424 9,822 (3,386) (12,000) (958) 15,902 42.03 6,684 7,173 13,857

Galerie Adamah Fine Arts Ltd 17,886 1,070 541 - - 19,497 50.00 9,749 - 9,749

Total 40,310 10,892 (2,845) (12,000) (958) 35,399 16,433 7,173 23,606

*Adjustment relates to the difference between the audited financial statements of the associates and the management accounts used in the Group accounts in the previous year.





An associate is an entity over which the Group has significant influence . Significant influence is the power to participate in the financial and operations of policy decisions of the investee, but is not control or joint control over those policies. The considerations made in determining significant influence are similar to those necessary to determine control over a subsidiary.

The Company

Investment in associates are initially measured at cost and subsequently measured at fair value, with unrealised gains or losses recognised in the statement of other comprehensive income and credited to the fair value reserve until the investment is derecognised, at which time, the cumulative gain or loss is transferred from fair value reserves to retained earnings.

The Group

Investments in associates are accounted for using the equity method, except when classified as held for sale.

Investment in associates are initially recorded at cost as adjusted by post acquisition changes in the Group's share of the net assets of the associate less any impairment in the value of individual investments.

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

The aggregate of the Group's share of profit or loss of an associate is shown on the face of the statements of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subidiaries of the associate.

When the Group's share of losses exceeds its interests in an associate, the Group discontinues recognising further losses, unless it has a legal or constructive obligation to make payments on behalf of the associate.

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

The financial statements of the associates are prepared for the same reporting period as the Group .Where necessary, appropriate adjustments are made to the financial statements of associates to bring the accounting policies used in line with those adopted by the Group.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amount previously recognised in other comprehensive income are reclassified to profit or loss where appropriate. Dilution gains and losses arising in investment in associates are recognised in profit or loss.

Upon loss of significant influence over the associate, the Group measures and recognises any retained investment at its fair value.





An associate is an entity over which the Group has significant influence . Significant influence is the power to participate in the financial and operations of policy decisions of the investee, but is not control or joint control over those policies. The considerations made in determining significant influence are similar to those necessary to determine control over a subsidiary.

The Company

Investment in associates are initially measured at cost and subsequently measured at fair value, with unrealised gains or losses recognised in the statement of other comprehensive income and credited to the fair value reserve until the investment is derecognised, at which time, the cumulative gain or loss is transferred from fair value reserves to retained earnings.

The Group

Investments in associates are accounted for using the equity method, except when classified as held for sale.

Investment in associates are initially recorded at cost as adjusted by post acquisition changes in the Group's share of the net assets of the associate less any impairment in the value of individual investments.

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

The aggregate of the Group's share of profit or loss of an associate is shown on the face of the statements of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subidiaries of the associate.

When the Group's share of losses exceeds its interests in an associate, the Group discontinues recognising further losses, unless it has a legal or constructive obligation to make payments on behalf of the associate.

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

The financial statements of the associates are prepared for the same reporting period as the Group .Where necessary, appropriate adjustments are made to the financial statements of associates to bring the accounting policies used in line with those adopted by the Group.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amount previously recognised in other comprehensive income are reclassified to profit or loss where appropriate. Dilution gains and losses arising in investment in associates are recognised in profit or loss.

Upon loss of significant influence over the associate, the Group measures and recognises any retained investment at its fair value.


11. FINANCIAL ASSETS AT FAIR VALUE THROUGH OCI

THE GROUP2021

THE GROUP Level 1 Level 3

LISTEDDEM

MARKET UNQUOTED TOTAL

Rs'000 Rs'000 Rs'000 Rs'000

At July 1, 22 710 8,395 9,127

Fair value movement - 184 (4,993) (4,809)

At June 30, 22 894 3,402 4,318

THE GROUP2020

THE GROUP Level 1 Level 3

LISTEDDEM

MARKET UNQUOTED TOTAL

Rs'000 Rs'000 Rs'000 Rs'000

At July 1, 22 895 8,395 9,312

Fair value movement - (185) - (185)

At June 30, 22 710 8,395 9,127

All the investments are denominated in Mauritian rupee.

Investment in financial assets designated at fair value through other comprehensive income include the Group’s non-strategic equity investments not held for trading. The Group has made an irrevocable election to classify the equity investments at fair value through other comprehensive income rather than through profit or loss because this is considered to be more appropriate for these investments as management intends to hold them for medium to long-term. Financial assets at fair value through OCI are initially measured at cost and subsequently measured at fair value, with unrealised gains or losses recognised in the statements of other comprehensive income and credited to the revaluation and other reserves until the investment is derecognised, at which time, the cumulative gain or loss is transferred from revaluation and other reserves to retained earnings.

The unquoted investments have been valued on net assets basis based on latest available financial statements. A sensitivity analysis has been disclosed in note 3.1(a)(iii).

12. DERIVATIVE FINANCIAL INSTRUMENTS

The Group is exposed to certain risk relating to its ongoing business operations. The primary risks managed using derivative instruments are foreign currency risk. The Group's risk management and strategy and how it is applied to manage risk are explained in note 3.

(a) Derivatives not designated as hedging instruments


Rs'000 Rs'000 Rs'000 Rs'000

Level 2

Derivative - Forwards contracts (7,238) (17,893) (7,211) -



12. DERIVATIVE FINANCIAL INSTRUMENTS (CONT'D)

(a) Derivatives not designated as hedging instruments (cont'd)

Derivatives not designated as hedging instruments reflect the change in fair value of those foreign exchange forward contracts that are not designated in hedge relationships, but are, nevertheless, intended to reduce the level of foreign currency risk for expected sales.

The Group uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange forward contracts are not designated as cash flow hedges and are entered for periods consistent with foreign currency exposure of the underlying transactions, generally from 1 to 12 months.

Derivatives often reflect at their inception only a mutual exchange of promises with little or no transfer of tangible consideration. However, these instruments frequently involve a high degree of leverage and are very volatile. A relatively small movement in the underlying of a derivative contract may have a significant impact on the profit or loss of the Group.

Forward contracts are contractual agreements to buy or sell a specified financial instrument at a specific price and date in the future. The Company has credit risk exposure to the counter parties of forward contracts. Forward contracts are settled gross and, therefore, considered to bear a high liquidity risk.

Valuation technique

Foreign exchange forward contracts are valued using valuation techniques, which employ the use of market observable inputs. As at June 30, 2021, the derivatives at fair value through profit or loss was fair valued using a closing foreign exchange rate as of June 30, 2021. To the extent that the significant inputs are observable, the Group categorises such instruments as level 2 of the fair value hierarchy.

(b) Derivatives designated as hedging instruments

THE GROUP2021 2020

Rs'000 Rs'000

Level 2

Derivative - Cross currency swap (109,246) (56,700)

Derivative - Forward contracts (6,339) -

(115,585) (56,700)

Cash flow hedge - Foreign currency risk

At June 30, 2021, the Group had a cross currency rate swap transaction in place with a notional amount of Rs 772.8m at an agreed foreign exchange rate of USD/MUR 36.80. The swap is designated as a hedging instrument in cash flow hedges to hedge the exposure to changes in the foreign exchange rate in Sucriere des Mascareignes Limited whose reporting currency is in USD. The carrying amount of the hedged item, which is a MUR bank loan, at June 30, 2021 is Rs 772.8m and is reported under loans and borrowings in the statements of financial position.

There is an economic relationship between the hedged item and the hedging instrument as the terms of the cross-currency rate swap creates a translation risk that will match the foreign exchange risk on the MUR loan borrowing in Sucrière des Mascareignes Limited. The Group has established a hedge ratio of 1:1 for the hedging relationship as the underlying risk of the foreign exchange is identical to the hedged risk component. To test the hedge effectiveness, the Group uses the hypothetical derivative method and compares the changes in the fair value of the hedging instrument against the changes in the fair value of the hedged item attributable to the hedged risks.




(a) Derivatives not designated as hedging instruments (cont'd)

Derivatives not designated as hedging instruments reflect the change in fair value of those foreign exchange forward contracts that are not designated in hedge relationships, but are, nevertheless, intended to reduce the level of foreign currency risk for expected sales.

The Group uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange forward contracts are not designated as cash flow hedges and are entered for periods consistent with foreign currency exposure of the underlying transactions, generally from 1 to 12 months.

Derivatives often reflect at their inception only a mutual exchange of promises with little or no transfer of tangible consideration. However, these instruments frequently involve a high degree of leverage and are very volatile. A relatively small movement in the underlying of a derivative contract may have a significant impact on the profit or loss of the Group.

Forward contracts are contractual agreements to buy or sell a specified financial instrument at a specific price and date in the future. The Company has credit risk exposure to the counter parties of forward contracts. Forward contracts are settled gross and, therefore, considered to bear a high liquidity risk.

Valuation technique

Foreign exchange forward contracts are valued using valuation techniques, which employ the use of market observable inputs. As at June 30, 2021, the derivatives at fair value through profit or loss was fair valued using a closing foreign exchange rate as of June 30, 2021. To the extent that the significant inputs are observable, the Group categorises such instruments as level 2 of the fair value hierarchy.

(b) Derivatives designated as hedging instruments

THE GROUP2021 2020

Rs'000 Rs'000

Level 2

Derivative - Cross currency swap (109,246) (56,700)

Derivative - Forward contracts (6,339) -

(115,585) (56,700)

Cash flow hedge - Foreign currency risk

At June 30, 2021, the Group had a cross currency rate swap transaction in place with a notional amount of Rs 772.8m at an agreed foreign exchange rate of USD/MUR 36.80. The swap is designated as a hedging instrument in cash flow hedges to hedge the exposure to changes in the foreign exchange rate in Sucriere des Mascareignes Limited whose reporting currency is in USD. The carrying amount of the hedged item, which is a MUR bank loan, at June 30, 2021 is Rs 772.8m and is reported under loans and borrowings in the statements of financial position.

There is an economic relationship between the hedged item and the hedging instrument as the terms of the cross-currency rate swap creates a translation risk that will match the foreign exchange risk on the MUR loan borrowing in Sucrière des Mascareignes Limited. The Group has established a hedge ratio of 1:1 for the hedging relationship as the underlying risk of the foreign exchange is identical to the hedged risk component. To test the hedge effectiveness, the Group uses the hypothetical derivative method and compares the changes in the fair value of the hedging instrument against the changes in the fair value of the hedged item attributable to the hedged risks.



(b) Derivatives designated as hedging instruments (cont'd)

Forward contracts

At June 30, 2021, forward covers with notional amount of EUR 2m were designated as hedging instruments in cash flow hedges of revenue from sale of villas in Euro. These transactions are unrecognised firm commitments. The economic relationship between the hedged item and the hedging instrument was such that the terms of the foreign exchange matched the terms of the firm commitment (i.e., notional amount and expected payment date). The Group had established a hedge ratio of 1:1 for the heding relationships as the underlying risk of the foreign exchange were identical to the hedged risk components. The carrying amount of the hedged item at June 30, 2021 is Rs 25.6m and is reported under contract liabilities in the statements of financial position.

The impact of hedging on the cash flow hedge reserves in equity is as follows: THE GROUP2021 2020

Rs'000 Rs'000

At July 1, - -

Effective portion of change in fair value (5,374) -

Reclassified from equity to profit or loss 1,078 -

At June 30, (4,296) -

The amount reclassified from equity to profit or loss is recognised as "fair value gain/(loss) on derivatives" in the statements of profit or loss.

Less than 1 year

Between 1 and 2 years


Rs'000 Rs'000 Rs'000 Rs'000 Rs'000

Derivative - Cross currency swap - - 460,000 312,800 772,800

Derivative - Forward contracts 94,182 - - - 94,182

Average forward rate (MUR/EUR) 46.88 - - - -

13. FINANCIAL ASSETS AT AMORTISED COST


Rs'000 Rs'000 Rs'000 Rs'000

At July 1, 213,288 175,552 203,947 38,354

Additional farmers' loan provided 7,041 23,260 - -

Additional funds provided to related parties - 1,591 14,043 188,013

Repayment from related parties - - (12,527) (8,157)

Transfer to investment in subsidiaries (note 8) - - - (14,263)

Exchange difference 11,602 12,885 1,195 -

At June 30, 231,931 213,288 206,658 203,947

The carrying amounts of financial assets approximate their fair value.



13. FINANCIAL ASSETS AT AMORTISED COST (CONTINUED)

The Company

The Company adopted the simplified approach in calculating ECL for non-current financial assets.

The Group

The Group adopted the simplified approach in calculating ECL for non-current financial assets. An ECL allowance of Rs 2.2m (2020: Rs 518k) has been booked.

Reconciliation of allowance for expected credit losses on farmers' loan:

THE GROUP 2021 2020

Rs'000 Rs'000

At July 1, 17,694 15,914

Movement in allowance for expected credit losses (2,112) 518

Exchange difference 878 1,262

At June 30, 16,460 17,694


Financial assets at amortised cost consist of long-term loans provided to joint ventures and farmers. They are measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

14. DEFERRED INCOME TAXES

THE GROUPDeferred income taxes are calculated on all temporary differences under the liability methods at 5% / 17% / 25% for the Group (2020: 5% / 17% / 25%), and 17% for the Company (2020: 17%). Deferred income tax assets and liabilities are offset when the income taxes relate to the same fiscal authority.

(a) The following amounts are disclosed in the statements of financial position as follows:

THE GROUP 2021 2020

Rs'000 Rs'000

Deferred tax assets (28,678) (66,595)

Deferred tax liabilities 1,189,123 998,420

1,160,445 931,825

2021 2020

Movement in deferred income tax Rs'000 Rs'000

At July 1, 931,825 756,571

Charged to profit or loss (note 19(b)) 158,903 86,964

Debited to other comprehensive income 450 1,807

Exchange difference 69,267 86,483

At June 30, 1,160,445 931,825



13. FINANCIAL ASSETS AT AMORTISED COST (CONTINUED)

The Company

The Company adopted the simplified approach in calculating ECL for non-current financial assets.

The Group

The Group adopted the simplified approach in calculating ECL for non-current financial assets. An ECL allowance of Rs 2.2m (2020: Rs 518k) has been booked.

Reconciliation of allowance for expected credit losses on farmers' loan:

THE GROUP 2021 2020

Rs'000 Rs'000

At July 1, 17,694 15,914

Movement in allowance for expected credit losses (2,112) 518

Exchange difference 878 1,262

At June 30, 16,460 17,694


Financial assets at amortised cost consist of long-term loans provided to joint ventures and farmers. They are measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

14. DEFERRED INCOME TAXES

THE GROUPDeferred income taxes are calculated on all temporary differences under the liability methods at 5% / 17% / 25% for the Group (2020: 5% / 17% / 25%), and 17% for the Company (2020: 17%). Deferred income tax assets and liabilities are offset when the income taxes relate to the same fiscal authority.

(a) The following amounts are disclosed in the statements of financial position as follows:

THE GROUP 2021 2020

Rs'000 Rs'000

Deferred tax assets (28,678) (66,595)

Deferred tax liabilities 1,189,123 998,420

1,160,445 931,825

2021 2020

Movement in deferred income tax Rs'000 Rs'000

At July 1, 931,825 756,571

Charged to profit or loss (note 19(b)) 158,903 86,964

Debited to other comprehensive income 450 1,807


At June 30, 1,160,445 931,825


14. DEFERRED INCOME TAXES (CONTINUED)

(b) Deferred tax assets and liabilities and deferred tax charged / (credited) are attributable to the following items:

THE GROUP

Accumulated tax

depreciation

Tax losses carried forward

Employee benefit

liabilities

Consumable biological

assets

Provision for doubtful

debts Other timing differences* Total

Deferred tax assets Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2020 361,120 (389,986) (4,943) - (21,984) (10,802) (66,595)(Credited) / charged to profit or loss 34,804 9,296 (1,516) - 683 (2,638) 40,629 Credited to other comprehensive income - - (586) - - - (586)

Exchange difference 19,467 (19,830) (28) - (1,114) (621) (2,126)

At June 30, 2021 415,391 (400,520) (7,073) - (22,415) (14,061) (28,678)

THE GROUP

Accumulated tax

depreciation


Employee benefit

liabilities


assets



Deferred tax liabilities Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2020 370,043 16,733 (48,831) 681,349 - (20,874) 998,420 (Credited) / charged to profit or loss 28,865 (16,734) 2,798 109,077 - (5,732) 118,274 Credited to other comprehensive income - - 1,036 - - - 1,036

Exchange difference 25,857 - (2,469) 47,982 - 23 71,393

At June 30, 2021 424,765 (1) (47,466) 838,408 - (26,583) 1,189,123

A deferred tax asset has been recognised in respect of Rs 1.334b of tax losses for the Group (2020: Rs 1.557b). No deferred tax asset has been recognised in respect of the remaining tax losses of the Group due to unpredictability of future profit streams.

THE GROUP

Accumulated tax

depreciation


Employee benefit

liabilities


assets



Deferred tax assets Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2019 461,161 (534,434) (4,680) - (21,751) (9,500) (109,204)

(Credited) / charged to profit or loss (130,583) 178,709 469 - 1,426 (530) 49,491

Credited to other comprehensive income (5) - (707) - - - (712)

Exchange difference 30,547 (34,261) (25) - (1,659) (772) (6,170)

At June 30, 2020 361,120 (389,986) (4,943) - (21,984) (10,802) (66,595)

THE GROUP

Accumulated tax

depreciation


Employee benefit

liabilities


assets



Deferred tax liabilities Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2019 330,711 14,707 (48,323) 533,899 - 34,781 865,775

(Credited) / charged to profit or loss 4,774 2,026 (277) 85,208 - (54,905) 36,826

Credited to other comprehensive income - 3,591 - - - 3,591

Exchange difference 34,558 - (3,822) 62,242 (750) 92,228

At June 30, 2020 370,043 16,733 (48,831) 681,349 - (20,874) 998,420

* Other timing differences include, assets revaluations, stock provisions and unrealised exchange differrences.

Deferred tax assets and liabilities have been presented separately for clarity and the comparative was amended accordingly.



14. DEFERRED INCOME TAXES (CONT’D)(c) Accounting policy

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

• When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

• In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

• When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

• In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognised subsequently if new information about facts and circumstances change. The adjustment is either treated as a reduction in goodwill (as long as it does not exceed goodwill) if it was incurred during the measurement period or recognised in profit or loss.

The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

15. INVENTORIES

THE GROUP2021 2020

Cost Rs’000 Rs’000Raw materials and spare parts 1,106,023 971,027 Coal 101,594 45,679 Goods for resale 21,275 4,377 Construction in progress (note 15 (a)) 859,841 797,206 Total 2,088,733 1,818,289



14. DEFERRED INCOME TAXES (CONT’D)(c) Accounting policy

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

• When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

• In respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

• When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

• In respect of deductible temporary differences associated with investments in subsidiaries, associates and joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognised subsequently if new information about facts and circumstances change. The adjustment is either treated as a reduction in goodwill (as long as it does not exceed goodwill) if it was incurred during the measurement period or recognised in profit or loss.

The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

15. INVENTORIES

THE GROUP2021 2020

Cost Rs’000 Rs’000Raw materials and spare parts 1,106,023 971,027 Coal 101,594 45,679 Goods for resale 21,275 4,377 Construction in progress (note 15 (a)) 859,841 797,206 Total 2,088,733 1,818,289


15. INVENTORIES (CONT’D)

(a) Construction in progress relates to the overall infrastructure costs of the northern parcels and villas under construction at Anahita, a high-end residential estate developed under the Integrated Resort Scheme (“IRS”) and land development on the land bank of the Group. This component includes land costs. The net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and applicable variable selling expenses.

(b) The cost of inventories recognised as expense and included in operating expenses amounted to Rs 3.9 bn (2020: Rs 3.4bn) for the Group.

(c) Borrowings are secured by floating charges on the assets of the Group, including inventories (note 22).

(d) During the year Rs 24.6m of spare parts was impaired (refer to note 41).

(e) Accounting policy

Inventories are stated at the lower of cost and net realisable value. Cost incurred in bringing each item of inventory to its present location and condition are accounted for using the weighted average method . The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads but excludes interest expense. Net realisable value is the estimate of the selling price in the ordinary course of business less the costs of completion and selling expenses.

Land and villas being constructed for sale in the ordinary course of business, rather than to be held for rental or capital appreciation, are held as inventory and measured at the lower of cost and net realisable value. Cost incurred in bringing each item of inventory to its present location and condition are accounted for using the weighted average method. Net realisable value is the estimated selling price in the ordinary course of business, less estimated selling expenses. Inventories include the stock of land for sale and work in progress which relates to construction incurred in respect of IRS villas and land development projects. Whenever the net realisable value of inventories and work-in-progress is less than the cost price, impairment losses are recognised.

16. CONSUMABLE BIOLOGICAL ASSETS

THE GROUP2021 2020

Level 3 Rs’000 Rs’000At July 1, 2,383,372 2,194,416 Expenditure for the year 9,749 - Increase/(decrease) in fair value -Due to harvest and sales (2,425,545) (2,261,852)-Due to biological transformation 2,953,742 2,259,178 Exchange difference 148,262 191,630 At June 30, 3,069,580 2,383,372

At June 30, 2021, standing canes comprised approximately 14,973 hectares of cane plantations (2020: 15,719 hectares) for the Group.

During the year, the Group harvested approximately 1,569,453 tonnes of canes (2020: 1,656,741 tonnes).


Consumable biological assets are measured by the fair value of standing canes. The fair value has been arrived at by determining the present value of expected net cash flows discounted at the relevant market determined pre-tax rate. The expected cash flows have been computed by estimating the expected crop, the sugar extraction rate and the forecasts of sugar prices which will prevail in the coming years. Harvesting costs and other direct costs are based on yearly budgets.

Standing canes have been measured at fair value. The fair value of the living plants is the present value of expected net cash flows from the standing canes discounted at the relevant market-determined pre-tax rate.



16. CONSUMABLE BIOLOGICAL ASSETS (CONT’D)

(b) THE GROUPFair value at

June 30,

Key unobservable

inputs


inputsSensitivity of the input to fair value

Rs’000 Rs’0002021

Standing cane 3,069,580 Discount rate3.16% - 11.38% 1% (8,716)

Price of sugarRs 14,500 -

Rs 30,449 5% 176,990

Extraction rate10% -

10.05% 1% 366,381 Estimated cane

production in metric tonnes 1,584,230 5% 164,693

2020



Rs 27,966 5% 154,414

Extraction rate9.89% - 10.15% 1% 312,295

Estimated cane production in

metric tonnes 1,656,033 5% 115,379

Other disclosures Standing canes were not pledged as security for any of the Group’s loans or borrowings during the year (2020: None). At June 30, 2021, the Group had no commitments in relation to its standing canes (2020: Nil). No government grants were received in relation to the Group’s agricultural activities during the year (2020: Nil).

Financial risk management strategiesThe Group is exposed to risks arising from environmental changes, changes in sugar prices as well as the financial risk in respect of agricultural activity. • The Group manages environmental risks, such as droughts, floods and disease outbreak through insurance cover with the Sugar

Insurance Fund Board.• The Group’s exposure to fluctuations in the sugar prices and sales volume is managed by the Mauritius Sugar Syndicate that hedges

the risks through forward sales. During the year, the Group received a compensation of Rs 44.8m from the Sugar Insurance Fund Board following adverse climatic conditions on sugar cane.

17. TRADE AND OTHER RECEIVABLESTHE GROUP THE COMPANY

2021 2020 2021 2020 Rs’000 Rs’000 Rs’000 Rs’000

Trade receivables 841,454 850,781 - - Prepayments 49,672 50,169 1,080 950 Other receivables 541,683 572,197 2,846 128 Farmers’ loan 87,038 102,043 - - Receivable from related companies- subsidiaries - - 6,779 229,256 - associates - - 2,522 - - joint ventures 81,516 27,481 3,260 3,008 - companies with common directors 18,250 16,862 - -

1,619,613 1,619,533 16,487 233,342



16. CONSUMABLE BIOLOGICAL ASSETS (CONT’D)

(b) THE GROUPFair value at

June 30,

Key unobservable

inputs


inputsSensitivity of the input to fair value

Rs’000 Rs’0002021



Rs 30,449 5% 176,990

Extraction rate10% -

10.05% 1% 366,381 Estimated cane

production in metric tonnes 1,584,230 5% 164,693

2020



Rs 27,966 5% 154,414

Extraction rate9.89% - 10.15% 1% 312,295

Estimated cane production in

metric tonnes 1,656,033 5% 115,379

Other disclosures Standing canes were not pledged as security for any of the Group’s loans or borrowings during the year (2020: None). At June 30, 2021, the Group had no commitments in relation to its standing canes (2020: Nil). No government grants were received in relation to the Group’s agricultural activities during the year (2020: Nil).

Financial risk management strategiesThe Group is exposed to risks arising from environmental changes, changes in sugar prices as well as the financial risk in respect of agricultural activity. • The Group manages environmental risks, such as droughts, floods and disease outbreak through insurance cover with the Sugar

Insurance Fund Board.• The Group’s exposure to fluctuations in the sugar prices and sales volume is managed by the Mauritius Sugar Syndicate that hedges

the risks through forward sales. During the year, the Group received a compensation of Rs 44.8m from the Sugar Insurance Fund Board following adverse climatic conditions on sugar cane.

17. TRADE AND OTHER RECEIVABLESTHE GROUP THE COMPANY

2021 2020 2021 2020 Rs’000 Rs’000 Rs’000 Rs’000

Trade receivables 841,454 850,781 - - Prepayments 49,672 50,169 1,080 950 Other receivables 541,683 572,197 2,846 128 Farmers’ loan 87,038 102,043 - - Receivable from related companies- subsidiaries - - 6,779 229,256 - associates - - 2,522 - - joint ventures 81,516 27,481 3,260 3,008 - companies with common directors 18,250 16,862 - -

1,619,613 1,619,533 16,487 233,342


17. TRADE AND OTHER RECEIVABLES (CONT’D)

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

(a) The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above. The Group does not hold any collateral as security.

(b) The Group has performed an impairment assessment on its trade and other receivables. An additional ECL allowance of Rs. 5.3 m (2020: Rs 12.2m) was recognised against trade and other receivables.

Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of credit insurance. At June 30, 2021, the Group had 1 customer (2020: 1 customer) with balances greater than Rs 100 million accounting for just over 25% (2020: 28%) of the total amounts receivable.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on actual incurred historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in note 3.1. The Group evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

(c) The carrying amounts of the Group and Company’s trade and other receivables are denominated in the following currencies:

THE GROUP THE COMPANY 2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000

Mauritian rupee 961,550 941,048 16,236 40,920

Tanzanian shilling 286,437 270,211 - -

Kenyan shilling 216,392 246,595 - -

US dollar 62,343 24,395 251 192,422

Euro 86,617 135,346 - -

Great Britain Pound 4,694 379 - -

South African rand 1,580 1,559 - -

1,619,613 1,619,533 16,487 233,342

(d) Reconciliation of allowance for expected credit losses trade and other receivables: THE GROUP 2021 2020

Rs’000 Rs’000

At July 1, 70,646 52,295

Movement in allowance for expected credit losses 7,464 12,335

Exchange difference (4,874) 6,016

At June 30, 73,236 70,646

ECL on trade and other receivables consists of trade receivables, other receivables and farmers’ loans amounting to Rs 9m, Rs 28m and Rs 36m respectively.

18. CONTRACT ASSETS

THE GROUP 2021 2020

Rs’000 Rs’000

At July 1, 81,353 102,514

Amount billed during the year (81,353) (102,514)

Amount recognised to revenue 53,866 81,353

At June 30, 53,866 81,353

A contract asset is the right to consideration in exchange for goods or services transferred to the customer.



18. CONTRACT ASSETS (CONT’D)

(a) Accounting policies

Contract assets are initially recognized for revenue earned from villas under construction rendered but yet to be billed to customers. Upon billing of invoice, the amounts recognized as contract assets are ultimately reclassified to trade and other receivables. Contract assets are subject to impairment assessment. Refer to accounting policies on impairment of financial assets in note 2(e).

19. TAXATION


(a) Statement of financial position Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 55,488 123,983 309 -

Movement during the year:

Current tax on the adjusted profit for the year

3%/15%/25% (2020: 3% / 15% / 25%) 541,552 392,473 - 1,224

CSR - 2% (2020: 2%) 3,434 6,326 - -

Withholding tax 116,041 99,975 - -

Tax refund - 1,045 - -

Tax paid (626,252) (568,664) (153) -

Accumulated losses used (69) (4,289) - (915)

Under/(over) provision 9,468 (1,425) (156) -

Exchange difference 2,828 6,064 - -

At June 30, 102,490 55,488 - 309

Disclosed as follows:

Current tax assets (3,797) (3,502) - -

Current tax liabilities 106,287 58,990 - 309

102,490 55,488 - 309

(b) Statement of profit or loss THE GROUP THE COMPANY 2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000


3%/15%/25% (2020: 3% / 15% / 25%) 541,552 392,473 - 1,224

CSR - 2% (2020: 2%) 3,434 6,326 - -


Deferred tax (note 14(a)) 158,903 86,964 - -

TDS - (82) - -



Tax charge for the year 829,329 579,942 (156) 309



18. CONTRACT ASSETS (CONT’D)

(a) Accounting policies

Contract assets are initially recognized for revenue earned from villas under construction rendered but yet to be billed to customers. Upon billing of invoice, the amounts recognized as contract assets are ultimately reclassified to trade and other receivables. Contract assets are subject to impairment assessment. Refer to accounting policies on impairment of financial assets in note 2(e).

19. TAXATION


(a) Statement of financial position Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 55,488 123,983 309 -

Movement during the year:


3%/15%/25% (2020: 3% / 15% / 25%) 541,552 392,473 - 1,224

CSR - 2% (2020: 2%) 3,434 6,326 - -


Tax refund - 1,045 - -

Tax paid (626,252) (568,664) (153) -



Exchange difference 2,828 6,064 - -

At June 30, 102,490 55,488 - 309


Current tax assets (3,797) (3,502) - -

Current tax liabilities 106,287 58,990 - 309

102,490 55,488 - 309

(b) Statement of profit or loss THE GROUP THE COMPANY 2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000


3%/15%/25% (2020: 3% / 15% / 25%) 541,552 392,473 - 1,224

CSR - 2% (2020: 2%) 3,434 6,326 - -


Deferred tax (note 14(a)) 158,903 86,964 - -

TDS - (82) - -



Tax charge for the year 829,329 579,942 (156) 309


19. TAXATION (CONT’D)

(c) The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the basic rate of the Group as follows:


Rs’000 Rs’000 Rs’000 Rs’000

Profit / (loss) before taxation 2,693,217 802,091 272,216 232,182

Tax at 3%/15%/30%for the Group (2020: 3% / 15% / 25%) 808,377 567,733 40,832 34,827

CSR - 2% (2020: 2%) 13,144 5,051 5,444 -


Income not subject to tax (136,896) (203,021) (69,669) (58,220)

Expenses not deductible for tax purposes 196,676 233,004 23,393 24,617

Tax losses for which no deferred tax was recognised - 20,868 - -

TDS - (82) - -

Tax credit (117,320) (114,865) - -

Accumulated tax losses utilised (15,954) (4,289) - (915)

(Over) / under provision 66 (24,432) (156) -

Total taxation 829,329 579,942 (156) 309

(d) The Mauritius Revenue Authority (MRA) has a claim against Alteo Agri Ltd regarding taxation unpaid on deemed interest on the loans receivable from its subsidiaries for the years 2007 to 2010, to which it is not agreeable. The claim against Alteo Agri Ltd, including penalty charges, amounts to Rs55.6m.

The company is of the opinion that the tax liability will not crystallise in the foreseeable future since it has strong support based on legal and tax advice.

(e) TPC Limited has been assessed by the TRA in respect of withholding tax not deducted on payments made to foreign companies. TRA’s claim amounted to a principal amount of Rs 7.5m (TZS 422m) and interest of Rs 1.6m (TZS 90m) which represents mainly payments made to companies in South Africa where there is a double taxation agreement (DTA) in place with Tanzania. TRA’s interpretation of the DTA differs from the company and its tax advisors and as such the company has submitted a statement of appeal to TRA’s final assessment as it feels that it has a valid case to rebut this claim.

TRA assessed the company on withholding tax not deducted on dividend payments made to the Government of United Republic of Tanzania. TRA’s claims amounted to a principal tax of Rs 27m (TZS 1.5bn) and interest for late payment of tax of Rs 2.7m (TZS 148m). TRA’s interpretation of the tax to be withheld differs from the Company’s and its tax advisors and as such has submitted an objection to TRA’s final assessment as it feels that is has valid case to rebut the claim.

On March 30, 2021, the Company received withholding tax assessment from the TRA that relates to WHT on non-resident service fees for the year 2019. A sum of Rs 5.8m (TZS 325m) is being claimed. The Company has objected against this assessment and paid one-third of the claimed amount for the admission of notice of objection.

(f) The Mauritius Revenue Authority (MRA) has a claim against Anahita Estates Limited regarding taxation unpaid on deemed interest on the long term loan receivable from its subsidiary, Anahita Golf Ltd for the years 2007 to 2010 to which Anahita Estates Limited is not agreeable. The claim, including penalty charges, amounts to Rs 20.4m. The case is still pending as at date.

20. SHARE CAPITAL

THE GROUP AND THE COMPANYIssued and fully paid 2021 2020

Ordinary shares of no par value Number

of shares Rs’000 Number of shares Rs’000

At June 30, 318,492,120 21,855,045 318,492,120 21,855,045



20. SHARE CAPITAL (CONT’D)


Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as deduction, net of tax, from proceeds.

21. REVALUATION AND OTHER RESERVES

THE GROUP 2021 2020

Rs’000 Rs’000

Revaluation and other reserves may be analysed as follows:

Associates and joint ventures reserves

At July 1, (26,085) 4,379

Movement in other reserves of joint venture and associates (11,947) (30,464)

At June 30, (38,032) (26,085)

Revaluation surplus

At July 1, (4,605,309) (4,900,457)

Fair value gain on land at fair value - 336,015

Transfer of fair value reserve to retained earnings upon disposal of land (9,331) (40,867)

At June 30, (4,614,640) (4,605,309)

Hedge reserves

At July 1, - -

Movement in cross currency swap (4,682) -

At June 30, (4,682) -

Fair value reserves on investment

At July 1, (185) -

Loss on financial assets at fair value through OCI (4,809) (185)

At June 30, (4,994) (185)

Translation reserves

At July 1, (368,417) (541,979)

Movement in translation reserve arising on retranslation of foreign subsidiaries 117,321 173,562

At June 30, (251,096) (368,417)

Actuarial (gains) / losses reserves

At July 1, (611,975) (460,149)

Remeasurement of post employment benefit obligations 151,800 (151,826)

At June 30, (460,175) (611,975)

At June 30, (5,373,619) (5,611,971)


The associates and joint ventures reserves relate to the Group’s share of associates’ and joint ventures’ reserves.

Revaluation surplus

The revaluation surplus relates to the revaluation of land. The movements in revaluation surplus relate to the disposal of revalued land upon which the revaluation surplus on land disposed is transferred to retained earnings.

In September 2017, the Board of Alteo Limited adopted a scheme of arrangement which led to the capitalisation of the revaluation reserves of Rs 10bn at Group level as part of its share capital of Alteo Limited. This transaction did not result in any change in the stake of the shareholders on the equity of the Group.



20. SHARE CAPITAL (CONT’D)


Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as deduction, net of tax, from proceeds.

21. REVALUATION AND OTHER RESERVES

THE GROUP 2021 2020

Rs’000 Rs’000

Revaluation and other reserves may be analysed as follows:


At July 1, (26,085) 4,379

Movement in other reserves of joint venture and associates (11,947) (30,464)

At June 30, (38,032) (26,085)

Revaluation surplus

At July 1, (4,605,309) (4,900,457)

Fair value gain on land at fair value - 336,015

Transfer of fair value reserve to retained earnings upon disposal of land (9,331) (40,867)

At June 30, (4,614,640) (4,605,309)

Hedge reserves

At July 1, - -

Movement in cross currency swap (4,682) -

At June 30, (4,682) -


At July 1, (185) -

Loss on financial assets at fair value through OCI (4,809) (185)

At June 30, (4,994) (185)


At July 1, (368,417) (541,979)

Movement in translation reserve arising on retranslation of foreign subsidiaries 117,321 173,562

At June 30, (251,096) (368,417)

Actuarial (gains) / losses reserves

At July 1, (611,975) (460,149)

Remeasurement of post employment benefit obligations 151,800 (151,826)

At June 30, (460,175) (611,975)

At June 30, (5,373,619) (5,611,971)


The associates and joint ventures reserves relate to the Group’s share of associates’ and joint ventures’ reserves.

Revaluation surplus

The revaluation surplus relates to the revaluation of land. The movements in revaluation surplus relate to the disposal of revalued land upon which the revaluation surplus on land disposed is transferred to retained earnings.

In September 2017, the Board of Alteo Limited adopted a scheme of arrangement which led to the capitalisation of the revaluation reserves of Rs 10bn at Group level as part of its share capital of Alteo Limited. This transaction did not result in any change in the stake of the shareholders on the equity of the Group.


21. REVALUATION AND OTHER RESERVES (CONTINUED)

Hedge reserves

The hedge reserve comprises the effective portion of the cummulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred.


Fair value reserves comprise the cumulative net change in the fair value of financial assets at fair value through OCI that has been recognised in other comprehensive income until the investments are derecognised.


The translation reserves comprise all foreign currency differences arising from the translation of the financial statements of foreign operations.

Actuarial reserves

Actuarial reserves comprise of movement in employee benefit assets and liabilities.

22. LOANS AND BORROWINGS


Rs’000 Rs’000 Rs’000 Rs’000

Current

Bank overdrafts (note 35(b)) 961,886 1,632,034 - 2,338

Loans at call - - 201,016 171,412

Money market deal (note 35(b)) 44 99,997 - -

Bank loans (note 22(a)) 1,046,260 587,296 - -

Lease liabilities (note 22(c)) 78,129 58,620 7,913 7,825

Debentures (note 22(d)) 500,000 50,000 500,000 50,000

2,586,319 2,427,947 708,929 231,575

Non-current

Bank loans (notes 22(a) and 22(b)) 3,459,835 3,517,961 - -

Lease liabilities (note 22(c)) 257,800 101,270 30,147 13,858

Debentures (note 22(d)) 950,000 1,450,000 950,000 1,450,000

Loans from shareholders (note 22(a)) 29,927 29,927 - -

4,697,562 5,099,158 980,147 1,463,858

Total borrowings 7,283,881 7,527,105 1,689,076 1,695,433

(a) The bank loans and bank overdrafts are secured by floating charges on the Group’s assets. Money market deals and loans at call are unsecured and are from other related parties. Loans from shareholders are unsecured and repayable at the discretion of the Group. Debentures issued are secured by fixed charges on the Group’s freehold land.



22. LOANS AND BORROWINGS (CONTINUED)

(b) Bank loans

THE GROUP 2021 2020

Rs’000 Rs’000

The maturity of non-current bank loans are as follows:

- After one year and before two years 758,084 501,543

- After two years and before five years 2,271,831 2,772,593

- After five years 429,920 243,825

3,459,835 3,517,961

(c) Lease liabilities


Rs’000 Rs’000 Rs’000 Rs’000

Minimum lease payments

Not later than one year 92,429 66,966 9,592 8,825

After one year and before two years 76,755 45,307 9,710 3,601

After two years and before five years 148,536 54,802 13,030 3,611

After five years 113,557 60,463 54,445 48,961

Future finance charges on lease liabilities (95,348) (67,648) (48,717) (43,315)

Present value of lease liabilities 335,929 159,890 38,060 21,683

The present value of lease liabilities may be analysed as follows:


Rs’000 Rs’000 Rs’000 Rs’000




After five years 61,133 14,053 10,926 9,824

335,929 159,890 38,060 21,683

The lease liabilities bear interest rates between 4.25% and 6.10% (2020: 6.75% and 7.87%) per annum. Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.



22. LOANS AND BORROWINGS (CONTINUED)

(b) Bank loans

THE GROUP 2021 2020

Rs’000 Rs’000

The maturity of non-current bank loans are as follows:

- After one year and before two years 758,084 501,543

- After two years and before five years 2,271,831 2,772,593

- After five years 429,920 243,825

3,459,835 3,517,961

(c) Lease liabilities


Rs’000 Rs’000 Rs’000 Rs’000

Minimum lease payments




After five years 113,557 60,463 54,445 48,961

Future finance charges on lease liabilities (95,348) (67,648) (48,717) (43,315)

Present value of lease liabilities 335,929 159,890 38,060 21,683

The present value of lease liabilities may be analysed as follows:


Rs’000 Rs’000 Rs’000 Rs’000




After five years 61,133 14,053 10,926 9,824

335,929 159,890 38,060 21,683

The lease liabilities bear interest rates between 4.25% and 6.10% (2020: 6.75% and 7.87%) per annum. Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.


22. LOANS AND BORROWINGS (CONT'D)

(d) Debentures THE GROUP THE COMPANY 2021 2020 2021 2020

Secured debentures: Rs'000 Rs'000 Rs'000 Rs'000

At 6% fixed interest redeemable on April 24, 2021 - 50,000 - 50,000

At 4.27% fixed interest redeemable on May 27, 2022 500,000 500,000 500,000 500,000

At 5% / 5.15% fixed interest redeemable on May 22, 2024 499,995 499,995 499,995 499,995

At 5.35% / 5.5% fixed interest redeemable on May 24, 2026 450,005 450,005 450,005 450,005

1,450,000 1,500,000 1,450,000 1,500,000

(e) The effective interest rates at the reporting date were as follows:

2021 2020

MUR EURO USD TZS KSH MUR EURO USD TZS KSH

THE GROUP % % % % % % % % % %

Bank overdrafts4.10% - 4.35% N/A

3.68%- 8.44% 12.00%

8.44% - 11.5 %

4.05 - 7.25% N/A

3.25% - 10% 12.00%

10% - 13 %

Bank borrowings3.83% - 4.10% 5.00%

3.0% - 4.85%

10% - 12.5% 4% - 12%

3.85% - 7.25% 5%

5.61% - 6.81%

10% - 12.5% 4% - 13%

Loans at call 2.90% N/A N/A N/A N/A 2.70% N/A N/A N/A N/A

Debentures4.27% -

6% N/A N/A N/A N/A 4.27% -

6% N/A N/A N/A N/A

Lease liabilities4.25% - 6.10% N/A N/A 10% 13%

4.25% - 7.27% N/A N/A 10% 13%

2021 2020

MUR EURO USD TZS KSH MUR EURO USD TZS KSH

THE COMPANY % % % % % % % % % %

Bank overdrafts 4.10% N/A N/A N/A N/A 4.10% N/A N/A N/A N/A

Bank borrowings N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Debentures 4.27% -

6% N/A N/A N/A N/A 4.27% -

6% N/A N/A N/A N/A

Lease liabilities4.25%-5.75% N/A N/A N/A N/A

4.25%-5.75% N/A N/A N/A N/A

(f) The carrying amounts of the Group's loans and borrowings are denominated in the following currencies: THE GROUP THE COMPANY

2021 2020 2021 2020

Rs'000 Rs'000 Rs'000 Rs'000

Mauritian rupee (MUR) 3,302,918 3,415,728 1,689,076 1,695,433

Euro (EUR) 52,924 51,576 - -

US dollar (USD) 1,391,949 1,592,452 - -

Tanzanian shilling (TZS) 963,971 940,730 - -

Kenyan shilling (KSH) 1,572,119 1,526,619 - -

7,283,881 7,527,105 1,689,076 1,695,433



22. LOANS AND BORROWINGS (CONT’D)

(g) To finance its operating activities, the Group issued loan notes against a total consideration of Rs 1.5bn , repayable on following terms:

- Rs 50m loan notes at a fixed interest rate of 6%, repayable in one bullet in May 2021

- Rs 500m loan notes at a fixed interest rate of 4.27%, repayable in one bullet in May 2022

- Rs 500m loan notes at a fixed interest rate of 5% / 5.15%, repayable in one bullet in May 2024

- Rs 450m loan notes at a fixed interest rate of 5.35% / 5.5%, repayable in one bullet in May 2026.

23. EMPLOYEE BENEFIT LIABILITIES

THE GROUP 2021 2020

Rs’000 Rs’000

Amounts recognised in the statements of financial position:

Pension benefits (note 23(a)(ii)) 1,093,268 1,290,445


Non-current assets (15,471) (606)

Non-current liabilities 1,108,739 1,291,051

1,093,268 1,290,445

Amounts charged to profit or loss:

- Pension benefits (note 23(a)(v)) 51,198 50,707

Amounts charged to other comprehensive income:

- Pension benefits (note 23(a)(vi)) (167,620) 163,510

(a) Defined pension benefits

(i) The Group contributes to two defined benefit pension plans, mainly the IBL Pension Fund and the Sugar Insurance Pension Fund. The plans are final salary plans, which provide benefits to members in the form of a guaranteed level of pension payable for life. The level of benefits provided depends on members’ length of service and their salary in the final years leading up to retirement.

The assets of plans are independently administered by MUA Pension Ltd, Swan Life Ltd and Swan Pension Ltd.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligations were carried out at June 30, 2021 by Swan Life Ltd. The present value of the defined benefit obligations, and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

The Employee Benefit liability also covers gratuities payable under the Workers’ Rights Act 2019. Prior to the implementation of the Portable Retirement Gratuity Fund (PRGF), these benefits are unfunded as at 31 December 2019. Moreover, employees who resign as from 2020, are eligible for a portable gratuity benefit based on service with the employer as from 1 January 2020 and remuneration at exit. The PRGF is administered by the Mauritius Revenue Authorities (MRA). As at 30 June 2020, no contribution towards the fund had been made.

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

THE GROUP 2021 2020

Rs’000 Rs’000

Present value of funded obligations (note 23(a)(iii)) 1,870,230 2,056,820

Fair value of plan assets (note 23(a)(iv)) (1,151,455) (1,133,724)

718,775 923,096

Present value of unfunded obligations (note 23(a)(iii)) 374,493 367,349

Liability in the statement of financial position 1,093,268 1,290,445



22. LOANS AND BORROWINGS (CONT’D)

(g) To finance its operating activities, the Group issued loan notes against a total consideration of Rs 1.5bn , repayable on following terms:

- Rs 50m loan notes at a fixed interest rate of 6%, repayable in one bullet in May 2021

- Rs 500m loan notes at a fixed interest rate of 4.27%, repayable in one bullet in May 2022

- Rs 500m loan notes at a fixed interest rate of 5% / 5.15%, repayable in one bullet in May 2024

- Rs 450m loan notes at a fixed interest rate of 5.35% / 5.5%, repayable in one bullet in May 2026.

23. EMPLOYEE BENEFIT LIABILITIES

THE GROUP 2021 2020

Rs’000 Rs’000

Amounts recognised in the statements of financial position:

Pension benefits (note 23(a)(ii)) 1,093,268 1,290,445


Non-current assets (15,471) (606)

Non-current liabilities 1,108,739 1,291,051

1,093,268 1,290,445

Amounts charged to profit or loss:

- Pension benefits (note 23(a)(v)) 51,198 50,707

Amounts charged to other comprehensive income:

- Pension benefits (note 23(a)(vi)) (167,620) 163,510

(a) Defined pension benefits

(i) The Group contributes to two defined benefit pension plans, mainly the IBL Pension Fund and the Sugar Insurance Pension Fund. The plans are final salary plans, which provide benefits to members in the form of a guaranteed level of pension payable for life. The level of benefits provided depends on members’ length of service and their salary in the final years leading up to retirement.

The assets of plans are independently administered by MUA Pension Ltd, Swan Life Ltd and Swan Pension Ltd.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligations were carried out at June 30, 2021 by Swan Life Ltd. The present value of the defined benefit obligations, and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

The Employee Benefit liability also covers gratuities payable under the Workers’ Rights Act 2019. Prior to the implementation of the Portable Retirement Gratuity Fund (PRGF), these benefits are unfunded as at 31 December 2019. Moreover, employees who resign as from 2020, are eligible for a portable gratuity benefit based on service with the employer as from 1 January 2020 and remuneration at exit. The PRGF is administered by the Mauritius Revenue Authorities (MRA). As at 30 June 2020, no contribution towards the fund had been made.


THE GROUP 2021 2020

Rs’000 Rs’000

Present value of funded obligations (note 23(a)(iii)) 1,870,230 2,056,820

Fair value of plan assets (note 23(a)(iv)) (1,151,455) (1,133,724)

718,775 923,096

Present value of unfunded obligations (note 23(a)(iii)) 374,493 367,349

Liability in the statement of financial position 1,093,268 1,290,445


23. EMPLOYEE BENEFIT LIABILITIES (CONT’D)

(a) Defined pension benefits (cont’d)


The reconciliation of opening balances to the closing balances for the net defined benefit liability is as follows:

THE GROUP 2021 2020

Rs’000 Rs’000At July 1, 1,290,445 1,156,838 Charged to profit or loss (note 23(a)(v)) 51,199 50,707 Charged to other comprehensive income (note 23(b)(vi)) (167,620) 163,510 Benefits paid (21,567) (26,648)Contributions paid (67,583) (66,392)Exchange difference 8,394 12,430 At June 30, 1,093,268 1,290,445

(iii) The movement in the present value of obligations for the year is as follows:

THE GROUP 2021 2020

Rs’000 Rs’000At July 1, 2,424,169 2,294,563 Current service cost 35,295 34,921 Past service cost (30,388) - Employees’ contribution 3,741 5,690 Interest expense 90,387 126,647 Benefits paid (154,875) (167,146)Effect of curtailments / settlements (17,642) (56,403)Actuarial (gains) / losses (114,367) 173,311 Exchange difference 8,403 12,586 At June 30, 2,244,723 2,424,169

Disclosed as follows:Funded obligations 1,870,230 2,056,820 Unfunded obligations 374,493 367,349

2,244723 2,424,169

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

THE GROUP 2021 2020

Rs’000 Rs’000At July 1, 1,133,724 1,137,725 Employees’ contribution 3,741 5,684 Scheme expenses (2,150) (704)Cost of insuring risk benefits (7,164) (1,532)Expected return on plan assets - 7,256 Actuarial gains on plan assets 53,253 9,801 Employer’s contribution 67,584 66,394 Benefits paid (133,302) (140,498)Interest income 35,769 49,598 At June 30, 1,151,455 1,133,724





(v) The amounts recognised in profit or loss are as follows: THE GROUP 2021 2020

Rs’000 Rs’000Current service cost 35,295 35,084 Past service cost (30,388) - Interest expense 54,618 69,789 Scheme expenses 2,150 728 Cost of insuring risk benefits 7,165 1,509 Effects of curtailments/ settlements (17,642) (56,403)Total included in staff costs 51,198 50,707 Actual return on plan assets 87,393 26,363

(vi) The amounts recognised in other comprehensive income are as follows: THE GROUP 2021 2020

Rs’000 Rs’000Liability experience loss/(gain) 60,336 (77,997)Actuarial (gains)/ losses arising from changes in financial assumptions (174,703) 251,308

(114,367) 173,311 Gain on pension scheme assets (53,253) (9,801)

(167,620) 163,510

THE GROUP (vii) Major asset categories as percentage of plan assets: 2021 2020

% %Local equities 23% 29%Overseas equities 27% 25%Fixed interest and cash 39% 32%Properties 11% 14%

(viii) The assets of the plan are invested in funds. The expected return on plan assets was determined by considering the expected returns available on the assets underlying the current investment policy. Expected yields on fixed interest investments are based on gross redemption yields as at the balance sheet date. Expected returns on equity and property investments reflect long-term real rates of return experienced in the respective markets.

(ix) Expected contributions to post-employment benefit plans for the year ended June 30, 2021 is Rs 37.3m m and Rs 0.9m to the pension scheme and PRGF respectively.

(x) The principal actuarial assumptions used for accounting purposes were:

THE GROUP 2021 2020

% %Discount rate 4.5 3.6 Future salary increases 0.98 1.0

(xi) Sensitivity analysis on defined benefit obligations at end of the reporting date:

Increase Decrease

June 30, 2021 Rs’000 Rs’000 Discount rate (1% movement) 239,612 201,096 Future long term salary assumption 52,673 19,728

June 30, 2020Discount rate (1% movement) 281,800 251,202 Future long term salary assumption 67,176 59,488





(v) The amounts recognised in profit or loss are as follows: THE GROUP 2021 2020

Rs’000 Rs’000Current service cost 35,295 35,084 Past service cost (30,388) - Interest expense 54,618 69,789 Scheme expenses 2,150 728 Cost of insuring risk benefits 7,165 1,509 Effects of curtailments/ settlements (17,642) (56,403)Total included in staff costs 51,198 50,707 Actual return on plan assets 87,393 26,363

(vi) The amounts recognised in other comprehensive income are as follows: THE GROUP 2021 2020

Rs’000 Rs’000Liability experience loss/(gain) 60,336 (77,997)Actuarial (gains)/ losses arising from changes in financial assumptions (174,703) 251,308

(114,367) 173,311 Gain on pension scheme assets (53,253) (9,801)

(167,620) 163,510

THE GROUP (vii) Major asset categories as percentage of plan assets: 2021 2020

% %Local equities 23% 29%Overseas equities 27% 25%Fixed interest and cash 39% 32%Properties 11% 14%

(viii) The assets of the plan are invested in funds. The expected return on plan assets was determined by considering the expected returns available on the assets underlying the current investment policy. Expected yields on fixed interest investments are based on gross redemption yields as at the balance sheet date. Expected returns on equity and property investments reflect long-term real rates of return experienced in the respective markets.

(ix) Expected contributions to post-employment benefit plans for the year ended June 30, 2021 is Rs 37.3m m and Rs 0.9m to the pension scheme and PRGF respectively.


THE GROUP 2021 2020

% %Discount rate 4.5 3.6 Future salary increases 0.98 1.0

(xi) Sensitivity analysis on defined benefit obligations at end of the reporting date:

Increase Decrease

June 30, 2021 Rs’000 Rs’000 Discount rate (1% movement) 239,612 201,096 Future long term salary assumption 52,673 19,728

June 30, 2020Discount rate (1% movement) 281,800 251,202 Future long term salary assumption 67,176 59,488





Management has reviewed the assumptions used by Swan Life Ltd (Management’s independent actuary) to arrive at the employee benefit liabilities as at June 30, 2021. The discount rate used is based on a yield curve derived from available information on local government bonds with terms from 0.25 to 20 years using the Nelson Siegel Svensson model. The salary increase assumption has been assumed to be nil for employees who are still active and covered under a Defined Benefit scheme. For employees who are still active but not covered under the Defined Benefit scheme, a salary growth of 0.98% has been assumed. The assumptions therefore that are critical to the determination of any unfunded pension liability are the discount rates, the future salary increases and pension increases. The recent Covid pandemic has resulted in a recognisable change in the discount rates which has an important impact on the determination of pension liability. Accordingly, a sensitivity analysis has been calculated on a wider range of deviation.

(xii) The weighted average duration of the defined benefit obligation is 10 years for the Group at the end of the reporting period.

(b) Risks associated with the pension promise / obligation

The pension promise expose the Group to actuarial risks such as longevity risk, interest rate risk, market (investment) risk, and salary risk.

(i) Longevity Risk - The liabilities disclosed are based on the mortality tables PA(92) for post-retirement mortality. Should the experience be less favorable than the standard mortality tables, the liabilities will increase.

(ii) Interest rate risk - If the bond interest rate decreases, the liabilities would be calculated using a lower discount rate, and would therefore increase.

(iii) Investment risk - The present value of the liabilities of the plan are calculated using a discount rate. Should the returns on the assets of the plan be lower than the discount rate, a deficit will arise.

(iv) Salary risk - If salary increases are higher than assumed in our basis, the liabilities would increase giving rise to actuarial losses.

(c) Accounting policy

(i) Defined benefit plans

A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

The liability recognised in the statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period, less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the Projected Unit Credit Method.

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

Past service costs are recognised in profit or loss on the earliest of:

- The date of amendment or curtailment, and

- The date that the Group recognises restructuring-related costs.





(i) Defined benefit plans (cont’d)

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

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

(ii) Defined contribution plans

A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

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

(iii) Short term employee benefits

Short term employee benefits are those expected to be settled wholly before twelve months after the end of the annual reporting period during which employee services are rendered, but do not include termination benefits. Short term employee benefits include wages, salaries and bonuses paid to current employees.

(iv) Gratuity on retirement

For employees who are not covered (or who are insufficiently covered by the above pension plans) the net present value of gratuity on retirement payable under the Workers Rights Act 2019 is calculated by qualified actuaries and provided for. The obligations arising under this item are not funded.

(v) Termination benefits

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

24. DEFERRED INCOME

THE GROUP 2021 2020

Rs’000 Rs’000

At July 1, 265,544 298,119

Release in profit or loss (33,669) (34,359)


At June 30, 232,959 265,544

Deferred income may be analysed as follows:

Current 26,907 34,492

Non current 206,052 231,052

232,959 265,544

Deferred income includes Government grant and grant from LCR relating to capital expenditure. Refer to note 7(a)(i) for further details.

Deferred income is released to profit or loss on straight line basis over the expected useful life of the related asset.





(i) Defined benefit plans (cont’d)

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

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

(ii) Defined contribution plans

A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

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

(iii) Short term employee benefits

Short term employee benefits are those expected to be settled wholly before twelve months after the end of the annual reporting period during which employee services are rendered, but do not include termination benefits. Short term employee benefits include wages, salaries and bonuses paid to current employees.

(iv) Gratuity on retirement

For employees who are not covered (or who are insufficiently covered by the above pension plans) the net present value of gratuity on retirement payable under the Workers Rights Act 2019 is calculated by qualified actuaries and provided for. The obligations arising under this item are not funded.

(v) Termination benefits

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

24. DEFERRED INCOME

THE GROUP 2021 2020

Rs’000 Rs’000

At July 1, 265,544 298,119

Release in profit or loss (33,669) (34,359)


At June 30, 232,959 265,544

Deferred income may be analysed as follows:

Current 26,907 34,492

Non current 206,052 231,052

232,959 265,544

Deferred income includes Government grant and grant from LCR relating to capital expenditure. Refer to note 7(a)(i) for further details.

Deferred income is released to profit or loss on straight line basis over the expected useful life of the related asset.


25. TRADE AND OTHER PAYABLES


Rs’000 Rs’000 Rs’000 Rs’000

Trade payables 592,935 669,553 - -

Other payables and accrued expenses 1,194,850 1,085,435 31,013 20,653

Accruals for centralisation and VRS costs 32,093 57,349 - -

Payable to related parties:

- subsidiaries - - 509 76,820

- joint ventures 1,389 - - 31

- companies with common directors 5 34,597 5 686

- major shareholders 158 367 - 364

1,821,430 1,847,301 31,527 98,554

The carrying amounts of trade and other payables approximate their fair values. Other payables and accrued expenses include client monies amounting to Rs. 30.5 m (2020: Rs. 16.8m) and Group share of net liabilities in joint ventures (Helios Beau Champ Limited and Domaine de L’Etoile Ltd) as it has a contractual commitment to make good of their liabilities. Client monies relate to deposit received from customers for building package and maintenance contract and upgrade projects. Other payables include Rs nil (2020: Rs 146.9m) of dividends payable pertaining to share of dividends to minority interests declared by the subsidiaries.

26. CONTRACT LIABILITIES

THE GROUP 2021 2020

Rs’000 Rs’000

At July 1, 600,292 253,603

Received during the year 909,680 1,241,837

Recognised as revenue during the year (977,060) (896,591)

Exchange difference (16,411) 1,443

At June 30, 516,501 600,292

Contract liabilities may be analysed as follows:

Current 490,013 561,034

Non current 26,488 39,258

516,501 600,292


A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration from the customer. A contract liability is recognised if a payment is received or a payment is due (whichever is earlier) from a customer before the Group transfers the related goods or services. Contract liabilities are recognised as revenue when the Group performs under the contract (i.e., transfers control of the related goods or services to the customer).

27. DIVIDENDS


Rs’000 Rs’000

Interim dividend of Rs 0.32 (2020: Rs 0.32) per share paid

- ordinary dividend 101,917 101,918

Final dividend of Rs 0.40 (2020: Rs 0.22) per share paid

- ordinary dividend 127,397 70,068

Total dividend declared 229,314 171,986



27. DIVIDENDS (CONT’D)


Dividend payable Rs’000 Rs’000

At July 1, 70,068 111,472

Dividend declared during the year 229,314 171,986

Dividend paid during the year (171,985) (213,390)

At June 30, 127,397 70,068

Rs 146.9m of dividends payable pertaining to share of dividends to minority interests declared by the subsidiaries and included in trade and other payables in 2020 were paid during the year.

28. REVENUE

THE GROUPTHE

COMPANY2021 Sugar Energy Property Total Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Recognised at a point in time:

Sale of goods / services 8,003,372 - 613,287 8,616,659 56,949

Recognised over time:

Sale of electricity - 698,058 - 698,058 -

Revenue from sale of villas - - 234,405 234,405 -

Total revenue from contracts with customers 8,003,372 698,058 847,692 9,549,122 56,949

THE GROUPTHE


Rs’000 Rs’000 Rs’000 Rs’000 Rs’000








Revenue from contracts with customers is recognised when control of the goods and services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods and services. The Group has generally concluded that it is the principal in its revenue arrangements, because it typically controls the goods / services before transferring them to the customer.

(i) Sugar cluster

The sugar cluster generates revenue through following main revenue streams:

- Sale of sugar and by-products: The performance obligation relating to the sale of sugar and by-products is satisfied upon delivery of those goods. At the grower stage, control of the goods passes when the delivery truck crosses the weighbridges. At the miller and refiner stage, control of the goods passes to the customer upon delivery. For Mauritius operations, the prices of sugar per ton and byproducts are determined by the Mauritius Sugar Syndicate. For Tanzanian and Kenyan operations, the prices are determined by the market.

- Agriculture diversification: Revenue from agricultural diversification is recognised when the product is sold to the customer. The price is fixed by the Group and payment is due immediately when the customer purchases the goods and takes delivery in store.



27. DIVIDENDS (CONT’D)


Dividend payable Rs’000 Rs’000

At July 1, 70,068 111,472

Dividend declared during the year 229,314 171,986

Dividend paid during the year (171,985) (213,390)

At June 30, 127,397 70,068

Rs 146.9m of dividends payable pertaining to share of dividends to minority interests declared by the subsidiaries and included in trade and other payables in 2020 were paid during the year.

28. REVENUE

THE GROUPTHE


Rs’000 Rs’000 Rs’000 Rs’000 Rs’000







THE GROUPTHE


Rs’000 Rs’000 Rs’000 Rs’000 Rs’000








Revenue from contracts with customers is recognised when control of the goods and services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods and services. The Group has generally concluded that it is the principal in its revenue arrangements, because it typically controls the goods / services before transferring them to the customer.

(i) Sugar cluster

The sugar cluster generates revenue through following main revenue streams:

- Sale of sugar and by-products: The performance obligation relating to the sale of sugar and by-products is satisfied upon delivery of those goods. At the grower stage, control of the goods passes when the delivery truck crosses the weighbridges. At the miller and refiner stage, control of the goods passes to the customer upon delivery. For Mauritius operations, the prices of sugar per ton and byproducts are determined by the Mauritius Sugar Syndicate. For Tanzanian and Kenyan operations, the prices are determined by the market.

- Agriculture diversification: Revenue from agricultural diversification is recognised when the product is sold to the customer. The price is fixed by the Group and payment is due immediately when the customer purchases the goods and takes delivery in store.


28. REVENUE (CONT’D)

(a) Accounting policy (cont’d)

(ii) Energy cluster

The energy cluster generates revenue from the sale of electricity, which is recognised over time as and when distributed on the grid. The transaction price is determined in the Power Purchase Agreement.

(iii) Property cluster

The property cluster generates revenue through the following main revenue streams:

- Construction and sale of villas: The Group generates revenue through the construction and sale of villas. The transaction price for the sale of each villa is governed by the agreement between the Group and its customer. Since there is only one performance obligation, the whole of the transaction price is allocated to the single performance obligation. Revenue is recognised over the life of the construction of the villa, based on the percentage completion which in turn is monitored through costs incurred. Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known to management.

The customers pay fixed amounts based on a payment schedule. If the services rendered by the Group exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised.

- Sale of land: Revenue is recognised when control over the land has been transferred to the customer. The land has generally no alternative use for the Group due to contractual restrictions. However, an enforceable right to payment does not arise until legal title has passed to the customer, i.e., upon signature of the “Acte de Vente”. Therefore, revenue is recognised at a point in time when the legal title has passed to the customer. The revenue is measured at the transaction price agreed under the contract. In most cases, the consideration is due when legal title has been transferred.

29. NORMALISED EARNINGS BEFORE INTEREST, TAXATION, DEPRECIATION AND AMORTISATION


Rs’000 Rs’000 Rs’000 Rs’000

Normalised earnings before interest, taxation, depreciation and amortisation is determined as follows:

Revenue (note 28) 9,549,122 8,286,946 56,949 55,128

Dividend income 611 636 389,679 363,963

Gain/ (loss) in fair value of consumable biological assets (note 16) 528,197 (2,675) - -

Other operating income (note 30) 161,993 152,493 4,777 5,084

Net foreign exchange gain/(loss) 22,512 (19,045) 10,072 -

Operating expenses (note 29(a)) (6,695,840) (6,409,480) (100,001) (87,509)

Fair value gain/( loss) on derivatives 9,577 (39,384) (7,211) (26,636)

3,576,172 1,969,491 354,265 310,030


Rs’000 Rs’000 Rs’000 Rs’000

(a) Operating expenses can be analysed as follows:

Staff costs (note 31) 2,240,040 2,149,695 52,230 40,823

Cost of sales 4,101,377 3,865,772 - -

Management fees 18,452 16,521 20,401 16,521

SIFB premium 26,383 25,461 - -

Bank charges and other expenses 309,588 352,031 27,370 30,165

6,695,840 6,409,480 100,001 87,509



30. OTHER OPERATING INCOME THE GROUP THE COMPANY 2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000Profit on sale of land 44,794 31,715 - - Other operating income 117,199 120,778 4,777 5,084 Total other operating income 161,993 152,493 4,777 5,084

(a) Accounting policyOther operating income earned by the Group is recognised on the following basis:

• Profit on sale of land is recognised when the control has been transferred to the buyer.

• Others include insurance refund received and sundries income which are recognised in the accounting year in which the goods are sold.

31. STAFF COSTS THE GROUP THE COMPANY 2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000Wages and salaries 1,824,021 1,775,977 47,304 38,540 Pension costs 416,019 373,718 4,926 2,283 Staff costs 2,240,040 2,149,695 52,230 40,823

Further to the COVID-19 outbreak, the Group received Rs 23.8m (2020: Rs 28.3m) through the Government Wage Assistance Scheme, which has been recorded against staff costs for the year.

32. FINANCE INCOME AND COSTS THE GROUP THE COMPANY 2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000(a) Interest income 26,028 8,470 14,018 13,873

Finance income 26,028 8,470 14,018 13,873 (b) Interest expense:

- Bank and other loans 374,094 406,576 85,754 82,232 - Bank overdrafts 89,517 93,181 255 154 - Lease liabilities 13,352 12,089 1,176 1,433 Finance costs 476,963 511,846 87,185 83,819

33. OTHER INCOME AND EXPENSES THE GROUP 2021 2020

Rs’000 Rs’000IncomeProfit on disposal of property, plant and equipment 122,750 201,136 Gain on fair value of investment properties (note 6) - 800 Reversal of compensation payable 87,202 - SIFB compensation 82,889 119,159

292,841 321,095 ExpensesPre-operational expenses - (25,364)Government 2000 Arpents land scheme - (42,885)Loss on fair value of investment properties (note 6) (13,581)Land development costs (31,599) (25,580)Blue print costs expensed (945) (837)Mutually agreed departure costs (58,786) (149,897)

(104,911) (244,563)Net other income 187,930 76,532



30. OTHER OPERATING INCOME THE GROUP THE COMPANY 2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000Profit on sale of land 44,794 31,715 - - Other operating income 117,199 120,778 4,777 5,084 Total other operating income 161,993 152,493 4,777 5,084

(a) Accounting policyOther operating income earned by the Group is recognised on the following basis:

• Profit on sale of land is recognised when the control has been transferred to the buyer.

• Others include insurance refund received and sundries income which are recognised in the accounting year in which the goods are sold.

31. STAFF COSTS THE GROUP THE COMPANY 2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000Wages and salaries 1,824,021 1,775,977 47,304 38,540 Pension costs 416,019 373,718 4,926 2,283 Staff costs 2,240,040 2,149,695 52,230 40,823

Further to the COVID-19 outbreak, the Group received Rs 23.8m (2020: Rs 28.3m) through the Government Wage Assistance Scheme, which has been recorded against staff costs for the year.

32. FINANCE INCOME AND COSTS THE GROUP THE COMPANY 2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000(a) Interest income 26,028 8,470 14,018 13,873

Finance income 26,028 8,470 14,018 13,873 (b) Interest expense:

- Bank and other loans 374,094 406,576 85,754 82,232 - Bank overdrafts 89,517 93,181 255 154 - Lease liabilities 13,352 12,089 1,176 1,433 Finance costs 476,963 511,846 87,185 83,819

33. OTHER INCOME AND EXPENSES THE GROUP 2021 2020

Rs’000 Rs’000IncomeProfit on disposal of property, plant and equipment 122,750 201,136 Gain on fair value of investment properties (note 6) - 800 Reversal of compensation payable 87,202 - SIFB compensation 82,889 119,159

292,841 321,095 ExpensesPre-operational expenses - (25,364)Government 2000 Arpents land scheme - (42,885)Loss on fair value of investment properties (note 6) (13,581)Land development costs (31,599) (25,580)Blue print costs expensed (945) (837)Mutually agreed departure costs (58,786) (149,897)

(104,911) (244,563)Net other income 187,930 76,532


34. EARNINGS PER SHARE THE GROUP THE COMPANY 2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000Basic and diluted earnings per share 3.64 (0.32) 0.86 0.73 Based on:Profit for the year attributable to the owner 1,158,973 (102,340) 272,372 231,873 Weighted average number of ordinary shares outstanding (note 20) 318,492,120 318,492,120 318,492,120 318,492,120

35. NOTES TO STATEMENT OF CASH FLOWS THE GROUP THE COMPANY

Notes 2021 2020 2021 2020

(a) Cash generated from operations Rs’000 Rs’000 Rs’000 Rs’000Profit / (loss) before tax 2,693,217 802,091 272,216 232,182 Adjustments for:Release of deferred income 24 (33,669) (34,359) - - Depreciation of property, plant and equipment and right of use 5, 36 811,089 728,079 8,882 7,902 Profit on sale of land 30 (44,794) (31,715) - - Reversal of impairment of bearer biological assets 41 (234,148) - - - Reversal of impairment of property, plant and equipment 41 (14,403) - - - Impairment of spare parts 41 24,649 18,979 - - Profit on sale of property, plant and equipment 33 (122,750) (201,136) - - Government 2000 Arpents land scheme 33 - 42,885 - - Loss on financial assets at fair value through profit or loss 12 (9,577) 27,241 7,211 - Loss/(gain) on fair value of investment property 33 13,581 (800) - - Increase in expected credit loss 41 5,352 12,853 - - Dividend income 29 (611) (636) (389,679) (363,963)Finance income 32(a) (26,028) (8,470) (14,019) (13,873)Finance costs 32(b) 476,963 511,846 87,183 83,819 Exchange difference (18,421) 4,923 (9,364) (1,341)Employee benefit expenses 23(a)(ii) (37,955) (42,333) - - Share of results of associates 10 (2,523) (3,512) - - Share of results of joint ventures 9 63,603 18,516 - - Changes in working capital:- (Increase)/ decrease in fair value of consumable biological assets 16, 29 (528,196) 2,675 - - - (Increase)/ decrease in inventories (192,143) 91,360 - - - (Increase)/ decrease in trade and other receivables (32,838) 21,691 13,936 (4,014)- (Decrease)/ increase in trade and other payables 6,753 (28,151) 8,259 5,418 - Increase in financial assets at amortised cost 13 (7,041) (36,145) - - Cash generated from / (used in) operations 2,790,110 1,895,882 (15,375) (53,870)

(b) Cash and cash equivalents THE GROUP THE COMPANY 2021 2020 2021 2020

Rs’000 Rs’000 Rs’000 Rs’000Cash in hand and at bank 532,255 1,017,474 198,928 14,414 Short term deposit - - 188,317 190,779 Bank overdrafts (note 22) (961,886) (1,632,034) - (2,338)Loans at call (note 22) - - (201,016) (171,411)Money market deal (note 22) (44) (99,997) - - At June 30, (429,675) (714,557) 186,229 31,444

(c) Non-cash transactionsThe principal non-cash transactions are the acquisition of right-of-use assets (note 36).



35. NOTES TO STATEMENT OF CASH FLOWS (CONT’D)

(d) Reconciliation of liabilities arising from financing activities

At July 1, 2020 Cash flows

Foreign exchange

movement New leases

Transfer between current

and non-current

At June 30,

2021

THE GROUP Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000Current loans and borrowings (excluding items below) 587,296 (788,723) 27,546 - 1,220,141 1,046,260

Current lease liabilities 58,620 (52,022) (180) 29 71,682 78,129

Current debentures 50,000 (50,000) - - 500,000 500,000 Non-current loans and borrowings (excluding items below) 3,517,961 1,044,135 117,880 - (1,220,141) 3,459,835

Non-current lease liabilities 101,270 - (5,502) 233,714 (71,682) 257,800

Non-current debentures 1,450,000 - - - (500,000) 950,000

Loans from shareholders 29,927 - - - - 29,927

Total liabilities from financing activities 5,795,074 153,390 139,744 233,743 - 6,321,951

At July 1, after impact of IFRS 16 Cash flows

Foreign exchange movement New leases


and non-current

At June 30,

2020

THE GROUP Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Current loans and borrowings (excluding items below) 717,124 (424,039) 34,359 - 259,852 587,296

Current lease liabilities 50,795 (27,534) (712) 8,941 27,130 58,620

Current debentures - - - - 50,000 50,000

Non-current loans and borrowings (excluding items below) 3,045,090 534,198 198,525 - (259,852) 3,517,961

Non-current lease liabilities 130,921 (29,584) (2,856) 29,919 (27,130) 101,270

Non-current debentures 1,500,000 - - - (50,000) 1,450,000

Loans from shareholders 28,069 1,858 - - - 29,927





(d) Reconciliation of liabilities arising from financing activities

At July 1, 2020 Cash flows

Foreign exchange

movement New leases


and non-current

At June 30,

2021

THE GROUP Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000Current loans and borrowings (excluding items below) 587,296 (788,723) 27,546 - 1,220,141 1,046,260

Current lease liabilities 58,620 (52,022) (180) 29 71,682 78,129

Current debentures 50,000 (50,000) - - 500,000 500,000 Non-current loans and borrowings (excluding items below) 3,517,961 1,044,135 117,880 - (1,220,141) 3,459,835

Non-current lease liabilities 101,270 - (5,502) 233,714 (71,682) 257,800

Non-current debentures 1,450,000 - - - (500,000) 950,000

Loans from shareholders 29,927 - - - - 29,927


At July 1, after impact of IFRS 16 Cash flows

Foreign exchange movement New leases


and non-current

At June 30,

2020

THE GROUP Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Current loans and borrowings (excluding items below) 717,124 (424,039) 34,359 - 259,852 587,296

Current lease liabilities 50,795 (27,534) (712) 8,941 27,130 58,620

Current debentures - - - - 50,000 50,000

Non-current loans and borrowings (excluding items below) 3,045,090 534,198 198,525 - (259,852) 3,517,961

Non-current lease liabilities 130,921 (29,584) (2,856) 29,919 (27,130) 101,270

Non-current debentures 1,500,000 - - - (50,000) 1,450,000

Loans from shareholders 28,069 1,858 - - - 29,927




(d) Reconciliation of liabilities arising from financing activities (cont’d )

At July 1, 2020 Cash flows New leases


and non-current

At June 30,

2021

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

Current lease liabilities 7,825 (7,940) - 8,528 8,413

Current debentures 50,000 (50,000) - 500,000 500,000

Non-current lease liabilities 13,858 - 24,318 (8,528) 29,648

Non-current debentures 1,450,000 - - (500,000) 950,000

Total liabilities from financing activities 1,521,683 (57,940) 24,318 - 1,488,061

At July 1, after impact of IFRS 16 Cash flows New leases

Transfer between

current and non-current

At June 30, 2020

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

Current lease liabilities* 7,146 (7,520) 374 7,825 7,825

Current debentures - - - 50,000 50,000

Non-current lease liabilities 19,582 - 2,101 (7,825) 13,858

Non-current debentures* 1,500,000 - - (50,000) 1,450,000

Total liabilities from financing activities 1,526,728 (7,520) 2,475 - 1,521,683

* The payment of current lease liabilities have been reclassified to show the correct current and non current portions.

(e) Accounting policy

Cash and cash equivalents in the statements of financial position include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of 3 months or less. Bank overdrafts are shown within borrowings in current liabilities on the statements of financial position.

For the purpose of the statements of cash flows, cash and cash equivalents consist of cash and cash equivalents in the statements of financial position, net of outstanding bank overdrafts. Cash and cash equivalents are measured at amortised cost.



36. RIGHT-OF-USE ASSETS

LesseeThe Group has lease contracts for motor vehicles, plant and machinery, land and building used in its operations. Leases of land and building have lease terms between 2 and 99 years, while motor vehicles generally have lease terms between 3-5 years. The Group’s obligations under its leases are secured by the lessor’s title to the leased assets. Generally the Group is restricted from assigning and subleasing the leased assets and some contracts require the Group to maintain certain financial ratios. There are several lease contracts that include extension and termination options and variable lease payments which are further discussed below.Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year:

THE GROUP Motor vehiclesPlant &

machinery Land Other building Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2019 - - - - - Impact of adoption of IFRS 16 93,875 - 9,952 20,060 123,887 Additions 11,632 27,209 19 - 38,860 Disposal (2,740) - - - (2,740)Depreciation expense (19,361) (5,193) (1,433) (8,050) (34,037)Exchange difference 742 - 899 - 1,641

84,148 22,016 9,437 12,010 127,611

At July 1, 2020 84,148 22,016 9,437 12,010 127,611 Additions 135,651 64,256 13,640 23,215 236,762 Transfers from property, plant and equipment (20,218) 55,030 10,587 (895) 44,504 Disposal (4,990) - - - (4,990)Depreciation expense (30,761) (20,707) (1,923) (8,272) (61,663)Exchange difference - - (1,690) - (1,690)At June 30, 2021 163,830 120,595 30,051 26,058 340,534

Right of use assets include Rs 3m of leased motor vehicles which has been financed partly by the Group.

THE COMPANYMotor

vehicles Land Other building Total Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2019 - - - - Impact on adoption of IFRS 16 1,162 9,850 15,717 26,729 Additions 2,475 - - 2,475 Depreciation expense (433) (132) (7,019) (7,584)At June 30, 2020 3,204 9,718 8,698 21,620

At July 1, 2020 3,204 9,718 8,698 21,620 Additions - 1,103 23,215 24,318 Depreciation expense (763) (146) (7,509) (8,418)At June 30, 2021 2,441 10,675 24,404 37,520

Set out below are the carrying amounts of lease liabilities (included under loans and borrowings) and the movements during the year: THE GROUP THE COMPANY

2021 2020 2021 2020 Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 159,890 - 21,683 - Impact on adoption of IFRS 16 - 181,716 - 26,728 Additions 233,714 38,860 24,318 2,475 Accretion of interest 13,352 12,089 1,175 1,433 Payments (65,374) (69,207) (9,115) (8,953)Exchange difference (5,653) (3,568) - - At June 30, 335,929 159,890 38,061 21,683 Current (Note 22) 78,129 58,620 7,913 7,825 Non-current (Note 22) 257,800 101,270 30,148 13,858

335,929 159,890 38,061 21,683

The maturity analysis of lease liabilities are disclosed in note 22.



36. RIGHT-OF-USE ASSETS

LesseeThe Group has lease contracts for motor vehicles, plant and machinery, land and building used in its operations. Leases of land and building have lease terms between 2 and 99 years, while motor vehicles generally have lease terms between 3-5 years. The Group’s obligations under its leases are secured by the lessor’s title to the leased assets. Generally the Group is restricted from assigning and subleasing the leased assets and some contracts require the Group to maintain certain financial ratios. There are several lease contracts that include extension and termination options and variable lease payments which are further discussed below.Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year:

THE GROUP Motor vehiclesPlant &

machinery Land Other building Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2019 - - - - - Impact of adoption of IFRS 16 93,875 - 9,952 20,060 123,887 Additions 11,632 27,209 19 - 38,860 Disposal (2,740) - - - (2,740)Depreciation expense (19,361) (5,193) (1,433) (8,050) (34,037)Exchange difference 742 - 899 - 1,641

84,148 22,016 9,437 12,010 127,611

At July 1, 2020 84,148 22,016 9,437 12,010 127,611 Additions 135,651 64,256 13,640 23,215 236,762 Transfers from property, plant and equipment (20,218) 55,030 10,587 (895) 44,504 Disposal (4,990) - - - (4,990)Depreciation expense (30,761) (20,707) (1,923) (8,272) (61,663)Exchange difference - - (1,690) - (1,690)At June 30, 2021 163,830 120,595 30,051 26,058 340,534

Right of use assets include Rs 3m of leased motor vehicles which has been financed partly by the Group.

THE COMPANYMotor

vehicles Land Other building Total Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2019 - - - - Impact on adoption of IFRS 16 1,162 9,850 15,717 26,729 Additions 2,475 - - 2,475 Depreciation expense (433) (132) (7,019) (7,584)At June 30, 2020 3,204 9,718 8,698 21,620

At July 1, 2020 3,204 9,718 8,698 21,620 Additions - 1,103 23,215 24,318 Depreciation expense (763) (146) (7,509) (8,418)At June 30, 2021 2,441 10,675 24,404 37,520

Set out below are the carrying amounts of lease liabilities (included under loans and borrowings) and the movements during the year: THE GROUP THE COMPANY

2021 2020 2021 2020 Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 159,890 - 21,683 - Impact on adoption of IFRS 16 - 181,716 - 26,728 Additions 233,714 38,860 24,318 2,475 Accretion of interest 13,352 12,089 1,175 1,433 Payments (65,374) (69,207) (9,115) (8,953)Exchange difference (5,653) (3,568) - - At June 30, 335,929 159,890 38,061 21,683 Current (Note 22) 78,129 58,620 7,913 7,825 Non-current (Note 22) 257,800 101,270 30,148 13,858

335,929 159,890 38,061 21,683

The maturity analysis of lease liabilities are disclosed in note 22.


36. RIGHT-OF-USE ASSETS (CONT’D)

Lessee (cont’d)

The following are the amounts recognised in profit or loss:

THE GROUP THE

COMPANY 2021 2020

Rs’000 Rs’000

Depreciation expense of right-of-use assets 61,663 8,104

Interest expense on lease liabilities 13,352 1,342

Total amount recognised in profit or loss 75,015 9,446

Lessor

The Group has entered into operating leases on its investment property portfolio consisting of certain land and buildings. These leases have terms of between 5-60 years. Rental income recognised by the Group during the year is Rs 1.7 m (2020: Rs 7.4m).

The future aggregate minimum lease payments under non-cancellable leases are as follows:

THE GROUP 2021 2020

Rs’000 Rs’000

Less than one year 1,830 7,332

One to two years 1,453 7,672

Two to three years 1,138 8,027

Three to four years 1,138 8,398

Four to five years 1,138 1,138

More than five years 47,811 47,811

54,508 80,378

37. CAPITAL COMMITMENTS

THE GROUP 2021 2020

Rs’000 Rs’000

Capital expenditure approved by the Board:

- contracted 146,634 160,273

- not contracted 749,716 741,897

896,350 902,170

38. CONTINGENT LIABILITIES

a) There are several legal cases against Transmara Sugar Company Ltd relating to disputes and breach of out-growers’contracts and termination of employment with total exposure amounting to Rs 231m (2020: Rs 322m). A provision amounting to Rs 6.5M (2020: Rs 1.4m) was recorded in the year for the cases that management assessed the probability of losing as possible. For the rest of the amount, the management has assessed risk of crystalising as not more than likely and hence no provision made.

b) At June 30, 2021, in the ordinary course of business, the Group obtained a letter of credit amounting to Rs 12 m (2020: Rs 20m) to third parties in respect of Alteo Energy Ltd.



39. RELATED PARTY TRANSACTIONS

(a) THE GROUPSale / (purchase) of goods and

services Dividend (expense) / incomeManagement fees (payable)/

Receivable Loans at call (from)/to Amount owed to Amount due from

2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020

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

Associates - - - 5,045 - - - - - - - -

Joint ventures (1,770) (21,768) - 2,314 - - (44) - 1,389 - 81,516 27,481

Companies with common directors (100,529) (450,879) - - - - - - 5 34,597 18,250 16,862

Major shareholders - - (20,401) (16,521) - - 158 367 - -

Total (102,299) (472,647) - 7,359 (20,401) (16,521) (44) - 1,552 34,964 99,766 44,343

THE COMPANY

Subsidiaries (7,780) (13,646) 387,179 317,748 58,852 54,363 (12,655) 327,294 509 76,820 6,779 229,256

Associates - - - 5,045 - - - - - - 2,522 -

Joint ventures (438) (461) - 2,314 - - (44) - - 31 3,260 3,008

Companies with common directors (7,241) (1,432) - - - - - - 5 686 - -

Major shareholders - - (20,401) (16,521) - - - 364 - -

Total (15,459) (15,539) 387,179 325,107 38,451 37,842 (12,699) 327,294 514 77,901 12,561 232,264

Outstanding balances at the year-end are secured, interest free and settlement occurs in cash. For the year ended June 30, 2021, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (2020: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

(b) Key management personnel compensation THE GROUP2021 2020

Rs’000 Rs’000

Salaries and short term benefits

25,852 24,028


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



39. RELATED PARTY TRANSACTIONS

(a) THE GROUPSale / (purchase) of goods and

services Dividend (expense) / incomeManagement fees (payable)/

Receivable Loans at call (from)/to Amount owed to Amount due from

2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020


Associates - - - 5,045 - - - - - - - -

Joint ventures (1,770) (21,768) - 2,314 - - (44) - 1,389 - 81,516 27,481

Companies with common directors (100,529) (450,879) - - - - - - 5 34,597 18,250 16,862

Major shareholders - - (20,401) (16,521) - - 158 367 - -

Total (102,299) (472,647) - 7,359 (20,401) (16,521) (44) - 1,552 34,964 99,766 44,343

THE COMPANY

Subsidiaries (7,780) (13,646) 387,179 317,748 58,852 54,363 (12,655) 327,294 509 76,820 6,779 229,256

Associates - - - 5,045 - - - - - - 2,522 -

Joint ventures (438) (461) - 2,314 - - (44) - - 31 3,260 3,008

Companies with common directors (7,241) (1,432) - - - - - - 5 686 - -

Major shareholders - - (20,401) (16,521) - - - 364 - -

Total (15,459) (15,539) 387,179 325,107 38,451 37,842 (12,699) 327,294 514 77,901 12,561 232,264

Outstanding balances at the year-end are secured, interest free and settlement occurs in cash. For the year ended June 30, 2021, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (2020: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

(b) Key management personnel compensation THE GROUP2021 2020

Rs’000 Rs’000

Salaries and short term benefits

25,852 24,028


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



40. SEGMENT INFORMATION

For management purposes, the Group analyses its operations by country, sub-categorised into three reportable segments, as follows:

- The sugar segment, which includes planting and harvesting of sugar cane and other food crops, sugar cane milling and sugar refining.

- The energy segment, which operates bagasse/coal power plants to supply steam and electricity.

- The property segment, which promotes, markets and sells villas, apartments and serviced land and operates a 18-hole championship golf course located at Anahita.

Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, cash and cash equivalents and trade and other receivables and exclude investment in joint ventures and investment in associates. Adjustment transactions represent elimination of intra-group which are entered into under the normal commercial terms and conditions that would be available to unrelated parties.

The accounting policies of the operating segments are same as those described in the summary of accounting policies.

The Group is organised into the following main business segments:

Sugar / agricultural Energy Property Adjustment transactions Total

Mauritius Tanzania Kenya Mauritius Mauritius

2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020

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

Segment revenue 1,658,478 1,816,206 3,739,895 3,192,243 2,730,641 1,911,900 711,815 638,307 857,901 956,844 - - 9,698,730 8,515,500

Inter-segment revenue - - - - - - - - - - (149,608) (228,554) (149,608) (228,554)

1,658,478 1,816,206 3,739,895 3,192,243 2,730,641 1,911,900 711,815 638,307 857,901 956,844 (149,608) (228,554) 9,549,122 8,286,946

Segment profit 702,538 (150,569) 2,021,132 1,394,502 162,790 (122,432) 44,604 66,408 274,168 132,562 - - 3,205,232 1,320,471

Finance income 1,605 5,431 4,158 2,380 17,281 - 16 721 2,968 (62) - - 26,028 8,470

Finance cost (129,680) (140,157) (76,729) (52,104) (237,216) (264,859) (496) (4,197) (32,842) (50,529) - - (476,963) (511,846)

Share of results of associates, net of tax 2,928 2,706 - - - - - - (405) 806 - - 2,523 3,512

Share of results of joint ventures, net of tax - (44) - - - - 4,383 11,495 (67,986) (29,967) - - (63,603) (18,516)

Profit / (loss) before tax 577,391 (282,633) 1,948,561 1,344,778 (57,145) (387,291) 48,507 74,427 175,903 52,810 - - 2,693,217 802,091

Taxation (10,926) (32,439) (715,234) (483,720) (56,235) (39,868) (7,686) (15,069) (39,248) (8,846) - - (829,329) (579,942)

Profit / (loss) for the year 566,465 (315,072) 1,233,327 861,058 (113,380) (427,159) 40,821 59,358 136,655 43,964 - - 1,863,888 222,149



40. SEGMENT INFORMATION

For management purposes, the Group analyses its operations by country, sub-categorised into three reportable segments, as follows:

- The sugar segment, which includes planting and harvesting of sugar cane and other food crops, sugar cane milling and sugar refining.

- The energy segment, which operates bagasse/coal power plants to supply steam and electricity.

- The property segment, which promotes, markets and sells villas, apartments and serviced land and operates a 18-hole championship golf course located at Anahita.

Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, cash and cash equivalents and trade and other receivables and exclude investment in joint ventures and investment in associates. Adjustment transactions represent elimination of intra-group which are entered into under the normal commercial terms and conditions that would be available to unrelated parties.

The accounting policies of the operating segments are same as those described in the summary of accounting policies.

The Group is organised into the following main business segments:

Sugar / agricultural Energy Property Adjustment transactions Total


2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020

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

Segment revenue 1,658,478 1,816,206 3,739,895 3,192,243 2,730,641 1,911,900 711,815 638,307 857,901 956,844 - - 9,698,730 8,515,500

Inter-segment revenue - - - - - - - - - - (149,608) (228,554) (149,608) (228,554)

1,658,478 1,816,206 3,739,895 3,192,243 2,730,641 1,911,900 711,815 638,307 857,901 956,844 (149,608) (228,554) 9,549,122 8,286,946

Segment profit 702,538 (150,569) 2,021,132 1,394,502 162,790 (122,432) 44,604 66,408 274,168 132,562 - - 3,205,232 1,320,471

Finance income 1,605 5,431 4,158 2,380 17,281 - 16 721 2,968 (62) - - 26,028 8,470

Finance cost (129,680) (140,157) (76,729) (52,104) (237,216) (264,859) (496) (4,197) (32,842) (50,529) - - (476,963) (511,846)

Share of results of associates, net of tax 2,928 2,706 - - - - - - (405) 806 - - 2,523 3,512

Share of results of joint ventures, net of tax - (44) - - - - 4,383 11,495 (67,986) (29,967) - - (63,603) (18,516)

Profit / (loss) before tax 577,391 (282,633) 1,948,561 1,344,778 (57,145) (387,291) 48,507 74,427 175,903 52,810 - - 2,693,217 802,091

Taxation (10,926) (32,439) (715,234) (483,720) (56,235) (39,868) (7,686) (15,069) (39,248) (8,846) - - (829,329) (579,942)

Profit / (loss) for the year 566,465 (315,072) 1,233,327 861,058 (113,380) (427,159) 40,821 59,358 136,655 43,964 - - 1,863,888 222,149



40. SEGMENT INFORMATION (CONT’D)

Sugar Energy Property Total


2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020


Segment assets 20,658,355 18,306,713 6,002,361 6,983,255 2,648,322 2,474,875 517,355 588,973 1,305,173 1,579,773 31,131,566 29,933,589

Associates 13,433 13,856 - - - - - - 9,343 9,750 22,776 23,606

Joint ventures - - - - - - - - (9,876) 15,347 28,754 15,347 18,878

31,169,689 29,976,073

Segment liabilities 4,930,739 5,123,631 4,507,894 4,277,416 2,038,822 1,877,549 269,721 291,722 761,964 1,163,050 12,509,140 12,733,368

Capital expenditure 468,724 214,070 435,373 208,484 182,608 127,219 3,314 3,338 12,491 33,554 1,102,510 586,665

Profit/(loss) disposal of property, plant and equipment 125,724 126,065 32 - (3,006) - - 72,853 - 2,218 122,750 201,136

Depreciation of property, plant and equipment and right-of-use assets 251,838 241,237 236,501 193,332 216,827 187,109 77,286 77,972 28,637 28,429 811,089 728,079

Impairment of spare parts 5,670 - - - 18,979 18,979 - 24,649 18,979

Reversal of impairment of property, plant and equipment (248,551) - - - - - - - - - (248,551) -

(a) Geographical information

The Group’s three business segments are managed locally and operate in the following main geographical areas:

Sales Total assets Capital expenditure

2021 2020 2021 2020 2021 2020

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

Mauritius 3,078,586 3,182,803 22,480,883 20,475,459 484,529 250,962

Tanzania 3,739,895 3,192,243 6,002,361 6,983,255 435,373 208,484

Kenya 2,730,641 1,911,900 2,648,322 2,474,875 182,608 127,219

9,549,122 8,286,946 31,131,566 29,933,589 1,102,510 586,665

Sales revenue is based on the country in which the customer is located. Total assets and capital expenditure are shown by the geographical area in which assets are located.


Segment information presented relate to the operating segments that engage in business activities for which revenues are earned and expenses incurred. The Group’s customer base is diversified, with no individually significant customers except for the Mauritius Sugar Syndicate and Central Electricity Board.



40. SEGMENT INFORMATION (CONT’D)

Sugar Energy Property Total


2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020


Segment assets 20,658,355 18,306,713 6,002,361 6,983,255 2,648,322 2,474,875 517,355 588,973 1,305,173 1,579,773 31,131,566 29,933,589

Associates 13,433 13,856 - - - - - - 9,343 9,750 22,776 23,606

Joint ventures - - - - - - - - (9,876) 15,347 28,754 15,347 18,878

31,169,689 29,976,073

Segment liabilities 4,930,739 5,123,631 4,507,894 4,277,416 2,038,822 1,877,549 269,721 291,722 761,964 1,163,050 12,509,140 12,733,368

Capital expenditure 468,724 214,070 435,373 208,484 182,608 127,219 3,314 3,338 12,491 33,554 1,102,510 586,665

Profit/(loss) disposal of property, plant and equipment 125,724 126,065 32 - (3,006) - - 72,853 - 2,218 122,750 201,136

Depreciation of property, plant and equipment and right-of-use assets 251,838 241,237 236,501 193,332 216,827 187,109 77,286 77,972 28,637 28,429 811,089 728,079

Impairment of spare parts 5,670 - - - 18,979 18,979 - 24,649 18,979

Reversal of impairment of property, plant and equipment (248,551) - - - - - - - - - (248,551) -

(a) Geographical information

The Group’s three business segments are managed locally and operate in the following main geographical areas:

Sales Total assets Capital expenditure

2021 2020 2021 2020 2021 2020

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

Mauritius 3,078,586 3,182,803 22,480,883 20,475,459 484,529 250,962

Tanzania 3,739,895 3,192,243 6,002,361 6,983,255 435,373 208,484

Kenya 2,730,641 1,911,900 2,648,322 2,474,875 182,608 127,219

9,549,122 8,286,946 31,131,566 29,933,589 1,102,510 586,665

Sales revenue is based on the country in which the customer is located. Total assets and capital expenditure are shown by the geographical area in which assets are located.


Segment information presented relate to the operating segments that engage in business activities for which revenues are earned and expenses incurred. The Group’s customer base is diversified, with no individually significant customers except for the Mauritius Sugar Syndicate and Central Electricity Board.



41. REVERSAL OF IMPAIRMENT OF ASSETS AND ALLOWANCE FOR EXPECTED CREDIT LOSSES

THE GROUP 2021 2020

Rs’000 Rs’000

Financial assets

Allowance for expected credit losses:

Non-current (note 13) (2,112) 518

Current (note 17) 7,464 12,335

5,352 12,853

Non-financial assets

Reversal of impairment plant and equipment (notes 5 and 41(a)) (14,403) -

Reversal of impairment bearer biological assets (notes 5 and 41(b)) (234,148) -

Impairment of spare parts (notes 15 and 41(a)) 24,649 18,979

(223,902) 18,979

Total reversal of impairment and allowance for expected credit losses (218,550) 31,832

The Group performed its annual impairment test on its cash generating units. Higher sugar price for Crop 2021 together with the additional remuneration of bagasse have led a reversal of impairment of previously impaired assets.

(a) Plant, equipment and spare parts

The Group has assessed the recoverable amount of its spare parts. An impairment of Rs 24.6m was booked as it estimated the recoverable amount on certain spare parts to be nil.

Key assumptions used in recoverable amount calculations

The recoverable amount of the non-financial assets is most sensitive to the following assumptions:

Achieving forecasted selling price and tonnage of raw sugar for Alteo Milling Ltd

Selling price of sugar is regulated by the Mauritius Sugar Syndicate. For crop 2020, the ex-syndicate price of Raw Sugar was at Rs 14,062/ton and management had estimated that price would go up for crop 2021 onwards to Rs 14,300/ton and Rs 3,300/ton for bagasse.

The recoverable amount of the Cash Generating Unit has been determined based on the value in use calculation using cash flow projections from financial budgets approved by senior management covering a 5-year period. The discount rate applied to cash flow projections is 11.97% (2020: 11.31%) and the cash flows beyond the 5 years were determined using a growth rate of 0% (2020: 0%). As a result of the analysis, impairment loss of Rs 14,403,093 has been reversed (2020: Rs nil) against its Property, plant and equipment during the financial year.

In line with IAS 20.24, the Company has taken into consideration the grant given by the authorities (in terms of LCR) in its impairment assessment. The Company policy is to recognise the grant received as deferred income, amortised against the life of the plant.

Discount rates represent the current market assessment of the risks specific to a Cash Generating Unit, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate for the financial year 11.97% (2020: 11.31%) calculation is based on the specific circumstances of the Company and is derived from its weighted average cost of capital (WACC). The WACC took into account both debt and equity. The cost of equity is derived from the expected return on investment by the Company’s investors. The cost of debt is based on the interest bearing borrowings the Company is obliged to service.



41. REVERSAL OF IMPAIRMENT OF ASSETS AND ALLOWANCE FOR EXPECTED CREDIT LOSSES

THE GROUP 2021 2020

Rs’000 Rs’000

Financial assets

Allowance for expected credit losses:

Non-current (note 13) (2,112) 518

Current (note 17) 7,464 12,335

5,352 12,853

Non-financial assets

Reversal of impairment plant and equipment (notes 5 and 41(a)) (14,403) -

Reversal of impairment bearer biological assets (notes 5 and 41(b)) (234,148) -

Impairment of spare parts (notes 15 and 41(a)) 24,649 18,979

(223,902) 18,979

Total reversal of impairment and allowance for expected credit losses (218,550) 31,832

The Group performed its annual impairment test on its cash generating units. Higher sugar price for Crop 2021 together with the additional remuneration of bagasse have led a reversal of impairment of previously impaired assets.

(a) Plant, equipment and spare parts

The Group has assessed the recoverable amount of its spare parts. An impairment of Rs 24.6m was booked as it estimated the recoverable amount on certain spare parts to be nil.



Achieving forecasted selling price and tonnage of raw sugar for Alteo Milling Ltd

Selling price of sugar is regulated by the Mauritius Sugar Syndicate. For crop 2020, the ex-syndicate price of Raw Sugar was at Rs 14,062/ton and management had estimated that price would go up for crop 2021 onwards to Rs 14,300/ton and Rs 3,300/ton for bagasse.

The recoverable amount of the Cash Generating Unit has been determined based on the value in use calculation using cash flow projections from financial budgets approved by senior management covering a 5-year period. The discount rate applied to cash flow projections is 11.97% (2020: 11.31%) and the cash flows beyond the 5 years were determined using a growth rate of 0% (2020: 0%). As a result of the analysis, impairment loss of Rs 14,403,093 has been reversed (2020: Rs nil) against its Property, plant and equipment during the financial year.

In line with IAS 20.24, the Company has taken into consideration the grant given by the authorities (in terms of LCR) in its impairment assessment. The Company policy is to recognise the grant received as deferred income, amortised against the life of the plant.

Discount rates represent the current market assessment of the risks specific to a Cash Generating Unit, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate for the financial year 11.97% (2020: 11.31%) calculation is based on the specific circumstances of the Company and is derived from its weighted average cost of capital (WACC). The WACC took into account both debt and equity. The cost of equity is derived from the expected return on investment by the Company’s investors. The cost of debt is based on the interest bearing borrowings the Company is obliged to service.


41. REVERSAL OF IMPAIRMENT OF ASSETS AND ALLOWANCE FOR EXPECTED CREDIT LOSSES (CONTINUED)

(b) Bearer biological assets

The recoverable amount of the Cash Generating Unit has been determined using discounted cash flow techniques on a 9-year period, which is the useful life of a bearer plant for Mauritius operations. The forecasted selling price and discount rate applied to cash flow projection are explained below. As a result of the analysis, a reversal of impairment of Rs 234m was recorded (2020: Rs Nil) against its bearer plants during the financial year.



Achieving forecasted selling price:

Selling price of sugar is regulated by the Mauritius Sugar Syndicate. For crop 2020, the ex-syndicate price of Raw Sugar was at Rs 14,062/ton and management has estimated that price would go up for crop 2021 to Rs 14,500/ton for FY 2021-22 and to Rs 13,920/ton for crop 2022 onwards. The estimation was based on market research performed by management. Following the National budget 2021-22, a biomass renumeration of Rs 3,300 per ton sugar accrued will be paid by Government to planters compared to Rs 62 per ton sugar accrued for the past crop. By-products revenue has been maintained at the same level as final prices for year ended June 30, 2021.

Discount rate

Discount rates represent the current market assessment of the risks specific to a Cash Generating Unit, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate (2021 & 2020: 9.88%) calculation is based on the specific circumstances of the Company and is derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Company’s investors. The cost of debt is based on the interest bearing borrowings the Company is obliged to service.

The fair valuation of the Cash Generating Unit of the Company falls under Level 3 of the fair value hierarchy.

Sensitivity to change in inputs to the valuation workings:

The following table shows the valuation techniques used in the determination of fair values within Level 3 of the hierarchy as well as the key unobservable inputs used in the valuation model.

The price of sugar is most sensitive of the unobservable inputs. A decrease in price of sugar of up to Rs 1,500 per ton will not result in an impairment.

Type Key unobservable inputs Range of unobservable inputs Sensitivity of the input to fair value

Rs’000

2021

Property Plant & Equipment Price of sugar Rs 13,920 ± Rs 1,000 ± 112,243

Extraction rate 10.27% ± 0.5% ± 94,169

Discount rate 9.88% 1% ± 23,042 2020

Property Plant & Equipment Price of sugar Rs 12,000 ± Rs 1,000 ± 113,188

Extraction rate 10.04% ± 1% ± 139,402

Discount rate 9.88% 1% 11,319

42. EVENTS AFTER THE REPORTING PERIOD

There have been no material events after the reporting date which require disclosure or adjustments to the financial statements for the year ending June 30, 2021.



43. THREE YEAR FINANCIAL SUMMARY

THE GROUP

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

2021 2020 2019

Rs’000 Rs’000 Rs’000

Revenue 9,549,122 8,286,946 8,997,439

Share of results of joint ventures (63,603) (18,516) (9,359)

Share of results of associates 2,523 3,512 7,357

Profit / (loss) before taxation 2,693,217 802,091 (705,882)

Taxation (829,329) (579,942) (376,342)

Profit / (loss) for the year 1,863,888 222,149 (1,082,224)

Other comprehensive income for the year, net of tax 333,969 399,387 7,243

Total comprehensive income / (loss) for the year 2,197,857 621,536 (1,074,981)

Profit attributable to:

- Equity holders of the parent 1,158,973 (102,340) (821,268)

- Non-controlling interests 704,915 324,489 (260,956)

1,863,888 222,149 (1,082,224)

Total comprehensive income attributable to:

- Equity holders of the parent 1,406,656 224,790 (785,848)

- Non-controlling interests 791,201 396,746 (289,133)

2,197,857 621,536 (1,074,981)

Basic and diluted earnings per share 3.64 (0.32) (2.58)

(b) Statement of financial position

2021 2020 2019

Rs’000 Rs’000 Rs’000

ASSETS

Non-current assets 23,801,845 23,052,550 22,655,024

Current assets 7,367,844 6,923,523 5,879,010

Assets held for sale - - -

Total assets 31,169,689 29,976,073 28,534,034

EQUITY AND RESERVES

Capital and reserves 17,009,402 15,831,072 15,778,268

Non-controlling interests 1,651,147 1,411,637 1,542,646

Total equity 18,660,549 17,242,709 17,320,914

LIABILITIES

Non-current liabilities 7,227,964 7,658,939 7,002,897

Current liabilities 5,281,176 5,074,425 4,210,223

Total liabilities 12,509,140 12,733,364 11,213,120

Total equity and liabilities 31,169,689 29,976,073 28,534,034


NOTICE IS HEREBY GIVEN THAT the Annual Meeting (the “Meeting”) of Shareholders of Alteo Limited (the “Company”) will be held at Vivéa Business Park, 81430 Saint Pierre, Mauritius on December 10, 2021 at 10:00 hours to transact the following business in the manner required for the passing of ORDINARY RESOLUTIONS:

AGENDA

1. To consider the Annual Report 2021 of the Company.

2. To receive the report of Ernst & Young, the auditors of the Company.

3. To consider and adopt the Group’s (the Company and its subsidiaries) and Company’s audited financial statements for the year ended June 30, 2021.

4. To re-elect on the recommendation of the Corporate Governance, Nomination, Remuneration & Ethics Committee, as Directors of the Company to hold office until the next Annual Meeting, the following persons who offer themselves for the re-election (as separate resolutions):

4.1 Mr. Arnaud Lagesse

4.2 Mrs. Priscilla Balgobin-Bhoyrul

4.3 Mr. André Bonieux

4.4 Mr. Patrick Chatenay

4.5 Mr. Dipak Chummun

4.6 Mr. P. Arnaud Dalais

4.7 Mr. Jean-Pierre Dalais

4.8 Mr. Jérôme de Chasteauneuf

4.9 Mr. Fabien de Marassé Enouf

4.10 Mr. Thierry Lagesse

4.11 Mr. Hubert Leclézio

4.12 Mrs. Sheila Ujoodha

5. To authorise the Board of Directors (the “Board”) to fix the remuneration of the Non-Executive Directors of the Company for the financial year ending June 30, 2022 and to ratify the fees paid to the Non-Executive Directors for the financial year ended June 30, 2021.

6. To re-appoint Ernst & Young as auditors of the Company for the ensuing year and to authorise the Board of Directors to fix their remuneration.

7. To ratify the remuneration paid to the auditors, Ernst & Young, for the financial year ended June 30, 2021.

8. To authorise the Board, acting in the best interests of the Company, to further issue such number of new notes (“Notes”) under the existing multi-currency note programme (the “Programme”), the salient features of which are set out in the Annex to the Notice of Meeting, for a period of twelve (12) months from the date of this resolution, at such time and on such other terms as to, including but not limited to, pricing and security as the Board finds appropriate based on the then market conditions.

9. To authorise the Board to complete and do all such acts and deeds, and take all actions, as may be required to give effect to the aforesaid resolutions.

BY ORDER OF THE BOARD

Intercontinental Secretarial Services LtdCompany Secretary

November 12, 2021


NOTES:

1. A shareholder of the Company, entitled to attend and vote at this Meeting, may appoint a proxy of his/her own choice to attend and vote on his/her behalf. A proxy does not need to be a member of the Company.

2. A proxy form and a postal vote are attached to the notice of Meeting.

3. The instrument appointing a proxy or any general power of attorney shall be deposited at the Share Registry and Transfer Office of the Company, MCB Registry & Securities Ltd, 2nd Floor, MCB Centre, 9-11, Sir William Newton Street, 11328 Port-Louis, not less than twenty-four (24) hours before the start of the Meeting and in default, the instrument of proxy shall not be treated as valid.

4. Postal votes shall be deposited at the Share Registry and Transfer Office of the Company, MCB Registry & Securities Ltd, 2nd Floor, MCB Centre, 9-11, Sir William Newton Street, 11328 Port-Louis, not less than forty-eight (48) hours before the start of the Meeting and in default, the postal vote shall not be treated as valid.

5. For the purpose of this Annual Meeting, in compliance with Section 120(3) (b) of the Companies Act 2001, the shareholders who are entitled to receive notice of the meeting shall be those shareholders whose names are registered in the share register of the Company as at November 11, 2021.

6. The minutes of the Annual Meeting to be held on December 10, 2021 will be available for consultation and comments during office hours at the registered office of the Company, Vivéa Business Park, 81430 Saint Pierre, Mauritius as from February 1 to 12, 2022.


BACKGROUND

A Multi-Currency Note Programme for a total amount of MUR 5 billion, with a first issue of notes corresponding to an amount of MUR 1.5 billion, was approved by the Board of the Company on March 27, 2019 and subsequently at a Special Meeting of the shareholders of the Company on April 30, 2019 (the “Special Meeting”). At the Special Meeting, by way of ordinary resolution, the shareholders also adopted a resolution to the effect that the Board be authorised, acting in the best interests of the Company, to issue such number of notes, at such time and on such other terms as to, including but not limited to, pricing and security as the Board would find appropriate based on the then market conditions, for a period of twelve (12) months from the date of the resolution.

PROGRAMME

This Annex is provided to shareholders pursuant to the Securities (Preferential Offer) Rules 2017 issued by the Financial Services Commission. The information set out herein provides a summary of the Programme. Terms not defined herein shall have the same meaning ascribed to them in the Programme. Before the Company issues any tranche of Notes (“Tranche of Notes”), it will complete and sign the applicable pricing supplement, based on the pro forma applicable pricing supplement included in the Programme Memorandum, setting out details of such Notes. The Programme Memorandum and the applicable pricing supplement will be posted on the Company’s website.

Objectives of the Programme Within the Programme, the Company will have the possibility, if the need arises, to meet its future growth strategy and optimise its debt funding costs and sources, by issuing tranches or series of Notes.

Total number of notes to be issued The Issuer may, at any time and from time to time, issue one or more Tranche(s) of Notes pursuant to the Programme, provided that the aggregate outstanding Nominal Amount of all of the notes issued under the Programme from time to time does not exceed the programme amount of MUR 5 billion.

Price at which or the price band within which the issue of notes is proposed

The issue price will be determined by the Company, based on the profile of the targeted investors. In any event, the Company will set a minimum subscription amount that will be in accordance with applicable Mauritian laws.

The class or classes of persons to whom the issue of notes is proposed to be made

The Notes will be offered either by way of a private placement or to the general public, in compliance with the applicable laws. When the Notes are offered by way of private placement, the Notes will be issued to investors, investing a minimum of MUR 1 million (or its equivalent in other currencies as may be applicable) for their own account.

The proposed time within which the issue will be completed

Each offer of Notes will be subject to a timetable, with an offer start date and an offer end date (“Offer Period”). The Offer Period will in no event be more than 12 months from the date of the shareholders’ approval.

OTHER CONSIDERATIONS:

a) The Notes will not confer the holders thereof any rights whatsoever to the share capital of the Company. In this respect, there will be no change in control in the Company subsequent to the issue of Notes. Furthermore, the shareholding pattern, prior to and after the issue of Notes, will remain unchanged.

b) The Notes have not been allotted to any person as at date.

c) The Notes will not be allotted for consideration other than cash.


I/We of being a member/members of Alteo Limited (the “Company”), do hereby appoint:

of or failing him/her of or failing him/her, the Chairman of the Meeting, as my/our proxy to represent me/us and on my/our behalf at the Annual Meeting of the Company to be held at Vivéa Business Park, 81430 Saint Pierre, Mauritius on December 10, 2021 at 10:00 hours and at any adjournment thereof.

I/We desire my/our vote(s) to be cast on the Ordinary Resolutions as follows:

FOR AGAINST ABSTAIN

1 To consider the Annual Report 2021 of the Company.

2 To receive the report of Ernst & Young, the auditors of the company.

3 To consider and adopt the Group’s and Company’s audited financial statements for the year ended June 30, 2021.

4 To re-elect on the recommendations of the Corporate Governance, Nomination, Remuneration & Ethics Committee, as Directors of the Company to hold office until the next Annual Meeting, the following persons who offer themselves for the re-election (as separate resolutions):













5 To authorise the Board of Directors to fix the remuneration of the Non-Executive Directors of the Company for the financial year ending June 30, 2022 and to ratify the fees paid to the Non-Executive Directors for the financial year ended June 30, 2021.

6 To re-appoint Ernst & Young as auditors of the Company for the ensuing year and to authorise the Board of Directors to fix their remuneration.

7 To ratify the remuneration paid to the auditors, Ernst & Young, for the financial year ended June 30, 2021.

8 To authorise the Board of Directors acting in the best interests of the Company, to further issue such number of new notes under the existing multi-currency note programme, the salient features of which are set out in the Annex to the Notice of Meeting, for a period of twelve (12) months from the date of this resolution, at such time and on such other terms as to, including but not limited to, pricing and security as the Board finds appropriate based on the then market conditions.

9 To authorise the Board of Directors to complete and do all such acts and deeds, and take all actions, as may be required to give effect to the aforesaid resolutions.

Signed this ______________day of __________________2021

____________________________

Signature(s)


NOTES:

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

2. If the instrument appointing the proxy is returned without an indication as to how the proxy shall vote on any particular resolution, the proxy will exercise his/her discretion as to whether, and if so, how, he/she votes.

3. The instrument appointing a proxy or any general power of attorney, duly signed, shall be deposited at the Share Registry and Transfer Office of the Company, MCB Registry & Securities Ltd, 2nd Floor, MCB Centre, 9-11, Sir William Newton Street, 11328 Port-Louis by December 9, 2021 at 10.00 hours and in default, the instrument of proxy shall not be treated as valid.


I/We of being a member/members of Alteo Limited (the “Company”), do hereby cast my/our vote, by virtue of clause 18.10 of the Constitution of the Company for the Annual Meeting of the Company to be held at Vivéa Business Park, 81430 Saint Pierre, Mauritius on December 10, 2021 at 10:00 hours and at any adjournment thereof.

I/We desire my/our vote(s) to be cast on the Ordinary Resolutions as follows:

FOR AGAINST ABSTAIN

1 To consider the Annual Report 2021 of the Company.

2 To receive the report of Ernst & Young, the auditors of the company.

3 To consider and adopt the Group’s and Company’s audited financial statements for the year ended June 30, 2021.

4 To re-elect on the recommendations of the Corporate Governance, Nomination, Remuneration & Ethics Committee, as Directors of the Company to hold office until the next Annual Meeting, the following persons who offer themselves for the re-election (as separate resolutions):













5 To authorise the Board of Directors to fix the remuneration of the Non-Executive Directors of the Company for the financial year ending June 30, 2022 and to ratify the fees paid to the Non-Executive Directors for the financial year ended June 30, 2021.

6 To re-appoint Ernst & Young as auditors of the Company for the ensuing year and to authorise the Board of Directors to fix their remuneration.

7 To ratify the remuneration paid to the auditors, Ernst & Young, for the financial year ended June 30, 2021.

8 To authorise the Board of Directors acting in the best interests of the Company, to further issue such number of new notes under the existing multi-currency note programme, the salient features of which are set out in the Annex to the Notice of Meeting, for a period of twelve (12) months from the date of this resolution, at such time and on such other terms as to, including but not limited to, pricing and security as the Board finds appropriate based on the then market conditions.

9 To authorise the Board of Directors to complete and do all such acts and deeds, and take all actions, as may be required to give effect to the aforesaid resolution.

Signed this __________________ day of __________________2021

__________________________

Signature(s)


NOTES:

1. The duly signed postal vote should reach the Share Registry and Transfer Office of the Company, MCB Registry & Securities Ltd, 2nd Floor, MCB Centre, 9-11, Sir William Newton Street, 11328 Port-Louis forty-eight (48) hours before the start of the meeting and in default, the postal vote shall not be treated as valid.


Every year, our communications, including our Annual Report, are printed and mailed to our shareholders, as per legal requirement. Yet, we believe that it would be more sustainable, efficient and cost effective to shift towards an electronic form of communication. Moreover, moving to electronic communications would allow for quicker and safer access to all our documentation, while also contributing to a greener environment by reducing our paper consumption.

It is with the above objective that we are pleased to offer you the opportunity to receive our communications electronically. To that end, we would need your written consent as per the Companies Act 2001.

Should you be favourable to this procedure, kindly fill in the enclosed Application form and send back same, in the attached pre-paid envelope, at your earliest convenience, to the following address:

MCB Registry & Securities Ltd

2nd Floor, MCB Centre


Port-Louis

Thank you in advance for your collaboration


Alteo Limited

C/o MCB Registry & Securities Ltd

1st Floor, Raymond Lamusse Building


Port Louis, Republic of Mauritius

Dear Sir/Madam,

Re: Authorisation to receive electronic communications

l/We

Name of shareholder (primary shareholder in case of joint holding)

National Identity Card Numbwer/Passport Number (for individuals)

Business Registration Number (for corporate bodies)

agree to receive by e-mail, notice of Shareholder’s meeting, accounts and other shareholder documents made available to me/us in my/our capacity as shareholder/shareholders of Alteo Limited (“Alteo”), and also to receive notification by e-mail that documents such as annual reports and circulars have been posted on Alteo’s website for consultation. l/We also agree to abide by the terms and conditions listed below.

Email address:

Contact numbers: (Home/Office/Mobile): ________________________________

Signature/s: _____________________________________Date: _______________

TERMS AND CONDITIONS

• Upon approval of my/our request, issuance of paper notice of meetings, annual reports, accounts, credit advices and other shareholder documents shall be discontinued. However, under special circumstances, l/we understand that Alteo reserves the right to send documents or other information to the shareholders in hard copy rather than by e-mail.

• Alteo cannot be held responsible for any failure in transmission beyond its control, any more that it can for postal failures.

• My/Our instructions will also apply for any shares that l/we may hold jointly.

• In case of joint holders, the person named first in the share register will be eligible to fill in and sign this document.

• In the case of companies, the person/s authorized to will be eligible to fill in and sign this document, and as corporate shareholder, we shall ensure that the e-mail address provided shall easily be read by/accessible to employees responsible for our shareholding in Alteo and that any de-activation of the said email address will be notified promptly to Alteo, C/o MCB Registry & Securities Ltd, 1st Floor, Raymond Lamusse Building, Sir William Newton Street, ort Louis, Mauritius. l/We shall be responsible for updating the designated e-mail address details as and when necessary to Alteo, C/o MCB Registry & Securities Ltd, 1st floor, Raymond Lamusse Building, Sir William Newton Street, Port Louis, Mauritius.

• l/We further undertake to hold Alteo and/or its agents harmless in the execution of my/our present instructions and not to enter any action against the aforesaid party and hereby irrevocably renounce to any rights l/We might have accordingly.

• The present authorization shall remain valid until written revocation by me/us is sent to Alteo, C/o MCB Registry & Securities Ltd, 1st floor, Raymond Lamusse Building, Sir William Newton Street, Port Louis, Mauritius.

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Alteo LimitedVivéa Business Park, Saint Pierre, 81430, Mauritius

Tel: (230) 402 9050 | Fax: (230) 432 0729www.alteogroup.com

BRN: C17150285

I N T E G R A T E D R E P O R T 2 0 2 1 - Alteo

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