· PDF file · 2016-09-21GROUP PROFILE CIEL Textile Limited is a subsidiary of CIEL Limited. ... J. Harold Mayer Alain Rey Eddy Yeung Kan Ching ... Email: [email protected]

Group Profile

Group Structure

Corporate Information

Group Financial Highlights and Ratios

Chairman’s Statement

Executive’s Report

Chairman’s Award for Manufacturing Excellence

Corporate Social and Environmental Responsibility

Corporate Governance Report

Other Statutory Disclosures

Statement of Directors’ Responsibilities

Certificate of Company Secretary

Independent Auditors’ Report

Statements of Financial Position

Income Statements

Statements of Comprehensive Income

Statements of Changes in Equity

Statements of Cash Flows

Notes to the Financial Statements

Notice of Annual Meeting

Proxy Form

Postal Vote

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CONTENTS

1CIEL TEXTILE LIMITED - ANNUAL REPORT 2014

Rs. 9.6bnGROUPTURNOVER

18,000COMMITTED EMPLOYEES

3CLUSTERS

WOVEN FINE KNITSKNITWEAR

GROUP PROFILE

CIEL Textile Limited is a subsidiary of CIEL Limited.

Listed on the Development and Enterprise Market of the Stock Exchange of Mauritius Ltd since 2006, CIEL Textile Limited is a world-class global player in textile and garment operations, spanned across Mauritius, Madagascar, India and Bangladesh. It has developed into a regional one-stop shop for textiles, with vertically integrated business units, from yarn spinning to finish garments.

2 CIEL TEXTILE LIMITED - ANNUAL REPORT 2014

19PRODUCTION UNITSMAURITIUS • MADAGASCARINDIA • BANGLADESH

33 MGARMENTS EXPORTEDEUROPE • USAINDIA • SOUTH AFRICA


WOVEN

100%AQUARELLE CLOTHING LTD

100%AQUARELLE LTÉE

50%LAGUNA CLOTHING (MAURITIUS) LTD

100 %AQUARELLE INTERNATIONAL LTD

49.93%LAGUNA CLOTHING (PRIVATE) LTD

79.99%TROPIC MAD S.A

100%FLOREAL MANUFACTURING LTD


0.20%SOCIÉTÉ CIVILE IMMOBILIÈREDES MASCAREIGNES

0.10%AJAX SWEATERS LTD

100%CTL RETAIL LTD


99.48%FLOREAL MADAGASCAR S.A

33.33%CIELTEX SA (PTY) LTD

33.33%TINKA INTERNATIONAL LTD

0.32%SOCIÉTÉ BONNETERIE MALAGASY(SOBOMA S.A)

99.99%AQUARELLE INDIA (PRIVATE) LTD

99.90%AQUARELLE MADAGASCAR S.A




100%INTERNATIONAL FABRICS LTD

FINE KNITS KNITWEAR RETAIL

100%TROPIC KNITS LTD

100%FLOREAL KNITWEAR LTD

100%FLOREAL CREATION S.A

100%FERNEY SPINNING MILLS LTD

83.53% SOCIÉTÉ TEXTILE D’AMDRAHARO(TEXARO S.A)

100%FLOREAL INTERNATIONAL LTD


82.97%CDL KNITS LTD

17.03%CDL KNITS LTD

100%TKL INTERNATIONAL LTD




98.80% NEW ISLAND CLOTHINGMADAGASCAR S.A

100% DE NYON LTD

100% CONSOLIDATED FABRICS LTD

LOCAL COMPANIES

GBL 1 COMPANIES

INTERNATIONAL COMPANIES


WOVEN

100%AQUARELLE CLOTHING LTD

100%AQUARELLE LTÉE

50%LAGUNA CLOTHING (MAURITIUS) LTD

100 %AQUARELLE INTERNATIONAL LTD

49.93%LAGUNA CLOTHING (PRIVATE) LTD


100%FLOREAL MANUFACTURING LTD




100%CTL RETAIL LTD






99.99%AQUARELLE INDIA (PRIVATE) LTD

99.90%AQUARELLE MADAGASCAR S.A




100%INTERNATIONAL FABRICS LTD

FINE KNITS KNITWEAR RETAIL

100%TROPIC KNITS LTD

100%FLOREAL KNITWEAR LTD

100%FLOREAL CREATION S.A

100%FERNEY SPINNING MILLS LTD

83.53% SOCIÉTÉ TEXTILE D’AMDRAHARO(TEXARO S.A)

100%FLOREAL INTERNATIONAL LTD


82.97%CDL KNITS LTD

17.03%CDL KNITS LTD

100%TKL INTERNATIONAL LTD




98.80% NEW ISLAND CLOTHINGMADAGASCAR S.A

100% DE NYON LTD

100% CONSOLIDATED FABRICS LTD

LOCAL COMPANIES

GBL 1 COMPANIES

INTERNATIONAL COMPANIES

GROUP STRUCTURE30 June 2014


CORPORATE INFORMATION


BOARD OF DIRECTORS P. Arnaud Dalais (Chairman)Jean-Pierre Dalais Maurice DalaisAntoine Delaporte Henri de Simard de PitrayEric Dorchies Roger Espitalier Noël J. Harold MayerAlain ReyEddy Yeung Kan ChingJérôme De Chasteauneuf (Alternate to P. Arnaud Dalais)

BOARD COMMITTEES

CORPORATE GOVERNANCE, NOMINATION & REMUNERATION COMMITTEEHenri de Simard de Pitray (Chairman)P. Arnaud DalaisAntoine Delaporte

AUDIT & RISK COMMITTEEAlain Rey (Chairman) Jean-Pierre DalaisJérôme De Chasteauneuf

FINANCIAL & SECRETARIAL SERVICESCIEL Corporate Services Ltd5th Floor, Ebène Skies,Rue de l’Institut, EbèneMauritiusTel : +230 404 2200Fax: +230 404 2201

TREASURY SERVICESAzur Financial Services Limited5th Floor, Ebène Skies,Rue de l’Institut, EbèneMauritius

REGISTRAR AND TRANSFER OFFICEIf you are a shareholder and have inquiries regarding your account, wish to change your name and address, or have questions about lost certificates, share transfers or dividends, please contact our Registrar and Transfer Office:

MCB Registry & Securities Limited2nd Floor MCB CentreSir William Newton StreetPort LouisTel: +230 202 5397Fax: +230 208 1167

REGISTERED OFFICE5th Floor, Ebène SkiesRue de l’InstitutEbèneTel: +230 404-2200Fax: +230 404-2201Email: [email protected]

MAIN BANKERSThe Mauritius Commercial Bank LtdThe Hong Kong and Shanghai Banking Corporation LimitedBarclays Bank PlcBank One LtdStandard Bank (Mauritius) LtdThe State Bank of Mauritius LtdAfrAsia Bank Ltd

EXTERNAL AUDITORSPricewaterhouseCoopers18 CyberCityEbène

INTERNAL AUDITORSBDO & Co10, Frère Félix de Valois StreetPort Louis

NOTARYEtude Montocchio – d’Hotman

LEGAL ADVISORSMe. Thierry Koenig, SAMe. Maxime Sauzier, SCMe. Patrice Doger de Spéville, SC

WEBSITEwww.cielgroup.com


THE GROUP2014 2013 2012 2011 2010

FINANCIAL HIGHLIGHTS

Turnover (Rs. M) 9,565 8,686 8,643 7,876 7,054

EBITDA (Rs. M) 946 861 900 550 578

EBIT (Rs. M) 727 661 698 353 359

Profit before Taxation (Rs. M) 651 607 611 232 287

Profit after Taxation (Rs. M) 551 516 516 214 229

Ordinary Dividends (Rs. M) 204 153 102 56 46

Net Cash Flow from Operations (Rs. M) 505 292 1,228 (299) 405

Capital Expenditure (Rs. M) 599 209 138 170 215

Shareholder’s Funds (Rs. M) 3,624 3,109 2,874 2,501 2,452

Redeemable Preference Shares (Rs. M) - - 405 449 449

Capital Employed (Rs. M) 4,372 3,724 3,447 3,526 3,523

Net Borrowings (Rs. M) 1,658 1,395 887 1,790 1,218

Interest Expense (Rs. M) 83 63 93 99 84

LIQUIDITY AND GEARING RATIOS

Current Ratio 1.39 1.44 1.42 1.39 1.42

Acid Test Ratio 0.71 0.73 0.68 0.68 0.78

Net Borrowings to Shareholders Funds 0.46 0.45 0.31 0.72 0.50

Interest Cover (times) 8.84 10.63 7.57 3.34 4.42

PROFITABILITY RATIOS

Return on Capital Employed (%) 16.8 18.0 20.4 9.4 10.5

Return on Shareholder’s Funds (%) 15.2 16.5 17.2 7.7 8.4

Net Profit Margin (%) 5.8 5.9 6.0 2.7 3.2

GROUP FINANCIAL HIGHLIGHTS AND RATIOSAS AT 30 JUNE


Turnover (Rs. M)

7,054

7,876

8,643

8,686

9,5652014

2013

2012

2011

2010

Profit after Taxation (Rs. M)

229

214

516

516

5512014

2013

2012

2011

2010

Return on Capital Employed (%)

10.5

9.4

20.4

18.0

16.82014

2013

2012

2011

2010

Net Borrowings (Rs. M)

1,218

1,790

887

1,395

1,6582014

2013

2012

2011

2010

Net Profit Margin (%)

3.2

2.7

6.0

5.9

5.82014

2013

2012

2011

2010


Dear shareholder,

On behalf of the Board of Directors (“the Board”), it is my pleasure to submit to you the Annual Report and audited results of CIEL Textile Limited (“CIEL Textile”/“the Company”) for the year ended 30 June 2014.

Group Financial Results

The Group’s turnover has increased by 10.1% to reach Rs. 9.6bn whilst profit before non-recurring expenses and tax grew by 17% attaining Rs. 674M against Rs. 576M last year. Net profit after tax improved by 6.8% and reached Rs. 551M, despite challenging market conditions. Profitability wise, local operations have contributed to 20% of the net results, with the remaining 80% being generated by international operations. The Group’s turnover is geographically spread almost equally between Mauritius, Madagascar and Asia. Shareholders’ funds have now reached Rs. 3,624M compared to Rs. 3,109M as at the end of last financial year whilst net borrowings have increased to Rs. 1,658M, mainly due to additional working capital requirements generated by the growth in turnover.

Going forward, the main strategic focus of the Group will be geared towards a prudent international expansion strategy, achieving operational excellence at all levels and a successful market diversification.

CHAIRMAN’SSTATEMENT


The knitwear cluster’s financial performance showed a year on year improvement. Both turnover and profits were on the rise, thanks to a shift towards higher value garments yielding better margins, increased volume in the ladieswear segment, the turnaround of the operations in Bangladesh which delivered a small profit after three years of consecutive losses and better loading in the factories resulting in improved operational efficiency.

Turnover for the woven cluster has increased by nearly 14% over last year and crossed the Rs. 5bn mark for the first time. However, net profits registered a slight drop of 3.2%. Laguna Clothing (Mauritius) Ltd has had a difficult year as the company did not achieve quality requirements on the non-iron shirt segment on bulk orders, leading to major leakages and significant losses. Lack of orders for fabrics, especially during the last quarter of the year, has also negatively impacted on performance, but the cluster has since scaled down capacity to align with the weaker demand.

For the past two years, the fine knits division has been working on improving its operational and financial performance. 2014 has been another positive year with a 43% increase in operational profits despite a slight reduction in turnover. The cluster has also embarked on a new five-year strategic plan which includes expansion plans in Asia.

Outlook and Prospects

Market conditions, especially in Europe and in the Republic of South Africa, remain challenging with a weakening of some major export currencies like the euro and the rand.

Global market conditions are even more difficult in our knitwear operations through Floreal Knitwear which is registering a drop in volumes in its menswear division while the ladies segment is showing some improvement.

The knits cluster, recently rebranded “Tropic Knits Group”, is confirming its improved performance and is now ready to implement its international expansion with the setting-up of a new factory in India hopefully by the end of the calendar year 2015.

Aquarelle group, which has shown major growth in its operations during recent years through its successful ventures in India, will consolidate its position through the marked improvement at the level of Pastel Blue, its ladies cluster as well as for its well established menswear division. Aquarelle has

also some challenges ahead with the sorting out of costly teething problems which occurred at the level of its non-iron formal shirt cluster at Laguna Clothing (Mauritius) Ltd, a partnership with Tessitura Monti, a world class cotton fabric supplier from Europe and India.

On a more positive note, the reinstatement of Madagascar’s eligibility for African Growth and Opportunity Act (AGOA) benefits should open new opportunities in the United States.

Going forward, the main strategic focus of the Group will be geared towards a prudent international expansion strategy, achieving operational excellence at all levels and a successful market diversification. As mentioned in last year’s report we will consolidate our three clusters’ position in their respective field of activities to further consolidate CIEL Textile as a true global player and a world class operator.

Dividend

The Company has declared an interim dividend of Rs. 0.75 per ordinary share on 12 December 2013 (2012: Rs. 0.50) and a final dividend of Rs. 1.25 per ordinary share on 23 June 2014 (2012: Rs 1.00).

Appreciation

On behalf of the Board of Directors and in my own personal name, I would like to express my thanks and appreciation to the CEO, Mr. J. Harold Mayer and the very committed team of CIEL Textile executives, management and our staff for the good results achieved over the year.

I invite you to go through the Executive’s Report for information on the operations of the different clusters of the Group.

P. Arnaud DalaisChairman

29 September 2014


EXECUTIVE’SREPORT

Dear shareholder,

I am pleased to inform you that CIEL Textile Limited has posted excellent overall results, with turnover increasing by 10% to Rs. 9.5 bn, operational profits before non-recurring items increasing by 17% to Rs. 674M and profit after taxation increasing by 6.8% to Rs. 551M. All three clusters posted positive and improved earnings. The geographical spread of our turnover was 36% in Mauritius, 36% in Madagascar and 28% in Asia, whilst the geographical spread of profitability was 20% in Mauritius and 80% in our international operations.

The Aquarelle group performed well with a 14% increase in sales (Rs. 5bn) and a healthy profit after taxation of Rs. 309M (3% down on previous year). Its operations in India, once again, had an outstanding year and were the major contributor to sales’ growth and profitability. Aquarelle’s group operations in India are the real benchmarks for the Group in many respects. However, Aquarelle group’s regional operations (Mauritius and Madagascar) had a more difficult year in terms of profitability. Whilst the Indian operations remain solid, the priority and challenge for the management team will be to tackle the managerial and operational issues at Consolidated Fabrics Limited and Laguna Clothing (Mauritius) Limited, whilst boosting marketing activity in Mauritius and Madagascar so as to load our factories appropriately.

“Manufacturing Excellence” is considered as a major strength across our Group today, thanks to world-class manufacturing and factory management teams and culture.


The Knitwear division had a very good year with profit after taxation at Rs. 129M, representing a 33% increase on last year and sales up 13%, as a result of higher sales in expensive yarns such as cashmere. All the divisions showed positive results: Floreal Mauritius and Madagascar improved their performance by selling more value added products, Ferney Spinning Mills Limited developed new export markets for its yarns and Floreal Bangladesh’s operations performed well under a new management team and posted modest profits for the first time. Unfortunately, “volume” of sales at Floreal Knitwear has regressed slightly and is not meeting budgeted and growth expectations. Thus, sales and marketing will be management team’s focus and priority for the next few years.

The Fine Knits cluster (Tropic Knits group) continues its improvement journey with a 43% increase in operational profits before tax and non-recurring items. The young and talented management team went through a “rebranding” exercise and presented its 5 years’ strategy, which focuses on an upmarket move and the start of its operations in India. Most key performance indicators in the Tropic Knits group improved over the year, except for CDL Knits Limited (formerly known as Consolidated Dyeing & Fabrics Limited), the fabric operations, whose manufacturing inconsistencies had a negative impact on profitability and delivery performance. The management team’s priority in the next year will be to stabilise operational performance at CDL Knits Limited, increase marketing activity to keep loading the factories at optimal levels and put a world-class management team in place to launch the TKL India operations.

The performance of our divisions on the non-financial scoreboards can be summarised as follows:

• On the “customer satisfaction” scoreboard, the results are generally good and improving except on pricing, which means that, as a Group, we need to address “costs” and eliminate non-productive – non-value added costs.

The Aquarelle group scoreboard looks very good in general (Aquarelle India being a benchmark) except in its “Formal” division where reliability was poor due to growth and technical issues. The Knitwear cluster showed excellent results overall except on pricing, thus, the need to address costs. The Fine Knits division keeps improving yearly.

• Generally, “operational effectiveness” in manufacturing, once again, improved across the board. Aquarelle group is leading the way in manufacturing excellence and won the majority of the awards at the yearly award ceremony. Both Knitwear and Fine Knits divisions also showed great “operational excellence” and are on the improvement trend. “Manufacturing Excellence” is considered as a major strength across our Group today, thanks to world-class manufacturing and factory management teams and culture.

• On the “Front-end” (marketing, back-office and admin) scoreboards as a group, we need to improve (except in India). Our Indian operations are both lean (cost efficient) and constantly having more “sales” potential than capacity. In the Mauritius/Madagascar region, we have a constant challenge because of our isolation and lack of visibility and, as a result, we have a significantly higher cost of marketing. Furthermore, our administrative costs in the region are also significantly higher than our Asian competitors. Therefore, all our management teams in the region need to constantly work on simplifying systems, eliminating non-value added activities and aggressively marketing so that our sales and margins are appropriate. Within the CIEL Textile Group, Floreal Knitwear faces the biggest challenge in this area, whilst the Aquarelle and Tropic Knits groups also have a lot to do.

• On the “Human Capital” front, once again, the competence and attitude of our teams are very good and getting better. People management in CIEL Textile is a major strength and is the major reason why we move into the future with a lot of confidence. Particular attention will be put in building strong leadership teams in Asia, where most of our growth is planned for the years ahead. Our “talent pool” is more and more international, and this is considered as a strength. Once again, stability in our key leadership teams has been excellent.

• From a management infrastructure point of view, we are reaching excellent results in all clusters. Top management team understands the importance of it in achieving results. However, the emphasis in the short-term is to “simplify” and “eliminate non-value added activities” in Mauritius and Madagascar so as to address our overheads’ challenge.


To conclude, the financial year ended 30 June 2014 has shown good non-financial scoreboard results. However, we need to listen to our customers and our customers are telling us that our prices (therefore our costs) are too high on the Mauritius/Madagascar region. These alarm bells will therefore be addressed in the front-end simplification processes and by selling more aggressively.

External Factors

At the time of writing this report, external factors affecting our operations are more negative than they were at the same time last year.

• Our major market, Europe (60% of our sales) is stagnant and bordering recession. Some of our major customers are looking aggressively for lower prices to address their profitability issues. The South African market (25% of our sales) is stagnating as a result of the weak currency, hence, higher retail prices.

• On the currency front, the Mauritian Rupee is continuing to strengthen v/s our competitor’s basket of currencies. On the positive side, both the Indian Rupee and the Madagascar Ariary have gained competitiveness although inflation is high in both countries.

• On the competitive front, we are definitely in a “buyers’ market” and the pace of cost increase from China has slowed down significantly. This is putting pressure on prices.

• Raw material prices have been stable & have showed signs of decreasing recently. This can help to partly mitigate the potential drop in margins due to lower demand and increased competitors activity.

Our Strategy

Our 5 years’ strategic plans in our clusters, all go in the same direction:

(a) A “globalisation” strategy, which will focus on new operations in India and Bangladesh.

In line with this strategy we are working towards:

• The start of Tropic Knits India in 2015 or 2016;;• The start of a new factory for Floreal Knitwear in Bangladesh for 2016 or 2017;• Two new factories for the Aquarelle group in India in 2016 or 2017; and• The start of Aquarelle Bangladesh factory in 2016 or 2017.

This will result in sales and profitability growth in the medium-term. However, capital expenditure and start-up costs over the next few years will be significant. Each of these new investments will only be triggered if, at the time of decision making, we consider that we have both the financial resources and manpower to make it a medium-term success.

(b) In the Mauritius/Madagascar region, the strategic focus will be on “operational improvements” and “upmarket” move. Its components will include:

• Transmission of know-how to Madagascar;

• Addressing our high overheads to be more in line with market requirements and international benchmarks; and

• Bringing our front-end activity to another level so as to constantly move upmarket and satisfy more demanding customers’ product & service requirements.

The above strategy should provide a platform for medium-term moderate growth, at a pace, which is commensurate with our financial and manpower resources. Furthermore, we will not allow our ‘getting bigger’ to negatively impact our ‘getting better’ priority.

Outlook

• In the first semester, we expect results to be close to those of last year.

• As regards the second semester, we expect an important drop in the Knitwear cluster’s results due to lower sales. The results from the Woven and Fine Knits clusters will depend on the quality of our order books and the operational effectiveness across our operations.

• In the medium-term, growth is expected to be driven by our globalisation process. We are confident that the investments and start up costs invested in this globalisation strategy will yield positive results in the medium term.

EXECUTIVE’S REPORT (CONT’D)


Appreciation

I would like to use this opportunity to express my gratitude to our leadership teams for their incredible level of commitment to satisfying our customers and moving their operations forward. The same expression of gratitude goes to our 18,000 employees who live our “winning family” values on a daily basis.

Last but not least, my appreciation goes to our Chairman, Mr. P. Arnaud Dalais, and the Board of Directors for their trust and support on our journey.

I invite you to read the individual report of our Executive Operational Directors, which gives more details on each of our three clusters.

J. Harold MayerChief Executive Officer

29 September 2014


FINEKNITS

TROPIC KNITS LTD

TKL INTERNATIONAL LTD

TROPIC MADAGASCAR SA

CDL KNITS LTD (Formerly known as Consolidated Dyeing & Fabrics Ltd)


3,600TONS KNITTEDFABRIC


14,2MGARMENTS PRODUCED

3TEXTILE FACTORIESMAURITIUS • MADAGASCAR

Rs. 2.1bnTURNOVER

Production of Jersey Wear Garments


Jean-Baptiste de Spéville Chief Executive Officer of the Fine Knits and Knitwear clusters

Guillaume Dalais Executive Director of Tropic Knits Ltd and CDL Knits Ltd

Bertrand ThevenauExecutive Director of Tropic Knits Ltd and CDL Knits Ltd

For the financial year ended 30 June 2014, the Fine Knits cluster’s operational profit increased by 43% despite a slight reduction in turnover. However, net profit after tax has been lower than the previous year due to fair value adjustments on financial derivatives. On the back of the general improvement of operational and financial performance, the Fine Knits cluster has embarked on a new five-year strategic plan. A rebranding exercise has also been done to align our corporate image with our new strategy.

The management has created the Tropic Knits Group, which is the umbrella for Tropic Knits Ltd, our garment division, and CDL Knits Ltd, our fabric division. It will also enable us to gear ourselves for our expansion plans in Asia, which is scheduled for mid-2015.

Tropic Knits Group’s balance sheet is at a satisfactory level with a low gearing ratio, thus, enabling us to finance our future growth.

Tropic Knits Ltd (“TKL”)

TKL has recorded a significant improvement in profitability whilst turnover has remained stable.

The Management Team’s focus on product innovation, reliability and speed in delivery performance is bringing positive results on our customer satisfaction scoreboard. The Marketing and Product Team has succeeded in maintaining a strong demand from our customers, therefore ensuring constant loading in our factories.

In line with our strategy to move into “better” value products, our margin has improved despite the very competitive environment.

Operational effectiveness has been good for the year 2013-2014. The operational team has been able to adapt to the change in our customer and order profile. Generally, all the key performance indicators are improving and our cost per piece also improved slightly, despite a more complex order book. The team has been reinforced and emphasis is being put on people development in order to bring the expected results. We are continuing our investment plan in new technologies and we recently implemented a new ERP system.

TKL’s balance sheet and gearing ratio are at a satisfactory level.

We are now confident that TKL’s operational performance is stable and allows us to look at the future with serenity. However, the market conditions, particularly in Europe, remain challenging. Therefore, despite a current stable customer base, we remain cautious as margin may come under pressure.

CDL Knits Ltd (“CDL Knits”)

For the past financial year, CDL Knits enjoyed a stable order book from both TKL and the export market. Despite very competitive conditions, we have seen a slight improvement in margin by moving to more value added products.

Customer satisfaction, which is our key objective, remains at satisfactory level.


The company faced some operational challenges which have had a negative impact on our cost and profitability. The necessary action plan is being implemented to ensure better operational performance. ‘CDL Knits’ profitability for the financial year ended 30 June 2014 was below expectations. However, its gearing ratio improved significantly during the financial year, on the back of rigorous cash flow management, and remain at satisfactory level.

We are continuing our investment plan in new technologies and people development with the aim to improve further on product quality, productivity, and energy management. We are maintaining our Carbon Footprint Emission monitoring program and we are satisfied with the continuous progress.

The order book for the first semester of the financial year is in line with our estimates. However, we remain cautious as we are facing pressure on our basic programs margins.


8,1 MMTS FABRICPRODUCTION

Rs. 5bnTURNOVER


13,5 MGARMENTS PRODUCED

10TEXTILE FACTORIESMAURITIUS • MADAGASCARINDIA • BANGLADESHProduction of

Formal, Casual and Ladies Shirts


WOVEN

AQUARELLE CLOTHING LTD

AQUARELLE INTERNATIONAL LTD

CONSOLIDATED FABRICS LTD

LAGUNA CLOTHING (MAURITIUS) LTD

AQUARELLE (INDIA) PRIVATE LTD

AQUARELLE MADAGASCAR SA

LAGUNA CLOTHING LTD


Aquarelle group’s turnover has increased by nearly 14% to reach for the first time the Rs. 5bn mark. However, the profitability was slightly lower than last year, mainly due to losses from three business units (Laguna Mauritius, Aquarelle Bangladesh and Consolidated Fabrics Limited), offset by improved profitability of other business units.

Casual Shirt Cluster

With 8.9M pieces and a turnover of Rs. 3bn, the casual cluster accounts for 60% of Aquarelle group’s total turnover.

The overall customer satisfaction’s performance remained excellent from our operations in India, Mauritius and Madagascar, where we have experienced a very healthy growth and profitability.

A reorganisation of our activities in Bangladesh has been put into place, to move away from a pure trading activity to a more controlled operation: we have signed a leased agreement with a small local factory, which we have started to manage since April 2014.

Our objective is to improve our product quality and delivery performance and build up a customer base in anticipation to a direct investment in our own factory in the next two years.

We might be buying a plot of land near Dhaka (Bangladesh) in the next couple of months as an initial step. Furthermore, the construction of a new factory in India is scheduled to start early next year. Located at about 100 km away from Bangalore, this new factory will be in the vicinity of the Laguna Clothing Factory.

On the operations front, our key challenges are:• Generating more demand for our regional operations

(Mauritius and Madagascar) to increase margins and demand for Consolidated Fabrics Limited - we are looking at strengthening our overall marketing organisation. With the AGOA about to be back to Madagascar, we will surely explore new business opportunities in the USA.

• Overhead cost reduction mainly in the region, to improve our competitiveness.


Eric Dorchies Chief Executive Officer of the Woven cluster (also known as Aquarelle Group)

Nagesh BadidaDeputy Executive Director of the Aquarelle Casual cluster and General Manager of Aquarelle India (Private) Ltd

Sarbajit GhoseManaging Director of Laguna Clothing Ltd

Elvis CateauxGeneral Manager of Laguna Clothing (Mauritius) Ltd

Eric EynaudGeneral Manager of Pastel Blue

Pascal WalterExecutive Director of Consolidated Fabrics Ltd

The financial year 2014-2015 will be challenging in the region from a margin and volume perspective, while India is likely to continue to grow and maintain a good profitability.

We expect to reduce Bangladesh losses in financial year 2014-2015, and potentially achieve a profit as from financial year 2015-2016.

Formal Shirt Cluster

Our formal shirt cluster, which operates under the name of Laguna Clothing (joint venture with Tessitura Monti, Italy) has reached a turnover of Rs. 1.5bn and total sales of 3.6M pieces (3M in India and 0.6M in Mauritius).

The customer satisfaction performance on our India operation has been affected by more than expected difficulties in building up capacities at the Kanakapura factory, while profitability remained excellent. The manufacturing team has been strengthened there, and productivity and quality are now improving.

The order book and margins remain very solid, and we can expect an increased turnover and profitability in India.

On the other hand, Laguna Mauritius experienced an extremely difficult year.

Despite positive trial orders performed on the non-iron shirt segment, the team could not achieve our main customer’s quality requirements on bulk orders. This has led to major leakages and very heavy losses.

We are now working on reducing quickly our exposure to that customer, which will come with a high one-off cost and a business reorganisation.

The first two quarters of the financial year 2014-2015 will still be very difficult and we expect to stabilise the business as from early next year.

Ladies’ Wear Division

The financial year 2013-2014 was a transitional year for our ladies’ wear division, Pastel Blue, which has reached a turnover of Rs. 320M, 1M pieces shipped and a small profit against a loss in 2012-2013.

Customer satisfaction is generally good, while we still need to strengthen our manufacturing team in Antananarivo, Madagascar, where Pastel Blue’s main manufacturing base is located.

The team has been very dynamic on the marketing front, with the acquisition of two main customers, Marks and Spencer and Esprit, and the identification of meaningful pipelines.

We can expect a solid turnover and profitability increase of Pastel blue in 2014-2015.

Woven Fabrics

Consolidated Fabrics Ltd (“CFL”) has achieved remarkable progress during the financial year 2013-2014 on customer satisfaction performance, mainly on the ‘delivery on time’ front. The quality improvement process journey is progressing positively as well.

On the other hand, high overheads and lack of orders mainly in the last quarter have led to a loss at the end of the financial year 2013-2014.

We have recently scaled down CFL’s capacity in alignment with the weaker demand and have started a very focus process on overhead and variable cost management. We have also launched a new upper market collection called “Opera”, to reposition CFL in the European mills’ market segment, where we expect to achieve better margins.

While demand remains quite soft in the first quarter, we should be able to improve the bottom line during the financial year 2014-2015.

However, CFL still need to upgrade its machines and equipments pro-actively, though maintaining a healthy balance sheet remains the primary focus.

Outlook

Overall, Aquarelle Group will continue to grow during 2014-2015, though at a slower pace than financial year 2013-2014.

Our profitability improvement will mainly depend on our capability to turn around current business units with losses into profits.


KNITWEARFLOREAL KNITWEAR LTD

FLOREAL MADAGASCAR SA

AJAX SWEATERS LTD

FLOREAL INTERNATIONAL LTD

FERNEY SPINNING MILLS LTD


1,500TONS WOOLLEN YARN


5,4MGARMENTS PRODUCED

6TEXTILE FACTORIESMAURITIUS•MADAGASCAR•BANGLADESH

Rs. 2.4bnTURNOVER

Production of Sweaters


Jean-Baptiste de SpévilleChief Executive Officer of the Fine Knits and Knitwear clusters

Mushtaq SooltangosGeneral Manager of Ferney Spinning Mills Ltd

The knitwear cluster’s financial performance for the year showed a year on year improvement, with all our operations generating positive results.

Our turnover increased from Rs. 2.1bn to Rs. 2.4bn, and profits after tax from Rs. 97.6M to Rs. 129.4 M.

These improved results came from:• A shift towards higher value garments (lambswool

and cashmere), yielding better margins.• An increased volume in ladies’ wear segment where

Floreal has historically been weak.• The turnaround of our operations in Bangladesh,

which is delivering a small profit after three years of consecutive losses.

• A better loading in our factories and an excellent manufacturing KPIs result.

• Much improved results of Ferney Spinning Mills Limited.

Floreal Knitwear Ltd (“FKL”)

FKL’s product quality and reliability have been high and our design team strengthened, with a high level of customer satisfaction.

To keep up with the market needs for more fancy stitched garments, investments were made in automatic knitting machines located both in Mauritius and Bangladesh factories. This is enabling us to widen our product offer competitively and we should keep increasing our park of automatic machines in the coming years.

On the marketing front, we consolidated Floreal Bangladesh as a “Marketing Platform” and most of their orders are now sold and merchandised locally. Due to the high density of “customer traffic” in Bangladesh, we expect to capture new markets which were previously out of reach. FKL Bangladesh is getting a new exposure and the feedback from customers visiting our facilities is extremely encouraging. We are in the process of finalising the acquisition of a new land site, which will cater for our future factory expansion in this country.

Environment In line with our Environmental Policy and our customer standards, we have invested in an Effluent Treatment Plant in our wash plant in Bangladesh. Several recycling schemes for cartons, plastics, raw material and batteries have also been put in place with the associated awareness campaign for our staffs.

Our energy consumption monitoring has been strengthened and several opportunities of savings obtained.

Human Resources On the Human Resources side, we are actively looking for young talents with leadership skills in Madagascar for coaching. The objective being for them to acquire the necessary competency to enable a knowhow transfer from Mauritius and reducing the level of support services required.

OutlookThe mild winter in both Europe and South Africa, coupled with the difficult economic situation in those countries are creating a soft market for knitwear with pressure on margins.

We are reinforcing our marketing efforts to mitigate this situation but it will be challenging to maintain current profitability level in the short term.

Ferney Spinning Mills Limited (“FSM”)

The financial year under review has been better than budgeted due to the following concurring factors:

• The critical inter-season loading was reasonable with the active non-captive weaving market and the late winter orders for FKL.

• The margins on the non-captive market have improved and FKL’s margins have been positive.

• The intelligent purchase of raw material, the blend engineering and the positive yield in production have positively influenced the financial results.

The high customer satisfaction has also resulted in repeat and increased orders. Customers appreciate the service and the quality of FSM. In the UK, our local delivery from our customs bonded warehouse is highly valued. Customers have also used our special airfreight service for fast track delivery from our warehouse in Mauritius. With the support of our weaving and knitting collections, we keep gaining market share with European weavers.


The market for woollen yarns in the weaving market in Europe has been buoyant. The demand for Lambswool, Shetland, Tweed yarns and innovative woollen yarns is high. FSM’s image as a woollen yarn specialist is now well established in the U.K. and Italian markets. In the knitting market segment, FSM is now perceived as a credible woollen yarn manufacturer for the ladies’ wear.

Our customers have exhibited this year at Première Vision, Milano Unica, Ideabiella, Mood and Heimtextil products made with FSM woollen yarns.

In 2014, we boosted our marketing firepower with the appointment of two additional agents in Italy and U.K. With our renewed efforts in Italy, we are optimistic to achieve our ambitious sales targets in this market. We are also strengthening our marketing team in Mauritius.

FSM has invested a lot in product development and blend engineering. Our cooperation with the yarn design and colour forecasting specialist ‘Stylprojet’ in Italy has been strengthened with the new contract signed with FKL.

The investments in our production capacity have allowed us to work with more flexibility in our low and peak seasons. We are continuously keeping our machinery updated and also keeping the existing plant fully operational with world class maintenance. A new generation of leaders is now fully settled and the results are already positive.

Environment In 2014, we have continued to invest in eco-friendly processes and green energy will be our future target. Our dyeing plant today has one of the lowest water consumption process for wool dyeing. Porcelain coating of our dyeing vessels for energy saving, solar energy and optimisation of rain water utilisation will lower our utilisation of electricity, steam and water.

Human Resources FSM’s Human Resource Department is now finalising the flexi-time and shift change. They are also working on a smooth succession and transition plan to bring new blood and talent in the company. Training from management to “grassroot” has been high on the agenda. The Management is also fully involved in the CSR programme to make our organisation socially responsible to meet the demands of our shareholders and that of the national authorities.

Outlook With the current positive trends on the non-captive market, the forecast of FKL, the stable wool market and the strong fundamentals of FSM, we are expecting further improved financial results from FSM.


RETAILHarris Wilson

Blu River

Floreal Boutique


39COMMITTED EMPLOYEES

Trading conditions continue to be challenging. Shops are closing on the high streets and in shopping malls and are not finding new tenants. The tourist spend is still declining but the Mauritian market share in our brands continues to grow. As a result, revenue grew by 2.5%, year on year.

The difficult trading environment led to greater emphasis on promotions to generate revenue, putting additional pressure on margins. This reduction in gross margins was however offset by the reduced operating overheads following the savings made in reduced shop floor space and administration expenses.

The perspectives for the financial year 2014-2015 remain uncertain and will depend on a return in tourist spend and the availability of a new placement within the Bagatelle Mall.

Peter Gilmour General Manager

8 SHOPS AND LOCATIONSSunset Boulevard - Grand Bay,

Caudan Waterfront – Port Louis, Floreal Square - Floreal,

Orchard Centre - Quatre Bornes, VIP Way - Flacq,

Anahita – Beau Champ, Mangalkhan – Floreal.


CHAIRMAN’S AWARDFOR MANUFACTURING EXCELLENCE

“Our People, Our Gold”

In an international context which is more and more competitive, the textile industry needs more than ever to be irreproachable in the levels of quality and services offered to its customers. This is why CIEL Textile has launched, since seven years, the Chairman’s Awards to reward its best employees and garment making units but also the textile operations with capital-intensive activities such as weaving, spinning and dyeing in the wake of a series of rigorous audits conducted in all plants.

Vertical Integration, Textile Division: 3 units in competition

Garment Division: 16 units in competition

Excellence at Grassroots: 30 best employees rewarded for their excellent performance at work


“Strive for Excellence: Coaching, Learning & Continuous Improvement”The Chairman’s Award also aims to generate a spirit of dynamism, performance and competitiveness among all employees of CIEL Textile, as well as the aim of promoting a culture of excellence.

As an opportunity to develop a culture of knowledge sharing between companies of the same group, to better cope with competition, The Chairman’s Award encourages the different production units to share experiences, successes and technology through presentations prepared and conducted by staff from various departments.

“Winning Family”


CORPORATE SOCIALAND ENVIRONMENTALRESPONSIBILITY

FG

H

I

J


A

B

C

D

E

A & HAquarelle Quatre-Bornes supports the team at nursery/day-care centre for Solidarité Maman at Résidence Père Laval.

BThe Fondation CIEL Nouveau Regard supports alternative education for students experiencing difficulties at school through the ANFEN network.

CThrough the NGO Kinouété, women released from prison are offered rehabilitation programmes at Palma.

DLa Caze Lespwar, a project managed by Caritas Solitude, is the largest community development project funded since 4 years by Fondation CIEL Nouveau Regard.

EDLD Teen Hope at Cité La Cure assist pupils, who failed at CPE, through alternative education.

FThe Zippy programme supported by l’Institut Cardinal Jean Margéot is concerned with the psychological development of primary students.

GAt Cité Mangalkhan, the ‘Vent d’un Rêve’ students receive music classes from Leslie Merven and the team.

IThough the pre-vocational section of the Society for the Welfare of the Deaf, impaired students have seeked and found employment within their aspirations and interests.

JThe Fondation Cours Jeanne d’Arc de St Patrick delivers quality training to students with special needs.

Main projects supported by the Fondation CIEL Nouveau Regard


CORPORATE SOCIALAND ENVIRONMENTALRESPONSIBILITY

Sustainability development aims at meeting the needs of the present without comprising the ability of future generations to meet their own needs. At the level of CIEL Textile, we are striving to make our operations sustainable through a series of measures directed to our stakeholders while ensuring that they are being conducted within legal parameters and other regulatory requirements.

Our Engagement for 2013-2014

CTL has been closely involved in community development projects and the protection of the environment at national and also international level, as it has operations in Madagascar, Bangladesh and India as well. A reforestation programme has been launched this year at companies’ level and a contribution of Rs. 1M made to the “Fondation CIEL Nouveau Regard” (“FCNR”), to support local NGOs in Mauritius.

Fondation CIEL Nouveau Regard (“FCNR”)

The FCNR is accredited by the National CSR Committee as a Special Purpose Vehicle (“SPV”), and is empowered to receive the Corporate Social Responsibility (“CSR”) tax contributions of CIEL’s subsidiaries and associates since February 2010.

Engaged mainly in the fight against poverty and exclusion, FCNR has celebrated its 10th years of existence in 2014. During the past decade, the foundation has spent some Rs. 50M in various projects, at regional and national level, which are in line with the criteria set by its Board of Directors, while following the legal guidelines of the law governing this tax.

This year some Rs. 6M, 82 % of the amount received from CSR tax contributions from CIEL’s subsidiaries and associate companies were used to finance projects managed by local NGOs in areas such as the fight against poverty, education, disability and health.

The table below gives an indication of the percentage of amount distributed over the year.

Main Projects supported by FCNR

Fight Against Poverty

In line with Government policy, FCNR has, again this year, concentrated its actions towards the fight against poverty. The foundation that launched the integrated community development project with Caritas, La Caze Lespwar in 2010, renewed its full support to this project.

Based in Solitude, La Caze Lespwar assists communities living in poverty and facing difficulties in the regions of Solitude, Triolet, Plaine des Papayes, Pointe aux Piments and Arsenal. It provides services that are adapted to their needs, among which education and training, community gardening, breakfast for pupils, sports, holiday activities for children, activities for women, emergency service, solidarity shop and a pre-school centre/creativity centre.

FCNR provides its support to other NGOs:• Kinouété - rehabilitation of ex-female prisoners - financing

salary of social worker; and• ICJM Counseling Department (Cellule d’écoute et de

counseling) at Bamboo Virieux.

Education

FCNR supports alternative education. Thanks to the ANFEN network and to the Zippy programme of ICJM, children with learning difficulties can have access to education.

FCNR provides its support to other NGOs:• Vent d’un Rêve (école de musique);• Solidarité Maman;• Teen Hope; and• Fondation Cours Jeanne d’Arc.

Disability

FNCR is strongly committed to providing disabled children with access to education. With the collaboration of the NGO Society for the Welfare of the Deaf (SWD), FCNR launched in January 2010 the first pre-vocational school for deaf children. For the first year the school hosted 20 students, all of them in Form I. In 2012, two new classes were launched: Form II and Form III. FCNR has renewed its support to the SWD in 2014.

FCNR provides its support to other NGOs:• Autisme Maurice; and• Mille Soleil

Health

FCNR has supported in 2014 the NGO T1 Diams in its endeavor to educate people suffering from diabetes of Type 1 and members.

Education

Health

Handicap

Poverty

Total number of beneficiaries: 3,800 among which

1,200 direct beneficiaries

Distribution of Financing by Activity Sector for 2014


ACTogether

www.ACTogether.mu is a web portal launched and managed by FCNR. The web portal hosts non-governmental organisations that aim at reducing all forms of exclusions that exist in Mauritius. ACTogether has organised and participated in a series of activities throughout the year.

Participation in Major Events

• July 2013: Mobilisation of more than fifteen NGOs for a walk in favour of l’APEIM in Port-Louis for the Ministry of Education to resume its supports to these specialized schools;

• October 2013: Talk on Financial Education for NGOs in collaboration with “l’Association des Emprunteurs Abusés” at the Financial Services Commission, Ebène;

• November 2013: 3rd edition of « Marché de Noël Solidaire ACTogether » at Caudan Waterfront and Bagatelle;

• November 2013: Presentation of services offered by ACTogether during Decentralised Cooperation training programme by the European Union;

• February 2014: Presence of ACTogether at « Salon de l’Emploi et de l’Etudiant » through participation of several NGOs (TIPA, Caritas, PILS…); and

• May 2014: Presence of ACTogether at the UTM’s Recruitment Day at La Tour Koenig. In collaboration with the SOS Children’s Village possibilities of job offers were presented to student in the field of Social Studies, Communication, Psychology and Counseling.

Environment

CTL encourages its companies, subsidiaries and stakeholders to endorse environmentally conscious practices in their operations and activities. We have introduced control systems at companies’ level to better manage water and energy consumption as well as waste and affluent.

Some Examples of Environmental Practices at CIEL

• Environmental Policy Statement;• Procedures are established, implemented and

maintained to ensure compliance with the Emergency Preparedness & Response;

• Ongoing collaboration with Ministry of Environment, and local NGOs such as Mission Verte in Mauritius and Spoorthivana in India;

• Employee engagement campaign aiming to raise awareness, train, inform and inspire all employees about Eco-Green Project;

• Distribution of plants to employees;• Policies and guidelines for reducing water and energy

use;• Regular monitoring to identify and manage

environmental risks;• Water & Effluents Management System;• Solid waste Management System; and• Rainwater harvesting and solar energy production

Awards

• For example, Aquarelle Surinam and Grand Bois factories have been awarded a Platinum Certificate of Commerce by Worldwide Responsible Accredited Production Award (“WRAP”).


Ethics

The decision to behave ethically is a moral one; employers and employees must decide what they think is the correct course of action. Ethics applies to all aspects of business conduct and is relevant to the conduct of individuals and the organisation as a whole. This could mean that the organisation rejects the route that would lead to the biggest short-term profit. Together with good corporate governance, ethical behaviour is an integral part of everything that CIEL does.

Some examples of Ethical Practices at CIEL:• Businesses are conducted within the

framework of relevant laws, regulations and internal policies;

• Codes of conduct for employees;• Ensuring that all our business partners

follow same standard of ethics in terms of employee welfare, society and environment;

• Regular awareness campaign on anti-bribery, anti-corruption and privacy and data protection policies;

• Continuous efforts to promote clean, high performing, more accountable and transparent control at all levels;

• Responsible procurements procedures;• Occupational health, Safety and Welfare of

employees are of prime concern; and• No discrimination is practiced, Freedom

of association and the right to collective bargaining are respected.


People Commitment

Our people are our greatest asset. We provide our employees with a wide-range of training and development programmes, to help them develop their talents and achieve their full potential in a collaborative, safe and healthy workplace.

Some examples of Employee Welfare:• Free medical tests once a year;• Leisure and sports activities;• Health and Social Insurances; and• Talks on themes like tuberculosis, HIV/AIDS, Malaria and

EBOLA.

Some examples of Training and Talent Development:• Ongoing training programmes for better performance

and self-development; and• Regular team building exercises.

Some examples of Occupational Health & Safety:• Occupational and Safety Committee in place;• Health and Safety Policy;• Risk assessment, Fire drill and First Aid training; and• Awareness sessions on Health Care.

Work Accidents:• No serious injuries were reported.

The Chairman’s Manufacturing Excellence Award

The Chairman’s Manufacturing Excellence Award was introduced in 2007 to reward excelling employees and companies of CIEL Textile. Rewards are awarded based on productivity, quality, human resources management, leadership and environmental sustainability among others.


CORPORATE GOVERNANCE

REPORT


Statement of Compliance(Section 75 (3) of the Financial Reporting Act)

Name of Public Interest Entity (“PIE”): CIEL Textile Limited

Reporting Period: 1 July 2013 to 30 June 2014

We, the Directors of CIEL Textile Limited, confirm that to the best of our knowledge:

The PIE has not complied with the following sections of the Code. Reasons for non-compliance are listed below:

P. Arnaud Dalais Alain ReyChairman Director

29 September 2014

Sections not complied with Reasons for non-compliance

2.8 - Remuneration of Direcors The Board of Directors has resolved not to disclose the remuneration paid to each Director on an individual basis due to the commercial sensitivity of such information.

2.10.3 - Board and Director Appraisal No board appraisal has been conducted as the directors feel that the composition of the Board is stable and efficient in monitoring the affairs of the Group.

2.5.5 – Role and Function of the Chairman Although the role of the Chairman is assumed by an executive, the CEO reports directly to him and to the Board, giving therefore sufficient segregation of power between the Chairman and the management. The Chairman has the primary responsibility for running the Board and ensuring that the corporate strategy and the related execution are aligned together with operational efficiencies. With his experience and strong knowledge of the Company, the Chairman is in an excellent position to oversee the affairs of the Company while ensuring that value is being created for all stakeholders.

CORPORATE GOVERNANCE REPORTYear ended 30 June 2014


CORPORATE GOVERNANCE REPORT (CONT’D)Year ended 30 June 2014 CIEL Textile Limited (“CTL” or “the Company”) is pleased to present its Annual Report for the year ended 30 June 2014.

Incorporated on 19 January 1971, CTL is a public company listed on the Development & Enterprise Market (“DEM”) of the Stock Exchange of Mauritius Ltd. CTL is registered as a Reporting Issuer with the Financial Services Commission since the promulgation of the Securities Act 2005.

Compliance Statement

The Board and Management of CTL reiterate their commitment to ensuring and maintaining a high standard of corporate governance within the Company and the Group to ensure transparency and protection of the interests of CTL’s shareholders and all stakeholders at large.

They also recognise the need to adapt and improve the principles and practices in light of their experience, regulatory requirements and investor expectations.

Except as specifically set out in this report, the Board considers that the Company and the Group have complied in all material respects with the provisions of the Code of Corporate Governance for Mauritius for the financial year ended 30 June 2014.

Constitution

The Constitution of the Company is in conformity with the provisions of the Companies Act 2001 and the DEM Rules of the Stock Exchange of Mauritius Ltd. Its salient features are:

• There shall be no restriction on the transfer of fully paid up shares.

• The Board may authorise a distribution by the Company to shareholders if it is satisfied on reasonable grounds that the Company will satisfy the solvency test immediately after the distribution.

• When shareholders exercise a power to approve any of the following, that power may only be exercised by a Special Resolution:

(i) an alteration to or revocation of this Constitution or the adoption of a new Constitution; (ii) a major transaction as defined by the Companies Act 2001 (‘the Act’); (iii) an amalgamation; (iv) the liquidation of the Company; (v) a reduction of the stated capital under Section 62 of the Act.

• There shall be a quorum for a meeting of the Ordinary Shareholders where two Ordinary Shareholders holding at least thirty four (34) percent of the Ordinary shares in issue are present or represented or have cast postal votes.

• The Board shall consist of not less than 3 or more than 12 Directors.

• The Directors shall have the power to appoint any person to a Director, either to fill a casual vacancy or as an addition to the existing Directors. The Director appointed to fill up the vacancy shall hold office only until the next following Annual Meeting and shall then be eligible for re-election.

• A Director having an interest shall not be counted in a quorum.

• Every Director shall have one vote and the Chairperson shall not be entitled to a casting vote.

A copy of the Company’s Constitution is available upon request in writing to the Company Secretary at the Registered Office of the Company, 5th Floor, Ebène Skies, rue de l’Institut, Ebène.

Shareholding

As at 30 June 2014, the stated capital of the Company was made up as follows:• Rs. 685,865,487 represented by 101,807,589 no par value ordinary shares; and • Rs. 3,500,100 represented by 100 Redeemable B shares.


Shareholding (cont’d)

As communicated in an official communiqué released by CTL on 19 July 2013, the following events took place during the year under review:

• The sale by IP Textile Holding Limited (“IPTH’’) to CIEL Investment Limited (now amalgamated with Deep River Investment Limited and renamed CIEL Limited) on 19 July 2013, of 8,181,818 shares of CTL, representing 8.03% in CTL;

• The sale by IPTH to Orchestra Asia Ltd on 19 July 2013, of 1,136,364 shares of CTL representing 1.12% in CTL;• The sale by IPTH to members of the Executive team of CTL on 19 July 2013, of 4,863,636 shares of CTL

representing 4.78% in CTL; and• The sale by I&P Capital (II) Ltd to Deep River Investment Limited (now amalgamated with CIEL Investment

Limited and renamed CIEL Limited) of 100% of the shares held by IPTH on 25 July 2013.

The holding structure of CTL as at 30 June 2014 was as follows:

CTL CIEL Limited IP Textile Holding LtdP. Arnaud Dalais • • •Jean-Pierre Dalais • • •Jérôme De Chasteauneuf • • •Antoine Delaporte*** • • -Roger Espitalier Noël • • -Harold Mayer • • •

* *

**

CIEL Limited

IP TextileHolding

Ltd

Others

CIELTextile Limited

44.54% 43.69%

11.77%

100%

A detailed Group structure, including the subsidiaries and associates of the Company as at 30 June 2014, has been disclosed under the section Group Structure.

Common Directors

The names of the common Directors within the holding structure as at reporting date are as follows:

* Chairman** Alternate Director *** Resigned on 19 July 2013 following the sale of I&P Capital (ii) Ltd to Deep River Investment Limited (now amalgamated with CIEL Investment Limited and renamed CIEL Limited) of 100% of the shares held by IPTH in CTL on 25 July 2013 and appointed again on 25 September 2013 upon the recommendation of the Corporate Governance, Nomination and Remuneration Committee of CTL.


Substantial Shareholders

The shareholders holding more than 5% of the share capital of CTL as at 30 June 2014 were as follows:

Data Analysis of Shareholding

The ownership of ordinary share capital by size of shareholding was as follows as at 30 June 2014:

Shareholder Number of Shares Held % Held

CIEL Limited 45,349,716 44.54IP Textile Holding Ltd 11,982,294 11.77

Size of Shareholding (No. of shares) Number of Shareholders Number of Shares Owned % Holding

1 - 500 808 108,455 0.11501 - 1,000 155 121,232 0.121,001 - 5,000 385 963,508 0.955,001 - 10,000 121 888,267 0.8710,001 - 50,000 214 4,912,187 4.8250,001 - 100,000 53 3,721,386 3.66100,001 - 250,000 43 6,633,076 6.52250,001 - 500,000 12 4,102,383 4.03500,001 - 1,000,000 4 2,962,628 2.91Over 1,000,000 13 77,394,467 76.01Total 1,808 101,807,589 100.00

Summary by Shareholder Category

The ownership of ordinary share capital by category of shareholding was as follows as at 30 June 2014:

Category Number of Shareholders Number of Shares Owned % Holding

Individuals 1,616 26,206,668 25.74%Insurance & Assurance Companies 10 2,269,489 2.23%Pensions and Provident Funds 31 3,754,625 3.69%Investment and Trust Companies 41 5,236,015 5.14%Other Corporate Bodies 110 64,340,792 63.20%Total 1,808 101,807,589 100.00%

Nb: The above number of shareholders is indicative due to consolidation of multi portfolios for reporting purposes. The total number of active shareholders as at 30 June 2014 was 1,907.

Shareholders’ Agreement

To the best knowledge of the Company, there has been no such agreement with any of its shareholders.

Share Option Plan

CTL has no Employee Share Option plan. Share Registry and Transfer Office

The Share Registry and Transfer Office of CTL are administered by MCB Registry & Securities Limited. For any queries regarding an account and/or change in names or addresses, and/or questions about lost certificates, share transfers or dividends, you are invited to contact the Share Registry and Transfer Office, details of which are found under the section Corporate Information of the Annual Report.

Shares in Public Hands

In accordance with the DEM Rules of the Stock Exchange of Mauritius Ltd, at least 10% of the shareholding of CTL is in the hands of the public.

CORPORATE GOVERNANCE REPORT (CONT’D)Year ended 30 June 2014


Communication with the Shareholders

The Company understands the importance of communicating with its shareholders and ensures that shareholders are kept informed on matters affecting the Company and the Group.

The Company and the Group communicates to its shareholders through its Annual Report, circulars issued in compliance with the DEM Rules of the Stock Exchange of Mauritius Ltd, press announcements, publication of quarterly, half-yearly and audited annual financial results of the Group, dividend declaration and at the Annual Meeting to which all shareholders are invited.

All official news release of relevance to the investors are also posted on the CIEL Group’s website: www.cielgroup.com.

The calendar of events is as follows:

Event Month

Financial year end JuneLast Annual Meeting of the shareholders DecemberDeclaration of dividend (for the financial year ended 30 June 2014):- Interim November/December- Final JunePublication of first quarter results NovemberPublication of half yearly results FebruaryPublication of third quarter results MayPublication of full year results September

Dividend Policy

Dividend payments are determined by the profitability of the Company, its cash flows, its future investments and growth opportunities.

Directors make sure that the Company satisfies the solvency test for each declaration of dividend. A certificate of compliance with the solvency test is signed by all Directors when a dividend is declared by the Board.

For the financial year ended 30 June 2014, the Company has declared an interim dividend of Rs. 0.75 per ordinary share on 12 December 2013 and a final dividend of Rs. 1.25 per ordinary share on 23 June 2014.

Dividends declared in respect of Redeemable B shares during the year under review were as follows:• Interim dividend of Rs. 15,271.14 per Redeemable B share on 12 December 2013; and• Final Dividend of Rs. 25,451.90 per Redeemable B share on 23 June 2014

Board of Directors

The Board as a whole is ultimately responsible and accountable for the affairs and overall performance of the Group. It must ensure that proper systems and controls are in place to protect the Group’s assets and its good reputation. Having regard to recommendations made by the management team, the Board makes strategic decisions and identifies key risk areas, monitors and evaluates the implementation of policies and business plans, approves the Group’s capital expenditure, investments and operating budgets.

The Board of CTL is aware of its responsibility to ensure that the Company adheres to all relevant legislation, complies with the DEM Rules of the SEM and applies the principles of good governance throughout the Group.

The roles of the Chairman and Chief Executive Officer are separate and each of them has clearly defined responsibilities. This ensures a proper balance of power, increased accountability and greater capacity for the Board for independent decision-making.

Although the role of the Chairman is assumed by an executive, the CEO reports directly to him and to the Board, giving therefore sufficient segregation of power between the Chairman and the management. The Chairman has the primary responsibility for running the Board and ensuring that the corporate strategy and the related execution are aligned together with operational efficiencies. With his experience and strong knowledge of the Company, the Chairman is in an excellent position to oversee the affairs of the Company while ensuring that value is being created for all stakeholders.

The Company’s Constitution provides that the Board shall consist of not less than 3 and not more than 12 Directors. CTL is currently managed by a unitary Board of 10 Directors, 3 of whom are executive, 5 are non-executive and 2 are independent.


Board of Directors (cont’d)

The Independent Directors bring to the Board a wide range of experience and skills. They are free from any business or other relationships, which could materially affect their ability to exercise independent judgement.

None of the Executive Directors nor the executive Chairman are nearing the statutory retirement age.

The following changes occurred on the Board during the year under review:• Mr. Antoine Delaporte resigned on 19 July 2013 and was re-appointed Director on 25 September 2013.• Mr. Jérome Lagesse resigned on 19 July 2013.• Mr. Jean-Pierre Dalais was appointed Director on 13 February 2014.• Mr. Eric Dorchies was appointed Director on 29 September 2014.

No Board appraisal has been conducted as the Directors feel that the composition of the Board is stable and efficient in monitoring the affairs of the Group.

The names of the Directors in office as at reporting date, their categories, profiles and directorships in other companies listed on the Official Market of the Stock Exchange of Mauritius Ltd are provided below.

P. Arnaud DalaisChairmanExecutive Director

Mr. P. Arnaud Dalais joined the CIEL Group in August 1977. Under his leadership, the CIEL Group at large has gone through an important growth both locally and internationally. He has played and continues to play an active role at the level of the Mauritian private sector and has assumed the chairmanship of a number of organisations including the Joint Economic Council from 2000 to 2002. He has in 2010 been appointed Group Chairman of the CIEL Group. Since the amalgamation of CIEL Investment Limited with and into Deep River Investment Limited effective on 24 January 2014, Mr. P. Arnaud Dalais acts as Chairman of CIEL Limited (formerly known as Deep River Investment Limited, the surviving company). He is also the Chairman of Sun Resorts Limited and Group Chief Executive of Alteo Limited.

Directorship in other listed companies: CIEL Limited, Caudan Development Ltd, Sun Resorts Limited, Promotion and Development Ltd, Alteo Limited

Jean-Pierre DalaisNon-Executive Director

Mr. Jean-Pierre Dalais was appointed Director on 13 February 2014. He is the Executive Director of CIEL Limited. With an MBA from The International University of America, Mr. Dalais acquired some working experience from Arthur Andersen (Mauritius and France) before joining the CIEL Group. He played and continues to play an active role in the development of the Group’s operations both in Mauritius and internationally.

Directorship in other listed companies: CIEL Limited, IPRO Growth Fund Ltd, Phoenix Beverages Limited (Alternate Director), Sun Resorts Limited, Alteo Limited

Maurice P. Dalais Non-Executive Director

Mr. Maurice P. Dalais was appointed Director of the Company on 18 June 2012. He is the Managing Director of Circonstance Estates Ltd, a family-owned enterprise.

Directorship in other listed companies: none

Antoine DelaporteNon-Executive Director

Mr. Antoine Delaporte resigned as Director of CIEL Textile Limited following the sale by I&P Capital (ii) Ltd to Deep River Investment Limited of 100% of the shares held by IPTH in CTL on 25 July 2013. He was nominated again on the Board of the Company on 25 September 2013 following the recommendation of the Corporate Governance, Nomination and Remuneration Committee of CTL. He is also a member of that committee. He is the founder and Managing Director of Adenia Partners Ltd, a private company managing private equity funds in the Indian Ocean and West African regions. He is also Director of Karina International Limited and C.E.A.L. in Mauritius as well as Antenne Réunion in Reunion Island. Mr. Delaporte is the Chairman of Newpack, Grand Hotel du Louvre and Socolait in Madagascar.

Directorship in other listed companies: CIEL Limited



Board of Directors (cont’d)

Eric DorchiesExecutive Director

Mr. Dorchies was appointed Director on 29 September 2014. Holder of a diploma from the “Ecole Supérieure de Commerce” in Paris, he joined the Group in1998 as General Manager of Consolidated Fabrics Ltd and was appointed Managing Director of Aquarelle Clothing Ltd in 2003. He was appointed Chief Executive Officer of the woven cluster of the CIEL Textile Group on 1 July 2008.

Directorship in other listed companies: None

Roger Espitalier NoëlNon-Executive Director

Mr. Roger Espitalier Noël was appointed Director of the Company on 18 June 2012. He holds a Certificate in Textile and Knitwear Technology from the City of Leicester Polytechnic. He was nominated as General Manager of Floreal Knitwear Ltd in 1998 and retired on June 2010 after 36 years of services in that company. He is now acting as consultant for the CIEL Textile Group. He is a Director of ENL Land Limited, ENL Investment Limited and ENL Limited.

Directorship in other listed companies: CIEL Limited, ENL Land Ltd

Henri de Simard de Pitray Independent Director

Mr. Henri de Simard de Pitray was appointed Director of the Company on 27 October 2003. He has been during eight years a member of the Board of Spencer Stuart Inc., one of the leading global executive search firms, of which he also chaired the Governance Committee. He currently advises several listed European companies on the functioning of their Boards. He is the Chairman of the Corporate Governance, Nomination and Remuneration Committee of the Company.

Directorship in other listed companies: None J. Harold Mayer Executive DirectorChief Executive Officer

Mr. J. Harold Mayer was appointed Director of the Company on 7 July 2003. He holds a Bachelor in Commerce and qualified as Chartered Accountant - South Africa. He has been very active in the management team of various companies of CIEL Textile Group since 1990 and was appointed Chief Executive Officer in 2006.

Directorship in other listed companies: CIEL Limited, Sun Resorts Limited

Alain Rey Independent Director

Mr. Alain Rey was appointed Director of the Company on 12 November 2007. He is a member of the Institute of Chartered Accountants of England and Wales and holds a BSc in Economics. He is the Chief Executive Officer of Compagnie de Mont Choisy and has a long experience in the textile industry. He is the Chairman of the Company’s Audit and Risk Committee.

Directorship in other listed companies: State Bank of Mauritius Ltd, Rogers Co. Ltd

Eddy Yeung Kan Ching Non-Executive Director

Mr. Eddy Yeung Kan Ching was appointed Director of the Company on 24 June 2003. He has been an active member of the management team of the Group since 1978 when he joined Ferney Spinning Mills Ltd and has been the Chief Operating Officer of the spinning, weaving and dyeing operations of the Group until 30 June 2008, when he retired. He now works as a consultant for the CIEL Textile Group.

Directorship in other listed companies: none


Jérôme De ChasteauneufAlternate Director

Mr. Jérôme De Chasteauneuf was appointed Alternate Director of Mr. P. Arnaud Dalais on 1 November 2006. 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. He joined the CIEL Group in 1993 as Corporate Finance Advisor and became Head of Finance of the CIEL Group in 2000 where he effectively acts as Group Treasurer. Mr. De Chasteauneuf is the Executive Director of CIEL Limited.

Directorship in other listed companies: Alteo Limited, CIEL Limited, Harel Mallac & Co. Ltd

Newly-Appointed Directors

In accordance with the Company’s Constitution, the Board may fill vacancies or newly-created directorships on the Board that may occur between Annual Meetings of shareholders, but so that the total number of Directors shall not at any time exceed the number fixed in accordance with the Constitution.

Under its nomination function, the Corporate Governance, Nomination & Remuneration Committee is responsible for identifying and recommending potential director(s) to the Board. Thereafter, newly appointed Directors are subject to election by shareholders at the Company’s Annual Meeting in their first year of appointment.

On appointment to the Board and any Committees, newly appointed Directors receive a complete induction pack from the Company Secretary in order to rapidly acquire a comprehensive view of the Company’s current operations practises, acceptable risks level and medium and long term strategy.

Profiles of the Senior Management Team

J. Harold MayerChief Executive Officer

Please refer to the section Board of Directors.

Eric Dorchies Chief Executive Officer of the Woven Cluster

Please refer to the section Board of Directors.

Jean-Baptiste de Spéville Chief Executive Officer of the Knits and Knitwear clusters

Holder of a B.Sc in Mechanical Engineering from the University of Natal, RSA and an MBA from the Edinburgh Business School, Mr. de Spéville joined Ferney Spinning Mills Limited in May 2006 as General Manger after 13 years spent in the beverages industry. He was nominated Chief Executive Officer of the knits and knitwear clusters on 1 July 2011.

Board Attendance

The Board has four scheduled meetings each year. Other meetings may nevertheless be called from time to time as may be determined and required.

Board meetings are convened by giving appropriate notice after obtaining approval of the Chairman and of the Chief Executive Officer. As a general rule, detailed agenda, management reports and other explanatory statements are circulated in advance amongst the Directors to facilitate meaningful, informed and focused decisions at the meetings.

The Directors may ask for any explanations or the production of additional information and, more generally, submit to the Chairman any request for information or access to information which might appear to be appropriate to him.

In addition to Directors, key management personnel and outside consultants may be invited to attend Board meetings when deemed necessary. During the year under review, the Board met five times. Decisions were also taken by way of resolutions in writing, agreed and signed by all the Directors then entitled to receive the notice of the meeting.



Board Attendance (cont’d)

The attendance of the Directors at Board Meetings during the financial year ended 30 June 2014 was as follows:

Directors Number of Meetings Attended

P. Arnaud Dalais, Chairman 6 out of 6Jean-Pierre Dalais* 1 out of 6Maurice P. Dalais 6 out of 6Antoine Delaporte** 4 out of 6Roger Espitalier Noël 4 out of 6Henri de Simard de Pitray 6 out of 6P. Jérôme Lagesse*** 1 out of 6J. Harold Mayer 6 out of 6Alain Rey 4 out of 6Eddy Yeung Kan Ching 5 out of 6

* Appointed on 13 February 2014** Resigned on 19 July 2013 and appointed again on 25 September 2013*** Resigned on 19 July 2013

The minutes of the proceedings of each Board meeting are recorded by the Company Secretary and are entered in the Minutes Book of the Company. The minutes of each Board meeting are submitted for confirmation at its next meeting and these are then signed by the Chairman and Company Secretary.

Board Committees

The Code provides that Board committees are a mechanism to assist the Board of Directors in discharging its duties and responsibilities through a more comprehensive evaluation of specific issues, followed by well-considered recommendations to the Board.

The Board committees operate independently from the Board and report to the Board on matters discussed at the committee meetings.

Two committees of the Board have been constituted namely, the Audit & Risk Committee and the Corporate Governance, Nomination & Remuneration Committee, which operate within clearly defined terms of reference approved by the Board. The Committees may, at the Company’s expense, request such internal/external professional advice that they consider necessary to perform their duties in the best interest of the Company.

The Company Secretary acts as secretary to Board Committees and works on the minutes, which are thereafter tabled at the following respective Board Committee for approval. Simultaneously, the Chairmen of the committees report orally on the proceedings of their committees at the Board meetings of the Company.

Audit & Risk Committee

The Committee is chaired by an Independent Director and currently consists of three members, namely:• Mr. Alain Rey (Chairman)• Mr. Jean-Pierre Dalais (nominated on the Committee on 13 February 2014)• Mr. Jérôme De Chasteauneuf

Mr. P. Jérôme Lagesse stepped down as member on 19 July 2013.

During the year under review, the Committee met six times. The composition of the Committee as well as the particulars of attendance at meetings during the year are given in the table below:

Members Number of Meetings Attended

Alain Rey, Chairman 6 out of 6Jean-Pierre Dalais (appointed on 13 February 2014) 1 out of 6Jérôme De Chasteauneuf 6 out of 6P. Jérôme Lagesse (Resigned on 19 July 2013) -


Members Number of Meetings Attended

Henri de Simard de Pitray 1 out of 1P. Arnaud Dalais 1 out of 1Antoine Delaporte 1 out of 1

Board Committees (cont’d)

Audit & Risk Committee (cont’d)

The broad terms of reference of the Committee are to:(i) Review the integrity of quarterly financial statements and recommend their adoption to the Board of Directors

prior to filing and publication;(ii) Review the effectiveness of the Company’s internal control and risk management systems;(iii) Monitor and supervise the effective function of the internal audit; and(iv) Oversee the process for selecting the external auditor, assesses the continuing independence of the external

auditor and approve the audit fees.

The Committee examined and made recommendations to the Board on the Company’s interim results, audited accounts, budget and dividend. The findings of the internal auditor were also lengthily discussed and adequate recommendations made.

The fees of the external and internal auditors were reviewed by the Committee who proposed same for approval to the Board.

The Financial Controller of CTL Group also attended the meetings. In addition, internal and external auditors were invited to explain the internal audit reports and audited accounts.

Sub-Committees of the Audit and Risk Committee were established at the level of the knits, knitwear and woven clusters. These meetings serve as forum to discuss reports from internal/external auditors and monitor progress on corrective actions prescribed by the auditors in view of eliminating/controlling high risk issues identified. The management of each cluster is also invited to report at these meetings.

Following the resignation of Mr. Jérome Lagesse, the sub-committees currently consist of two members, namely, Mr. Jérôme De Chasteauneuf (Head of Finance of the CIEL Group) and Mr. Bertrand Rivalland (Financial Controller of CTL Group). No candidate has yet been nominated to replace the vacancy created by the resignation of Mr. Jérôme Lagesse.

Corporate Governance, Nomination & Remuneration Committee

The Committee is composed of three members and has met once during the year. The attendance of the members was as follows:

The main attribution of the Corporate Governance, Nomination & Remuneration Committee is to provide guidance to the Board on aspects of corporate governance and for recommending the adoption of policies and best practices as appropriate for the Company.

Together with its duties, the Corporate Governance Committee is also responsible for remuneration and nomination matters. The Directors believe that the success of the Company depends to a large extent on its ability to attract and retain the best performing people and to provide a stimulating and motivating environment. The Corporate Governance, Nomination & Remuneration Committee makes recommendations based on this conviction.

Directors’ & Officers’ Liability Insurance

As permitted by its Constitution, the Company has contracted a Directors’ and Officers’ Liability Insurance, renewed on a yearly basis.



Directors’ Interests in Shares

The Directors’ interests in the capital of the Company as at 30 June 2014 were as follows:

Name of DirectorDirect Shareholding

Number of SharesIndirect Shareholding

Number of Shares

P. Arnaud Dalais 1,813,840 1,550,097Maurice P. Dalais 106,729 56,723Jean-Pierre Dalais (appointed on 13 February 2014) 2,512,511 1,244,171Antoine Delaporte - -Eric Dorchies 1,812,000 -Roger Espitalier Noël - 97,578Henri de Simard de Pitray - -J. Harold Mayer 1,978,291 1,300Alain Rey 3,052 -Eddy Yeung Kan Ching 13,140 2,389Jérôme De Chasteauneuf (Alternate to P. Arnaud Dalais) 227,691 -

Name of DirectorDirect Shareholding

Number of SharesIndirect Shareholding

Number of Shares

P. Arnaud Dalais - -Maurice P. Dalais - -Jean-Pierre Dalais (appointed on 13 February 2014) - -Antoine Delaporte - -Roger Espitalier Noël - 2,065Henri de Simard de Pitray - -J. Harold Mayer 200,032 1,300Alain Rey - -Eddy Yeung Kan Ching - -Jérôme De Chasteauneuf (Alternate to P. Arnaud Dalais) 227,273 -

The Directors and officers of the Company have been made aware of their responsibilities in disclosing to the Company any acquisition or disposal in the Company’s securities, as per the Securities Act 2005 and DEM rules.

Share dealings by Directors during the year under review were as follows:

Risk Management

Risk Management refers to the process used by the Group and the Company to monitor and mitigate its exposure to risk. The objective of risk management is not to eliminate risk altogether, but to reduce it to an acceptable level having regard to the objectives of the Group and the Company.

The Board is ultimately responsible for the system of internal control and for reviewing its effectiveness. The Board confirms that there is an ongoing process for identifying, evaluating and managing the various risks faced by the Group and the Company.

Risk is managed on the day-to-day by management whilst the internal auditors assist the Board and management with the monitoring of the risk management process. Regular management reporting, which provides a balanced assessment of key risks and controls, is an important component of the Board Assurance.

The finance department provides confirmation that financial and accounting control frameworks have operated satisfactorily. In addition, the Board receives assurance from the Audit and Risk Committee, which derives its information, in part, from regular internal and external audit reports on risk and internal control throughout the Company.

The Group’s and Company’s principal liabilities comprise of bank loans and overdrafts, finance leases, bills discounted and trade payables and other payables to finance the operations of the Group and the Company

The activities of the Company and the Group are exposed to a variety of financial risks: market risks, credit risk and liquidity risk. The overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s and Company’s financial performance.


Risk Management (cont’d)

A description of the risk factors is disclosed in note 35 to the financial statements as well the risk management policies which have been applied.

Some of the prominent risks to which the Company is exposed are:

• Financial - The Company is exposed to a wide range of financial risks, including currency risks and price risks, credit risks, liquidity risks as reported in note 35 to the financial statements.

• Operational risk defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.

• Compliance risk defined as the risk of not complying with laws, regulations and policies.• Reputational risk defined as the risk of losses due to unintentional or negligent failure to meet a professional

obligation to stakeholders.

Statement of Remuneration Philosophy

The Board has delegated to the Corporate Governance, Nomination and Remuneration Committee, the responsibility of determining the adequate remuneration to be paid to the Board members and 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 and to reward them in accordance with their individual as well as collective contribution towards the achievement of the Group’s objectives and performance, whilst taking into account current market conditions. The Directors are remunerated for their knowledge, experience and insight given to Board and Committees.

Retirement Benefit Obligations

The details of the total amount of provisions booked or otherwise recognised by the Company are provided in note 17 of the financial statements.

External Auditors

Shareholders rely on the external auditors to act in the long-term interest of the Group and the Company in which they have invested their money such that the independence of auditors is paramount in making sure the necessary safeguards are in place.

The Board assesses and reviews on a regular basis the independence of the external auditor, PricewaterhouseCoopers.

Internal Audit

The mission of the internal audit is to provide independent, objective assurance services designed to add value and improve the Group’s operations.

The scope of the internal audit function is to assist the Board of Directors and Management to maintain and improve the process by which risks are identified and managed and to help the Board to discharge its responsibilities and to maintain and strengthen the internal control framework.

The internal audit function has been outsourced to Messrs. BDO & Co which carries its functions independently and has a direct reporting line to the Audit and Risk Committee. The internal auditor also maintains an open and constructive communication channel with the executive management. The reporting structure allows the internal auditors to remain independent and to report all items of significance.

The internal audit plan, which is approved by the Audit and Risk Committee, is based on the principles of risk management to align coverage and effort with the degree of risk attributable to the areas audited.

Company Secretariat

The Company has entered into a service agreement with CIEL Corporate Services Ltd (‘CCS’) for company secretariat and legal services. The Company Secretary is responsible for the smooth operation of the Company’s formal decision making and reporting.

All Directors have access to the advice and services of the Company Secretary who is accountable to the Board for ensuring that the Board procedures are complied with and that the Board is properly guided on all governance matters. Under the direction of the Chairman, the Company Secretary’s responsibilities include ensuring good information flow within the Board and its Committees, between senior management and the Directors, as well as facilitating induction and assisting with professional development.



Company Secretariat (cont’d)

Moreover, the Company Secretary is the primary channel of communication between the Company and the regulatory authorities.

Agreements

In addition to providing company secretarial and legal services to CTL Group of companies, CCS also acts as its head office and offers other services such as finance, treasury, legal, payroll, communication and strategic support.

The Company also holds an agreement with Azur Financial Services Ltd, a subsidiary of CIEL Corporate Services Limited for the provision of treasury management services to the Group.

No major agreements, other than those in the ordinary course of business, were contracted by the Company during the year under review. There is no agreement in place which affects the governance of the Company.

Financial Risk Factors

Please refer to note 35 of the Financial Statements.

Related Party Transactions

Please refer to note 34 of the Financial Statements.

Share Price Information

The Company’s ordinary shares are listed on the Development & Enterprise Market of the Stock Exchange of Mauritius Ltd.

The evolution of the share price over the year has been as follows:

Shareholders’ Relations and Communication

CTL Group understands the importance of communicating with its shareholders and ensures that shareholders are kept informed on matters affecting the Group.

The Group communicates to its shareholders through its Annual Report, circulars issued in compliance with the DEM Rules of the Stock Exchange of Mauritius Ltd, press announcements, publication of unaudited quarterly and audited condensed financial statements of the Group, dividend declaration and the Annual Meeting, to which all shareholders are invited.

Annual Meeting of Shareholders

The Board strongly encourage shareholders to attend the Annual Meeting which provides an opportunity for the latter to receive copies of the Group and Company’s accounts and to keep abreast of the overall strategy and goals.

The Chairman, Chief Executive Officer and Board members assist the Annual meeting and invite shareholders to put questions on different aspects of the Group’s activities and directions the business will take in the future.

The notice included in the annual report clearly explains the procedures regarding proxy and postal voting. The deadlines as to when these should be received by the Company Secretary are also stated.

20Jul 13

23.75

Aug 13

24.00

Sep 13

23.60

Jan 14

27.00

Feb 14

28.85

Months

Rs.

Mar 14

30.00

Apr 14

29.35

May 14

32.10

Jun 14

33.90

Jul 14

33.40

Aug 14

36.50

Oct 13

25.10

Nov 13

24.80

Dec 13

25.80

23

26

29

32

35

38

41

Sep 14

37.00


Sustainability Reporting

CTL Group recognises that it operates within a broader social and economic community. Consequently, when it takes decisions and carries out activities, it is committed to considering not only economic viability but also environmental consequences and social implications. The Group recognises its key role regarding job and wealth creation in the Mauritian society.

Ethics and Business Conduct

CTL Group together with its employees adhere to sound principles of morality for ensuring corporate responsibility, quality assurance and customer satisfaction. These principles act as a guiding framework for motivating and regulating the employees, in addition to providing a focus for achieving the business goals.

The Group is committed to a policy for fair, honest dealing and integrity in the conduct of its business. This commitment is based on a fundamental belief that business should be conducted honestly, fairly and legally.

Environment, Health and Safety Policy

CTL Group remains sensible to the climatic change to which the globe is subject to and takes environmental responsibility at heart and recognizes the importance of preserving the integrity of natural heritage. In its endeavor to preserve the environment, it continuously aims at improving processes in its various operations.

The Group also recognises its role in providing a healthy, sound, safe and secure working environment for all its employees and any authorised third party. Safety implications are therefore taken into account before any operational and strategic decisions are taken.

In compliance with the Health and Safety legislation, the Group has implemented recommended policies and practices to ensure that the plants, machinery and equipment provided for use at work are safe to operate; information instructions and training, as necessary, are provided to enable its employees to perform their duties efficiently and safely; and continuous improvement in the performance of its Health and Safety management systems are maintained.

Corporate Social Responsibility (“CSR”)

CSR activities were carried out and aligned with the CTL Group’s values.

Initiatives in that context were again geared towards the contribution of funds to Fondation CIEL Nouveau Regard (“FCNR”), the CSR arm of the CIEL Group. FCNR has been involved over the past years in community development projects throughout the island, focusing on children in distress, including those who grow up in the streets and those facing difficult family situations.

Clothilde de Comarmond, ACISPer CIEL Corporate Services Ltd Company Secretary

29 September 2014



OTHER STATUTORY DISCLOSURES(Pursuant to Section 221 of the Companies Act 2001) Nature of Business

The principal activity of the Company is that of an investment holding company with interests in a number of companies involved in textile activities.

Remuneration of the Directors

The emoluments of the Executive Directors have not been disclosed on an individual basis due to the commercial sensitivity of that information.

Remuneration and benefits of the Directors received from the Company and its subsidiaries were as follows:

The Company Subsidiaries2014 2013 2014 2013

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Executive Directors Nil Nil 64,888 42,804Non-Executive & Independent Directors 2,077 1,600 1,593 1,610

Executive Directors of Subsidiaries Nil Nil 81,120 57,972

The Non-Executive and Independent Directors were paid a fixed annual fee of Rs. 150,000 as well as an attendance fee of Rs. 22,500 per meeting during the year ended 30 June 2014.

Following the recommendation of the Corporate Governance, Nomination & Remuneration committee, it was decided that the members of the Board committees would be remunerated as follows:

Corporate Governance, Nomination & Remuneration Committee:• Rs. 150,000 per year for the Chairman of the Committee and • Rs. 100,000 per year for the other members.

Audit & Risk Committee:• Rs. 225,000 per year for the Chairman of the Committee and • Rs. 150,000 per year for the other members.

Executives sitting on the Board Committees did not perceive any fee.

Directorship of Subsidiary Companies as at 30 June 2014

Dora Brocchetto Cieltex SA Pty Ltd Elvis Cateaux New Island Clothing Madagascar SA P. Arnaud Dalais Aquarelle Clothing Ltd Aquarelle India (Private) Ltd Aquarelle International Ltd Aquarelle Madagascar SA CDL Knits Ltd (Formely known as Consolidated Dyeing and Fabrics Ltd) Consolidated Fabrics Ltd CTL Retail Ltd De Nyon Ltd Ferney Spinning Mills Ltd Floreal International Ltd Floreal Knitwear Ltd Floreal Madagascar SA Floreal Manufacturing Ltd International Fabrics Ltd Laguna Clothing (Mauritius) Ltd New Island Clothing Madagascar SA TKL International Ltd Tropic Knits Ltd Tropic Mad SA Société Textile d’Andraharo SA - Texaro Société Bonneterie Malagasy - SOBOMA


Guillaume Dalais CDL Knits Ltd (Formely known as Consolidated Dyeing and Fabrics Ltd) TKL International Ltd Tropic Mad SA Tropic Knits Limited Jean-Pierre Dalais Aquarelle Clothing Ltd CDL Knits Ltd (Formely known as Consolidated Dyeing and Fabrics Ltd) Consolidated Fabrics Ltd CTL Retail Ltd Ferney Spinning Mills Limited Floreal Knitwear Ltd Tropic Knits Ltd Jérôme De Chasteauneuf Aquarelle Clothing Ltd Aquarelle International Ltd Aquarelle Madagascar SA Ajax Sweaters Ltd CDL Knits Ltd (Formely known as Consolidated Dyeing and Fabrics Ltd) Consolidated Fabrics Ltd (Alt Director of Eddy Yeung Kan Ching) CTL Retail Ltd De Nyon Ltd Ferney Spinning Mills Ltd Floreal International Ltd Floreal Knitwear Ltd Floreal Madagascar SA Floreal Manufacturing Ltd TKL International Ltd Tropic Knits Ltd Tropic Mad SA Société Bonneterie Malagasy - SOBOMA Jean-Baptiste Doger de Spéville Ajax Sweaters Ltd CDL Knits Ltd (Formely known as Consolidated Dyeing and Fabrics Ltd) Ferney Spinning Mills Ltd Floreal International Ltd Floreal Knitwear Ltd TKL International Ltd Tropic Knits Ltd Floreal Madagascar SA Eric Dorchies Aquarelle Clothing Ltd Aquarelle India (Private) Ltd Aquarelle International Ltd Aquarelle Madagascar SA Consolidated Fabrics Ltd International Fabrics Ltd Laguna Clothing Private Ltd Laguna Clothing (Mauritius) Ltd New Island Clothing Madagascar SA Tinka International Ltd Jacques Edouard-Betsy Société Textile d’Andraharo SA - Texaro Roger Espitalier Noël Aquarelle Madagascar SA Floreal Madagascar SA New Island Clothing Madagacar SA Tropic Mad SA Société Textile d’Andraharo SA - Texaro Louis Baron Stephane Fromet De Rosnay New Island Clothing Madagascar SA Sarbajit Ghose Laguna Clothing Private Ltd Laguna Clothing (Mauritius) Ltd Françoise Ip Ajax Sweaters Ltd Aquarelle Madagascar SA Floreal Madagascar SA Tropic Mad SA

OTHER STATUTORY DISCLOSURES (CONT’D)(Pursuant to Section 221 of the Companies Act 2001)


Baboo Daneshwarsingh Jagarnath Aquarelle Madagascar SA Rajesh Kumar Laguna Clothing Private Ltd Michel André Kim Shin Loo Chin Moy Tropic Mad SA Nicolas Maigrot Floreal Knitwear Ltd Ferney Spinning Mills Ltd J. Harold Mayer Aquarelle Clothing Ltd Aquarelle India (Private) Ltd Aquarelle International Ltd Aquarelle Madagascar SA CDL Knits Ltd (Formely known as Consolidated

Dyeing and Fabrics Ltd) Consolidated Fabrics Ltd CTL Retail Ltd De Nyon Ltd Ferney Spinning Mills Ltd Floreal International Ltd Floreal Knitwear Ltd Floreal Madagascar SA Floreal Manufacturing Ltd International Fabrics Ltd Laguna Clothing Private Ltd New Island Clothing Madagascar SA Tinka International Ltd TKL International Ltd Tropic Knits Ltd Tropic Mad SA Société Textile d’Andraharo SA - Texaro Société Bonneterie Malagasy - SOBOMA Bruno Monti Laguna Clothing Private Ltd Laguna Clothing (Mauritius) Ltd Paolo Monti Laguna Clothing Private Ltd Manuel Monti Laguna Clothing (Mauritius) Ltd Neera Munisamy Ajax Sweaters Ltd Murali Nagesh Aquarelle India (Private) Ltd Bertrand Rivalland Aquarelle Madagascar SA Ajax Sweaters Ltd Cieltex Pty SA Floreal Madagascar SA Tropic Mad SA Société Textile d’Andraharo SA - Texaro Société Bonneterie Malagasy - SOBOMA Vaidyanathan Pudugramam Venkata Subramanian Aquarelle India (Private) Ltd

Bertrand Thevenau Tropic Knits Ltd CDL Knits Ltd (Formely known as Consolidated

Dyeing and Fabrics Ltd) TKL International Ltd Tropic Mad SA Tinka International Ltd Société Bonneterie Malagasy - SOBOMA


Eddy Yeung Kan Ching Aquarelle Clothing Ltd Aquarelle International Ltd CDL Knits Ltd (Formely known as Consolidated

Dyeing and Fabrics Ltd) Consolidated Fabrics Ltd CTL Retail Ltd De Nyon Ltd Ferney Spinning Mills Ltd Floreal International Ltd Floreal Knitwear Ltd Floreal Manufacturing Ltd TKL International Ltd Tropic Knits Ltd Pascal Walter Consolidated Fabrics Ltd

Directors’ Service Contracts

The Chief Executive Officer of CTL, Chief Executive Officer of the knits and knitwear clusters and Chief Executive Officer of the woven cluster hold service contracts with Company, with no expiry terms. Executive Directors of the subsidiaries of the Company also hold service contracts with either the Company or the subsidiaries of the Company, with no expiry terms.

Donations

Donations made during the year by the Company and its subsidiaries were as follows:

Company (Rs.’000) Subsidiaries (Rs.’000)2014 2013 2014 2013

Political - - - -Others - - 57 1,213

In addition to the above, CTL Group has contributed Rs. 487,402 as Corporate Social Responsibility, channelled to FCNR, registered as a special purpose vehicle accredited to receive CSR contribution. CTL is one of the promoters of FCNR.

Contract of Significance

There were no contracts of significance subsisting during or at the end of the year in which a Director of the Company is or was materially interested, either directly or indirectly.

OTHER STATUTORY DISCLOSURES (CONT’D)(Pursuant to Section 221 of the Companies Act 2001)


* Includes Tax compliance fees and IFRS training fees. ** Includes Group accounts consolidation fees.

Internal Audit Fees

Fees paid in respect of the internal audit for the year under review was Rs. 900,000.

ON BEHALF OF THE BOARD


29 September 2014

The Company (Rs.’000) Subsidiaries (Rs.’000)2014 2013 2014 2013

Audit fees paid to:PricewaterhouseCoopers 600 600 4,900 4,900Overseas auditors - - 2,826 2,937

600 600 7,726 7,837

Fees paid for other services provided by:PricewaterhouseCoopers* 37 37 1,500 963BDO & Co** 900 775 - 150Overseas auditors - - 726 426

937 812 2,226 1,539

Note: Fees are exclusive of VAT

External Audit Fees

External Audit fees for the year were as follows:


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 comply with International Financial Reporting Standards (IFRS);

(iii) The selection of appropriate accounting policies supported by reasonable and prudent judgments. 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 adhered to. Any departure in the interest in fair

presentation has been disclosed, explained and quantified.

(iv) The code of Corporate Governance has been adhered to in all material aspects and reasons provided for non-compliance.

ON BEHALF OF THE BOARD


29 September 2014



CERTIFICATE OFCOMPANY SECRETARY


In our capacity as Company Secretary, we hereby certify, to the best of our knowledge and belief, that CIEL Textile Limited has filed with the Registrar of Companies, for the financial year ended 30 June 2014, all such returns as are required of the company under The Companies Act 2001, and that all such returns are true, correct and up to date.

Clothilde de Comarmond, ACISPer CIEL Corporate Services LtdCompany Secretary

29 September 2014


INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF CIEL TEXTILE LIMITED


INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CIEL TEXTILE LIMITED

Report on the Financial Statements

We have audited the consolidated financial statements of CIEL Textile Limited (the “Company”) and its subsidiaries (together the “Group”) and separate financial statements of the Company on pages 64 to 140 which comprise the Group’s and the Company’s statements of financial position at 30 June 2014 and their respective statements of income, comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Directors’ Responsibility for the Financial Statements

The Company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in compliance with the requirements of the Mauritian Companies Act 2001, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements on pages 64 to 140 give a true and fair view of the financial position of the Group and of the Company at 30 June 2014 and of their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with the Mauritian Companies Act 2001.

Report on Other Legal and Regulatory Requirements

Mauritian Companies Act 2001The Mauritian Companies Act 2001 requires that in carrying out our audit we consider and report to you on the following matters. We confirm that:(a) we have no relationship with or interests in the

Company or any of its subsidiaries other than in our capacities as auditor and tax advisor of the Company and some of its subsidiaries;

(b) we have obtained all the information and explanations we have required; and

(c) in our opinion, proper accounting records have been kept by the Company as far as appears from our examination of those records.

Financial Reporting Act 2004The directors are responsible for preparing the corporate governance report. Our responsibility is to report on the extent of compliance with the Code of Corporate Governance (the ‘Code’) as disclosed in the corporate governance report on whether the disclosure is consistent with the requirements of the Code.

In our opinion, the disclosure in the corporate governance report is consistent with the requirements of the Code.

Other Matter

This report, including the opinion, has been prepared for and only for the Company’s shareholders, as a body, in accordance with Section 205 of the Mauritian Companies Act 2001 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

PricewaterhouseCoopers

Mushtaq Oosman, licensed by FRC

29 September 2014


STATEMENTS OF FINANCIAL POSITIONAs at 30 June 2014

THE GROUP THE COMPANYAs at

30 June,As at

1 July,As at

30 June,2014 2013 2012 2014 2013

Notes Restated RestatedASSETS Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Non-current assetsProperty, plant and equipment - at fair value 3 1,907,413 1,417,127 1,415,843 122,414 112,625 Property, plant and equipment - at cost 3 920,695 782,644 784,342 - -

2,828,108 2,199,771 2,200,185 122,414 112,625 Intangible assets 4 16,164 16,876 9,416 - - Investments in:- Subsidiary companies 5 - - - 1,201,801 1,201,801 - Available for sale investments 7 6,712 6,712 3,477 6,712 6,712

6,712 6,712 3,477 1,208,513 1,208,513 Non-current receivables 8 58,308 24,976 12,998 - - Deferred income tax assets 9 49,998 41,457 32,824 - -

2,959,290 2,289,792 2,258,900 1,330,927 1,321,138 Current assetsInventories 10 2,462,406 2,281,292 2,036,376 - - Trade and other receivables 11 2,339,194 2,143,618 1,643,122 156,893 117,774 Cash and cash equivalents (excluding bank overdrafts) 247,892 166,706 241,768 3,972 461

5,049,492 4,591,616 3,921,266 160,865 118,235

Non-current assets classified as held for sale 12 - 22,366 22,366 - -

TOTAL ASSETS 8,008,782 6,903,774 6,202,532 1,491,792 1,439,373

EQUITY AND LIABILITIESCapital and reservesShare capital 13 685,865 685,865 685,865 685,865 685,865 Revaluation and other reserves 759,213 579,657 653,596 131,874 121,396 Retained earnings 2,179,233 1,843,260 1,534,899 98,086 98,103 Owners’ interest 3,624,311 3,108,782 2,874,360 915,825 905,364 Non-controlling interests 179,390 217,311 177,237 - - Total equity 3,803,701 3,326,093 3,051,597 915,825 905,364

Non-current liabilitiesBorrowings 15 153,615 71,275 149,852 - 14,000 Deferred income tax liabilities 9 236,573 182,194 175,519 20,554 18,408 Retirement benefit obligations 17 177,804 144,215 70,305 - -

567,992 397,684 395,676 20,554 32,408 Current liabilitiesTrade and other payables 19 1,697,321 1,509,758 1,185,814 428,112 385,789 Provisions 20 20,528 37,990 35,188 - - Borrowings 15 1,751,969 1,490,867 979,287 6 14,004 Redeemable preference share capital 14 - - 404,937 - - Current income tax liabilities 21 40,012 39,574 48,761 36 - Employee benefit liability 18 - - 9,760 - - Dividends payable 27 127,259 101,808 91,512 127,259 101,808

3,637,089 3,179,997 2,755,259 555,413 501,601

Total liabilities 4,205,081 3,577,681 3,150,935 575,967 534,009

TOTAL EQUITY AND LIABILITIES 8,008,782 6,903,774 6,202,532 1,491,792 1,439,373

These financial statements have been approved for issue by the Board of Directors on 29 September 2014.

The notes on pages 70 to 140 form an integral part of these financial statements.Auditors’ report on page 63.



INCOME STATEMENTSYear ended 30 June 2014

THE GROUP THE COMPANY Notes 2014 2013 2014 2013

RestatedRs.’000 Rs.’000 Rs.’000 Rs.’000

Revenue 33 9,565,100 8,685,727 207,687 155,766

Earnings before interest, tax, depreciation and amortisation

22 a 969,945 829,906 210,164 158,275

Depreciation and amortisation (219,322) (199,208) (2,835) (2,835)Earnings before interest and tax 750,623 630,698 207,329 155,440

Finance income 25 6,494 9,036 4,370 3,165 Finance costs 25 (83,108) (63,412) (8,065) (6,090)Net finance costs 25 (76,614) (54,376) (3,695) (2,925)

Profit from Ordinary Activities 22 c 674,009 576,322 203,634 152,515

Non Recurring Items 22 b (23,449) 30,712 - -

Profit before taxation 24 650,560 607,034 203,634 152,515

Income tax (expense)/credit 21 (99,472) (91,177) (36) 482

Profit for the year 551,088 515,857 203,598 152,997

2014 2013Restated

Rs.’000 Rs.’000Profit attributable to : Owners of the company 517,195 464,138 Non-controlling interests 33,893 51,719

551,088 515,857

Basic and diluted earnings per share 26 Rs. 5.08 4.53



STATEMENTS OF COMPREHENSIVE INCOMEYear ended 30 June 2014

THE GROUP THE COMPANY 2014 2013 2014 2013

Notes RestatedRs.’000 Rs.’000 Rs.’000 Rs.’000

Profit for the year 551,088 515,857 203,598 152,997

Other comprehensive income

Items that will not be reclassified to profit or lossRevaluation surplus 16 276,473 2,167 12,624 - Deferred tax on revaluation surplus 9 (44,593) (329) (2,146) - Remeasurements of post retirement benefit obligations 16 (11,819) (58,381) - - Deferred tax on remeasurements of post retirement benefit obligations 9 3,359 8,695 - -

223,420 (47,848) 10,478 -

Items that may be subsequently reclassified to profit or lossAmount recognised in cash flow hedge reserve (40,230) - - - Deferred tax on cash flow hedge reserve 9 2,003 - - - Exchange differences 16 (39,558) (36,970) - -

(77,785) (36,970) - -

Other comprehensive income/(loss) for the year 145,635 (84,818) 10,478 -

Total comprehensive income for the year 696,723 431,039 214,076 152,997

2014 2013Restated

Rs.’000 Rs.’000Total comprehensive income attributable to:Owners of the company 650,958 390,199 Non-controlling interests 45,765 40,840

696,723 431,039



STATEMENTS OF CHANGES IN EQUITYYear ended 30 June 2014

THE GROUP

(Attributable to the owners of the company)

At 30 June 2014 NotesStated Capital

Capital Redemption

ReserveRevaluation

SurplusGeneral Reserve

Actuarial losses

Cash Flow

Hedge Reserve

Retained Earnings

Translation of foreign

operations Sub-Total

Non-controlling

interestsTotal

Equity

Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000

Balance as at 1 July 2013 (restated) 685,865 75,000 602,890 1,505 (49,655) - 1,843,260 (50,083) 3,108,782 217,311 3,326,093

Profit for the year - - - - - - 517,195 - 517,195 33,893 551,088

Other comprehensive income - - 215,408 - (8,199) (38,227) - (35,219) 133,763 11,872 145,635

Transactions with owners:

Changes in ownership interest in subsidiaries

that do not result in a loss of control 29(a) - - 45,793 - - - 22,393 - 68,186 (83,686) (15,500)

Ordinary dividends 27 - - - - - - (203,615) - (203,615) - (203,615)

Balance as at 30 June 2014 685,865 75,000 864,091 1,505 (57,854) (38,227) 2,179,233 (85,302) 3,624,311 179,390 3,803,701

-

At 30 June 2013

Balance as at 1 July 2012 (as previously reported) 685,865 75,000 601,052 1,505 - - 1,534,899 (22,904) 2,875,417 177,507 3,052,924

Effect of changes in accounting policies 38 - - - - (1,057) - - - (1,057) (270) (1,327)

Balance as at 1 July 2012 (restated) 685,865 75,000 601,052 1,505 (1,057) - 1,534,899 (22,904) 2,874,360 177,237 3,051,597

Profit for the year (as previously reported) - - - - - - 462,335 - 462,335 51,702 514,037

Effect of changes in accounting policies 38 - - - - - - 1,803 - 1,803 17 1,820

Profit for the year (restated) - - - - - - 464,138 - 464,138 51,719 515,857

Other comprehensive income (as previously reported) - - 1,838 - - - - (27,179) (25,341) (9,791) (35,132)

Effect of changes in accounting policies 38 - - - - (48,598) - - - (48,598) (1,088) (49,686)

Other comprehensive income (restated) - - 1,838 - (48,598) - - (27,179) (73,939) (10,879) (84,818)

Preference dividends - - - - - - (3,066) - (3,066) (766) (3,832)

Transactions with owners: -

Ordinary dividends 27 - - - - - - (152,711) - (152,711) - (152,711)

Balance as at 30 June 2013 (restated) 685,865 75,000 602,890 1,505 (49,655) - 1,843,260 (50,083) 3,108,782 217,311

3,326,093

-

The notes on pages 70 to 140 form an integral part of these financial statements.

Auditors’ report on page 63.


STATEMENTS OF CHANGES IN EQUITYYear ended 30 June 2014 THE COMPANY

Stated Revaluation RetainedNotes Capital Surplus Earnings Total

Rs.’000 Rs.’000 Rs.’000 Rs.’000

At 1 July 2013 685,865 121,396 98,103 905,364 Profit for the year - - 203,598 203,598 Other comprehensive income - 10,478 - 10,478 Transactions with owners:Ordinary dividends 27 - - (203,615) (203,615)At 30 June 2014 685,865 131,874 98,086 915,825

At 1 July 2012 685,865 121,396 97,817 905,078 Profit for the year - - 152,997 152,997 Other comprehensive income - - - - Transactions with owners:Ordinary dividends 27 - - (152,711) (152,711)At 30 June 2013 685,865 121,396 98,103 905,364



STATEMENTS OF CASH FLOWSYear ended 30 June 2014


Notes RestatedRs.’000 Rs.’000 Rs.’000 Rs.’000

OPERATING ACTIVITIES Cash generated from operations 28(a) 690,822 437,230 213,368 183,961 Interest received 6,494 9,036 4,370 3,165 Tax paid (109,389) (91,037) - (63)Interest paid (83,108) (63,412) (8,065) (6,090)Net cash generated from operating activities 504,819 291,817 209,673 180,973

INVESTING ACTIVITIES Acquisition of subsidiary, net of cash acquired 29(b) (114,957) - - - Purchase of additional shares in subsidiary 29(a) (15,500) - - -

Proceeds from disposal of non current assets held for sale 12 53,700 - - - Purchase of property, plant and equipment 3 (326,688) (209,146) - - Purchase of intangible assets 4 (4,532) (11,821) - - Purchase of investment in subsidiary company - - - (50,000)Purchase of available for sale investments - (3,235) - (3,235)Net movement in non-current receivables (33,332) (11,978) - - Proceeds from disposal of property, plant and equipment 7,730 2,743 - - Net cash used in investing activities (433,579) (233,437) - (53,235)

FINANCING ACTIVITIES Net movement in bank and import loans 1,837 202,129 - - Net movement in bills discounted 173,612 90,474 - - Net movement on finance leases (18,908) (15,654) - - Net movement in debentures (28,000) (14,000) (28,000) (14,000)Redemption of Redeemable preference shares (30,000) (404,937) - - Net movement in loans from related companies - - - (82)Ordinary Dividends paid to owners of the parent 27(b) (178,164) (122,168) (178,164) (122,168)B shares dividends paid (3,563) (2,443) - - Preference dividends paid to financial institutions - (24,079) - - Net cash used in financing activities (83,186) (290,678) (206,164) (136,250)

Net (decrease)/increase in cash and cash equivalents (11,946) (232,298) 3,509 (8,512)Exchange differences (8,601) (12,818) - - At 1 July (256,783) (11,667) 457 8,969

At 30 June, 28(b) (277,330) (256,783) 3,966 457



NOTES TO THE FINANCIAL STATEMENTSYear ended 30 June 2014 1. CORPORATE INFORMATION

CIEL Textile Limited is a public Company incorporated and domiciled in Mauritius. It is quoted on the Development and Enterprise Market (DEM). Its registered office is situated on the 5th Floor Ebène Skies, rue de L’Institut, Ebène.

The main activity of the Company is that of investment holding while the Group is engaged in the manufacture and sales of knitted and woven garments.

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

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.

2.1 Basis of Preparation

The financial statements have been prepared on a historical cost basis as modified by the revaluation of land and buildings and available-for-sale investments. 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 consolidated financial statements are disclosed on pages xx and xx. The financial statements are presented in thousand rupees except where otherwise indicated. Where necessary, comparative figures have been regrouped and/or restated to conform to the current year’s presentation. The financial statements include the consolidated financial statements of the parent company and its subsidiaries (together the “Group”) and the separate financial statements of the parent company (the “Company”). Statement of ComplianceThe financial statements of CIEL Textile Limited have been prepared in accordance with International Financial Reporting Standards (IFRSs) and comply with the Companies Act 2001.

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

IFRS 10, ‘Consolidated financial statements’ builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. The standard did not have any impact on the Group’s financial statements.

IAS 27, ‘Separate Financial Statements’ deals solely with separate financial statements. The standard has no impact on the Group’s financial statements, as IFRS 10 has been adopted.

IFRS 11, ‘Joint arrangements’ focuses on the rights and obligations of the parties to the arrangement rather than its legal form. There are two types of joint arrangements: joint operations and joint ventures. Joint operations arise where the investors have rights to the assets and obligations for the liabilities of an arrangement. A joint operator accounts for its share of the assets, liabilities, revenue and expenses. Joint ventures arise where the investors have rights to the net assets of the arrangement; joint ventures are accounted for under the equity method. Accounting for an interest in a joint venture using the proportionate consolidation method is not permitted under IFRS 11. The standard is not expected to have any impact on the Group’s financial statements.

Amendment to IAS 1, ‘Financial statement presentation’, regarding ‘other comprehensive income’. The main change resulting from these amendments is a requirement for entities to group items presented in ‘other comprehensive income’ (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The Group and the Company have adopted this amendment.

Amendments to IAS 36, ‘Impairment of assets’, on the recoverable amount disclosures for non-financial assets. The amendment removed certain disclosures of the recoverable amount of CGU’s which had been included in IAS 36 by the issue of IFRS 13. The amendment is not mandatory until 01 July 2014 and does not affect the Group’s and the Company’s financial statements.

IAS 28, ‘Investments in Associates and Joint Ventures’. The scope of the revised standard covers investments in joint ventures as well. IFRS 11 requires investments in joint ventures to be accounted for using the equity method of accounting. The standard has no impact on the Group’s financial statements.


2. ACCOUNTING POLICIES (CONT’D)

2.1 Basis of Preparation (cont’d)

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

IFRS 12, ‘Disclosures of interests in other entities’ includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, structured entities and other off balance sheet vehicles. The standard has no impact on the Group’s financial statements.

IFRS 13, ‘Fair value measurement’, aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs. The Group and the Company have made the required disclosures in the financial statements.

IAS 19, ‘Employee benefits’ was revised in June 2011. The changes on the Group’s accounting policies has been as follows: to immediately recognise all past service costs; and to replace interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability (asset). See note 17 and 38 for the impact on the financial statements.

IFRIC 20, ‘Stripping costs in the production phase of a surface mine’, has no impact on the Group’s financial statements.

Amendment to IFRS 7, ‘Financial instruments: Disclosures’, on asset and liability offsetting. This amendment includes new disclosures and is not expected to have any impact on the Group’s financial statements. Amendment to IFRS 1 (Government Loans) has no impact on the Group’s financial statements.

Annual Improvements to IFRSs 2009-2011 Cycle

IFRS 1 (Amendment), ‘First time adoption of IFRS’, has no impact on the Group’s operations.

IAS 1 (Amendment), ‘Presentation of financial statements’, clarifies the disclosure requirements for comparative information when an entity provides a third statement of financial position either as required by IAS 8, ‘Accounting policies, changes in accounting estimates and errors’ or voluntarily.

IAS 16 (Amendment), ‘Property, plant and equipment’, clarifies that spare parts and servicing equipment are classified as property, plant and equipment rather than inventory when they meet the definition of property, plant and equipment. The amendment does not have an impact on the Group’s operations.

IAS 32 (Amendment), ‘Financial instruments: Presentation’, clarifies the treatment of income tax relating to distributions and transaction costs. The amendment does not have an impact on the Group’s operations.

IAS 34 (Amendment), ‘Interim financial reporting’, clarifies the disclosure requirements for segment assets and liabilities in interim financial statements.

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

Certain standards, amendments to published standards and interpretations have been issued that are mandatory for accounting periods beginning on or after 1 January 2014 or later periods, but which the Group has not early adopted.

At the reporting date of these financial statements, the following were in issue but not yet effective and not relevant to the Group’s operations:

IAS 32 Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)Recoverable Amount Disclosures for Non-financial Assets (Amendments to IAS 36)Novation of Derivatives and Continuation of Hedge Accounting (Amendments to IAS 39)Annual Improvements to IFRSs 2010-2012 cycleAnnual Improvements to IFRSs 2011-2013 cycleClarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38)

The Group has early adopted the following standards and interpretations for the year ended 30 June 2014:

IFRS 9 Financial instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39). Refer to Note 36 where the impact of the application of IFRS 9 is disclosed.


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 2. ACCOUNTING POLICIES (CONT’D)


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

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

Significant Accounting Judgements and Estimates

JudgmentsIn the process of applying the Group’s accounting policies, the directors have made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements:

Operating Lease Commitments - Group as LesseeThe entity’s subsidiaries have entered into leases for motor vehicles and computer equipment. The directors have considered the terms and conditions of the lease agreements and determined that the Group does not retain all the significant risks and rewards of ownership of these assets, and therefore, such lease agreements have been recorded as operating leases, rather than finance leases.

Consolidation of Laguna Clothing (Mauritius) Ltd (formerly known as New Island Clothing Limited) and Laguna Clothing LtdLaguna Clothing (Mauritius) Ltd (formerly known as New Island Clothing Limited) and Laguna Clothing Ltd have been consolidated in the Group’s financial statements, albeit holdings of 50% in each respective company, as the power to govern the financial and operating policies of each of those subsidiaries remains with the Group, under an agreement.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Deferred tax assetsDeferred tax assets are recognised for all unused tax losses and unused tax credits to the extent that it is probable that taxable profits will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

Pension benefitsThe present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of pension obligations.

The subsidiaries in their respective countries of operations determine their appropriate discount rates at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, the Company considers the interest rates to high-quality government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension obligation.

Other key assumptions for pension obligations are based in part on current market conditions. Revaluation of propertyProperty is measured at revalued amounts with changes in fair value being recognised in ‘other comprehensive income’. The Group engaged independent valuation specialists to determine fair value as at 30 June 2014.

Provision for slow-moving inventoriesManagement is required to exercise significant judgement in estimating the provision for slow-moving inventories.

The following are considered to provide for inventories write-off:• Apply appropriate procedures to identify slow-moving and obsolete stocks;• Make reasonable and prudent estimates of the prices obtainable in the market in which the goods are expected to

be sold at the time at which they will be available for sale; and• Take into account projected time to completion and sale (for example, repair costs for damaged stocks and sales

commission).




Significant Accounting Judgements and Estimates (cont’d)

Depreciation and amortisation ratesThe Group depreciates or amortises its assets to their residual values over their estimated useful lives. The estimation of useful lives is based on historical performance and expectation about future use and requires significant degree of judgement. The residual value of an asset is the estimated net amount that the Group would currently obtain from disposal of the asset, if the asset were already of the age and in condition expected at the end of its useful life.

The directors therefore make estimates based on historical experience and use best judgement to assess the useful lives of assets and to forecast the expected residual values of the assets at the end of their expected useful lives.

Limitation of sensitivity analysisSensitivity analysis in respect of market risk demonstrates the effect of a change in a key assumption while other assumptions remain unchanged. In reality, there is a correlation between the assumptions and other factors. It should also be noted that these sensitivities are non-linear and larger or smaller impacts should not be interpolated or extrapolated from these results.

Sensitivity analysis does not take into consideration that the Group’s assets and liabilities are managed. Other limitations include the use of hypothetical market movements to demonstrate potential risk that only represent the Group’s view of possible near-term market changes that cannot be predicted with any certainty.

• Summary of Significant Accounting Policies

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

The Chief Operating Officer (CEO) of the different clusters of the Group (Fine Knits, Knitwear, Woven and Retail) are the Chief Operating Decision Makers (CODM). Management has determined the operating segments based on the information reviewed by the above CEOs for the purposes of allocating resources and assessing performance.

The CEOs consider the business from both a geographic and product perspective. Geographically, management considers the performance in Mauritius, Madagascar, Asia and South Africa. From a product perspective, management separately considers the activities in the Fine Knits, Knitwear, Woven and Retail clusters. The CEOs assess performance of the operating segments based on revenue and profit metrics.

Operating segments are reported in a manner consistent with the internal reporting provided to the CODM.

(b) Foreign currencies

Functional currency and presentation currency

The companies in the Group prepare their financial reports in the currency used in the primary economic environment in which they operate which is known as the functional currency. These reports provide the basis for the consolidated financial statements. The consolidated financial statements are presented in Mauritian Rupees being the Parent Company’s functional currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in ‘other comprehensive income’ as qualifying cash flow hedges.

Foreign exchange gains and losses are presented in profit or loss within ‘Earnings before interest, tax, depreciation and amortisation’.




(b) Foreign currencies (cont’d)

Transactions and balances (cont’d)

Changes in the fair value of monetary securities denominated in foreign currency classified as available for sale are analysed between translation differences resulting from changes in the amortised cost of the security and other changes in the carrying amount of the security. Translation differences related to changes in amortised cost are recognised in profit or loss and other changes in carrying amount are recognised in ‘other comprehensive income’. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets such as equities classified as available for sale are included in the fair value reserve in ‘other comprehensive income’.

The statements of financial position and income statements for all foreign operations (none of which has the currency of a hyperinflationary economy) whose functional currency is not the presentation currency are translated into the presentation currency using the following procedures:

• assets and liabilities for each reporting period presented are translated at the closing rate at the date of that statement of financial position;

• income and expenses for each income statement presented are translated at the average exchange rate for the respective year, unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions;

• equity items are translated at closing rate; and• all exchange differences that arise are reported in ‘other comprehensive income’.

Translation of foreign operations

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognised in ‘other comprehensive income’.

(c) Property, plant and equipment

Land and buildings comprise mainly factories, retail outlets and offices. Land and buildings are shown at fair value, based on valuations by external independent valuers, less subsequent depreciation for buildings. Valuations are performed with sufficient regularity to ensure that the fair value of a revalued asset does not differ materially from its carrying amount. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to the revalued amount of the asset. All other property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

Subsequent costs are included in the assets’ carrying amount or recognised as a separate asset as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the profit or loss during the financial period in which they are incurred.

Increases in the carrying amount arising on revaluation are credited to ‘other comprehensive income’ and shown as revaluation surplus in shareholders’ equity. Decreases that offset previous increases of the same asset are charged against the revaluation surplus directly in equity; all other decreases are charged to profit or loss. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount restated to the revaluated amount of the asset.

The land and buildings are revalued by an independent Land Surveyor every 3 years and assessed annually to ensure that the fair value of the revalued asset does not differ materially from its carrying amount.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

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




(c) Property, plant and equipment (cont’d)

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Land is not depreciated. Depreciation on other assets is calculated on the straight-line method to write off the cost of assets, or the revalued amounts, to their residual values over their estimated useful life as follows:

Buildings - 2% p.aBuildings on leasehold land - 2% p.aPlant and machinery - 10% - 20% p.aMotor vehicles - 20% p.aFurniture and equipment - 5% - 20% p.aComputer equipment - 20% p.aOther items - 10% - 20% p.a

The assets’ residual values and useful lives are reviewed and adjusted if appropriate, at the end of each reporting period. (d) Investments in subsidiaries

Separate financial statements of the Company

In the separate financial statements of the Company, investments in subsidiary companies are carried at cost. The carrying amount is reduced to recognise any impairment in the value of individual investments.

Consolidated financial statements

(a) SubsidiariesSubsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree 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. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquire on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.

Acquisition-related costs are expensed as incurred.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognised in profit or loss.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or loss or as a change to ‘other comprehensive income’. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If the total of consideration transferred, non-controlling interest recognised and previously held interest measured 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 the income statement.




(d) Investments in subsidiaries (cont’d)

Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated. When necessary amounts reported by subsidiaries have been adjusted to conform with the Group’s accounting policies.

(b) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as transactions with the owners in their capacity as owners. The difference between fair value of 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.

(c) Disposal of subsidiaries

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

(e) Investments in associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights.

Separate financial statements of the CompanyInvestments in associates are carried at cost. The carrying amounts are reduced to recognise any impairment in the value of individual investments. The impairment loss is taken to income statement.

Consolidated financial statementsThe Group’s investments in associated companies are accounted for using the equity method of accounting. The investment in associate is thus carried in the statement of financial position at cost plus post-acquisition changes in the Group’s share of net assets of the associated companies, less any impairment loss. Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised.

The income statement reflects the share of the results of operations of the associates. Where there has been a change recognised directly in the equity of the associates, the Group recognises its share of any changes and discloses this, when applicable, in the statement of changes in equity.

When the Group’s share of losses exceeds the carrying amount of the investment, the investment is reported at nil value and recognition is discontinued except to the extent of the Group’s commitment on behalf of the associated company.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

Dilution gains and losses arising in investments in associates are recognised in income statement.

(f) Impairment of non-financial assets

Intangible assets that have an indefinite useful life or intangible assets not ready to use are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). Prior impairments of non financial assets (other than goodwill) are reviewed for possible reversal at each reporting date.




(g) Intangible assets

GoodwillGoodwill acquired in a business combination is initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units. Each unit or group of units to which the goodwill is so allocated:• represents the lowest level within the Group at which the goodwill is monitored for internal management

purposes; and• is not larger than an operating segment in accordance with IFRS 8 Operating Segments.

Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating units), to which the goodwill relates. Where the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognised.

Where goodwill forms part of a cash-generating unit (group of cash-generating units) and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.

Negative goodwill on a bargain purchase represents the excess of the acquirer’s interest in the fair values of the identifiable net assets and liabilities acquired over the cost of acquisition. It is recognised immediately as gain from bargain purchase in the income statement.

Negative goodwill arising from the acquisition of an associated company is excluded from the carrying amount of the investment and is included as income in the determination of the Group’s share of associate’s profit or loss in the period the investment was acquired.

Other intangible assets

Computer softwareCosts associated with maintaining computer software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the following criteria are met:• it is technically feasible to complete the software product so that it will be available for use;• management intends to complete the software product and use or sell it;• there is an ability to use or sell the software product;• it can be demonstrated how the software product will generate probable future economic benefits;• adequate technical, financial and other resources to complete the development and to use or sell the software

product are available; and• the expenditure attributable to the software product during its development can be reliably measured.

Directly attributable costs that are capitalised as part of the software product include the software development employee costs and an appropriate portion of relevant overheads.Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.Computer software development costs recognised as assets are amortised over their estimated useful lives, which does not exceed three years.




(h) Other investments and other financial assets

ClassificationThe Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as non-current.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. The Group’s loans and receivables comprise ‘trade and other receivables’ and ‘cash and cash equivalents’ in the statement of financial position.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting period.

Recognition and measurementRegular purchases and sales of financial assets are recognised on the trade-date –the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the income statement. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method.

Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in profit or loss in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in profit or loss when the Group’s right to receive payments is established.

Changes in the fair value of monetary and non-monetary securities classified as available for sale are recognised in ‘other comprehensive income’.

When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments recognised in equity are included in the income statement as ‘Gains and losses from investment securities’.

Interest on available-for-sale securities calculated using the effective interest method is recognised in profit or loss. Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group’s right to receive payments is established.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.




(i) Trade and other receivables

Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 60 - 90 days overdue) are considered indicators that the trade receivable is impaired. 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 original effective interest rate.

The carrying amount of the asset is reduced through the use of an allowance for credit losses account, and the amount of the loss is recognised in profit or loss within selling and marketing costs. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against selling and marketing costs in profit or loss.

(j) Interest-bearing loans, debentures and borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Preference shares, which are mandatorily redeemable on a specific date, are classified as liabilities. The dividends on these preference shares are recognised in the income statement as interest expense.

(k) Cash and cash equivalents

Cash and short-term deposits in the statement of financial position comprise cash at banks and in hand and short-term deposits with an original maturity of three months or less. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(l) Redeemable Share Capital

(1) Redeemable preference shares

The redeemable preference shares in subsidiaries are not transferable, carry no voting rights and are redeemable at subscription price at the option of the Company. In the prior years, as the Group did not have any obligation to deliver cash or another financial asset to another entity in respect of the redeemable preference shares, the instrument evidenced characteristics of equity. However, the redeemable preference shares did not entitle any control over the net assets of the respective subsidiaries and belong to shareholders outside the Group. They were thus carried at cost and were disclosed separately from equity holders of the parent. At 30 June 2013, these preference shares were fully redeemed and paid for.

(2) Redeemable B and C Shares

The component of the non-cumulative redeemable shares that exhibits characteristics of a liability is recognised as a liability in the statement of financial position, net of transaction costs.

The redeemable shares also give rise to benefits in respect of future dividends payable. These dividends are classified within administrative expenses.




(m) Derecognition of financial assets and liabilities

Financial assetsA financial asset (or, where applicable a part of a financial asset or part of a Group of similar financial assets) is derecognised where:• the rights to receive cash flows from the asset have expired;• the Company or the Group retains the right to receive cash flows from the asset, but has assumed an obligation to

pay them in full without material delay to a third party under a ‘pass-through’ arrangement; or• the Company or the Group has transferred its rights to receive cash flows from the asset and either (a) has

transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Where the Company or the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company or the Group’s continuing involvement in the asset. 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 Company or the Group could be required to repay.

Where continuing involvement takes the form of a written and/or purchased option (including a cash-settled option or similar provision) on the transferred asset, the extent of the Group’s continuing involvement is the amount of the transferred asset that the Group may repurchase, except that in the case of a written put option (including a cash-settled option or similar provision) on an asset measured at fair value, the extent of the Group’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price.

Financial liabilitiesA financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

Where 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 a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

(n) Impairment of financial assets

Assets carried at amortised cost

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

For loans and receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated income statement. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Group may measure impairment on the basis of an instrument’s fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in the consolidated income statement.




(n) Impairment of financial assets (cont’d)

Assets classified as available for saleThe Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. For debt securities, the Group uses the criteria referred to in (a) above. In the case of equity investments classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is also evidence that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss– is removed from equity and recognised in profit or loss. Impairment losses recognised in the consolidated income statement on equity instruments are not reversed through the consolidated income statement. If, in a subsequent period, the fair value of a debt instrument classified as available for sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through the consolidated income statement.

(o) Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is determined using the first in, first out (FIFO) method.Costs incurred in bringing each product to its present location and condition is accounted for as follows:

Raw materials − purchase cost on a weighted average cost basis;Finished goods and work in progress − cost of direct materials and labour and a proportion of manufacturing

overheads based on normal operating capacity but excluding borrowing costs.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

(p) Provisions

Provisions are recognised when the Group or Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group or Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

(q) Derivative financial instruments and hedging activities

Derivatives are initially recognised at fair value on the date a derivative is entered into and are subsequently re-measured at their fair value. All derivatives are carried in current assets when amounts are receivable by the Group and the Company and in current liabilities when amounts are payable by the Group and the Company.

Cash flow hedge

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as: hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction (cash flow hedge).

The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

The fair values of derivative instruments used for hedging purposes are disclosed in note 35 and 36. Movements on the hedging reserve in ‘other comprehensive income’ are shown in note 16. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining hedged item is more than 12 months and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability.




(q) Derivative financial instruments and hedging activities (cont’d)

Cash flow hedge (cont’d)

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in ‘other comprehensive income’. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss.

Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss (for example, when the forecast sale that is hedged takes place). The gain or loss relating to the effective portion of currency forward contracts is recognised in profit or loss. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, inventory or fixed assets), the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset. The deferred amounts are ultimately recognised in cost of goods sold in the case of inventory or in depreciation in the case of fixed assets.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to profit or loss.

(r) Employee benefits

The Group operates various post-employment schemes, including both defined benefit and defined contribution pension plans and post-employment plans.

Pension obligationsA 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. 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.

The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms of maturity approximately to the terms of the related pension obligation. In countries where there is no deep market in such bonds, the market rates on government bonds are used.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in ‘other comprehensive income’ in the period in which they arise.

Past-service costs are recognised immediately in income.

For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

Other post-employment obligations

Some retired employees are paid benefits directly by the Group’s subsidiaries. The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and the completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment using the same accounting methodology as used for defined benefit pension plans.




(r) Employee benefits (cont’d)

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in ‘other comprehensive income’ in the period in which they arise. These obligations are valued annually by independent qualified actuaries.

Termination benefits

Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within the scope of IAS 37 and involves the payment of termination benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.

Profit sharing and bonus plans

The Group recognises a liability and an expense for bonuses and performance based bonuses, based on a formula that takes into consideration the profit attributable to the Company’s shareholders after certain adjustments. The Group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

(s) Current and deferred income tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in ‘other comprehensive income’ or directly in equity. In this case, the tax is also recognised in ‘other comprehensive income’ or directly in equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

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

Deferred income tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries, associates and joint arrangements, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Generally the Group is unable to control the reversal of the temporary difference for associates. Only where there is an agreement in place that gives the Group the ability to control the reversal of the temporary difference not recognised.

Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries, associates and joint arrangements only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available against which the temporary difference can be utilised.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.




(s) Current and deferred income tax (cont’d)

Value Added TaxRevenues, 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

• 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 accounts receivables or payables in the statement of financial position.

(t) Finance Lease

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.

The Group leases certain property, plant and equipment. Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments.

Each lease payment is allocated between the liability and finance charges. The corresponding rental obligations, net of finance charges, are included in other long-term payables. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term.

(u) Borrowing costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

(v) Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

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

(w) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods supplied, stated net of discounts, returns and value added taxes. The Group recognises revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the Group’s activities. The Group bases its estimate of return on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.




(w) Revenue recognition (cont’d)

(i) Sale of goods and servicesRevenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and upon customer acceptance, if any, or performance of services, net of value added taxes and discounts, and after eliminating sales within the Group. The Group turnover reflects the invoiced values of knitted and woven garments and fabrics, inclusive of insurance and freight when sold on a ‘cost, insurance and freight’ basis and in other cases on its ‘free on board’ value for sales on ‘free on board’ basis.

(ii) Other operating incomeOther operating income earned by the Group are recognised on the following basis:• Interest income - as it accrues (taking into account the effective yield on the asset) unless collectability is in doubt.• Dividend income - when the shareholder’s right to receive payment is established.

(x) Share capital

Ordinary shares are classified as equity. Mandatorily redeemable preference shares are classified as liabilities. Incremental costs directly attributable to the issue of new shares or options are shown in equity as deduction, net of tax, from proceeds. Where any group company purchases its equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or reissued. When such shares are subsequently reissued, any net consideration received, is included in equity attributable to the Company’s equity holders.

(y) Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by the Company’s shareholders.

(z) Non-current assets held for sale

Non –current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are stated at lower of carrying amount and fair value less costs to sell.

(aa) Grant related to income

The Group (foreign subsidiaries) receives grants in relation to income which has been presented as a credit in the statement of comprehensive income under the heading ‘Other operating income – net’.


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 3. PROPERTY, PLANT AND EQUIPMENT

(a) THE GROUP Freehold Land and Buildings

Buildings on

Leasehold Land

Plant and Machinery

Motor Vehicles

Furniture and

EquipmentComputer Equipment

Assets Under Construction

Other Items Total

Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000

At 30 June 2014

COST OR VALUATION

At 1 July 2013 907,707 752,190 2,808,493 102,436 430,569 63,087 15,216 9,572 5,089,270

Additions 84,035 3,316 270,877 19,058 25,184 12,833 9,976 6,378 431,657

Disposals - - (29,870) (4,869) (133) (454) - - (35,326)

Assets written off - - (33,505) - (37,436) (2,842) - - (73,783)

Acquisition through business combination (Note 29(b)) 167,500 - - - - - - - 167,500

Revaluation surplus 235,394 14,642 - - - - - - 250,036

Translation adjustments (24,073) - (36,912) (2,779) (5,006) (2,390) - (212) (71,372)

At 30 June 2014 1,370,563 770,148 2,979,083 113,846 413,178 70,234 25,192 15,738 5,757,982

DEPRECIATION

At 1 July 2013 99,833 142,937 2,174,548 55,913 362,826 48,539 2,453 2,450 2,889,499

Charge for the year 14,280 12,429 142,252 15,922 16,588 7,163 4,737 833 214,204

Disposals - - (15,957) (4,372) (11,739) (223) - - (32,291)

Revaluation adjustments (8,133) (18,304) - - - - - - (26,437)

Assets written off - - (33,366) - (37,349) (2,830) - - (73,545)

Translation adjustments (9,744) - (24,668) (1,908) (3,740) (1,447) - (49) (41,556)

At 30 June 2014 96,236 137,062 2,242,809 65,555 326,586 51,202 7,190 3,234 2,929,874

NET BOOK VALUES

At 30 June 2014 1,274,327 633,086 736,274 48,291 86,592 19,032 18,002 12,504 2,828,108


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

(a) THE GROUP Freehold Land and Buildings

Buildings on

Leasehold Land

Plant and Machinery

Motor Vehicles

Furniture and

EquipmentComputer Equipment

Assets Under Construction

Other Items Total

Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000

At 30 June 2013

COST OR VALUATION

At 1 July 2012 892,529 739,507 2,735,542 93,946 475,003 101,050 18,522 7,277 5,063,376

Additions 15,964 12,683 127,478 23,854 19,738 7,453 - 1,976 209,146

Disposals - - (9,374) (12,753) (1,151) (425) (247) (119) (24,069)

Reclassifications - - 7,648 - (5,392) 651 (2,907) - -

Assets written off (742) - (37,603) (1,241) (56,011) (41,129) (152) - (136,878)

Transfer to intangible assets (Note 4) - - - - - (3,497) - - (3,497)

Revaluation surplus 2,167 - - - - - - - 2,167

Translation adjustments (2,211) - (15,198) (1,370) (1,618) (1,016) - 438 (20,975)

At 30 June 2013 907,707 752,190 2,808,493 102,436 430,569 63,087 15,216 9,572 5,089,270

DEPRECIATION

At 1 July 2012 89,269 126,924 2,091,485 54,411 409,749 87,128 2,453 1,772 2,863,191

Charge for the year 13,971 16,013 127,638 14,196 16,165 6,734 - 695 195,412

Disposals - - (8,390) (10,977) (823) (335) - (119) (20,644)

Reclassifications - - 4,950 - (5,296) 346 - - -

Assets written off (187) - (35,566) (1,241) (55,866) (41,077) - - (133,937)

Transfer to intangible assets (Note 4) - - - - - (3,487) - - (3,487)

Translation adjustments (3,220) - (5,569) (476) (1,103) (770) - 102 (11,036)

At 30 June 2013 99,833 142,937 2,174,548 55,913 362,826 48,539 2,453 2,450 2,889,499

NET BOOK VALUES

At 30 June 2013 807,874 609,253 633,945 46,523 67,743 14,548 12,763 7,122 2,199,771


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 3. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

(b) THE COMPANY Buildings on

Leasehold Land

Plant and Machinery Total

Rs.’000 Rs.’000 Rs.’000At 30 June 2014

COST OR VALUATIONAt 1 July 2013 143,857 5,748 149,605 Revaluation surplus 12,624 - 12,624 At 30 June 2014 156,481 5,748 162,229

DEPRECIATIONAt 1 July 2013 31,232 5,748 36,980 Charge for the year 2,835 - 2,835 At 30 June 2014 34,067 5,748 39,815

NET BOOK VALUESAt 30 June 2014 122,414 - 122,414

Buildings on

Leasehold Land

Plant and Machinery Total

Rs.’000 Rs.’000 Rs.’000At 30 June 2013

COST OR VALUATIONAt 1 July 2012 and 30 June 2013 143,857 5,748 149,605

DEPRECIATIONAt 1 July 2012 28,397 5,748 34,145 Charge for the year 2,835 - 2,835 At 30 June 2013 31,232 5,748 36,980

NET BOOK VALUESAt 30 June 2013 112,625 - 112,625



(c) Fair value of land and buildingsAn independent valuation of the Group’s and the Company’s land and buildings was performed by professional land valuers to determine the fair value of the land and buildings as at 30 June 2014 and 2013. The revaluation surplus was credited to the other comprehensive income and is shown in revaluation surplus’ in statements of changes in equity. The following table analyses the non-financial assets carried at fair value, by valuation method. The different levels have been defined as follows:- Quoted prices (unadjusted) in active market for identical assets or liabilities (Level 1)- Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either

directly (that is, as prices) or indirectly (that is, derived from process) (Level 2)- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)

(Level 3)

Fair value measurements at 30 June 2014 using

Level 1 Level 2 Level 3Rs.’000 Rs.’000 Rs.’000

THE GROUPRecurring fair value measurementsFreehold land and buildings - - 1,274,327 Buildings on leasehold land - - 633,086

- - 1,907,413

THE COMPANYRecurring fair value measurementsBuildings on leasehold land - - 122,414

- - 122,414

(i) Fair value measurements using significant unobservable inputs (Level 3)

THE GROUP Manufacturing sites Mauritius Madagascar Asia Total

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Opening balance 920,692 361,831 134,604 1,417,127 Acquisition through business combination (Note 29) 167,500 - - 167,500 Additions 72,330 13,229 1,792 87,351 Depreciation (17,957) (6,472) (2,280) (26,709)Translation adjustments - (10,342) (3,987) (14,329)Gains and losses recognised in other comprehensive income 69,584 157,076 49,813 276,473 Closing balance 1,212,149 515,322 179,942 1,907,413

THE COMPANY Manufacturing site

MauritiusRs.’000

Opening balance 112,625 Depreciation (2,835)Gains and losses recognised in other comprehensive income 12,624 Closing balance 122,414


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 3. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

(ii) Valuation processes of the Group

On an annual basis, the Group engages external, independent and qualified valuers to determine the fair value of the Group’s and the Company’s land and buildings. At 30 June 2014, the fair value of the land and buildings have been determined by SDDS Sworn Land Surveyors, Ratsimbazafy Ihanta Evelyne and Advisory Valuation & Consultancy for land and buildings held in Mauritius, Madagascar and India respectively.

The external valuations of level 3 land and buildings have been performed using: (i) a sales comparison approach, and (ii) replacement cost less depreciation approach, Given that there are limited or no similar sites in the vicinity in which the land and buildings of the Group are located, the external valuers have determined the unobservable inputs based on the size, age and condition of the land and buildings, the state of the local economy and comparable prices where relevant.

Information about fair value measurements using significant unobservable inputs (Level 3)

DescriptionFair value at

30 June 2014Valuation

techniquesUnobservable

inputs

Range of unobservable

inputs (probability – weighted

average)

Relationship of unobservable inputs to fair

valueRs.

Manufacturing and retail sites – Mauritius 1,212,149

Sales comparison and replacement

cost less depreciation

approach

Price per square metre

Rs. 332 - Rs. 3,419/square metre (land) and

Rs. 1,906 - Rs. 248,564/ square metre

(buildings)

The higher the price per square

metre, the higher the fair

value

Manufacturing sites – Madagascar 515,322

Rs. 1,742 - Rs. 5,354/square metre (land) and

Rs. 1,799 - Rs. 5,132

(buildings)

Manufacturing sites – Asia 179,942

Price per acres and

square feet

Rs. 3,050,400/acre (land) and Rs. 713/square feet (buildings)

The higher the price per square

feet and acre, the higher the

fair value 1,907,413



(d) If the land and buildings were stated on the historical cost basis, the amounts would be as follows:-

THE GROUP THE COMPANY2014 2013 2014 2013

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Cost 1,494,497 1,407,146 18,364 18,364 Accumulated depreciation (1,035,409) (1,005,519) (10,943) (10,575)Net book values 459,088 401,627 7,421 7,789

(e) Property, plant and equipment above include leased assets as follows:

Plant and Machinery

Motor Vehicles

2014 Total

THE GROUP Rs.’000 Rs.’000 Rs.’000

Cost 150,830 45,115 195,945 Accumulated depreciation (29,961) (27,985) (57,946)Net book values at 30 June 2014 120,869 17,130 137,999

Net book values at 30 June 2013 38,730 14,951 53,681

Leased assets are pledged as security for the related finance lease liabilities.

(f) Borrowings are guaranteed by fixed and floating charges over the assets of the Group.

(g) The acquisition of property, plant and equipment includes purchases under finance leases obligations amounting to Rs. 104,969,220 (2013: Rs. Nil).


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 4. INTANGIBLE ASSETS

Computer Software

Development Cost Total

THE GROUP Rs.’000 Rs.’000 Rs.’000COSTAt 1 July 2013 38,007 4,435 42,442 Additions 4,532 - 4,532 Write off (62) - (62)Translation adjustment (116) - (116)At 30 June 2014 42,361 4,435 46,796

At 1 July 2012 25,904 2,113 28,017 Additions 7,611 4,210 11,821 Reclassification 1,888 (1,888) - Transfer from property, plant and equipment (Note 3) 3,497 - 3,497 Write off (752) - (752)Translation adjustment (141) - (141)At 30 June 2013 38,007 4,435 42,442

AMORTISATIONAt 1 July 2013 25,402 164 25,566 Charge for the year 4,201 917 5,118 Write off (9) - (9)Translation adjustment (43) - (43)At 30 June 2014 29,551 1,081 30,632

At 1 July 2012 18,584 17 18,601 Charge for the year 3,649 147 3,796 Transfer from property, plant and equipment (Note 3) 3,487 - 3,487 Write off (237) - (237)Translation adjustment (81) - (81)At 30 June 2013 25,402 164 25,566

NET BOOK VALUES at 30 June 2014 12,810 3,354 16,164

NET BOOK VALUES at 30 June 2013 12,605 4,271 16,876

The average remaining useful life of the computer software range between 2 and 5 years.

5. INVESTMENTS IN SUBSIDIARY COMPANIESUnquoted

2014 2013THE COMPANY Rs.’000 Rs.’000(a) COSTAt 1 July 1,210,431 1,110,431 Additions - 100,000 At 30 June 1,210,431 1,210,431

IMPAIRMENT PROVISIONSAt 1 July (8,630) (8,630)Reversal of impairment 8,630 - Write off of investment (8,630) - At 30 June (8,630) (8,630)

1,201,801 1,201,801

The Directors have carried out an impairment assessment as at 30 June 2014 and no impairment indicator has been identified, except as disclosed above.


5. INVESTMENTS IN SUBSIDIARY COMPANIES (CONT’D)

(b) The subsidiary companies are as follows:

YEAR 2014

Name of Company

Class of Shares

HeldYear

endedDenominated

CurrencyStated Capital

Country of Incorporation

Direct percentage

holding and voting

power

Indirect percentage

holding and voting

power

Proportion of ownership

interest held by non-controlling

interestMain

Business000’s % % %

Ajax Sweaters Limited Ordinary 30 June Taka 36,036 Bangladesh - 100.00 - KnitwearFloreal Knitwear Ltd Ordinary 30 June Rs. 216,450 Mauritius 100.00 - - KnitwearFloreal Madagascar SA Ordinary 30 June MGA 300,000 Madagascar - 99.70 0.30 KnitwearFloreal Creation SA Ordinary 30 June Euro 50 France 100.00 - - KnitwearFerney Spinning Mills Limited Ordinary 30 June Rs. 15,314 Mauritius 100.00 - - KnitwearFloreal International Ltd Ordinary 30 June Rs. 14,000 Mauritius 100.00 - - KnitwearSociété Civile Immobilières des Mascareignes Ordinary 30 June MGA 2,000 Madagascar 0.20 99.80 - KnitwearTexaro Ordinary 30 June MGA 260,000 Madagascar - 83.55 16.45 KnitwearCielTex SA (Proprietary) Limited Ordinary 30 June ZAR 1 South Africa - 100.00 - RetailCTL Retail Ltd Ordinary 30 June Rs. 10,001 Mauritius - 100.00 - RetailDe Nyon Limited Ordinary 30 June Rs. 33,547 Mauritius - 100.00 - KnitsTropic Knits Limited Ordinary 30 June Rs. 115,000 Mauritius 100.00 - - KnitsTropic Madagascar SA Ordinary 30 June MGA 6,500,000 Madagascar - 100.00 - KnitsConsolidated Dyeing & Fabrics Limited Ordinary 30 June Rs. 173,000 Mauritius 17.00 83.00 - KnitsTKL International Ltd Ordinary 30 June Rs. 3,814 Mauritius 100.00 - - KnitsFloreal Manufacturing Limited Ordinary 30 June Rs. 5,750 Mauritius - 100.00 - KnitsSociete Bonnetiere Malagasy Ordinary 30 June MGA 390,000 Madagascar - 100.00 - KnitsAquarelle Clothing Limited Ordinary 30 June Rs. 180,000 Mauritius 100.00 - - WovenAquarelle Madagascar SARL Ordinary 30 June MGA 225,000 Madagascar - 100.00 - WovenAquarelle International Limited Ordinary 30 June Rs. 7,404 Mauritius 100.00 - - WovenAquarelle India Private Limited (4) Ordinary 31 March INR 24,000 India - 100.00 - WovenAquarelle Limitee (3) (4) Ordinary 31 March Rs. 5,000 Mauritius - 100.00 - WovenConsolidated Fabrics Ltd (2) Ordinary 30 June Rs. 25,743 Mauritius - 100.00 - WovenInternational Fabrics Ltd (2) Ordinary 30 June USD 11,328 Mauritius - 100.00 - WovenLaguna Clothing Ltd (1) (4) Ordinary 31 March INR 74,900 India - 50.00 50.00 WovenTinka International Ltd Ordinary 31 March HKG 100 Hong Kong - 100.00 - WovenLaguna Clothing (Mauritius) Ltd (1) Ordinary 30 June Rs. 20,000 Mauritius - 50.00 50.00 WovenNew Island Clothing Madagascar SA Ordinary 30 June MGA 10,000 Madagascar - 98.80 1.20 Woven

(1) The companies are deemed to be subsidiaries of the Group, as the Group maintains control over those companies.(2) In March 2014, the Group acquired additional 20 per cent interest in International Fabrics Ltd and its subsidiary, Consolidated Fabrics Ltd.(3) Effective January 1, 2014, the Group acquired 100 per cent of the issued share capital and obtained control of Aquarelle Limitée.(4) The Group’s financial statements have been prepared based on the financial statements of the companies at 30 June 2014.


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 5. INVESTMENTS IN SUBSIDIARY COMPANIES (CONT’D)


YEAR 2013

Name of Company

Class of Shares

HeldYear

endedDenominated



Direct percentage

holding and voting

power

Indirect percentage

holding and voting

power



interestMain


Ajax Sweaters Limited Ordinary 30 June Taka 36,036 Bangladesh - 100.00 - KnitwearFloreal Knitwear Ltd Ordinary 30 June Rs. 216,450 Mauritius 100.00 - - KnitwearFloreal Madagascar SA Ordinary 30 June MGA 300,000 Madagascar - 99.70 0.30 KnitwearFloreal Creation SA Ordinary 30 June Euro 50 France 100.00 - - KnitwearFloreal Boutique SARL (3) Ordinary 30 June MGA 2,000 Madagascar - - - KnitwearFerney Spinning Mills Limited Ordinary 30 June Rs. 15,314 Mauritius 100.00 - - KnitwearFloreal International Ltd Ordinary 30 June Rs. 14,000 Mauritius 100.00 - - KnitwearFloreal Knowledge Centre Limited (2) Ordinary 30 June Rs. 25 Mauritius - - - KnitwearSociété Civile Immobilières des Mascareignes Ordinary 30 June MGA 2,000 Madagascar 0.20 99.80 - KnitwearInfoclick Limited (2) Ordinary 30 June Rs. 10 Mauritius - - - KnitwearTexaro Ordinary 30 June MGA 260,000 Madagascar - 83.55 16.45 KnitwearCielTex SA (Proprietary) Limited Ordinary 30 June ZAR 1 South Africa - 100.00 - RetailCTL Retail Ltd Ordinary 30 June Rs. 10,001 Mauritius - 100.00 - RetailDe Nyon Limited Ordinary 30 June Rs. 33,547 Mauritius - 100.00 - KnitsTropic Knits Limited Ordinary 30 June Rs. 115,000 Mauritius 100.00 - - KnitsTropic Madagascar SA Ordinary 30 June MGA 6,500,000 Madagascar - 100.00 - KnitsConsolidated Dyeing & Fabrics Limited Ordinary 30 June Rs. 173,000 Mauritius 17.00 83.00 - KnitsTKL International Ltd Ordinary 30 June Rs. 3,814 Mauritius 100.00 - - KnitsFloreal Manufacturing Limited Ordinary 30 June Rs. 5,750 Mauritius - 100.00 - KnitsSociete Bonnetiere Malagasy Ordinary 30 June MGA 390,000 Madagascar - 100.00 - KnitsAquarelle Clothing Limited Ordinary 30 June Rs. 180,000 Mauritius 100.00 - - WovenAquarelle Madagascar SARL Ordinary 30 June MGA 225,000 Madagascar - 100.00 - WovenAquarelle International Limited Ordinary 30 June Rs. 7,404 Mauritius 100.00 - - WovenAquarelle India Private Limited (4) Ordinary 31 March INR 24,000 India - 100.00 - WovenConsolidated Fabrics Ltd Ordinary 30 June Rs. 25,743 Mauritius - 80.00 20.00 WovenInternational Fabrics Ltd Ordinary 30 June USD 11,328 Mauritius - 80.00 20.00 WovenLaguna Clothing Ltd (1),(4) Ordinary 31 March INR 74,900 India - 50.00 50.00 WovenTinka International Ltd Ordinary 31 March HKG 100 Hong Kong - 100.00 - WovenIndustrial Consultancy Services Ltd (2) Ordinary 30 June Rs. 25 Mauritius - - - WovenLaguna Clothing (Mauritius) Ltd (1),(5) Ordinary 30 June Rs. 20,000 Mauritius - 50.00 50.00 WovenNew Island Clothing Madagascar SA Ordinary 30 June MGA 10,000 Madagascar - 98.80 1.20 Woven

(1) The companies are deemed to be subsidiaries of the Group, as the Group maintains control over those companies.(2) Infoclick Limited, Floreal Knowledge Centre Limited and Industrial Consultancy Services Ltd have been amalgamated with CIEL Textile Limited (the “Company”) during the financial year ended 30 June 2013.(3) Floreal Boutique SARL and Azzurri Company Ltd have been liquidated during the financial year ended 30 June 2013.(4) Aquarelle India Private Limited and Laguna Clothing Ltd have been consolidated for 12 month period from 1 July 2012 to 30 June 2013 whereas

comparatives were for a 15 month period from 1 January 2011 to 30 June 2012.(5) New Island Clothing Limited changed its name to Laguna Clothing (Mauritius) Ltd during the year 2013.




YEAR 2013

Name of Company

Class of Shares

HeldYear

endedDenominated



Direct percentage

holding and voting

power

Indirect percentage

holding and voting

power



interestMain


Ajax Sweaters Limited Ordinary 30 June Taka 36,036 Bangladesh - 100.00 - KnitwearFloreal Knitwear Ltd Ordinary 30 June Rs. 216,450 Mauritius 100.00 - - KnitwearFloreal Madagascar SA Ordinary 30 June MGA 300,000 Madagascar - 99.70 0.30 KnitwearFloreal Creation SA Ordinary 30 June Euro 50 France 100.00 - - KnitwearFloreal Boutique SARL (3) Ordinary 30 June MGA 2,000 Madagascar - - - KnitwearFerney Spinning Mills Limited Ordinary 30 June Rs. 15,314 Mauritius 100.00 - - KnitwearFloreal International Ltd Ordinary 30 June Rs. 14,000 Mauritius 100.00 - - KnitwearFloreal Knowledge Centre Limited (2) Ordinary 30 June Rs. 25 Mauritius - - - KnitwearSociété Civile Immobilières des Mascareignes Ordinary 30 June MGA 2,000 Madagascar 0.20 99.80 - KnitwearInfoclick Limited (2) Ordinary 30 June Rs. 10 Mauritius - - - KnitwearTexaro Ordinary 30 June MGA 260,000 Madagascar - 83.55 16.45 KnitwearCielTex SA (Proprietary) Limited Ordinary 30 June ZAR 1 South Africa - 100.00 - RetailCTL Retail Ltd Ordinary 30 June Rs. 10,001 Mauritius - 100.00 - RetailDe Nyon Limited Ordinary 30 June Rs. 33,547 Mauritius - 100.00 - KnitsTropic Knits Limited Ordinary 30 June Rs. 115,000 Mauritius 100.00 - - KnitsTropic Madagascar SA Ordinary 30 June MGA 6,500,000 Madagascar - 100.00 - KnitsConsolidated Dyeing & Fabrics Limited Ordinary 30 June Rs. 173,000 Mauritius 17.00 83.00 - KnitsTKL International Ltd Ordinary 30 June Rs. 3,814 Mauritius 100.00 - - KnitsFloreal Manufacturing Limited Ordinary 30 June Rs. 5,750 Mauritius - 100.00 - KnitsSociete Bonnetiere Malagasy Ordinary 30 June MGA 390,000 Madagascar - 100.00 - KnitsAquarelle Clothing Limited Ordinary 30 June Rs. 180,000 Mauritius 100.00 - - WovenAquarelle Madagascar SARL Ordinary 30 June MGA 225,000 Madagascar - 100.00 - WovenAquarelle International Limited Ordinary 30 June Rs. 7,404 Mauritius 100.00 - - WovenAquarelle India Private Limited (4) Ordinary 31 March INR 24,000 India - 100.00 - WovenConsolidated Fabrics Ltd Ordinary 30 June Rs. 25,743 Mauritius - 80.00 20.00 WovenInternational Fabrics Ltd Ordinary 30 June USD 11,328 Mauritius - 80.00 20.00 WovenLaguna Clothing Ltd (1),(4) Ordinary 31 March INR 74,900 India - 50.00 50.00 WovenTinka International Ltd Ordinary 31 March HKG 100 Hong Kong - 100.00 - WovenIndustrial Consultancy Services Ltd (2) Ordinary 30 June Rs. 25 Mauritius - - - WovenLaguna Clothing (Mauritius) Ltd (1),(5) Ordinary 30 June Rs. 20,000 Mauritius - 50.00 50.00 WovenNew Island Clothing Madagascar SA Ordinary 30 June MGA 10,000 Madagascar - 98.80 1.20 Woven

(1) The companies are deemed to be subsidiaries of the Group, as the Group maintains control over those companies.(2) Infoclick Limited, Floreal Knowledge Centre Limited and Industrial Consultancy Services Ltd have been amalgamated with CIEL Textile Limited (the “Company”) during the financial year ended 30 June 2013.(3) Floreal Boutique SARL and Azzurri Company Ltd have been liquidated during the financial year ended 30 June 2013.(4) Aquarelle India Private Limited and Laguna Clothing Ltd have been consolidated for 12 month period from 1 July 2012 to 30 June 2013 whereas

comparatives were for a 15 month period from 1 January 2011 to 30 June 2012.(5) New Island Clothing Limited changed its name to Laguna Clothing (Mauritius) Ltd during the year 2013.


(c) Subsidiaries with material non-controlling interests

Details for subsidiaries that have non-controlling interests that are material to the entity are disclosed below:

Name

Profit/(loss) allocated to

non-controlling interests

during the year

Accumulated non-controlling interests at 30

June 2014

Rs.’000 Rs.’000

2014

Laguna Clothing Ltd 57,379 157,790

Laguna Clothing (Mauritius) Ltd (20,742) (22,440)

(d) Summarised financial information on subsidiaries with material non-controlling interests

(i) Summarised statement of financial position and statement of profit or loss and other comprehensive income.

The summarised financial information disclosed above is before intra-group eliminations

(e) All subsidiary undertakings are included in the consolidation. The proportion of the voting rights in the subsidiary undertakings held directly by the parent company do not differ from the proportion of ordinary shares held.

(f) The total non-controlling interest for the year ended 30 June 2014 is Rs. 179,390,000, of which, Rs. 178,594,960 is for Monti. The non-controlling interests in respect of Floreal Madagascar SA, Texaro and New Island Clothing Madagascar SA are not material.

(g) There are no significant restrictions for South Africa, Madagascar, India and Bangladesh.

NameCurrent assets

Non-current assets

Current liabilities

Non-current liabilities Revenue

Profit/ (loss) for the year

Other Comprehensive

Loss

Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000

2014

Laguna Clothing Ltd 643,309 142,425 (426,138) (7,166) 1,172,293 114,757 32,877

Laguna Clothing (Mauritius) Ltd 139,213 29,875 (180,912) 16,292 290,174 (41,485) (521)

2013

Laguna Clothing Ltd 370,137 138,752 (251,569) (11,113) 999,087 99,632 -

Laguna Clothing (Mauritius) Ltd 90,801 13,177 (84,882) (5,206) 186,046 (3,452) (5,627)

International Fabrics Ltd - 35,596 - - - - -

Consolidated Fabrics Ltd 404,776 522,291 296,481 91,052 883,314 18,292 (4,947)

(ii) Summarised cash flow information:

2014 2013

Operating activities

Investing activities

Financing activities

Net increase/ (decrease)

in cash and cash

equivalentOperating activities

Investing activities

Financing activities

Net increase/ (decrease)

in cash and cash

equivalent

Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000

Laguna Clothing Ltd (5,325) (28,129) 60,877 27,423 101,582 (31,079) (47,438) 23,065

Laguna Clothing (Mauritius) Ltd (85,418) (19,833) 52,253 (52,998) 25,552 (6,969) - 18,583

International Fabrics Ltd - - - - - - - -

Consolidated Fabrics Ltd - - - - 61,003 (53,312) (108,152) (100,461)


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 6. INVESTMENTS IN ASSOCIATES

Unquoted2014 2013

(a) THE GROUP Rs.’000 Rs.’000

At 1 July and at 30 June - -

(b) The associates are as follows:2014 2013

Name of Company Year endedCountry of

Incorporation% Holding

Indirect% Holding

Indirect

AMTECS (International) Ltd 30 June 2014 Mauritius - -

The investment in AMTECS (International) Ltd has been fully impaired and is not of a material nature for the Group.

7. AVAILABLE FOR SALE INVESTMENTS


Rs.’000 Rs.’000 Rs.’000 Rs.’000

At 1 July 6,712 3,477 6,712 3,477 Additions - 3,235 - 3,235 At 30 June 6,712 6,712 6,712 6,712

The directors believe that the fair value of the available-for-sale investments approximates the cost of these investments as the prices of these investments have remained the same.

All investments are denominated in Mauritian Rupees.

8. NON CURRENT RECEIVABLES

THE GROUP2014 2013

Rs.’000 Rs.’000

Long-term deposits 58,308 24,976

All non-current receivables are due within 2 to 5 years from the end of the reporting period.The fair value of the non-current receivables does not differ significantly from its carrying amount.

9. DEFERRED TAX LIABILITIES/(ASSETS)THE GROUP THE COMPANY2014 2013 2014 2013

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Deferred tax liabilities 236,573 182,194 20,554 18,408 Deferred tax assets (49,998) (41,457) - - Net deferred tax liabilities 186,575 140,737 20,554 18,408

(a) The movement in deferred tax during the year is as follows:THE GROUP THE COMPANY2014 2013 2014 2013


At 1 July- as previously reported 149,628 142,891 18,408 18,883 - effect of adopting IAS 19 (Revised) (8,891) (196) - - -as restated 140,737 142,695 18,408 18,883 Acquisition through business combination (note 29(b)) 17,584 - - - Translation adjustment 248 (1,229) - - Other comprehensive income 39,231 (8,366) 2,146 - Income statement (Note 21(b)) (11,225) 7,637 - (475)At 30 June 186,575 140,737 20,554 18,408


9. DEFERRED TAX LIABILITIES/(ASSETS) (CONT’D)

(b) Deferred tax assets and liabilities, deferred tax charge/(credit) in the Statement of Comprehensive Income are attributable to the following items:

At 1 July 2013

As previously reported

Effect of adopting

IAS 19 (Revised)

As restated

Acquisition through business

combinationTranslation Adjustment

Income Statement

Other Comprehensive

Income

At 30 June

2014

(i) THE GROUP - 2014 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000

Deferred tax liabilities

Accelerated tax depreciation 119,494 - 119,494 9,170 (433) (4,955) - 123,276

Revaluation of properties 63,050 - 63,050 8,414 - - 44,593 116,057

Others (350) - (350) - - (2,410) - (2,760)

182,194 - 182,194 17,584 (433) (7,365) 44,593 236,573

Deferred tax assets

Retirement benefit obligations 6,806 8,891 15,697 - - 1,979 3,359 21,035

Tax losses 1,292 - 1,292 - (127) 3,508 - 4,673

Provisions 6,635 - 6,635 - (24) 650 - 7,261

Investment tax credit 5,308 - 5,308 - (530) (1,722) - 3,056

Cash flow hedge reserves - - - - - 3,515 2,003 5,518

Others 12,525 - 12,525 - - (4,070) - 8,455

32,566 8,891 41,457 - (681) 3,860 5,362 49,998

Net deferred tax liabilities 149,628 (8,891) 140,737 17,584 248 (11,225) 39,231 186,575


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 9. DEFERRED TAX LIABILITIES/(ASSETS) (CONT’D)

At 1 July 2012

As previously reported

Effect of adopting

IAS 19 (Revised)

As restated

Translation Adjustment

Income Statement

Other Comprehensive

Income

At 30 June

2013Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000

(i) THE GROUP - 2013

Deferred tax liabilitiesAccelerated tax depreciation 106,829 - 106,829 (1,125) 13,790 - 119,494 Revaluation of properties 68,780 - 68,780 - (6,059) 329 63,050 Others (90) - (90) 112 (372) - (350)

175,519 - 175,519 (1,013) 7,359 329 182,194

Deferred tax assetsRetirement benefit obligations 1,240 196 1,436 - 5,566 8,695 15,697 Tax losses (1,799) - (1,799) (23) 3,114 - 1,292 Provisions 13,555 - 13,555 - (6,920) - 6,635 Investment tax credit 4,700 - 4,700 245 363 - 5,308 Others 14,932 - 14,932 (6) (2,401) - 12,525

32,628 196 32,824 216 (278) 8,695 41,457

Net deferred tax liabilities 142,891 (196) 142,695 (1,229) 7,637 (8,366) 140,737

At 1 July 2013

Income Statement

Other Comprehensive

Income

At 30 June

2014Rs.’000 Rs.’000 Rs.’000 Rs.’000

(ii) THE COMPANY - 2014Deferred tax liabilitiesAccelerated tax depreciation 12,790 - - 12,790 Revaluation of property 5,618 - 2,146 7,764 Net deferred tax liabilities 18,408 - 2,146 20,554


9. DEFERRED TAX LIABILITIES/(ASSETS) (CONT’D)

(ii) THE COMPANY - 2013

At 1 July 2012

Income Statement

Other Comprehensive

Income

At 30 June

2013Rs.’000 Rs.’000 Rs.’000 Rs.’000

Deferred tax liabilitiesAccelerated tax depreciation 13,265 (475) - 12,790 Revaluation of property 5,618 - - 5,618 Net deferred tax liabilities 18,883 (475) - 18,408

THE GROUP2014 2013

Rs.’000 Rs.’000

(c) Unused tax losses available for offset against future taxable profits. 82,303 78,177

The tax losses are available for set off against future taxable profits of the Group are as follows:THE

GROUPUp to year ending: Rs.’000

30 June 2015 17,387 30 June 2017 9 30 June 2018 264 30 June 2019 58,048

75,708 No expiry 6,595

82,303

(d) At the end of the reporting period, the Group had unused tax losses of Rs. 82,302,902 (2013: Rs. 78,176,726) available to offset against future profits. A deferred tax assets has been recognised in respect of Rs. 27,488,000 (2013: Rs. 7,600,000) of such losses. No deferred tax assets has been recognised in respect of the remaining Rs. 54,814,902 (2013: Rs. 70,576,726) due to unpredictability of future profit streams.

10. INVENTORIESTHE GROUP2014 2013

Rs.’000 Rs.’000

Raw materials 800,700 771,337 Other stocks 105,369 107,193 Work in progress 1,351,377 1,265,780 Finished goods 118,268 81,479 Goods in transit 166,918 144,444 Less provision for obsolescence (80,226) (88,941)

2,462,406 2,281,292

The amount of inventories recognised as an expense during the year is Rs. 4,897,849,537 (2013: Rs. 4,521,834,470).


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 11. TRADE AND OTHER RECEIVABLES


Rs.’000 Rs.’000 Rs.’000 Rs.’000

Trade receivables 1,961,354 1,741,825 - - Less: provision for impairment (24,762) (23,900) - - Trade receivables - net 1,936,592 1,717,925 - - Amount receivable from subsidiaries - - 153,865 117,076 Amount receivable from related companies 6 2,905 - - Advances to Executive Directors 3,912 4,337 - - Fair value asset on forward contracts 4,861 81,657 - - Other receivables and prepayments (Note 11 (viii)) 393,823 336,794 3,028 698

2,339,194 2,143,618 156,893 117,774

Included in amount receivable from subsidiaries is an amount of Rs. 129,804,676 (2013: Rs. 103,843,741) representing dividend receivable from subsidiaries at 30 June 2014. The dividends have been received after year end.

The carrying amount of trade and other receivables approximate their fair values.

The maximum exposure to credit risk at the end of the reporting period is equal to the carrying value of each class of trade and other receivables mentioned above.

(i) Trade receivables are not secured, non interest bearing and are generally on 60 days term. At 30 June 2014, trade receivables at nominal value of Rs. 24,762,000 (2013: Rs. 23,900,000) were impaired and fully provided for based on the financial difficulties of the customers.

(ii) At 30 June 2014 and 2013, the ageing analysis of trade receivables is as follows:

Past Due not Impaired

Total

Neither Past Due

nor Impaired < 30 days

30 - 60 days

60 - 90 days > 90 days

Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000

2014 1,936,592 1,634,042 172,407 57,703 21,658 50,782

2013 1,717,925 1,451,423 196,716 34,808 22,793 12,185

The credit quality of those receivables have been assessed by management who is satisfied as to their recoverability.


11. TRADE AND OTHER RECEIVABLES (CONT’D)

(iii) The carrying amount of the Group’s trade and other receivables are denominated in the following currencies:


Rs.’000 Rs.’000 Rs.’000 Rs.’000

Rupee 195,360 216,607 156,893 112,381 US Dollar 628,531 637,864 - 5,364 UK Pound 671,541 408,504 - 29 Euro 341,776 224,592 - - ZAR 233,622 363,578 - - INR 153,768 178,053 - - Other currencies 114,596 114,420 - -

2,339,194 2,143,618 156,893 117,774

(iv) Movements on the provision for impairment of trade receivables are as follows:THE GROUP2014 2013

Rs.’000 Rs.’000

At 1 July (23,900) (26,794)Receivables written off during the year as uncollectible - 2,994 Unused amounts reversed 137 432 Increase in provision for the year (999) (532)At 30 June (24,762) (23,900)

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

(vi) All other classes of trade and other receivables are neither past due nor impaired. No collaterals are held in respect of those receivables.

(vii) The advances to Directors are secured by charges on their respective personal assets.

(viii) Other receivables and prepaymentsTHE GROUP THE COMPANY2014 2013 2014 2013

Rs.’000 Rs.’000 Rs.’000 Rs.’000Other receivables and prepayments consist of:Deposits 14,469 8,425 - - Taxes and grants 152,031 103,287 - - Advance payments to suppliers 129,729 105,324 - - Advances to employees 16,820 27,340 - - Others 80,774 92,418 3,028 698

393,823 336,794 3,028 698


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 12. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE

THE GROUP2014 2013

Rs.’000 Rs.’000

At 1 July 22,366 22,366 Disposals (22,366) - At 30 June - 22,366

(a) On 20 February 2014, the Group disposed of its 21.9% stake in Harris Wilson Textile SA, realising a gain on disposal of Rs. 31.7 M. The 21.9% stake, previously accounted for as an investment in associate and was classified as a held for sale financial asset in 2013 as the conditions set by IFRS 5 were fulfilled.

13. SHARE CAPITAL2014 2013

Rs.’000 Rs.’000Stated capital101,807,589 no par value ordinary shares 685,865 685,865

14. REDEEMABLE PREFERENCE SHARE CAPITALTHE GROUP2014 2013

Rs.’000 Rs.’000Redeemable Preference Shares at Rs. 1,000 eachAt 1 July - 404,937 Repaid during the year - (404,937)At 30 June - -

Analysed as follows:Current - (404,937)

During the year ended 30 June 2013, the redeemable preference shares of Rs. 260 M in Tropic Knits Limited (TKL) and Rs. 144.9 M in Consolidated Fabrics Ltd (CFL) were repaid on 5 July 2012 and 10 January 2013 respectively. These preference shares were not transferable, carried no voting rights and were redeemable at subscription price at the option of the issuing subsidiary company.

Subject to the satisfaction of the Solvency Test, they entitled the holder to an annual dividend up to a maximum of 5% up to 2012, and thereafter a participating dividend as well as an annual dividend up to a maximum of 10% until redemption.


15. BORROWINGSTHE GROUP THE COMPANY 2014 2013 2014 2013

Rs.’000 Rs.’000 Rs.’000 Rs.’000(a) Non-currentBank loans - Note (b) 61,549 34,095 - - Obligations under finance leases - Note (d) 91,521 22,635 - - Debentures - Note (f) - 14,000 - 14,000 Others 545 545 - -

153,615 71,275 - 14,000

CurrentBank overdrafts - Note (e) 525,222 423,489 6 4 Bills discounted - Note (g) 680,307 506,695 - - Bank loans - Note (b) 9,839 8,855 - - 9% Redeemable preference shares - Note (c) - 30,000 - - Import loan - Note (g) 503,105 489,717 - - Debentures - Note (f) - 14,000 - 14,000 Obligations under finance leases - Note (d) 33,496 16,321 - - Others - 1,790 - -

1,751,969 1,490,867 6 14,004

Total borrowings 1,905,584 1,562,142 6 28,004

Bills discounted of Rs. 506,695,000 and Rs. 416,221,000 have been reclassified from current liabilities in the statement of financial position to borrowings in 2013 and 2012 respectively. Refer to note 38 for impact on the financial statements.

(b) Bank loansTHE GROUP THE COMPANY 2014 2013 2014 2013

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Within one year 9,839 8,855 - - After one year and before two years 14,006 6,795 - - After two years and before three years 15,510 7,151 - - After three years and before five years 16,866 13,731 - - After five years 15,167 6,418 - -

71,388 42,950 - -

The loans are secured by fixed and floating charges over the assets of the Group and the Company and bear interest as disclosed in note 35.

(c) 9% redeemable preference sharesDuring the year 2013, the preference shares were redeemed at par value. These preference shares were entitled to a fixed cumulative preferential dividend of 9% per annum.

(d) Obligations under finance leasesTHE GROUP THE COMPANY 2014 2013 2014 2013

Rs.’000 Rs.’000 Rs.’000 Rs.’000Finance lease liabilities - minimum lease payments:Within one year 38,108 19,175 - - After one year and before two years 27,931 15,051 - - After two years and before three years 25,184 5,935 - - After three years and before five years 43,786 3,918 - - After five years 928 - - -

135,937 44,079 - - Finance charges allocated to future periods (10,920) (5,123) - - Present value of finance lease liabilities 125,017 38,956 - -


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 15. BORROWINGS (CONT’D)

The present value of finance lease liabilities may be analysed as follows:


Rs.’000 Rs.’000 Rs.’000 Rs.’000

Within one year 33,496 16,321 - - After one year and before two years 25,202 13,655 - - After two years and before three years 23,738 5,348 - - After three years and before five years 41,684 3,632 - - After five years 897 - - -

125,017 38,956 - -

(e) The bank overdrafts are secured by fixed and floating charges over the assets of the Group and the Company.

(f) DebenturesTHE GROUP THE COMPANY 2014 2013 2014 2013

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Within one year - 14,000 - 14,000 After one year and before two years - 14,000 - 14,000

- 28,000 - 28,000

During the year 30 June 2014, the debentures have been fully repaid. The debentures were bearing interest at 1% above prime lending rate (PLR).

(g) The bills discounted are secured by fixed and floating charges over the assets of the Group and the Company and bear interest as disclosed in notes 35.

(h) The import loans are secured by fixed and floating charges over the assets of the Group and the Company and bear interest as disclosed in note 35.

(i) The carrying amounts of the Group’s and Company’s borrowings are denominated in the following currencies:


Restated Rs.’000 Rs.’000 Rs.’000 Rs.’000

Rupee 231,285 203,415 6 28,004 US Dollar 979,503 837,103 - - Euro 220,030 242,058 - - UK Pound 447,167 230,681 - - INR 24,600 19,807 - - Other currencies 2,999 29,078 - -

1,905,584 1,562,142 6 28,004

(j) The fair values of the non-current borrowings are approximately equal to their carrying value as the impact of discounting is not significant.


16. OTHER COMPREHENSIVE INCOME

(a) THE GROUP

Revaluation Surplus

Actuarial (losses)/

gains

Translation of foreign

operations

Cash Flow

Reserve Total2014 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Items that will not be reclassified to profit or lossRevaluation surplus 276,473 - - - 276,473 Deferred tax on revaluation reserve (Note 9(a)) (44,593) - - - (44,593)Remeasurements of post retirement benefit liabilities net of tax - (11,819) - - (11,819)Deferred tax on remeasurements of post retirement benefit obligations - 3,359 - - 3,359

Items that may be subsequently reclassified to profit or lossAmount recognised in cash flow hedge reserve - - - (40,230) (40,230)Deferred tax on cash flow hedge reserve - - - 2,003 2,003 Translation differences on foreign subsidiaries - - (39,558) - (39,558)Other comprehensive (loss)/income for year 2014 231,880 (8,460) (39,558) (38,227) 145,635

2013Items that will not be reclassified to profit or lossRevaluation surplus 2,167 - - - 2,167 Deferred tax on revaluation reserve (Note 9(a)) (329) - - - (329)Remeasurements of post retirement benefit liabilities net of tax - (58,381) - - (58,381)Deferred tax on remeasurements of post retirement benefit obligations - 8,695 - - 8,695

Items that may be subsequently reclassified to profit or lossTranslation differences on foreign subsidiaries - - (36,970) - (36,970)Other comprehensive income/(loss) for year 2013 1,838 (49,686) (36,970) - (84,818)

(b) THE COMPANY Revaluation surplus

2014 2013Rs.’000 Rs.’000

Revaluation surplus 12,624 - Deferred tax on revaluation reserve (2,146) - Other comprehensive income for year 10,478 -

17. RETIREMENT BENEFIT OBLIGATIONS THE GROUP2014 2013

RestatedAmounts recognised in the statement of financial position: Rs.’000 Rs.’000

Pension benefits (Note (a)) 47,889 39,296 Other post retirement benefits (Note (b)) 129,915 104,919

177,804 144,215 Amounts charged to profit or lossPension benefits (Note (a)) 9,488 6,807 Other post retirement benefits (Note (b)) 21,303 23,799

30,791 30,606 Amounts charged to other comprehensive incomePension benefits (Note (a)) (269) (20,191)Other post retirement benefits (Note (b)) (11,550) (38,190)

(11,819) (58,381)


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 17. RETIREMENT BENEFIT OBLIGATIONS (CONT’D)

(a) Pension benefits The Group has two defined benefit plans, one funded and one unfunded, covering substantially all of its employees, both being administered separately. The Group has also provided for an unfunded retirement benefit plan to former employees. The following tables summarise the funded status and amounts recognised in the statement of financial position and the component of net benefit expense recognised in the statement of comprehensive income for the respective plans.

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

Benefit liability

Funded retirement benefit plan for

existing employees

Unfunded retirement benefit plan for

existing employees


former employees Total 2014 2013 2014 2013 2014 2013 2014 2013

Restated Restated Restated RestatedRs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000

Defined benefit obligation (108,020) (93,432) (2,442) (2,312) (12,195) (12,385) (122,657) (108,129)Fair value of plan assets 74,768 68,833 - - - - 74,768 68,833 Benefit liability (33,252) (24,599) (2,442) (2,312) (12,195) (12,385) (47,889) (39,296)

(ii) Amounts recognised in income statement are as follows:

Net benefit expense

Funded retirement benefit plan for

existing employees


existing employees


former employees Total 2014 2013 2014 2013 2014 2013 2014 2013

Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000Current service cost 4,829 3,801 70 48 - - 4,899 3,849 Scheme expenses 774 663 - - - - 774 663 Cost of insuring risk benefits 527 560 - - - - 527 560 Interest cost on benefit obligation 5,876 4,911 179 145 868 959 6,923 6,015 Expected return on plan assets (3,635) (4,280) - - - - (3,635) (4,280)Net benefit expense 8,371 5,655 249 193 868 959 9,488 6,807

(iii) Actual return on plan assets 7,904 7,477


17. RETIREMENT BENEFIT OBLIGATIONS (CONT’D)

(a) Pension benefits (cont’d)

(iv) The reconciliation of the opening balances to the closing balances for the defined benefit liability is as follows:

Funded retirement

benefit plan for existing

employees

Unfunded retirement


employees

Unfunded retirement

benefit plan for former

employees Total Rs.’000 Rs.’000 Rs.’000 Rs.’000

At 1 July 2012- as previously reported (4,771) (2,365) (9,722) (16,858)- effect of adopting IAS 19 (Revised) 1,811 880 (994) 1,697 - as restated (2,960) (1,485) (10,716) (15,161)Total expense (5,655) (193) (959) (6,807)Actuarial losses recognised in other comprehensive income (17,690) (634) (1,867) (20,191)Employer contributions 1,706 - 1,157 2,863 At 30 June 2013 (restated) (24,599) (2,312) (12,385) (39,296)

At 1 July 2013- as previously reported (8,699) (2,503) (9,546) (20,748)- effect of adopting IAS 19 (Revised) (15,900) 191 (2,839) (18,548)- as restated (24,599) (2,312) (12,385) (39,296)Total expense (8,371) (249) (868) (9,488)Actuarial losses recognised in other comprehensive income (288) 119 (100) (269)Employer contributions 6 - 1,158 1,164 At 30 June 2014 (33,252) (2,442) (12,195) (47,889)

(v) Changes in the present value of the defined benefit obligation are as follows:

Funded retirement


employees

Unfunded retirement


employees

Unfunded retirement

benefit plan for former

employees Total Rs.’000 Rs.’000 Rs.’000 Rs.’000

At 1 July 2012 (65,599) (1,485) (10,716) (77,800)Interest cost (6,556) (145) (959) (7,660)Current service cost (3,801) (48) - (3,849)Changes in assumptions underlying the present value of the scheme - (751) (1,248) (1,999)Experience (gains)/losses (19,241) 117 (619) (19,743)Benefits paid 1,765 - 1,157 2,922 At 30 June 2013 (93,432) (2,312) (12,385) (108,129)Interest cost (7,344) (179) (870) (8,393)Current service cost (4,829) (70) - (4,899)Experience (gains)/losses (3,089) 119 (100) (3,070)Benefits paid 674 - 1,160 1,834 At 30 June 2014 (108,020) (2,442) (12,195) (122,657)




(vi) Changes in the fair value of plan assets of the funded retirement benefit plan are as follows:

THE GROUP2014 2013

Rs.’000 Rs.’000

At 1 July 68,833 62,640 Implied return on plan assets 1,470 1,645 Remeasurements:– Return on plan assets, excluding amounts included in interest expense 3,635 4,280 – Experience losses 2,801 1,550 Expected returnContributions by employer 5 1,707 Scheme expenses (774) (663)Benefits paid (675) (1,766)Cost of insuring risk benefits (527) (560)At 30 June 74,768 68,833

(vii) The fair value of the plan assets at the end of the reporting period is as follows:

THE GROUP2014 2014 2013 2013

Rs.’000 % Rs.’000 %

Local equities 19,440 26% 17,208 25%Overseas equities 39,627 53% 32,352 47%Fixed interest 15,701 21% 19,273 28%Total market value of assets 74,768 100% 68,833 100%

The fair values of the above equity and debt instruments are determined based on quoted market prices in active markets whereas the fair values of properties and derivatives are not based on quoted market prices in active markets. The assets of the plan are invested in the CIEL Group Segregated Fund. The breakdown of the assets above correspond to a notional allocation of the underlying investments based on the long term strategy of the Fund.

The Fund is expected to produce a smooth return, a fairly reasonable indication of future returns can be obtained by looking at historical ones. Therefore, the long term expected return on asset assumption has been based on historical performance of the Fund.

In terms of the individual expected returns, the expected return on equities has been based on an equity risk premium above a risk free rate. The risk free rate has been measured in accordance to the yields on government bonds at the measurement date.

The fixed interest portfolio includes local and foreign deposits. The expected return for this asset class has been based on these fixed deposits at the measurement date.

(viii) The amounts recognised in other comprehensive income are as follows:THE GROUP2014 2013

Restated Rs.’000 Rs.’000

Losses on pension scheme assets 2,800 1,551 Experience gain on liabilities (3,069) (3,951)Changes in assumptions underlying the present value of the scheme - (17,791)

(269) (20,191)

(ix) The Group expects to contribute Rs.7m to the pension scheme for the year ending 30 June 2015.




(x) The principal assumptions used in determining pension for the Group are shown below:

2014 2013 2012 2011

Discount rates 7.5% 7.5% 9.5% 9.5%Expected rate of return on assets 7.5% 7.5% 10.0% 10.0%Future salary increases 5.5% 5.5% 7.5% - 8.0% 7.5% - 8.0%Future pension increases 0.0% 0.0% 0.0% 0.0%

(xi) Sensitivity analysis on defined benefit obligations at end of the reporting date: At 30 June 2014 Increase Decrease

Rs.’000 Rs.’000

Discount rate (1% increase) - 17,498 Future long term salary assumption (1% increase) 7,848 -

An increase/decrease of 1% in other principal actuarial assumptions would not have a material impact on defined benefit obligations at the end of the reporting period.

The sensitivity above have been determined based on a method that extrapolates the impact on net defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The present value of the defined benefit obligation has been calculated using the projected unit credit method.

The sensitivity analysis may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

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

(xii) The weighted average duration of the defined benefit obligations ranges between 7 to 23 years at the end of the reporting period.




(xiii) The defined benefit pension plan exposes the Group to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk.

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

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

2014 2013 2012 2011 2010Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000

Defined benefit obligation (122,657) (108,129) (77,800) (71,153) (66,650)Plan assets 74,768 68,833 62,640 64,044 58,630 Deficit (47,889) (39,296) (15,160) (7,109) (8,020)

Experience losses on plan liabilities (269) (20,191) (7,662) (2,538) (6,848)

(b) Other post retirement benefitsOther post retirement benefits comprise retirement gratuities payable under the Employment Rights Act 2008.

(i) The amounts recognised in the statement of financial position are as follows:THE GROUP2014 2013

RestatedRs.’000 Rs.’000

Present value of plan liability (129,915) (104,919)Liability in the statement of financial position (129,915) (104,919)

(ii) The amounts recognised in the income statement are as follows:THE GROUP2014 2013


Current service cost 12,903 4,736 Interest cost 8,400 4,611 Past service cost - 14,452 Total, included in employee benefit expense 21,303 23,799

(iii) Movement in the liability recognised in the statement of financial position:THE GROUP2014 2013


- as previously reported (74,222) (57,933)- reclassification to other payables 8,841 6,011 - effect of adopting IAS 19 (Revised) (39,538) (3,222)- as restated (104,919) (55,144)Total expense as above (21,303) (23,799)Actuarial losses recognised in other comprehensive income (11,550) (38,190)Benefits paid 7,857 12,214 At 30 June (129,915) (104,919)



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

(iv) The amounts recognised in other comprehensive income are as follows:THE GROUP2014 2013


Experience loss on liabilities (11,550) (38,190) (11,550) (38,190)

Movement in other comprehensive income

At 1 July (41,412) (3,222)Actuarial losses recognised during the year (11,550) (38,190)At 30 June (52,962) (41,412)

(v) The movement in the defined benefit obligation over the year is as follows:THE GROUP2014 2013


At 1 July (104,919) (55,144)Current Service Cost (12,903) (4,736)Interest Cost (8,400) (4,611)Past service cost - (14,452)Actuarial losses recognised during the year (11,550) (38,190)Benefits paid 7,857 12,214 At 30 June (129,915) (104,919)

(vi) Amounts for the current and previous years are as follows: 2014 2013 2012Rs.’000 Rs.’000 Rs.’000

Defined benefit obligation (129,915) (104,919) (55,144)

(vii) The principal actuarial assumptions used for accounting purposes were:THE GROUP

2014 2013

Discount rates 7.5% 7.5% Future long term salary increases 5.5% 5.5%

(viii) Sensitivity analysis on defined benefit obligations at end of the reporting date: At 30 June 2014 Increase Decrease

Rs.’000 Rs.’000

Discount rate (1% increase) - 10,744 Future long term salary assumption (1% increase) 12,423 -

An increase/decrease of 1% in other principal actuarial assumptions would not have a material impact on defined benefit obligations at the end of the reporting period.

The sensitivity above have been determined based on a method that extrapolates the impact on net defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The present value of the defined benefit obligation has been calculated using the projected unit credit method.

The sensitivity analysis may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

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

(ix) The weighted average duration of the defined benefit obligations ranges between 7 to 16 years at the end of the reporting period.


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 18. EMPLOYEE BENEFIT LIABILITY

The Company and some of its subsidiaries issued redeemable shares for executives pursuant to resolutions of the Board approved on 28 February 2005 and approved by the shareholders on 13 April 2005. Under the scheme, a fixed number of Redeemable B shares and Redeemable C shares were issued at a fixed price per share.

The shares have the following specificities:

Redeemable B Shares

100 redeemable shares were issued to the Chief Executive Officer of the Woven Cluster at a consideration of Rs. 35,001 each. The shares are not transferable, carry no voting rights and are redeemable at subscription price at the option of the Company.

The shares will entitle the holder to a non-cumulative annual dividend equivalent to 0.02% of the dividend paid to ordinary shareholders.

As the overall contract does not evidence any residual interest to the shareholder, the directors are thus of opinion that the contract is a financial liability. Dividends payable are recognised as an expense in profit or loss over the term of the contract.

Redeemable C Shares

Some subsidiaries of the Company have also issued redeemable shares for executives pursuant to resolutions approved by the Board on 20 June 2005 and approved by the shareholders on 1 July 2005.

Under the scheme, a fixed number of Redeemable C shares has been issued at a fixed price per share.

The shares have the following specificities:

The following redeemable shares were issued to the Chief Executive Officer of CIEL Textile Limited and also to the Chief Executive Officer of the Woven Cluster:

No. Shares Issue PriceRs.

In FKLChief Executive Officer - CIEL Textile 200 1,113

In ACLChief Executive Officer - CIEL Textile 200 6,824Chief Executive Officer of the Woven Cluster 300 6,824

In TKLChief Executive Officer - CIEL Textile 200 33,439

The shares will each entitle the holder to a non-cumulative annual dividend equivalent to:

- 0.02% of the dividend paid to ordinary shareholders in the first three years following the issue (i.e. up to 30 June 2008)

- 0.002% of the increase in the retained earnings of the respective subsidiary company between 30 June 2003 and 30 June 2008.

The dividends were payable over a five year period from 2009 to 2013.

However, the dividends were paid in full during 2009, at which point a financial asset (advance) was recognised in the statement of financial position. The employee benefit expense related to the dividends is recognised in the income statement on a straight-line basis from the date of inception of the scheme up to 30 June 2013.


18. EMPLOYEE BENEFIT LIABILITY (CONT’D)

Total employee benefit liabilities recognised in the statement of financial position are as follows:


Rs.’000 Rs.’000 Rs.’000 Rs.’000Redeemable C Shares - - - -

Analysed as follows:

Current - - - -

19. TRADE AND OTHER PAYABLESTHE GROUP THE COMPANY2014 2013 2014 2013


Trade payables 764,185 758,452 - - Amount payable to related parties 129,524 52,581 421,964 381,381 Amount payable to associates - - 393 - Fair value liability on forward contracts 42,534 23,935 - - Other payables and accruals (Note 19(a)) 761,078 674,790 5,755 4,408

1,697,321 1,509,758 428,112 385,789

Gratuity leaves of Rs. 8,839,000 and Rs. 6,009,000 have been reclassified from retirement benefit obligations to trade and other payables in 2013 and 2012 respectively. Refer to note 38 for impact on the financial statements.

Provisions of Rs. 37,990,000 and Rs. 35,188,000 have been reclassified from trade and other payables to current liabilities on the statement of financial position in 2013 and 2012 respectively. Refer to note 38 for impact on the financial statements.

(a) Other payables and accrualsTHE GROUP THE COMPANY2014 2013 2014 2013

RestatedOther payables and accruals consist of: Rs.’000 Rs.’000 Rs.’000 Rs.’000

Accrued expenses 147,660 125,675 - - Deposits from customers 7,324 6,603 - - Goods in transit 24,603 43,255 - - Employees related expenses 395,177 309,134 - - Directors’ fees 4,505 1,600 1,600 1,600 Other payables 181,809 188,523 4,155 2,808

761,078 674,790 5,755 4,408


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 19. TRADE AND OTHER PAYABLES (CONT’D)

(b) The carrying amount of the Group’s and the Company’s trade and other payables are denominated in the following currencies:



Rupee 647,467 588,026 428,112 385,789 US Dollar 495,144 433,219 - - UK Pound 82,090 68,426 - - Euro 60,750 51,280 - - INR 313,771 216,729 - - Other currencies 98,099 152,078 - -

1,697,321 1,509,758 428,112 385,789

20. PROVISIONSTHE GROUP2014 2013

Movement in provisions during the year is as follows: Rs.’000 Rs.’000

At 1 July 37,990 35,188 Additional provisions 528 8,752 Amounts incurred and charged against provisions (17,990) (5,828)Exchange differences - (122)At 30 June 20,528 37,990

Provisions consist mainly of severance allowances, penalties and legal claims.

21. INCOME TAXTHE GROUP THE COMPANY2014 2013 2014 2013

(a) Income Tax - Statement of financial position Rs.’000 Rs.’000 Rs.’000 Rs.’000

At 1 July 39,574 48,761 - 70 Current tax on adjusted profits for the year 114,141 86,454 36 - Exchange differences (870) (1,690) - - Over provision of prior years (5,434) (4,236) - (7)Corporate Social Responsibility 1,990 1,322 - - Paid during the year (109,389) (91,037) - (63)At 30 June 40,012 39,574 36 -


(b) Income Tax - Income statement Rs.’000 Rs.’000 Rs.’000 Rs.’000

Current tax on adjusted profits for the year 114,141 86,454 36 - Corporate Social Responsibility 1,990 1,322 - - Over provision of prior years (5,434) (4,236) - (7)

110,697 83,540 36 (7)Deferred tax (Note 9) (11,225) 7,637 - (475)

99,472 91,177 36 (482)


21. INCOME TAX (CONT’D)

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



Profit before tax 650,560 607,034 203,634 152,515

Tax calculated at a rate of 17% (2013: 17%) 110,595 103,196 34,618 25,928

Adjustments for:Non-deductible expenses 2,907 5,475 36 538 Exempt income (8,231) (412) (34,618) (26,941)Tax on turnover of overseas subsidiaries (225) 4,328 - - Effect of different tax rate 35,814 36,597 - - Under provision of deferred tax in prior years 4,670 (4,599) - - Over provision of prior years income tax (5,434) (4,236) - (7)Foreign tax credit (35,038) (33,175) - - Investment tax relief (9,192) (8,690) - - Others 3,606 (7,307) - -

99,472 91,177 36 (482)

22(a). EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (EBITDA)


Rs.’000 Rs.’000 Rs.’000 Rs.’000

Revenue 9,565,100 8,685,727 207,687 155,766 Cost of goods produced (4,897,850) (4,521,834) - - Logistics (308,946) (326,815) - - Utilities (350,777) (350,663) - - Repairs and maintenance (144,386) (129,832) - - Employee benefit expense (note 23) (2,274,488) (1,851,359) - - Transport expenses (132,754) (134,019) - - International business (182,568) (170,336) - - Rental and leases (102,436) (100,115) - - Office expenses (116,996) (111,700) - - Services (134,393) (123,311) (177) - Social and events (57,590) (52,742) - - Fees and commission (142,348) (191,746) (108) (65)Other operating income 250,377 208,651 2,762 2,574 Earnings before interest tax, depreciation and amortisation (EBITDA) 969,945 829,906 210,164 158,275

EBITDA refers to revenue adjusted for all operating expenses before accounting for depreciation, amortisation, interest and non-recurring items.

Included in ‘Other operating income’ are duty drawback and scripts amounting to Rs. 129,038,347 (2013:Rs. 123,444,000) relating to export incentives obtained from Indian authorities and recognised on an accrual basis.


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014

23. EMPLOYEE BENEFIT EXPENSETHE GROUP2014 2013


Wages and salaries 2,109,927 1,671,508 Social security costs 102,569 92,004 Other post retirement benefits (Note 17(b)) 21,303 23,799 Pension costs-defined benefit plans (Note 17(a)) 9,488 6,807 Pension costs- defined contribution plans 15,754 16,414 Others 15,447 40,827

2,274,488 1,851,359

22(b). NON RECURRING ITEMS THE GROUP THE COMPANY2014 2013 2014 2013

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Fair value (loss)/gain on forward contracts (55,178) 30,712 - - Profit on disposal of investments held for sale 31,729 - - -

(23,449) 30,712 - -

The fair value (loss)/gain on forward contracts consists of both realised loss (Rs. 57,722,000) and unrealised gain (Rs. 2,544,000)

Non recurring items are exceptional items that relate to the sale of an investment in foreign associate and fair value gain/loss on forward contracts which are considered to be one-off items.

22(c). PROFIT FROM ORDINARY ACTIVITIES

Profit from ordinary activities is derived from operational profits adjusted for net finance costs and before non-recurring items and income tax (expense)/credit.


24. PROFIT BEFORE TAXATIONTHE GROUP THE COMPANY 2014 2013 2014 2013

Rs.’000 Rs.’000 Rs.’000 Rs.’000Profit before taxation is arrived at aftercrediting:Profit on disposal of non-current assets classified as held for sale 31,729 - - - Profit on disposal of property, plant and equipment 4,695 - - -

and charging:Loss on disposal of property, plant and equipment - 682 - - Depreciation on property, plant and equipment- owned assets 188,816 182,912 2,835 2,835 - leased assets 25,388 12,500 - - Amortisation of intangible assets 5,118 3,796 - - Cost of raw materials 4,897,850 4,521,834 - - Employee benefit expense (Note 23) 2,274,488 1,851,359 - -

No. of employees at year end 19,140 17,247 - -

25. NET FINANCE COSTSTHE GROUP THE COMPANY 2014 2013 2014 2013

Rs.’000 Rs.’000 Rs.’000 Rs.’000Interest expense on:- Bank overdrafts (25,035) (20,519) (29) (49)- Bills discounted (17,220) (13,882) - - - Bank and other loans (8,519) (5,303) - - - Import loans (15,143) (7,922) - - - Finance leases (3,845) (4,667) - - - Debentures (1,741) (2,987) (1,741) (2,987)- B shares dividends (4,072) (3,054) (4,072) (3,054)- Preference share dividend (2,700) (2,700) - - - Loans from related parties - - (1,236) - - Others (4,833) (2,378) (987) - Finance costs (83,108) (63,412) (8,065) (6,090)

Interest income on: - Loans and advances 74 39 - - - Bank balances 5,821 6,727 - - - Loans to related parties - - 3,964 2,992 - Others 599 2,270 406 173 Finance income 6,494 9,036 4,370 3,165

Net finance costs (76,614) (54,376) (3,695) (2,925)



26. EARNINGS PER SHARETHE GROUP2014 2013


Profit attributable to owners of the parent 517,195 464,138 Preference dividends attributable to owners of the parent - (3,066)

517,195 461,072

Number of shares in issue 101,807,589 101,807,589

Basic and diluted earnings per share Rs. 5.08 4.53

27. DIVIDENDS THE GROUP THE COMPANY 2014 2013 2014 2013

Rs.’000 Rs.’000 Rs.’000 Rs.’000(a) Amounts recognised as distribution to owners of the

parent in the year:Interim dividend of Rs. 0.75 (2013: Rs. 0.50) per share 76,356 50,903 76,356 50,903 Final dividend of Rs. 1.25 (2013: Rs. 1.00) per share 127,259 101,808 127,259 101,808

203,615 152,711 203,615 152,711

(b) Dividends payable at year end 30 June:At 1 July

2013

Declared during the

yearPaid during

the yearAt 30 June

2014(i) THE GROUP - 2014 Rs.’000 Rs.’000 Rs.’000 Rs.’000

Dividend to ordinary shareholders (payable by the holding company) 101,808 203,615 (178,164) 127,259

At 1 July 2012

Declared during the

yearPaid during

the yearAt 30 June

2013THE GROUP - 2013 Rs.’000 Rs.’000 Rs.’000 Rs.’000

Dividend to ordinary shareholders (payable by the holding company) 71,265 152,711 (122,168) 101,808 Preference dividend to financial institutions (payable by the Group) 20,247 3,832 (24,079) -

91,512 156,543 (146,247) 101,808

At 1 July 2013

Declared during the

yearPaid during

the yearAt 30 June

2014(ii) THE COMPANY - 2014 Rs.’000 Rs.’000 Rs.’000 Rs.’000


At 1 July 2012

Declared during the

yearPaid during

the yearAt 30 June

2013THE COMPANY - 2013 Rs.’000 Rs.’000 Rs.’000 Rs.’000



28. NOTES TO THE STATEMENTS OF CASH FLOWS THE GROUP THE COMPANY 2014 2013 2014 2013

Restated(a) Cash generated from operations Rs.’000 Rs.’000 Rs.’000 Rs.’000

Profit before taxation 650,560 607,034 203,634 152,515 Adjustments for:- Depreciation of property, plant and equipment 214,204 195,412 2,835 2,835 - (Profit)/loss on disposal of property, plant and equipment (4,695) 682 - - - Property, plant and equipment written off 238 2,941 - - - Amortisation of intangible assets 5,118 3,796 - - - Intangible assets written off 53 515 - - - Profit on disposal of non-current assets classified as held

for sale (31,729) - - - - Bargain on purchase (67) - - - - Retirement benefit obligations 21,770 18,359 - - - Employee benefit liability - (9,760) - - - Provisions (17,462) 2,802 - - - Unrealised foreign exchange differences (1,691) (17,072) - - - Interest income (6,494) (9,036) (4,370) (3,165)- Interest expense 83,108 63,412 8,065 6,090 Cash generated from operations before changes in working capital 912,913 859,085 210,164 158,275 Changes in working capital:- Inventories (181,114) (244,916) - - - Trade and other receivables (180,883) (500,496) (39,119) 7,755 - Trade and other payables 139,906 323,557 42,323 17,931 Cash generated from operations 690,822 437,230 213,368 183,961

2014 2013 2014 2013(b) Cash and cash equivalents Rs.’000 Rs.’000 Rs.’000 Rs.’000

Cash in hand and at bank 247,892 166,706 3,972 461 Bank overdrafts (Note 15 - Borrowings) (525,222) (423,489) (6) (4)

(277,330) (256,783) 3,966 457

29. BUSINESS COMBINATIONS

(a) Acquisition of additional interest of International Fabrics Ltd and its subsidiary

On 26 March 2014, the Group acquired additional interest in International Fabrics Ltd and its subsidiary for a cash consideration of Rs. 15.5 million, increasing its ownership from 80% to 100%. The carrying amount of International Fabrics Ltd and its subsidiary’s net assets in the consolidated financial statements on the date of the acquisition was Rs. 418,428,967. The Group recognised a decrease in non-controlling interest of Rs. 83,685,793 and an increase in retained earnings and revaluation reserves attributable to the parent of Rs. 22,392,541 and Rs. 45,793,252 respectively.



29. BUSINESS COMBINATIONS (CONT’D)

The following summarises the effect of changes in the parent’s ownership interest:2014

Rs.’000

Parent’s ownership interest at 1 July 2013 344,302 Effect of increase in parent’s ownership interest 68,186 Share of profit for the year after deducting for share of profit attributable to non-controlling interest prior to acquisition (21,318)Parent’s ownership interest at 30 June 2014 391,170

(b) Acquisition of Aquarelle Limitée

Effective 1 January 2014, the Group acquired 100 per cent of the issued share capital and obtained control of Aquarelle Limitée for a cash consideration of Rs. 115,000,000, which resulted in a gain on bargain purchase of Rs. 66,688.The following table summarises the consideration paid for Aquarelle Limited and the amounts of the assets acquired and liabilities assumed recognised at the acquisition date.

2014Consideration Rs.’000At 1 January 2014Cash consideration 115,000

Recognised amounts of identifiable assets acquired and liabilities assumedProperty, plant and equipment (note 3(a)) 167,500 Trade and other receivables, net of provision 10,778 Cash and cash equivalents 43 Trade and other payables (184)Deferred tax liabilities (note 9(a)) (17,584)Borrowings - current (2,941)Borrowings - non-current (42,545)Total identifiable net assets 115,067 Bargain on purchase (67)

115,000

Net cash outflow on acquisition of subsidiary 2014Rs.’000

Cash consideration 115,000 Less: cash and cash equivalent balances acquired-net (43)Net outflow 114,957

The revenue included in the consolidated statement of comprehensive income since 1 January 2014, contributed by Aquarelle Limited was Rs. 5,002,098. The subsidiary’s profit for the year was Rs. 2,290,456 over the same period.


30. CONTINGENT LIABILITIES

At 30 June 2014, the Group had bank guarantees amounting to Rs. 67 M (2013: Rs. 111 M) to third parties in respect of expatriates.

31. COMMITMENTS

(a) Capital commitments

Capital commitments amounting to Rs. 592 M (2013: Rs. 380 M) have been approved by the Board of Directors but not yet contracted for.

(b) Operating lease commitments

The Group leases land and motor vehicles under non-cancellable operating lease agreements. The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

THE GROUP2014 2013

Rs.’000 Rs.’000

Not later than one year 14,824 10,794 Later than one year and not later than five years 13,034 11,419

27,858 22,213

The average lease terms range from three to ten years.


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 32. SEGMENTAL INFORMATION - GROUP

THE GROUP

Segment information The following is an analysis of the Group’s revenue and results from continuing operations by reportable segment:

30 June 2014 Knitwear Fine Knits Woven Retail TotalRs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000

Total segment revenues 2,400,117 2,097,374 5,012,927 54,682 9,565,100 Revenues from external customers 2,400,117 2,097,374 5,012,927 54,682 9,565,100

Earnings before interest and tax 185,369 135,057 426,376 3,821 750,623 Net finance costs (29,027) (9,872) (36,888) (827) (76,614)Profit from ordinary activities 156,342 125,185 389,488 2,994 674,009 Non recurring items (Note(a)) (20,465) (35,757) 1,044 31,729 (23,449)Profit before taxation 135,877 89,428 390,532 34,723 650,560 Income tax expense (6,414) (12,052) (81,010) 4 (99,472)Profit after taxation 129,463 77,376 309,522 34,727 551,088 Non-controlling interests - - (33,893) - (33,893)Profit attributable to owners of the parent 129,463 77,376 275,629 34,727 517,195

30 June 2013 Knitwear Fine Knits Woven Retail TotalRs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000

Total segment revenues 2,114,074 2,124,698 4,393,617 53,338 8,685,727 Revenues from external customers 2,114,074 2,124,698 4,393,617 53,338 8,685,727

Earnings before interest and tax 104,152 97,323 428,264 959 630,698 Net finance costs (27,637) (10,172) (15,843) (724) (54,376)Profit from ordinary activities 76,515 87,151 412,421 235 576,322 Non recurring items 17,217 18,254 (4,759) - 30,712 Profit before taxation 93,732 105,405 407,662 235 607,034 Income tax expense 3,784 (7,119) (87,835) (7) (91,177)Profit after taxation 97,516 98,286 319,827 228 515,857 Non-controlling interests - - (51,719) - (51,719)Profit attributable to owners of the parent 97,516 98,286 268,108 228 464,138

(a) Included in the retail segment is an amount of Rs. 31,729,961 representing profit on disposal of shares in Harris Wilson Textile SA. and a reversal of impairment of Rs. 1,801,577 on consolidation.

Other non recurring item in Knitwear, Knits and Woven clusters consist of fair value gains / (losses) on forward contracts and disposal of investment in foreign associate.


30 June 2013Knitwear Fine Knits Woven Retail

Consolidation Adjustments Total

Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000ASSETSOther segment assets 2,464,535 1,463,258 2,941,560 82,686 (256,428) 6,695,611 Deferred income tax assets 14,477 6,600 19,014 1,366 - 41,457 Cash in hand and at bank 38,234 7,679 120,076 717 - 166,706 Consolidated total assets 2,517,246 1,477,537 3,080,650 84,769 (256,428) 6,903,774

LIABILITIESOther segment liabilities 637,270 443,237 865,916 42,719 (195,371) 1,793,771 Current income tax liabilities 1,717 2,701 35,156 - - 39,574 Deferred income tax liabilities 84,984 23,916 73,294 - - 182,194 Borrowings 839,060 245,492 468,115 9,475 - 1,562,142 Consolidated total liabilities 1,563,031 715,346 1,442,481 52,194 (195,371) 3,577,681

Equity attributable to shareholders of parent 3,108,782 Non-controlling interests 217,311

6,903,774

OTHER INFORMATIONCapital additions 45,145 26,060 132,806 5,135 209,146 Depreciation and amortisation 54,013 56,084 87,472 1,639 199,208

32. SEGMENTAL INFORMATION - GROUP (CONT’D)

30 June 2014 ConsolidationKnitwear Fine Knits Woven Retail Adjustments Total

Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000ASSETSOther segment assets 2,825,123 1,391,793 3,655,817 88,247 (250,088) 7,710,892 Deferred income tax assets 19,238 6,079 23,312 1,369 - 49,998 Cash in hand and at bank 64,690 23,767 158,941 494 - 247,892 Consolidated total assets 2,909,051 1,421,639 3,838,070 90,110 (250,088) 8,008,782

LIABILITIESOther segment liabilities 722,257 453,398 1,021,774 38,583 (213,100) 2,022,912 Current income tax liabilities 6,271 9,090 24,651 - - 40,012 Deferred income tax liabilities 99,457 28,036 109,080 - - 236,573 Borrowings 897,222 185,879 812,596 9,887 - 1,905,584 Consolidated total liabilities 1,725,207 676,403 1,968,101 48,470 (213,100) 4,205,081

Equity attributable to shareholders of parent 3,624,311 Non-controlling interests 179,390

8,008,782

OTHER INFORMATIONCapital additions 123,433 118,656 188,943 625 431,657 Depreciation and amortisation 58,733 54,091 104,744 1,754 219,322



32. SEGMENTAL INFORMATION - GROUP (CONT’D)

Geographical informationRevenues from

External Customers Non-current assets Capital Additions2014 2013 2014 2013 2014 2013

Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000

Mauritius 7,316,235 6,631,398 2,012,751 1,637,029 295,679 136,434 Madagascar 4,538 4,878 452,557 297,680 44,975 18,583 Asia 1,832,068 1,589,873 443,734 313,298 90,904 53,911 South Africa 412,259 459,578 250 328 99 218 Total 9,565,100 8,685,727 2,909,292 2,248,335 431,657 209,146

Revenues from external customers are presented based on the respective subsidiaries’ country of domicile.

The cluster CEO’s and executive directors form the Group’s CODM. They have determined operating segments based on the information reviewed by the business units meetings (BUM) for the purpose of allocating resources and assessing performance.

The BUM considers business from a cluster and geographic perspective. Geographically, the CODM considers the revenue from Mauritius, Madagascar, Asia and South Africa. From a product perspective, the CODM separately considers Knitwear, Knits, Woven and Retail clusters.

The CODM assesses the performance of the operating segments based on a measure of ‘Earnings before interest and tax’ and ‘Profit after tax’.

33. REVENUE

All revenue of the Group relate to sale of goods.The revenue for the Company comprises dividend income from subsidiary companies.


34. RELATED PARTY TRANSACTIONS

The Group is controlled by CIEL Limited which owns 56.31% of the Company’s shares. The remaining shares are widely held. The following transactions were carried out with related parties.

THE GROUP

30 June 2014Holding

companyRelated

Companies

Key Management

PersonnelRs.’000 Rs.’000 Rs.’000

Treasury and corporate management fees (fellow subsidiaries) - 28,731 -

Purchase of goods (shareholder of a subsidiary) - 356,427 - Amount due to (shareholder of a subsidiary) - 129,524 - Amount due from - 6 3,912 Acquisition of subsidiary (Note 29) 115,000 - - Acquisition of property 65,000 - - Wages and salaries - - 136,619 Other post employment benefits - - 3,442 Dividend - - 4,052

30 June 2013Related

Companies

Key Management

PersonnelRs.’000 Rs.’000

Treasury and corporate management fees (fellow subsidiaries) 25,582 -

Purchase of goods (shareholder of a subsidiary) 276,010 - Amount due to (shareholder of a subsidiary) 52,581 - Amount due from 2,905 4,337 Wages and salaries - 113,733 Other post employment benefits - 3,747 Dividend - 3,054

Director’s interests in an employee incentive schemeCertain key management personnel receive benefits through employee incentive schemes. Note 18 of these financial statements sets out the details of the schemes.

THE COMPANY 2014 2013Rs.’000 Rs.’000

Amount due from subsidiaries (Note 11) 153,865 117,076 Amount due to subsidiaries (Note 19) 421,964 381,381 Dividend received from subsidiaries 207,687 151,558

Terms and conditions:

Outstanding balances at the year-end are unsecured, interest free and settlement occurs in cash. There has been no guarantees provided except for the advances made to the Executive Directors or received for any related party receivables or payables.

For the years ended 30 June 2014 and 2013, the Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial period through examining the financial position of the related party and the market in which the related party operates.


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 35. FINANCIAL RISK MANAGEMENT AND POLICIES

The Group’s and Company’s principal financial liabilities comprise bank loans and overdrafts, bills discounted, finance leases and trade and other payables. The main purpose of these financial liabilities is to raise finance for the Group’s and the Company’s operations. The Group and Company have various financial assets, such as trade and other receivables and cash and cash equivalent which arise directly from its operations.

The Group’s and the Company’s activities, therefore, expose it to a variety of financial risks: market risk (including currency risk, cash flow interest rate risk), credit risk and liquidity risk. The Group’s and Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s and Company’s financial performance.

The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below.

35.1 Financial risk factors

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

(a) Currency riskThe Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures primarily with respect to British pound, Euro, US Dollar, SA Rand and Indian Rupee. Foreign exchange risk arises from future commercial transactions. The Group hedges its foreign currency risk of sales by entering into forward contracts.

(b) Cash flow and fair value interest rate riskThe Group borrows at fixed and variable rates. In respect of the latter, it is exposed to risk associated with effect of fluctuations in the prevailing label of market interest rates on its financial position and cash flows. The interest rate risk profile is on the following main liabilities:

Bank Overdrafts Floating 2014 2013

Mauritian Rupee Prime lending rate Prime lending rateEuro Euribor + 1.5%/+ 3.5% Euribor + 1.5%/+ 3.5%US Dollar Libor + 1.5%/+ 3.5% Libor + 1.5%/+ 3.5%Indian Rupee 12% 12%

Loans - FixedMauritian Rupee Prime lending rate + 1% Prime lending rate + 1%Euro Euribor + 3% Euribor + 3%

Finance LeaseMauritian Rupee 7.5% - 10.5% 8% - 10.5%US Dollar 2.9% - Euro 2.75% -

Bills DiscountedMauritian Rupee Prime lending rate Prime lending rateEuro Euribor + 1.5%/+ 3.5% Euribor + 1.5%/+ 3.5%US Dollar Libor + 1.5%/+ 3.5% Libor + 1.5%/+ 3.5%Indian Rupee 10.45 % - 13.00 % 10.70 % - 13.00 %

Preference SharesMauritian Rupee 9% 5% - 9%

DebenturesMauritian Rupee Prime lending rate + 1% Prime lending rate + 1%


35. FINANCIAL RISK MANAGEMENT AND POLICIES (CONT’D)

35.1 Financial risk factors (cont’d)

At 30 June 2014, if interest rates on borrowings had been 50 basis points higher/lower with all other variables held constant, pre-tax profit for the year would have been lower/higher as shown in the table below, mainly as a result of higher/lower interest expense on floating rate borrowings as shown below. Management believes that a 50 basis point movement is a reasonable basis to determine the sensitivity for the Group’s liquidity risk.

THE GROUP THE COMPANY Effect higher/lower on pre-tax profit 2014 2013 2014 2013

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Rupee 531 822 - 140 USD 4,898 4,186 - - Euro 1,100 1,210 - - UK Pound 2,236 1,153 - - INR 123 99 - - Other currencies 15 146 - -

8,903 7,616 - 140

(c) Liquidity riskPrudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. The Group and the Company aims at maintaining flexibility in funding by keeping reliable credit lines available. Management monitors rolling forecasts of the Group’s liquidity reserve on the basis of expected cash flow.

The table below analyses the non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the end of the reporting period to the contractual maturity date.

THE GROUP At callLess than 3 months

Between 3 months and 1 year

Over 1 year

Rs.’000 Rs.’000 Rs.’000 Rs.’000At 30 June 2014Borrowings 827,166 562,155 362,648 153,615 Trade and other payables 156,845 1,235,660 295,614 9,202 Dividend payable - 127,259 - -

At 30 June 2013Borrowings 423,489 757,187 310,191 71,275 Trade and other payables 94,175 1,164,410 247,036 4,137 Dividend payable - 101,808 - -





THE COMPANY At callLess than 3 months

Between 3 months and 1 year

Over 1 year

Rs.’000 Rs.’000 Rs.’000 Rs.’000At 30 June 2014Borrowings 6 - - - Trade and other payables 5,754 487 421,871 - Dividend payable - 127,259 - -

At 30 June 2013Borrowings 4 - 14,000 14,000 Trade and other payables - 4,408 381,381 - Dividend payable - 101,808 - -

(d) Credit riskThe Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the statement of financial position are net of allowances for doubtful receivables, estimated by the Group’s management based on prior experience and the current economic environment.

The Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history.

The maximum exposure to credit risk at the end of the reporting period is equal to the carrying value of each financial asset.

(e) Fair value riskFinancial assets and liabilities, which are accounted for at historical cost, are not significantly different from their fair values.




The following table details the forward foreign currency (FC) contracts outstanding at the end of the reporting period:

Average exchange rate 2014 2013 Contract value Fair value

Outstanding contracts 2014 2013 Sell Buy Sell Buy 2014 2013 2014 2013

FC’000 FC’000 FC’000 FC’000 Rs.’000 Rs.’000 Rs.’000 Rs.’000

Sell currency EUR and buy currency USD 1.37 1.31 3,000 4,113 4,137 5,404 122,610 164,484 1,061 549

Sell currency EUR and buy currency MUR 41.95 40.32 6,355 266,622 8,590 346,338 266,622 346,338 6,801 4,641

Sell currency GBP and buy currency EUR 0.80 0.85 680 851 250 213 34,498 9,887 75 (19)

Sell currency GBP and buy currency USD 1.63 1.54 22,655 36,920 11,038 16,989 1,100,586 517,147 (45,088) 6,355

Sell currency GBP and buy currency MUR 51.00 47.82 10,370 528,827 11,840 566,172 528,827 566,172 1,579 14,535

Sell currency ZAR and buy currency EUR 14.47 - 318 22 - - 892 - 12 -

Sell currency ZAR and buy currency USD 11.00 10.79 159,002 14,451 1,611 149 430,769 4,850 (4,134) (51)

Sell currency ZAR and buy currency MUR 2.79 3.29 58,960 164,618 182,612 600,751 164,618 600,751 2,638 53,262

Sell currency USD and buy currency MUR 31.24 30.94 404 12,622 4,895 151,470 12,622 151,470 898 2,315

Sell currency USD and buy currency INR 61.89 56.70 1,550 95,936 8,500 481,938 46,798 481,938 (136) (17,200)

Sell currency GBP and buy currency INR 105.03 87.29 540 56,716 1,305 113,909 27,666 113,909 (462) (3,141)

Sell currency EUR and buy currency INR 84.63 75.06 1,300 110,013 1,650 123,851 53,664 123,851 (917) (3,524)

Total (37,673) 57,722

Recognised as follows: 2014 2013

On statement of financial position Rs.’000 Rs.’000

Fair value asset on forward contracts 4,861 81,657

Fair value liability on forward contracts (42,534) (23,935)

(37,673) 57,722

In income statement

Fair value movement on outstanding financial derivatives 2,557 57,722

In statement of other comprehensive income

Amount recognised in cash flow hedge reserve (40,230) -

(37,673) 57,722

At 30 June 2014, if rupee had weakened/strengthened by 5% against Euro/UK Pound/US Dollar with all other variables held constant, pre-tax profit for the year would have been Rs. 32,142,000 (2013: Rs. 29,590,000) higher/lower as a result of foreign exchange gains/losses on translation of Euro/UK Pound/US Dollar denominated trade receivables, trade payables and borrowings and is as follows:

2014 2013

Rs.’000 Rs.’000

Euro 3,050 (3,437)

UK Pound 7,114 5,470

US Dollar (42,306) (31,623)

(32,142) (29,590)


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 35. FINANCIAL RISK MANAGEMENT AND POLICIES (CONT’D)

35.2 Fair value estimation of financial instruments

The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting period. The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Group uses a variety of methods namely the capitalised earnings, net asset basis and dividend yield and makes assumptions that are based on market conditions existing at the end of each reporting date.

The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values.

The fair value of those financial assets and liabilities not presented on the Group’s statements of financial position at the fair values are not materially different from their carrying amounts.

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets and liabilities;

• Level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

THE GROUP AND THE COMPANYLevel 1 Level 2 Level 3Rs.’000 Rs.’000 Rs.’000

As at 30 June 2014 Available-for-sale financial assets - - 6,712 Forward exchange contracts (Hedged items) - (37,673) - Total - (37,673) 6,712

As at 30 June 2013 Available-for-sale financial assets - - 6,712 Forward exchange contracts - 57,722 - Total - 57,722 6,712



35.3 Capital risk management

The primary objectives of the Group and Company, when managing capital, are to safeguard the entity’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

The Group and the Company manage its capital structure and makes adjustment to it, in light of changes in economic conditions. In order to maintain or adjust the capital structure, the Group and the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. No changes were made in the objectives, policies or processes during the years ended 30 June 2014 and 30 June 2013.

The Group and the Company monitors capital on the basis of the debt-to-capital ratio. This ratio is calculated as net debt adjusted capital. Total debt comprise of borrowings and bills discounted. Net debt is calculated as total debt (as shown in the statement of financial position) less cash and bank balances.

Adjusted capital comprises all components of equity (i.e. share capital, non-controlling interests, retained earnings, revaluation surplus and the redeemable preference shares).

The gearing ratios at 30 June 2014 and 30 June 2013 were as follows:


Rs.’000 Rs.’000 Rs.’000 Rs.’000

Total debt 1,905,584 1,562,142 6 28,004 Less: cash and bank balances (Note 28(b)) (247,892) (166,706) (3,972) (461)Net Debt 1,657,692 1,395,436 (3,966) 27,543

Total equity 3,803,701 3,326,093 915,825 905,364

Gearing Ratio 43.58% 41.95% N/A 3.04%

36. CASH FLOW HEDGE

The Group is involved in the production and selling of textile apparel, most of which is done through exports to foreign countries. The Group is made up of Knitwear Cluster; Fine knits Cluster and Woven Cluster and is exposed to foreign exchange risk on the sale of textile products denominated in foreign currency. The Group exports almost all of its production in foreign currencies (South African Rand ‘ZAR’, United States Dollars ‘USD’, Great Britain Pound ‘GBP’ and Euro ‘EUR’).

The Group is mainly faced to the following foreign exchange exposures:

Pre-transaction foreign currency riskThis arises before the transaction (‘sales’) becomes contractual while a quote is given to the client in foreign currency. Even though the transaction is not confirmed, movement in exchange rate to the disfavour of the Group signifies a potential risk. If a customer later accepts the quote received, there is a risk that the foreign currency price then converted to MUR will not bring the desired margin.

Transaction foreign currency riskTransactional foreign currency risk arises as soon as a there is a contractual obligation between the Group and the foreign customers. If nothing is done, there is a certain risk that the foreign exchange rate may weaken and if it so happens, the Group may only lose the intended margin on the transaction and may even incur losses if the exchange rate variations are drastically in disfavour of the Group.

The Group adopted the following strategy:

The treasury Committee/Chief Executive of the Group are responsible for the decision making, with the intention to take cover, through forward exchange contracts with a view to cover for sale transactions that are judged as being highly probable. The intention is to cover for transactional exposures as they are unveiled. Prerogative is given to the treasury Committee/Chief Executive of the Group to decide if they would keep part of this position uncovered with the view of benefiting from potential currency appreciation against the MUR.

The Group enters into forward covers to manage its foreign exchange risk on foreign denominated sales. Forward exchange covers are taken for orders received and which are highly probable and this is designated as a cash flow hedge. Forward covers are used as a mechanism to fix the amount of foreign currency denominated sales which are used to modify cashflow between financial instrument and sales receipts upon realisation.


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 36. CASH FLOW HEDGE (CONT’D)

Transaction foreign currency risk (cont’d)Financial instruments taken to hedge the Group’s sales are fair valued and recognised in the statement of financial position as financial assets /liability. For those sales on which a forward has been taken and which has materialised, the resulting fair value gain/loss on re-measurement is accounted for in profit or loss while for those transactions for which the underlying sale has not yet materialised, the fair value gain/loss is recorded in other comprehensive income. The latter is then recycled to profit or loss as soon as the sale materialise and the goods are shipped.

The Group enters into forward contracts (hedge instrument) to buy or to sell foreign currencies at a specified future time at a price agreed upon the contract date. The price is locked until delivery of sales order which normally will not exceed 9 months.

Hedge instruments, in this case forward exchange contracts, are expected to be highly effective to mitigate the foreign currency risk exposure on sales (hedge item). By selling forward, the Group expects to mitigate long term currency exchange risk and will revalue in the opposite direction to the underlying transaction.

The objective of the Group is to cover identified exposures (i.e. confirmed orders or highly probable sales orders) to the minimum of 75% and a maximum of 125%. However, this bench mark is determined on a case to case basis by the CEO and treasury committees of the respective business clusters while taking into consideration the specific transaction requirements.

For all sales not yet shipped and for which a forward exchange contract cover has been taken, the Group performs a revaluation of outstanding forward contracts relating to cash flow hedges which is then recorded in the statement of other comprehensive income.

Revaluation of outstanding forex contracts relating to transaction for which an asset has already crystallised in the statement of financial position (sales already shipped and debtors raised) will be recorded in profit or loss.

Subsequently, the cash flow hedge recognised in other comprehensive income will be reversed profit or loss in the following year, as an underlying asset would already have crystallised upon the orders being shipped ( Sales not shipped last year would have been shipped this year).

Hedge instruments in the form of forward foreign exchange contracts is expected to be highly effective as the unshipped sales, which represents the hedged item, has a direct economic relationship to the forward foreign exchange contract entered into to mitigate the foreign exchange exposure on the Group’s unshipped and confirmed sales orders at year end.

Although effectiveness is certain to be 100 % as long as plain vanilla forward contracts are used, a 10 % error margin in the hedge effectiveness is considered as acceptable. To determine effectiveness of the hedge, the list of hedge instruments (Forward contracts) are matched with list of sales not yet shipped / highly probable sales (hedge items).


36. CASH FLOW HEDGE (CONT’D)

Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15

Notional amount USD - 664,000 - - - - - - - - - -

Average hedged rate to MUR - 30.90 - - - - - - - - - -

Notional amount GBP 12,120,000 4,700,000 1,200,000 500,000 750,000 - 850,000 - 260,000 - - -

Average hedged rate USD 1.62 1.63 1.63 1.66 1.63 - 1.69 - 1.70 - - -

Notional amount GBP 500,000 500,000 500,000 2,000,000 500,000 -

750,000 - - - - -

Average hedged rate MUR 49.32 50.00 51.21 51.24 51.40 - 51.27 - - - - -

Notional amount EUR - 175,000 - - - 3,000,000 - - - - - -

Average hedged rate to MUR - 42.00 - - - 41.68 - - - - - -

Notional amount EUR 750,000 750,000 1,000,000 - - - - - - - - -

Average hedged rate to USD 1.38 1.36 1.37 - - - - - - - - -

Notional amount ZAR 2,179,450 20,758,353 19,536,000 8,360,000 13,928,000 6,470,000 - - - - - -

Average hedged rate to USD 11.08 11.10 11.04 10.82 11.04 10.93 - - - - - -

Notional amount ZAR 600,000 415,000 3,527,502 2,000,000 - - - - - - - -

Average hedged rate to MUR 2.80 2.70 2.79 2.86 - - - - - - - -

The Group has a single risk category which is the foreign exchange risk on foreign denominated sales.

Effectiveness is expected to be 100 % as long as plain vanilla forward contracts are used.

The Group does not have any forecast transaction for which hedge accounting had been used in the previous period but which is no longer expected to occur.


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)Year ended 30 June 2014 36. CASH FLOW HEDGE (CONT’D)

The impact of hedging instruments (forward exchange contracts) designated in hedging relationships as of 30 June 2014 on the statement of financial position of CIEL Textile Limited (the Group), is as follows:

Cash flow hedges Notional amount Carrying amount

Line item in the statement of

financial position

Change in fair value used for measuring ineffectiveness for

the period(FCY) 000 Rs.’000

Forward exchange contract (USD) 664 654

Trade and other payables/Trade and other receivables -

Forward exchange contract (GBP) 25,130 (43,834)


Forward exchange contract (EUR) 5,675 3,074


Forward exchange contract (ZAR) 77,774 (124)


The impact of hedged items designated in hedging relationships as of 30 June 2014 on the statement of financial position of the Group is, as follows:

The above hedging relationships affect other comprehensive income as follows:

Cash flow hedgesChange in value used for measuring

ineffectiveness Cash flow hedge reserveRs.’000

Foreign exchange riskUnshipped sales - 40,230

Cash flow hedge Carrying amount

Thereof accumulated fair

value adjustments

Line item in the statement of

financial position

Change in fair value used for measuring ineffectiveness for

the year

Forward exchange contract (USD) 654 654


Forward exchange contract (GBP) (43,834) (43,834)


Forward exchange contract (EUR) 3,074 3,074


Forward exchange contract (ZAR) (124) (124)


Cash flow hedges

Hedging gain/(loss) recognized

in OCI

Ineffectiveness recognized in profit or loss

Line item in profit or loss

Amount reclassified from OCI to profit or

lossLine item in

profit or loss

Foreign exchange riskUnshipped sales (40,230) - None - -


37. THREE YEAR SUMMARY2014 2013 2012

(a) THE GROUP Restated RestatedRs.’000 Rs.’000 Rs.’000

Stated capital/Issued and paid up share capital 685,865 685,865 685,865 Retained earnings 2,179,233 1,843,260 1,534,899 Other reserves 759,213 579,657 653,596 Amount attributable to owners 3,624,311 3,108,782 2,874,360 Profit before taxation 650,560 607,034 610,679 Profit for the year 551,088 515,857 515,888

Dividends to Ordinary Shareholders 203,615 152,711 101,808

2014 2013 2012(b) THE COMPANY Rs.’000 Rs.’000 Rs.’000

Stated capital/Issued and paid up share capital 685,865 685,865 685,865 Revaluation surplus 131,874 121,396 121,396 Retained earnings 98,086 98,103 97,817 Total equity 915,825 905,364 905,078 Profit before taxation 203,634 152,515 104,008 Profit for the year 203,598 152,997 101,515

Dividends to Ordinary Shareholders 203,615 152,711 101,808

38. CHANGES IN ACCOUNTING POLICIES

(a) Adoption of IAS 19 (revised 2011)In the current year, the Group has adopted IAS 19 Employee Benefits (Revised 2011). The Group has applied IAS 19 (Revised 2011) retrospectively in accordance with the transitional provisions as set out in IAS 19 (Revised 2011), paragraph 173. These transitional provisions do not have an impact on future periods. The opening statement of financial position of the earliest comparative period presented (1 January 2012) has been restated.

The revised employee benefit standard introduces changes to the recognition, measurement, presentation and disclosure of post-employment benefits. The standard also requires net interest expenses/income to be calculated as the product of the net defined benefit liability/asset and the discount rate as determined at the beginning of the year. The effect of this is to remove the previous concept of recognising an expected return on plan assets.

The effects of the changes to the accounting policies is shown in the following tables.

(i) The effect on the statements of financial position are as follows:THE GROUP

Retirement benefit

obligations

Deferred tax

liabilities - net

Rs.’000 Rs.’000

Balance as at 1 July 2012 (as previously reported) 74,791 142,891 Reclassification to other payables (6,011) - Effect of adopting IAS 19 (Revised 2011) 1,525 (196)Balance as at 1 July 2012 (restated) 70,305 142,695

Balance as at 30 June 2013 (as previously reported) 94,970 149,628 Reclassification to payables on 2012 figures (6,011) - Reclassification to payables on 2013 figures (2,830) - Effect of adopting IAS 19 (Revised) on 2012 figures 1,525 (196)Effect of adopting IAS 19 (Revised) on 2013 figures 56,561 (8,695)Balance as at 30 June 2013 (restated) 144,215 140,737



38. CHANGES IN ACCOUNTING POLICIES (CONT’D)

(a) Adoption of IAS 19 (revised 2011) (cont’d)

(ii) The effect on profit or loss is as follows: THE GROUP2013

Rs.’000

Increase in administrative expenses 1,820 Decrease in income tax expense - Increase in profit for the year 1,820

(iii) The effect on the statement of other comprehensive income is as follows: THE GROUP2013

Rs.’000

Remeasurement of defined benefit obligations (58,381)Increase in deferred tax relating to remeasurement of defined benefit obligations 8,695 Decrease in other comprehensive income (49,686)

(b) The following table summarises the adjustments made to the Group’s statements of financial position at 1 July 2012 and 30 June 2013, and its income statements, statements of comprehensive income and cash flows for the year ended 30 June 2013 as result of the adoption of IAS 19 (revised 2011) and reclassification of leave schemes from retirement benefit obligation to trade payables.

Statement of financial position July 01, 2012As

previously reported Adjustments As restated

Rs.’000 Rs.’000 Rs.’000

Deferred income tax assets (Note 9) 32,628 196 32,824 Overall impact on total assets 196

Retirement benefit obligations (Note 17) 74,791 (4,486) 70,305 Trade and other payables (Note 19) 1,214,993 (29,179) 1,185,814 Provision - 35,188 35,188 Borrowings - current 563,066 416,221 979,287 Bills discounted 416,221 (416,221) - Overall impact on total liabilities 1,523

Actuarial losses - (1,057) (1,057)Non-controlling interests 177,507 (270) 177,237 Overall impact on total equity (1,327)

30 June 2013As


Rs.’000 Rs.’000 Rs.’000

Deferred income tax assets (Note 9) 32,566 8,891 41,457 Overall impact on total assets 8,891

Retirement benefit obligations (Note 17) 94,970 49,245 144,215 Trade and other payables (Note 19) 1,538,909 (29,151) 1,509,758 Provision - 37,990 37,990 Borrowings - current 984,172 506,695 1,490,867 Bills discounted 506,695 (506,695) - Overall impact on total liabilities 58,084

Actuarial losses - (49,655) (49,655)Retained earnings 1,841,457 1,803 1,843,260 Non-controlling interests 218,652 (1,341) 217,311 Overall impact on total equity (49,193)


38. CHANGES IN ACCOUNTING POLICIES (CONT’D)

Income statement For the year ended 30 June 2013As


Rs.’000 Rs.’000 Rs.’000

Earnings before interest, tax, depreciation and amortisation 858,798 1,820 860,618 Overall impact in the income statement 1,820

Earnings per share (Rs’) 4.51 0.02 4.53 Overall impact on earnings per share (Rs’) 0.02

Statement of comprehensive income For the year ended 30 June 2013As


Rs.’000 Rs.’000 Rs.’000Items that will not be reclassified to profit or lossRemeasurements of post retirement benefit obligations - (58,381) (58,381)Deferred tax on remeasurements of post retirement benefit obligations - 8,695 8,695 Overall impact on ‘other comprehensive income’ (49,686)

Statement of cash flows For the year ended 30 June 2013As


Rs.’000 Rs.’000 Rs.’000

Profit before taxation 605,214 1,820 607,034 Adjustments for:- Retirement benefit obligations 20,179 (1,820) 18,359 Overall impact on cash and cash equivalents -



39. CHANGE IN PRESENTATION OF INCOME STATEMENT

The Group and the Company have changed the presentation of the income statement and comparative figures have been restated accordingly to reflect the change in presentation, which will be applied consistently from one period to the next. The change in presentation did not have any impact on the prior period results of the Group and its subsidiaries.

(i) 2013 - As previously presentedTHE

GROUPTHE

COMPANYRestated

Rs.’000 Rs.’000

Revenue 8,685,727 155,766 Cost of sales (7,022,280) - Gross profit 1,663,447 155,766

Other operating income/(losses) 185,296 (261)

Fair value movement on outstanding forward exchange contracts 30,712 - Administrative and selling expenses (1,218,045) (65)

661,410 155,440

Finance income 9,036 3,165 Finance costs (63,412) (6,090)Net finance costs (54,376) (2,925)

Profit before taxation 607,034 152,515

Income tax (expense)/credit (91,177) 482

Profit for the year 515,857 152,997

(i) 2013 - As currently presentedTHE

GROUPTHE

COMPANYRestated

Rs.’000 Rs.’000

Revenue 8,685,727 155,766 Earnings before interest, tax, depreciation and amortisation 860,618 155,440 Depreciation and amortisation (199,208) - Earnings before interest and tax 661,410 155,440

Finance income 9,036 3,165 Finance costs (63,412) (6,090)Net finance costs (54,376) (2,925)

Profit before taxation 607,034 152,515

Income tax (expense)/credit (91,177) 482

Profit for the year 515,857 152,997


40. FINANCIAL INSTRUMENTS

THE GROUPFinancial instruments by category 30 June 2014


Derivatives used for hedging

Available for sale Total

Assets as per statement of financial position Rs.’000 Rs.’000 Rs.’000 Rs.’000

Available-for-sale financial assets - - 6,712 6,712 Derivative financial instruments - 4,861 - 4,861 Trade and other receivables excluding prepayments 2,313,315 - - 2,313,315 Cash and cash equivalents (excluding bank overdrafts) 247,892 - - 247,892 Total 2,561,207 4,861 6,712 2,572,780


Other financial

liabilities at amortised

cost TotalLiabilities as per statement of financial position Rs.’000 Rs.’000 Rs.’000

Borrowings (excluding finance lease liabilities) - 1,780,567 1,780,567 Finance lease liabilities - 125,017 125,017 Derivative financial instruments 42,534 - 42,534 Trade and other payables - 1,697,321 1,697,321 Dividend payable - 127,259 127,259 Total 42,534 3,730,164 3,772,698

Financial instruments by category 30 June 2013 (Restated)




Assets as per statement of financial position Rs.’000 Rs.’000 Rs.’000 Rs.’000

Available-for-sale financial assets - - 29,078 29,078 Derivative financial instruments - 81,657 - 81,657 Trade and other receivables excluding prepayments 2,040,092 - - 2,040,092 Cash and cash equivalents (excluding bank overdrafts) 166,706 - - 166,706 Total 2,206,798 81,657 29,078 2,317,533


Other financial


cost TotalLiabilities as per statement of financial position Rs.’000 Rs.’000 Rs.’000

Borrowings (excluding finance lease liabilities) - 1,523,186 1,523,186 Finance lease liabilities - 38,956 38,956 Derivative financial instruments 23,935 - 23,935 Trade and other payables - 1,509,758 1,509,758 Dividend payable - 101,808 101,808 Total 23,935 3,173,708 3,197,643



40. FINANCIAL INSTRUMENTS (CONT’D)

THE COMPANYFinancial instruments by category (cont’d) 30 June 2014



Assets as per statement of financial position Rs.’000 Rs.’000 Rs.’000

Available-for-sale financial assets - 6,712 6,712 Trade and other receivables excluding prepayments 156,893 - 156,893 Cash and cash equivalents (excluding bank overdrafts) 3,972 - 3,972 Total 160,865 6,712 167,577

Other financial


cost TotalLiabilities as per statement of financial position Rs.’000 Rs.’000

Borrowings (excluding finance lease liabilities) 6 6 Trade and other payables 428,112 428,112 Dividend payable 127,259 127,259 Total 555,377 555,377

Financial instruments by category 30 June 2013 (Restated)Loans and

receivables TotalAssets as per statement of financial position Rs.’000 Rs.’000

Trade and other receivables excluding prepayments 117,774 117,774 Cash and cash equivalents (excluding bank overdrafts) 461 461 Total 118,235 118,235

Other financial


cost TotalLiabilities as per statement of financial position Rs.’000 Rs.’000

Borrowings 28,004 28,004 Trade and other payables 385,789 385,789 Dividend payable 101,808 101,808 Total 515,601 515,601



NOTICE OFANNUAL MEETING


Notes:

(a) A shareholder of the Company entitled to attend and vote at the Meeting may appoint a proxy, whether a member or not, to attend and vote in his/her stead. A proxy need not be a shareholder of the Company.

(b) Proxy Forms should be deposited at the Company’s Share Registry and Transfer Office, MCB Registry & Securities Limited, 2nd Floor, MCB Centre, Sir William Newton Street, Port Louis, not less than 24 hours before the Meeting, and in default, the instrument of proxy shall not be treated as valid.

(c) Postal votes shall reach the Company’s Share Registry and Transfer Office, MCB Registry & Securities Limited, 2nd Floor, MCB Centre, Sir William Newton Street, Port Louis, not less than 48 hours before the Meeting, and in default, the postal vote shall not be treated as valid.

(d) A proxy form and postal vote are included in this annual report and are also available at the Registered Office of the Company.

(e) For the purpose of this Meeting, the shareholders who are entitled to receive notice and attend the Meeting shall be those shareholders whose names are registered in the share register of the Company as at 19 November 2014.

(f) The minutes of the Annual Meeting held on 12 December 2013 are available for consultation by the shareholders of the Company during normal trading office hours, at the Registered Office of the Company.

(g) The profiles and categories of Directors proposed for appointment and re-election are set out in the Corporate Governance Report.

Notice is hereby given that the Annual Meeting (“the Meeting”) of the shareholders of CIEL Textile Limited (“the Company’’) will be held on 17 December 2014 at 15.00 hours at the Registered Office of the Company, 5th floor, Ebène Skies, rue de l’Institut, Ebène to transact the following business in the manner required for passing Ordinary Resolutions:

AGENDA

1. To receive, consider and approve the Group’s and the Company’s audited Financial Statements for the year ended 30 June 2014, including the annual report and the auditors’ report, in accordance with section 115(4) of the Companies Act 2001.

2. To appoint Mr. Jean-Pierre Dalais as Director of the Company.

3. To appoint Mr. Eric Dorchies as Director of the Company.

4. To authorise, in accordance with section 138(6) of the Companies Act 2001, Mr. Maurice Dalais to continue to hold office as a Director until the next Annual Meeting of the shareholders of the Company.

5-11. To re-elect, as Directors of the Company to hold office until the next Annual Meeting, the following persons who offer themselves for re-election (as separate resolutions):

5. Mr. P. Arnaud Dalais 6. Mr. Antoine Delaporte 7. Mr. Henri de Simard de Pitray 8. Mr. Roger Espitalier Noël 9. Mr. J. Harold Mayer 10. Mr. Alain Rey 11. Mr. Eddy Yeung Kan Ching

12. To take note of the automatic re-appointment of Messrs. PricewaterhouseCoopers as auditors in accordance with Section 200 of the Companies Act 2001 and to authorise the Directors to fix their remuneration.

13. To ratify the remuneration paid to the auditors for the year ended 30 June 2014.

Clothilde de Comarmond, ACISPer CIEL Corporate Services LtdCompany Secretary

31 October 2014



I/We

of

being shareholder(s) of CIEL Textile Limited 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 vote for me/us and on my/our behalf at the Annual Meeting of the shareholders of the Company to be held on 17 December 2014 at 15.00 hours at the Company’s Registered Office, 5th Floor, Ebène Skies, rue de l’Institut, Ebène and at any adjournment thereof.

I/We direct my/our proxy to vote in the following manner (Please vote with a tick):

Notes:

1. Any shareholder entitled to attend and vote at the Meeting may appoint a proxy, whether a member or not, to attend and vote in his/her stead.

2. If the instrument appointing the proxy is returned without any indication as 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. Proxy forms should be deposited at the Company’s Share Registry and Transfer Office, MCB Registry & Securities Limited, 2nd Floor, MCB Centre, Sir William Newton Street, Port Louis, not less than 24 hours before the Meeting, and in default, the instrument of proxy shall not be treated as valid.

RESOLUTIONS FOR AGAINST ABSTAIN



3. To appoint Mr. Eric Dorchies as Director of the Company


5-11 To re-elect, as Directors of the Company to hold office until the next Annual Meeting, the following persons who offer themselves for re-election (as separate resolutions):

5. Mr. P. Arnaud Dalais

6. Mr. Antoine Delaporte

7. Mr. Henri de Simard de Pitray

8. Mr. Roger Espitalier Noël

9. Mr. J. Harold Mayer

10. Mr. Alain Rey

11. Mr. Eddy Yeung Kan Ching



Signed this day of 2014.

Signature/s

PROXY FORM



I/We

of

being shareholders of CIEL Textile Limited (“the Company’’), do hereby cast my/our vote by post, by virtue of section 19.10 of the constitution of the Company, for the Annual Meeting of the shareholders of the Company to be held on 17 December 2014 at 15.00 hours at the Company’s Registered Office, 5th Floor, Ebène Skies, rue de l’Institut, Ebène and at any adjournment thereof.

I/We desire my/our vote to be cast on the Resolutions as follows (please vote with a tick):

RESOLUTIONS FOR AGAINST ABSTAIN



3. To appoint Mr. Eric Dorchies as Director of the Company


5-11 To re-elect, as Directors of the Company to hold office until the next Annual Meeting, the following persons who offer themselves for re-election (as separate resolutions):5. Mr. P. Arnaud Dalais

6. Mr. Antoine Delaporte

7. Mr. Henri de Simard de Pitray

8. Mr. Roger Espitalier Noël

9. Mr. J. Harold Mayer

10. Mr. Alain Rey

11. Mr. Eddy Yeung Kan Ching



Signed this day of 2014.

Signature/s

Note:

1. Duly signed postal votes shall reach the Company’s Share Registry and Transfer Office, MCB Registry & Securities Limited, 2nd Floor, MCB Centre, Sir William Newton Street, Port Louis, not less than 48 hours before the Meeting, and in default, the postal vote shall not be treated as valid.

POSTAL VOTE



· PDF file · 2016-09-21GROUP PROFILE CIEL Textile Limited is a subsidiary of CIEL Limited. ... J. Harold Mayer Alain Rey Eddy Yeung Kan Ching ... Email: [email protected]

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