MARGARINE INDUSTRIES LIMITED

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MMAARRGGAARRIINNEE IINNDDUUSSTTRRIIEESS

LLIIMMIITTEEDD

Annual Report

for the year ended 31 December 2012

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Margarine Industries Limited – Corporate information

CORPORATE INFORMATION

Directors of the Company Chairman Mr. Bashirally A Currimjee, G.O.S.K - Also alternate to Mr. Anil C Currimjee Executive Mr. Azim F Currimjee - Director-Also alternate to Mr. Currimjee J Currimjee Mr. Raffi Currimjee - Managing Director Non-Executive Mr. Fakhruddin J Currimjee, G.O.S.K Mr. Mustanshir A Currimjee - Also alternate to Mr. Ashraf M Currimjee Mr. Currimjee J Currimjee, G.O.S.K - Also alternate to Messrs. Azim F Currimjee &

Fakhruddin J Currimjee Mr. Anil C Currimjee - Also alternate to Mr. Bashirally A Currimjee Mr. Ashraf M Currimjee - Also alternate to Mr. Mustanshir A Currimjee Mr. Mazahir F E Adamjee - Also alternate to Mr. Raffi Currimjee Mr. Saliah Mohamed Sait - Also alternate to Mr. Mazahir F E Adamjee Independent Non-Executive Mr. Hassam Vayid, G.O.S.K Mr. Uday K Gujadhur Directors of the Company’s Subsidiary Central Distributors Company Limited

(‘CDCO’) Mr. Currimjee J Currimjee √ Mr Mustanshir A Currimjee √ Mr Azim F Currimjee √ Mr Raffi Currimjee √ Mr Ashraf M Currimjee Alternate to Mr. Mustanshir A Currimjee The Company Secretary Currimjee Limited 6, Sir William Newton Street, Port-Louis Mauritius Registered Office 6, Sir William Newton Street, Port-Louis Mauritius Registry Currimjee Limited 6, Sir William Newton Street Port Louis Mauritius

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Margarine Industries Limited – Corporate information

Principal Place of Business New Trunk Road, Trianon - Mauritius Auditors Deloitte 7th Floor, Raffles Tower 19, Cybercity Ebene Mauritius Bankers

• The Mauritius Commercial Bank Ltd.

• State Bank of Mauritius Ltd

• Barclays Bank Plc • Afrasia Bank Limited

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Margarine Industries Limited – Report from the Board of Directors

REPORT FROM THE BOARD OF DIRECTORS

Dear Shareholder

The Board of Directors is pleased to present the Annual Report of MARGARINE INDUSTRIES LIMITED (the “Company”) for the year ended 31 December 2012.

LEGAL FORM AND PRINCIPAL ACTIVITY

The Company was incorporated on 20th April 1966 as a private company and was converted into a

public company on 29th June 1982. The Company was admitted to the Development & Enterprise

Market of the Stock Exchange of Mauritius in August 2006.

Its principal activity consists of manufacturing and sale of margarine and has remained unchanged

during the year.

The wholly-owned subsidiary of the Company, Central Distributors Company Limited [“CDCO”], is

engaged in the trading of consumer goods and its activity has also remained unchanged during the

year.

RESULTS Year on year, Group turnover increased by 3.3%. Operating profit remained constant at Rs 43M;

however, Profit after tax in the year decreased from Rs 30.3M to Rs 27.8M, prinicipally due to higher

financial charges.

In the prevailing competitive environment and with the rising commodity prices, 2013 will be a

challenging year. However, the Company expects the results to be sustained given various measures

undertaken.

STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS

Company law requires the Directors to prepare financial statements for each financial year, which

present fairly the financial positions, financial performances and cash flows of the Company. In

preparing those financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

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Margarine Industries Limited – Report from the Board of Directors

• make judgements and estimates that are reasonable and prudent;

• state whether applicable Accounting Standards have been followed and complied with, subject to

any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume

that the Company will continue in business.

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

statements.

The Directors are responsible for keeping proper accounting records, which disclose with reasonable

accuracy at any time, the financial position of the Company and to enable them to ensure that the

financial statements comply with the Companies Act 2001. They are also responsible for safeguarding

the assets of the Company and hence for taking reasonable steps for the prevention and detection of

fraud and other irregularities.

DONATIONS From the Company From Subsidiaries 2012

(Rs) 2011 (Rs)

2012 (Rs)

2011 (Rs)

Political donations 20,000 Nil Nil Nil Non-political / charitable donations 27,525 32,500 Nil Nil TOTAL 47,525 32,500 Nil Nil

AUDITORS The Auditors, Messrs. Deloitte have expressed their willingness to continue in the office and a

resolution proposing their re-appointment will be submitted to the Annual Meeting.

The fees paid to the Auditors were:

The Company The Group 2012

Rs. 2011 Rs.

2012 Rs.

2011 Rs.

Audit fees 363,000 300,000 412,500 375,000

Other Services 11,000 10,000 22,000 20,000

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Margarine Industries Limited – Corporate Governance Report

Corporate Governance Report The Company is committed to high standards of Corporate Governance and the Board has established

procedures to ensure compliance with the provisions of the Mauritius Code of Corporate Governance.

The Holding Structure

The holding structure of the Company as at 31 December 2012 is as follows:

Substantial Shareholding

With the exception of CIND, no other Shareholder holds more than 5% of the share capital of the

Company.

Board of Directors

For the year under review, the Board consisted of twelve Directors with a mix of two Executives, eight

Non-Executives and two Independent Directors.

Fakhary Limited (“FL”)

Currimjee Industries Limited (“CIND”)

Others

Margarine Industries Limited (“the Company”)

Central Distributors Company Limited (“CDCO”)

100%

25.0%

75.0%

100%

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The Independent and Non-Executive Directors bring a wide range of experience and skills to the Board.

Independent Directors are free from any business or other relationships which would materially affect

their ability to exercise independence of mind and judgement.

Where necessary in the discharge of their duties, Directors may seek independent professional advice

at the Company’s expense.

Directors’ Profiles

The profile of each member of the Board of Directors is set out hereafter:

Mr. Bashirally A Currimjee G.O.S.K - Chairman Mr. Bashirally A Currimjee is the Chairman of the Company since 1 January 2011. He is also the

Chairman and Managing Director of Currimjee Jeewanjee and Company Limited and the Chariman of

the following Development Enterprise Market (DEM) listed companies:

- Compagnie Immobilière Limitée, Soap & Allied Industries Limited, Quality Beverages Limited and

Vital Water Bottling Co Ltd.

He is presently a Director of Fincorp Limited, a company listed on the Official Market of the Stock

Exchange of Mauritius (“SEM”).

Mr. Azim F Currimjee Mr. Azim F Currimjee was appointed Director of the Company in September 2001. He is also a Director

of the following DEM listed companies:

- Compagnie Immobilière Limitée, Quality Beverages Limited, Soap & Allied Industries Limited, and


Mr. Raffi Currimjee Mr. Raffi Currimjee was appointed as Executive Director of the Company in August 2008. In September

2012 he was appointed as Managing Director of the Company. He is also a Director of the following

DEM listed companies:

- Compagnie Immobilière Limitée, Quality Beverages Limited and Vital Water Bottling Co Ltd.

Mr. Fakhruddin J Currimjee G.O.S.K Mr. Fakhruddin J Currimjee was appointed Director of the Company in April 1966. He is also a Director

of the following DEM listed companies:

- Quality Beverages Limited and Vital Water Bottling Co Ltd.

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Mr. Mustanshir A Currimjee Mr. Mustanshir A Currimjee was appointed Director of the Company in August 1976. He is also a

Director of the following DEM listed companies:

- Quality Beverages Limited, Soap & Allied Industries Limited and Vital Water Bottling Co Ltd.

Mr. Currimjee J Currimjee G.O.S.K Mr. Currimjee J Currimjee has acted as Chairman of the Company from 15 November 1978 to 31

December 2010. He is also a Director of the following DEM listed companies:


Mr. Anil C Currimjee Mr. Anil C Currimjee was appointed Director of the Company in July 2005. He is presently a Director of

the following DEM listed companies:

- Compagnie Immobilière Limitée, Quality Beverages Limited, Soap & Allied Industries Limited and


Mr. Ashraf M Currimjee Mr. Ashraf M Currimjee was appointed Director of the Company in June 2007 and is a Director of the

following DEM listed companies:



He is also a Director of Mauritius Oil Refineries Limited, a company listed on the Official Market of the

SEM.

Mr. Mazahir F E Adamjee Mr. Mazahir F E Adamjee was appointed Director of the Company in July 2005. He is a Director of the

following listed companies:



He also a Director of National Investment Trust Ltd, a company listed on the Official Market of the SEM.

Mr. Saliah Mohamed Sait Mr. Saliah Mohamed Sait was appointed as Director of the Company in June 2006. He is also a

Director of the following DEM listed companies:


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Mr. Hassam Vayid Mr. Hassam Vayid was appointed as an Independent Director of the Company in July 2005. He is the

Chairman of Bramer Banking Corporation Ltd and a Director of the following DEM listed companies:


Mr. Uday K Gujadhur Mr Uday K Gujadhur was appointed as an Independent Director and Chairman of the Company’s Audit

Committee in July 2010. He is a Director of the following DEM listed companies:

- Quality Beverages Limited, Soap & Allied Industries Limited and Vital Water Bottling Co Ltd. Board Meeting

The Board of Directors meets every quarter to review performance, conformance and the overall

management of the Company as well as approves its long term objectives and strategy. Decisions are

also taken by way of resolutions in writing, assented and signed by all Directors.

The Board of Directors met five times during the year under review.

Board Committees

In line with Corporate Governance best practices, the Board has established the following sub-

committees to assist it in the decision-making process and in the performance of its duties and

responsibilities:

• Corporate Governance Committee

• Audit Committee.

In addition, committees are also convened as and when necessary to review major investments and

new projects.

Corporate Governance Committee

The Corporate Governance Committee is chaired by Mr Hassam Vayid, an Independent Director, and

the other members as at 31 December 2012 were Messrs Bashirally A Currimjee, Ashraf M Currimjee,

Azim F Currimjee and Mazahir Adamjee.

The Committee operates under a Committee Charter approved by the Board and its main attribution is

to make recommendations to the Board of Directors on all corporate governance provisions to be

adopted so that the Board remains effective and complies with prevailing corporate governance

principles.

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The Committee met once during the year under review.

Audit Committee

The Audit Committee is chaired by Mr Uday Kumar Gujadhur, an independent Director. Mr Uday K

Gujadhur is a Fellow Member of the Association of Chartered Certified Accountants, United Kingdom.

The other members of the Audit Committee as at 31 December 2012 were Messrs Saliah Mohamed

Sait, Ashraf M Currimjee and Hassam Vayid.

The Audit Committee operates under the Terms of Reference set by the Board of Directors and a

formally approved Audit Committee Charter.

The role of the Audit Committee has continually been pre-dominant in assisting the Board in carrying

out its responsibilities relating to accounting policies, internal control procedures, financial reporting

practices and audit process.

The Audit Committee oversees the financial reporting process and in particular, it reviews the annual

and quarterly financial statements before being submitted to the Board of Directors for approval. It also

reviews and monitors the following:

• the effectiveness of the internal audit function;

• the qualifications, assessment of external auditors independence, performance and remuneration;

and

• the compliance of the Company with laws and regulations.

The Audit Committee met four times for the year under review.

Currimjee Limited acts as Secretary to all the above Committees.

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Board and Committee Attendance

The following table gives the records of attendance at meetings of the Company’s Board and its

Committees for the year under review:

Directors Board Meeting

Audit Committee

Corporate Governance Committee

Mr Bashirally A Currimjee 5/5 n/a 1/1 Mr Azim F Currimjee 5/5 n/a 1/1 Mr Raffi Currimjee 5/5 n/a n/a Mr Fakhruddin J Currimjee 3/5 n/a n/a Mr Mustanshir A Currimjee 4/5 n/a n/a Mr Currimjee J Currimjee 1/5 n/a n/a Mr Anil C Currimjee 4/5 n/a n/a Mr Ashraf M Currimjee 4/5 2/4 1/1 Mr Mazahir F E Adamjee 5/5 n/a 1/1 Mr Saliah Mohamed Sait 5/5 4/4 n/a Mr Hassam Vayid 5/5 4/4 1/1 Mr Uday K Gujadhur 5/5 4/4 n/a

Common Directors within the Holding Structure

Company Fakhary Limited

Currimjee Industries

Limited

Central Distributors

Company Limited

Mr Bashirally A Currimjee √ √ √

Mr Azim F Currimjee √ √ √

Mr Raffi Currimjee √ √ √

Mr Fakhruddin J Currimjee √ √ √

Mr Mustanshir A Currimjee √ √ A* √

Mr Currimjee J Currimjee √ √ √ √

Mr Anil C Currimjee √ √

Mr Ashraf M Currimjee √ A* √ A*

Mr Mazahir F E Adamjee √ √ √

Mr Hassam Vayid √ √

A* stands for Alternate Director

Internal control

The Board is responsible for the maintenance of an internal control system. The Board of Directors is

conscious of its role of upholding the highest standard of corporate governance and has established a

sensible framework of valuable controls which enables risks to be assessed and managed. The Board

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regularly reviews processes and procedures to ensure effectiveness of the Company’s internal control

systems. In that respect reliance is also placed on the work undertaken by Internal Audit in line with the

approved Internal Audit Plan.

The Internal Audit Service for the Company is outsourced to Currimjee Jeewanjee and Company

Limited who delivers the service through its Internal Audit Department with clear reporting structure

between the Internal Auditor and the Company. The Internal Auditor reports to the Audit Committee.

The Internal Auditor has unrestricted access to the Company’s accounting records, to management and

employees.

Risks Management

Senior Management assumes responsibility for identifying and monitoring the risks as appropriate to

their position in the organisation. The objective of risk management is to reduce risk to an acceptable

level.

The Board is, nevertheless responsible for the total process of risk management, including the

identification and evaluation of risks and putting in place appropriate systems and controls to mitigate

the impact of risks.

Statement of the Company’s remuneration philosophy

The Nomination and Remuneration Committee is set up at the level of Currimjee Limited and is chaired

by Mr Carrim A Currimjee. The other members as at 31 December 2012 were Messrs Bashirally A

Currimjee and Fakhruddin J Currimjee. Sir Hamid Moollan Q.C. and Mr Jean Paul de Chazal have

been nominated as co-opted Members on the Committee for their independent expert advice.

The Committee’s main responsibility is for making recommendations to the Board for determining,

developing and agreeing the Company’s general policy on remuneration for Directors and pension for

Retired Directors and on the appointment of new Directors.

All decision taken at the Nomination and Remuneration Committee level are submitted for approval to

the Board of the Company.

The Company’s remuneration philosophy concerning Directors follow the guidelines proposed by the

Nomination and Remuneration Committee, which solicits the expert advice of a Consultant to assist in

determining the remuneration of Executive Directors.

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Independent Directors who are Members of the Board’s sub-committees are paid committee fees, in

addition to their Directors’ fees.

The Company’s policy for determining remuneration for Management and Staff follow the guidelines

below:

• Ensure that remuneration is commensurate with qualifications, skills and experience;

• Ensure that pay levels are internally consistent and align with market rates;

• Provide a remuneration package that attracts, retains and motivates staff; and

• Reward managers according to their performance and their responsibilities.

As approved by the Board, remuneration and benefits received by Directors during the financial year

were as follows:

From the Company

Rs

Executive Directors 558,337

Non-Executive Directors 300,643

Independent Directors 147,500

TOTAL 1,006,480

Directors did not receive any remuneration and benefits from the Company’s subsidiaries for the year

under review. Remuneration of Directors has not been disclosed on an individual basis due to commercial sensitivity.

Directors and Officers Liability Insurance

The Company has subscribed to a Directors and Officers Liability Insurance Cover, as provided for

under the Companies Act 2001.

Directors’ service contracts

Non of the Directors hold a service contract with the Company.

Directors’ Interest and Dealings in Shares

The Directors are aware of the principles of the model code on securities transactions by Directors as

detailed in Appendix 6 of the Mauritius Stock Exchange Listing rules.

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The Company Secretary maintains a Register of Interests, which is updated with every transaction

entered into by the Directors and their closely related parties. All new Directors are required to notify in

writing to the Company Secretary their holdings in the Company’s shares as well as those in related

companies.

None of the Directors traded in the Company’s shares throughout the year under review.

The following table details the interests of the Directors in the share capital of the Company as at

31 December 2012:

Interests in the Company’s shares as at 31 December 2012

Number of shares

Direct Indirect

Mr Bashirally A Currimjee 4,482 -

Mr Azim F Currimjee 500 2,000

Mr Raffi Currimjee 1,556 -

Mr Fakhruddin J Currimjee 5,558 2,281

Mr Mustanshir A Currimjee 4,482 -

Mr Currimjee J Currimjee 5, 608 -

Mr Anil C Currimjee - -

Mr Ashraf M Currimjee - -

Mr Mazahir F E Adamjee 1,000 -

Mr Saliah Mohamed Sait - -

Mr Hassam Vayid - -

Mr Uday K Gujadhur - -

Constitution

The main highlights of the Constitution are as follows:

• The Board of Directors shall consist of not less than six Directors;

• The quorum for a Board meeting is three Directors;

• The Shareholders can freely transfer fully paid up shares of the Company; and

• The quorum for a Shareholders’ meeting is three Shareholders present or represented by proxy.

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Shareholders’ Agreement

To the knowledge of the Company, there was no such agreement with any of its Shareholders for the

year under review.

Share Registry and Transfer Office

The share registry is managed by Currimjee Limited and as at 31 December 2012, the Company had

136 registered Shareholders.

Shareholding Profile

The share ownership and the category of Shareholders as at 31 December 2012 are set out below:

Number of Shareholders

Size of Shareholding Number of Shares Owned

% of Total Issued Shares

115 1-500 shares 4,921 1.639

6 501-1,000 shares 5,100 1.699

9 1,001-5,000 shares 26,702 8.894

4 5,001-10,000 shares 25,888 8.622

1 10,001-50,000 shares 12,450 4.147

- 50,001-100,000 shares - -

1 100,001-250,000 shares 225, 178 75.000

- 250,001-500,000 shares - -

- Over 500,000 shares - -

136 Total 300,239 100%

Number of Shareholders

Category of Shareholders Number of Shares Owned

% of Total Shares Issued

5 Other Corporate Bodies 229,663 76.49

130 Individuals 58,126 19.36

1 Pension & Provident Funds 12,450 4.18

136 Total 300,239 100%

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Share Price Information The share of the Company has a nominal value of Rs 100 and the Company’s share price evolution for

the year 2012 was as follows:

0100200300400500600700800900

1000

Mar

ket P

rice

(Rs.)

Year 2012

Price (Rs.)

Shareholders’ Communication and Calendar of Events

The Board of Directors of the Company understands that communication to Shareholders about

matters pertaining to the Company is of great importance and ensures that information is delivered in

an open, transparent and meaningful manner. Press communiqués, disclosures in the Annual Report

and the Annual Meeting of Shareholders are means availed by the Board in keeping the communication

line with Shareholders open.

The calendar of key events is as follows:

Publication of Abridged Audited Accounts for the year ended 31 December March

Publication of 1st Quarter Results May

Annual Report to Shareholders June

Annual Meeting of Shareholders June

Publication of 2nd Quarter Results August

Publication of 3rd Quarter Results November

Projection for Declaration/Payment of Final Dividend November/December

Financial Year End December

Employee Share Scheme

There is no Employee Share Option Plan in place at Company or Group level.

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Dividend Policy

Payment of dividends is subject to the profitability of the Company, its cash flow and its capital-

expenditure requirements. For the year under review, the Company declared a dividend of Rs 70.00

per share [2011: Rs 60.00 per share].

The trend in dividend declaration or the previous 10 years is illustrated below:

01020304050607080

20032005

20072009

2011

Year

%

Final Dividend % onNominal Value ofOrdinary Shares

Senior Management’s Profiles Salim Rafic Sulliman – General Manager Salim Holds an Advance General Management certificate from National University of Singapore. He

joined the Company in 1990.

Sivapragassen Rengasamy – Factory Manager Sivapragassen is a qualified Technician Engineer from City and Guilds. He is responsible for the

production, maintenance and technical operations of the Company. He joined the Company in May

1972.

Zabeer Abbas – Accounts Manager Zabeer is an affiliate of the Association of Chartered Certified Accountants; he is responsible for the

financial management of the business, including production of financial reports, periodic review packs

and forecasts. He joined the Company in August 2010.

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Zeenat Mungloo Peyrye – Production and R & D Manager Zeenat holds a BSc (Hons) Food Science and Technology from the University of Mauritius and she is

responsible for day to day management of Production department and for product improvement and

development. She joined the Company on 1st August 2008.

Choaib Moreea – Operations Manager Choaib holds holds a BSc (Hons) Management from the University of Mauritius. He is the Operations

Manager in the Commercial Division. He joined the Company on 1st November 2009.

Senior Management’s Interests in Shares

The following table details the interests of Senior Management in the share capital of the Company as

at 31 December 2012

Number of shares

Number of shares in the Company as at 31st December 2012

Direct Indirect

Rafic Sulliman 1,100 2,000

Sivapragassen Rengasamy 100 -

Related Party Transactions

All the transactions of the Company are carried out at arm’s length.

Please refer to note 27 of the accounts for related party transactions and balances.

Secretarial Service Agreement and the Company Secretary

All the Directors have access to the services of the Company Secretary, Currimjee Limited. The

Company Secretary administers, attend and prepares minutes of all Boards, Board Committees and

Shareholders meetings.

It also ensures that the Company complies with its constitution and all relevant statutory and regulatory

requirements. It plays a key role in the application of corporate governance and is a central source of

guidance and advice to the Board on matters of ethics and good governance.

A Secretariat Service Agreement between Currimjee Limited and the Company have been signed in

that respect.

http://www.currimjeefoundation.com/

24MARGARINE INDUSTRIES LIMITEDSTATEMENTS OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2012

2012 2011 2012 2011Note Rs Rs Rs Rs

Revenue 19 374,639,781 362,754,756 304,509,023 296,298,091

Cost of sales (256,207,355) (255,177,918) (200,288,747) (202,636,095)

Gross profit 118,432,426 107,576,838 104,220,276 93,661,996

Other income 20 2,760,322 1,266,709 4,727,889 3,270,300

Selling and distribution expenses (21,255,609) (17,179,032) (13,052,453) (10,708,231)

Marketing expenses (14,818,288) (12,589,876) (14,818,288) (12,589,876)

Administrative expenses (41,169,242) (35,554,445) (40,194,493) (33,954,419)

Finance costs 21 (9,574,374) (7,522,884) (8,005,411) (6,163,410)

Profit before taxation 34,375,235 35,997,310 32,877,520 33,516,358

Taxation 15(b) (6,489,979) (5,693,681) (6,303,270) (5,693,681)

Profit for the year 22 27,885,256 30,303,629 26,574,250 27,822,677

Other comprehensive income

Fair value (loss)/gain on cash flow hedges (5,737,041) 1,461,903 (5,737,041) 1,461,903 Gain on revaluation of land and buildingsand plant and machinery 5 - 30,407,712 - 30,407,712 Deferred tax on revaluation of land and buildings and plant and machinery - 826,177 - 826,177

Other comprehensive (loss)/income for the year (5,737,041) 32,695,792 (5,737,041) 32,695,792

Total comprehensive income for the year Rs 22,148,215 62,999,421 20,837,210 60,518,469

Profit attributable to:

Owners of the company Rs 27,885,256 30,303,629 26,574,250 27,822,677

Total comprehensive income attributable to owners of the company Rs 22,148,215 62,999,421 20,837,210 60,518,469

Earnings per share 23 Rs 92.88 100.93

THE COMPANYTHE GROUP

25MARGARINE INDUSTRIES LIMITEDSTATEMENTS OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2012

THE GROUP

Stated Revaluation Other RetainedNote capital reserves reserves earnings Total

Rs Rs Rs Rs Rs

At 1 January 2011 30,023,900 44,547,933 3,229,620 29,307,391 107,108,844

Profit for the year - - - 30,303,629 30,303,629 Other comprehensive income - 31,233,889 1,461,903 - 32,695,792

Total comprehensive income for the year - 31,233,889 1,461,903 30,303,629 62,999,421 Dividend 26 - - - (18,014,340) (18,014,340)

At 31 December 2011 30,023,900 75,781,822 4,691,523 41,596,680 152,093,925

Profit for the year - - - 27,885,256 27,885,256 Other comprehensive income - - (5,737,041) - (5,737,041)

Total comprehensive income for the year - - (5,737,041) 27,885,256 22,148,215 Revaluation surplus realised on depreciation - (1,841,455) - 1,841,455 - Dividend 26 - - - (21,016,730) (21,016,730)

At 31 December 2012 Rs 30,023,900 73,940,367 (1,045,518) 50,306,661 153,225,410

THE COMPANY

Stated Revaluation Other RetainedNote capital reserves reserves earnings Total

Rs Rs Rs Rs Rs

At 1 January 2011 30,023,900 44,547,933 3,229,620 32,931,562 110,733,015

Profit for the year - - - 27,822,677 27,822,677 Other comprehensive income - 31,233,889 1,461,903 - 32,695,792

Total comprehensive income for the year - 31,233,889 1,461,903 27,822,677 60,518,469 Dividend payable 26 - - - (18,014,340) (18,014,340)

At 31 December 2011 30,023,900 75,781,822 4,691,523 42,739,899 153,237,144

Profit for the year - - - 26,574,250 26,574,250 Other comprehensive income - - (5,737,041) - (5,737,041)

Total comprehensive income for the year - - (5,737,041) 26,574,250 20,837,209 Revaluation surplus realised on depreciation - (1,841,454) - 1,841,454 - Dividend 26 - - - (21,016,730) (21,016,730)

At 31 December 2012 Rs 30,023,900 73,940,367 (1,045,518) 50,138,874 153,057,623

Attributable to owners of the company

MARGARINE INDUSTRIES LIMITED 26STATEMENTS OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2012

2012 2011 2012 2011Note Rs Rs Rs Rs

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before tax 34,375,235 35,997,310 32,877,520 33,516,358

Adjustments for:- Depreciation and amortisation 13,372,658 8,382,254 13,372,658 8,382,254 Loss on disposal of property, plant and equipment 20 300,646 - 300,646 - Retirement benefit obligations 1,936,747 1,170,500 1,649,797 779,000 Interest income 20 (463,785) (472,017) (631,352) (675,607) Interest expense 21 9,574,374 7,522,884 8,005,411 6,163,410 OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 59,095,875 52,600,930 55,574,680 48,165,415

Increase in inventories (9,807,633) (30,960,113) (11,310,565) (26,004,904) Increase in trade and other receivables (4,382,766) (13,225,563) (1,481,805) (9,591,886) Increase in trade and other payables 20,716,531 7,823,872 16,420,132 3,077,726

6,526,132 (36,361,803) 3,627,762 (32,519,064)

CASH GENERATED FROM OPERATIONS 65,622,007 16,239,127 59,202,443 15,646,351 Tax paid (5,067,943) (6,293,977) (4,992,782) (6,293,977) Interest paid (9,574,374) (7,522,884) (8,005,411) (6,163,410)

NET CASH GENERATED FROM OPERATING ACTIVITIES 50,979,690 2,422,266 46,204,250 3,188,964

CASH FLOWS FROM INVESTING ACTIVITIESInterest received 463,785 472,017 631,352 675,607 Purchase of property, plant and equipment 25 (9,114,753) (3,421,018) (9,114,753) (3,421,018) Purchase of intangible assets 6 - (2,656,533) - (2,656,533) Proceeds from sale of property, plant and equipment 750,000 - 750,000 -

NET CASH USED IN INVESTING ACTIVITIES (7,900,968) (5,605,534) (7,733,401) (5,401,944)

CASH FLOWS FROM FINANCING ACTIVITIESDividend paid (39,031,070) - (39,031,070) - Loans received 6,265,314 44,460,119 597,200 35,000,000 Repayment of loans - (19,000,000) - (14,000,000) Repayment of finance leases (12,604,157) (8,199,842) (12,604,156) (8,199,842)

NET CASH (USED IN)/GENERATED FROM FINANCING ACTIVITIES (45,369,913) 17,260,277 (51,038,026) 12,800,158

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (2,291,191) 14,077,009 (12,567,177) 10,587,178

CASH AND CASH EQUIVALENTS AT 1 JANUARY 24 Rs 5,968,785 (8,108,224) 10,937,208 350,030

CASH AND CASH EQUIVALENTS AT 31 DECEMBER 24 Rs 3,677,594 5,968,785 (1,629,969) 10,937,208


27MARGARINE INDUSTRIES LIMITEDNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2012

1. GENERAL INFORMATION

2. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

New and revised IFRS applied with no material effect on the financial statements

IAS 12 Income Taxes - Limited scope amendment (recovery of underlying assets)

IFRS 7 Financial Instruments: Disclosures - Amendments enhancing disclosures about transfers of financial assets.

New and revised IFRS in issue but not yet applied

IAS 1 Presentation of Financial Statements - Amendments to revise the way other comprehensive income ispresented (effective 1 July 2012)

IAS 1 Presentation of Financial Statements -Amendments resulting from Annual Improvements (effective 1January 2013)

IAS 16 Property, Plant and Equipment -Amendments resulting from Annual Improvements (effective from 1 January 2013)

IAS 19 Employee Benefits-Amended standard resulting from the Post Employment Benefits and TerminationBenefits Projects. (effective 1 January 13)

IAS 27 Consolidated and Separate Financial Statements - Reissued as IAS 27 Separate Financial Statements (asamended in 2011) (effective 1 January 2013)

IAS 27 Separate Financial Statements - Amendments for investment entities (effective 1 January 2014)IAS 32 Financial Intruments-presentation and amendments to application guidance on the offsetting of financial

assets and financial liabilities (effective 1 January 2014)IAS 32 Financial Instruments -Amendments resulting from Annual Improvements (effective 1 January 2013)

IAS 34 Amendments resulting from Annual Improvements (interim reporting of segment assets) ( effective 1January 2013)

IFRS 7 Financial Instruments: Disclosures - Amendments about offsetting financial assets and financial liabilities(effective 1 January 2013)

IFRS 7 Financial Instruments: Disclosures - Amendments requiring the disclosures about the initial application ofIFRS 9 (effective 1 January 2015)

IFRS 9 Financial Instruments - Classification and Measurement (effective 1 January 2015)IFRS 9 Financial Instruments - accounting for financial liabilities and de-recognition (effective 1 January 2015)

IFRS 9 Financial Instruments - Deferral of mandatory effective date of IFRS 9 and amendments to transitiondisclosures (effective 1 January 2015)

IFRS 10 Consolidated Financial Statements - Original issue (effective 01 January 2013)

IFRS 10 Consolidated Financial Statements - Amendments to transitional guidance (effective 1 January 2013)

IFRS 10 Consolidated Financial Statements - Amendments for investment entities (effective 1 January 2014)

At the date of authorisation of these financial statements, the following relevant standards and Interpretations were inissue but effective on annual periods beginning on or after the respective dates as indicated.

The Company is a public company incorporated in Mauritius with its registered office at 6, Sir William Newton Street,Port Louis and principal place of business at Trianon. It is listed on the Development and Enterprise Market (DEM) ofthe Stock Exchange of Mauritius. Its main activities are the manufacture and sale of margarine and its related productswhile the subsidiary is a private company which trades in consumer goods.

The following relevant new and revised Standards and Interpretations have been adopted in these financial statements.Their application has not had any material impact on the amounts reported for the current and prior years but mayimpact the accounting for future transactions or arrangements.

In the current year, the group and the Company have applied all of the new and revised standard and interpretationsissued by the International Accounting Standards Board (the "IASB") and the International Financial ReportingInterpretations Committee ("IFRIC") of the IASB that are relevant to its operations and effective for accounting periodsbeginning on 1 January 2012.

28MARGARINE INDUSTRIES LIMITEDNOTES TO THE FINANCIAL STATEMENTS (CONT'D)FOR THE YEAR ENDED 31 DECEMBER 2012

2.

IFRS 12 Disclosures of Interests in Other Entities - Original issue (effective 1 January 2013)IFRS 12 Disclosures of Interests in Other Entities - Amendments to transitional guidance (effective 1

January 2013)IFRS 12 Disclosures of Interests in Other Entities - Amendments for investment entities (effective 1

January 2013)IFRS 13 Fair Value Measurement (effective 1 January 2013)

a)

b)

c)

3. ACCOUNTING POLICIES

The principal accounting policies adopted by the group and the Company are as follows:-

(a) Basis of preparation

(b) Basis of consolidation

immediate recognition of past service costs in profit or loss and an increase in the net pension asset; and

reversal of the difference between the gain arising from the expected rate of return on pension planassets and the discount rate through other comprehensive income.

The financial statements are prepared under the historical cost convention as modified by the revaluationof certain property, plant and equipment and financial instruments and in accordance with InternationalFinancial Reporting Standards (IFRS).

The consolidated financial statements incorporate the financial statements of the Company and entitiescontrolled by the Company (its subsidiaries). Control is achieved where the Company has the power togovern the financial and operating policies of an entity so as to obtain benefits from its activities.

APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS(IFRS)(CONT'D)

The directors anticipate that these IFRSs will be applied on their effective dates in the company`sfinancial statements in future periods. Except for IAS 19 which is detailed below, the directors have notyet assessed the potential impact of the application of these amendments.

IAS 19 Employee benefits

The amendments to IAS 19 change the accounting for defined benefit plans and termination benefits.The most significant change relates to the accounting for changes in defined benefit obligations and planassets. The amendments require the recognition of changes in defined benefit obligation and in fair valueof plan assets when they occur, and hence eliminate the ‘corridor approach’ permitted under theprevious version of IAS 19 and accelerate the recognition of past service costs. The amendments requireall actuarial gains and losses to be recognised immediately through other comprehensive income inorder for the net pension asset or liability recognised in the statement of financial position to reflect thefull value of the plan deficit or surplus. Furthermore, the interest cost and expected return on plan assetsused in the previous version of IAS 19 are replaced with a ‘net-interest’ amount, which is calculated byapplying the discount rate to the net defined benefit liability or asset.

The amendments to IAS 19 require retrospective application. Based on the directors’ preliminaryassessment, when the group and the company applies the amendments to IAS 19 for the first time forthe year ending 31 December 2013, there will be no impact on the profit after income tax for the yearended 31 December 2012 while other comprehensive income after income tax for the said year would bedecreased by Rs 6,055,400 for the group and Rs 6,300,200 for the company and (1 January 2012:increase in retained earnings of Rs Rs 15,929,850 for the group and increase of Rs 13,495,450 for thecompany) with the corresponding adjustments being recognised in the retirement benefit asset. This neteffect reflects a number of adjustments, including their income tax effects:

full recognition of actuarial gains through other comprehensive income and increase in the net pensionasset;


3. ACCOUNTING POLICIES (CONT'D)

(b) Basis of consolidation (Cont'd)

(c) Investment in subsidiary

(d) Revenue recognition

Revenue

Other income

-- Management fee is recognised on an accrual basis.- Sundry income is recognised on an accrual basis

(e) Property, plant and equipment - depreciation

The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement ofcomprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accountingpolicies into line with those used by other members of the group.

Plant and equipment are stated at cost or valuation less accumulated depreciation and any accumulated impairmentlosses.

In the Company's financial statements, investment in subsidiary is stated at cost, unless in the opinion of thedirectors, there has been a permanent diminution in value, in which event they are written down to the net assetvalue.

Revenue is measured at the fair value of the consideration received or receivable and represents amountsreceivable for goods and services provided in the normal course of business net of Value Added Tax, discounts,allowances and returns. Sale of goods are recognised when goods are delivered and title has passed.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Interest income is accrued on a time basis by reference to the principal outstanding and at the effectiveinterest rate applicable.

Depreciation is not provided for on freehold land. On other items of fixed assets, it is calculated to write off the costor revalued amount of assets over the expected useful lives of such assets.

Plant and machinery are stated at their revalued amounts being the fair value at the date of revaluation, less anysubsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluation adjustmentsare recognised on the same basis as for land and buildings.

Freehold land and buildings are stated at their revalued amounts being the fair value at the date of revaluation, lessany subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations areperformed such that the carrying amount does not differ materially from that which would be determined using fairvalues at the reporting date. Revaluation of land and buildings is being done every three years by an independentvaluer.

Any revaluation increase arising on the revaluation of such land and buildings is credited in equity to the propertiesrevaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previouslyrecognised in statement of comprehensive income, in which case the increase is credited to profit or loss to theextent of the decrease previously charged. A decrease in the carrying amount arising on the revaluation of suchland and buildings is charged to statement of comprehensive income to the extent that it exceeds the balance, ifany, held in the properties revaluation reserve relating to a previous revaluation of that asset.

Depreciation on revalued buildings is charged to profit or loss. On the subsequent sale or retirement of a revaluedproperty, the attributable revaluation surplus remaining in the properties revaluation reserve is transferred directly toretained earnings.



(e) Property, plant and equipment - depreciation (Cont'd)

The annual depreciation rates used are as follows:

Plant and machinery - 6.5% - 12% p.a. straight lineFactory building - 2% p.a. straight lineMotor vehicles - 10% - 14.28% p.a. straight lineComputer equipment - 20% - 33⅓% p.a. straight lineOffice furniture and equipment - 12.5% - 50% p.a. straight line

(f) Grants

(g) Intangible assets

Software costs

(h) Foreign currency balances

(i) Inventories

Assets held under finance leases are depreciated over their expected useful lives on the same basis asowned assets.

Expenditure incurred on the development of new computer software programmes is recognised as asset andis amortised at 25% p.a on a straight line basis over their estimated useful lives.

Grants received on the implementation of the ERP software have been amortised and recognised in profit orloss over a period of 4 years, consistent with the useful life of the software.

Inventories are valued at the lower of cost and net realisable value. Cost is determined on Average Cost(AVCO) method. Cost is based on the invoiced value of materials plus in the case of finished goods, aproportion of labour and factory overheads, based on a normal level of production. Net realisable valuerepresents the estimated selling price for inventories less all estimated costs of completion and costsnecessary to make the sale.

Cost associated with maintaining computer software programmes are recognised as an expense as incurred.

Transactions is foreign currencies are converted at the exchange rate at the date of the transactions.Monetary assets and liabilities in foreign currencies outstanding at year end are translated to MauritianRupees at the rates of exchange ruling at end of the reporting period. Exchange differences arising ontranslation of monetary assets and liabilities are dealt with in the statement of comprehensive income.

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment isdetermined as the difference between the sales proceeds and the carrying amount of the asset and isrecognised in statement of comprehensive income.

Each year, the difference, net of the impact of deferred tax, between the depreciation based on the revaluedcarrying amount of the asset ( the depreciation charged to the Statement of comprehensive income) and thedepreciation based on the asset's original cost is transferred from revaluation reserves to retained earnings.



(j) Taxation

Current tax

(k)

(l)

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reportedin the statement of comprehensive income because it excludes items of income or expense that are taxableor deductible in other years and it further excludes items that are never taxable or deductible. The company’sliability for current tax is calculated using tax rates that have been enacted or substantively enacted by thereporting date.

Deferred tax

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in thefinancial statements and the corresponding tax bases used in the computation of taxable profit, and isaccounted for using the liability method. Deferred tax liabilities are generally recognised for all taxabletemporary differences, and deferred tax assets are generally recognised for all deductible temporarydifferences to the extent that it is probable that taxable profits will be available against which those deductibletemporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent thatit is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to berecovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period inwhich the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted orsubstantively enacted by the reporting date. The measurement of deferred tax liabilities and assets reflectsthe tax consequences that would follow from the manner in which the company expects, at the reporting date,to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current taxassets against current tax liabilities and when they relate to income taxes levied by the same taxationauthority and the company intends to settle its current tax assets and liabilities on a net basis.

Cash and cash equivalents

Cash comprises cash at bank and in hand and demand deposits net of bank overdrafts. Cash equivalentsare short-term highly liquid investments that are readily convertible to known amounts of cash and which aresubject to an insignificant risk of change in value.

Leased assets

Assets held under finance leases are initially recognised as assets of the Group at their fair value at theinception of the lease or, if lower, at the present value of the minimum lease payments. The correspondingliability to the lessor is included in the statement of financial position as a finance lease obligation.

Lease payments are apportioned between finance expenses and reduction of the lease obligation so as toachieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognisedimmediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they arecapitalised in accordance with the group’s general policy on borrowing costs.


3.

(m)

(i) Defined benefit obligation

The present value of funded obligation is recognised in the statement of financial position as a non-currentliability after adjusting for the fair value of plan assets, any unrecognised actuarial gains and losses and anyunrecognised past service cost. A firm of actuaries carries out the valuation of the funded obligation triennially.The current service cost and any recognised past service cost are included as an expense together with theassociated interest cost, net of expected return on plan assets.

A portion of the actuarial gains and losses is recognised as income or expense if the net cumulativeunrecognised actuarial gains and losses at the end of the previous accounting period exceeded at that date:

- 10% of the present value of defined benefit obligation at that date; and

- 10% of the fair values of plan assets at that date.

(ii)

The present value of other retirement benefits as provided under the Employment Rights Act 2008 isrecognised in the statement of financial position as a non-current liability.

The Company is a party to a contractual arrangement with related companies with respect to an unfundedpension plan. When there is a contractual arrangement or stated policy for charging the net benefit costs forthe plan as a whole measured in accordance with IAS 19 to related companies, each related companyrecognised in its individual financial statements, the net defined benefit so charged.

The present value of the unfunded obligation is recognised in the statement of financial position as a non-current liability based on the the valuation carried out by a firm of actuaries annually. If there is a contractualagreement or stated policy for charging the net defined benefit cost for the plan as a whole measured inaccordance with IAS 19 to related companies, each related company recognises in its individual financialstatements, the net defined benefit cost so charged.

(iii) State plan

Contributions to the National Pension Scheme are expensed to the statement of comprehensive income in theperiod in which they fall due.

(n) Financial instruments

(i) Accounts receivable

(ii) Loans receivable from related companies

Loans receivable from related companies are stated at their principal value.

ACCOUNTING POLICIES (CONT'D)

Other retirement benefits

Retirement benefits

Financial assets and liabilities are recognised on the statement of financial position when the Company has becomeparty to the contractual provisions of the financial instruments.

Financial instruments are initially measured at cost, which includes transaction costs. Subsequent to initialrecognition these instruments are measured as set out below:-

Accounts receivable originated by the Company are stated at cost less provision for doubtful debts. An estimateof doubtful debts is made based on a review of all outstanding amounts at the reporting date. Debts are writtenoff during the period in which they are identified.



(n) Financial instruments

(iii) Cash and cash equivalents

(iv)

(v)

(o) Related parties

(p) Impairment

(q) Provision

Provisions are recognised when the group and the company have a present obligation as a result of a pastevent, and it is probable that the group and the company will be required to settle the obligation and a reliableestimate can be made of the amount of the obligation. Provisions are measured at the directors' best estimate ofthe expenditure required to settle the obligation at the reporting date. Provisions are reviewed at each reportingdate and adjusted to reflect the current best estimate.

Accounts payable

Accounts payable are stated at amortised cost.

Cash and cash equivalents are measured at fair value, based on the relevant exchange rates at thereporting date.

An impairment loss is recognised as an expense in the statement of comprehensive income immediately, unlessthe asset is carried at revalued amount in which case the impairment loss is recognised against the fair valuereserve for the asset to the extent that the impairment loss does not exceed the amount held in the fair valuereserve for that same asset. Any excess is recognised immediately in the statement of comprehensive income.

Borrowings

Interest bearing loans and bank overdrafts are initially recorded at the proceeds received, net of directissue costs. Finance charges, including premiums payable on settlement or redemption, are accounted foron an accrual basis and are added to the carrying amount of the instalment to the extent that they are notsettled in the period in which they arise. Borrowings are subsequently measured at amortised cost.

For the purposes of these financial statements, parties are considered to be related to the group if they have theability, directly or indirectly, to control the group or exercise significant influence over the group in makingfinancial and operating decisions, or vice versa, or if they and the group are subject to common control. Relatedparties may be individuals or other entities.

At each reporting date, the group and the company review the carrying amounts of its assets to determinewhether there is any indication that those assets have suffered an impairment loss. If any such indication exists,the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any.An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds itsrecoverable amount which is higher of an asset's net selling price and value in use, that is the present value ofestimated future cash flows expected to arise from continuing to use the asset and from its disposal at the end ofits useful life. For the purpose of assessing impairment, assets are grouped at the lowest level for which thereare separately identifiable cash flows.



(r) Goodwill

(s) Cash flow hedges

4. ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Key sources of estimation uncertainty

(i) Impairment of assets

Goodwill arising on the acquisition of a subsidiary represents the excess of the cost of acquisition over the fairvalue of the group's share of the Net identifiable assets of the acquired subsidiary/Associate at the date ofacquisition. Goodwill on acquisition of subsidies is shown in a separate line in the statement of financialposition. Goodwill on acquisition of associates is included in investments in associates. Goodwill is testedannually for impairment and carried at cost less accumulated impairement loss. Gain and losses on thedisposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allotted to CGU for the purpose of impairment testing. If the recoverable amount of the CGU isless than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amountof any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of thecarrying amount of each asset in the limit. An impairment less recognised for goodwill is not reversed in asubsequent period.

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

Property, plant and equipment are reviewed for impairment whenever events or changes in circumstancesindicate that the carrying amount of the asset exceeds its recoverable amount. The recoverable amount of anasset or a cash generating unit is determined based on the higher of its fair value less cost to sell and value inuse, calculated on the basis of management' s assumptions and estimates. Changing the key assumptions,including the discount rates or the growth rate assumptions in the cash flow projections, could materially affectthe value-in-use calculations.

The preparation of financial statements in accordance with IFRS requires the directors and management to exercisejudgement in the process of applying the accounting policies. It also requires the use of accounting estimates andassumptions that may affect the reported amounts and disclosures in the financial statements. Judgements andestimates are continuously evaluated and are based on historical experience and other factors, includingexpectations and assumptions concerning future events that are believed to be reasonable under the circumstances.The actual results could, by definition therefore, often differ from the related accounting estimates.

Where applicable, the notes to the financial statements set out areas where management has applied a higherdegree of judgement that have a significant effect on the amounts recognised in the financial statements, orestimations and assumptions that have a significant risk of causing a material adjustment to the carrying amounts ofassets and liabilities within the next financial year.

The Group enters into forward contracts to purchase raw materials to cover specific requirements and theseare accounted for as cash flow hedges.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flowhedges is recognised in other comprehensive income and accumulated under the heading of other reserves.The gain or loss relating to the ineffective portion is recognised immediately in profit or loss, and is included inthe 'other income' line item.


4. ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (CONT'D)

(ii) Property valuation

(iii) Property, plant and equipment and depreciation

(iv) Deferred tax assets

(v) Pension obligations

Other key assumptions for pension obligations are based in part on current market conditions.

(vi) Allowances for bad debts

In arriving at the fair value of the properties, which is determined by on an open market value basis, theindependent valuers have to make assumptions that are mainly based on market conditions existing at thereporting date. Should these assumptions and estimates change, or not be met, the valuation as adopted inthe financial statements will be affected.

Freehold land and buildings, and the building component of owner-occupied leasehold properties are valuedevery three years by independent valuers. In the intervening years the group reviews the carrying values andadjustment is made where there has been a material change. In arriving at the valuation of land andbuildings, assumptions and economic estimates have to be made.

Management determines the estimated useful lives and related depreciation charges for the group's property,plant and machinery and equipment. Management will revise the depreciation charge where useful lives aredifferent to previously estimated, or it will write-off or write-down technically obsolete or non-strategic assetsthat have been abandoned or sold.

Recognition of deferred tax assets, which principally relate to tax losses, depends on the management'sexpectation of future taxable profit that will be available against which the tax losses can be utilized. Theoutcome of their actual utilization may be different.

Allowances for bad debts for the group and the company is determined using a combination of factors toensure that the trade receivables are not overstated due to non-recoverability. The allowance for bad debtsfor all customers is based on a variety of factors, including the overall quality and ageing of the receivables,continuing credit evaluation of the customer's financial conditions. Also, specific provisions for individualaccounts are recorded when the group and the company become aware of the customer's inability to meet itsfinancial obligations such as in the case of deterioration in the customer's operating results or financialposition.

The present value of the pension obligations depends on a number of factors that are determined on anactuarial basis using a number of assumptions. The assumptions used in determining the net cost (income)for pensions include the expected long-term rate of return on the relevant plan assets and the discount rate.Any changes in these assumptions will impact the carrying amount of pension obligations.

The expected return on plan assets assumption is determined on a uniform basis, taking into considerationlong-term historical returns, asset allocation and future estimates of long-term investment returns.

The group determines the appropriate discount rate at the end of each year. This is the interest rate thatshould be used to determine the present value of estimated future cash outflows expected to be required tosettle the pension obligations. In determining the appropriate discount rate, the group considers the interestrates of high-quality corporate bonds that have terms to maturity approximating the terms of the relatedpension liability.


5. PROPERTY, PLANT AND EQUIPMENTOffice

THE GROUP Freehold Factory Plant and Motor Computer furniture andland building machinery vehicles equipment equipment TotalRs Rs Rs Rs Rs Rs Rs

COST OR VALUATION

At 1 January 2011 36,500,000 50,000,000 134,271,176 19,209,801 11,034,558 11,903,847 262,919,382 Additions - - 1,995,816 11,574,755 520,759 8,500 14,099,830 Revaluation adjustments - - (41,000,470) - - - (41,000,470) Write off - - (12,953,668) - - - (12,953,668)

At 31 December 2011 36,500,000 50,000,000 82,312,854 30,784,556 11,555,317 11,912,347 223,065,074 Additions - 2,505,925 3,719,444 10,065,831 2,399,166 2,321,331 21,011,697 Disposals - - - (2,425,000) - - (2,425,000)

At 31 December 2012 Rs 36,500,000 52,505,925 86,032,298 38,425,386 13,954,483 14,233,678 241,651,771

DEPRECIATION

At 1 January 2011 - - 79,585,002 10,493,080 9,839,670 10,768,922 110,686,674 Charge for the year - 1,014,078 4,776,848 1,398,417 473,517 280,218 7,943,078 Write off - - (12,953,668) - - - (12,953,668) Revaluation adjustments - - (71,408,182) - - - (71,408,182)

At 31 December 2011 - 1,014,078 - 11,891,498 10,313,187 11,049,140 34,267,903 Charge for the year - 1,036,256 7,149,011 2,887,162 539,246 365,413 11,977,088 Disposals - - - (1,374,354) - - (1,374,354)

At 31 December 2012 Rs - 2,050,334 7,149,011 13,404,305 10,852,434 11,414,553 44,870,637

NET BOOK VALUE

At 31 December 2012 Rs 36,500,000 50,455,591 78,883,287 25,021,081 3,102,050 2,819,125 196,781,135

At 31 December 2011 Rs 36,500,000 48,985,922 82,312,854 18,893,058 1,242,130 863,207 188,797,171


5. PROPERTY, PLANT AND EQUIPMENT (CONT'D)Office

THE COMPANY Freehold Factory Plant and Motor Computer furniture andland building machinery vehicles equipment equipment TotalRs Rs Rs Rs Rs Rs Rs

COST OR VALUATION

At 1 January 2011 36,500,000 50,000,000 134,271,176 19,209,801 11,034,557 10,143,409 261,158,943 Additions - - 1,995,816 11,574,755 520,759 8,500 14,099,830 Revaluation adjustments - - (41,000,470) - - - (41,000,470) Write off - - (12,953,668) - - - (12,953,668)

At 31 December 2011 36,500,000 50,000,000 82,312,854 30,784,556 11,555,316 10,151,909 221,304,635 Additions - 2,505,925 3,719,444 10,065,831 2,399,166 2,321,331 21,011,697 Disposals - - - (2,425,000) - - (2,425,000)

At 31 December 2012 Rs 36,500,000 52,505,925 86,032,298 38,425,387 13,954,482 12,473,240 239,891,332

DEPRECIATION

At 1 January 2011 - - 79,585,002 10,493,080 9,839,669 9,008,484 108,926,235 Charge for the year - 1,014,078 4,776,848 1,398,417 473,517 280,218 7,943,078 Write off - - (12,953,668) - - - (12,953,668) Revaluation adjustments - - (71,408,182) - - - (71,408,182)

At 31 December 2011 - 1,014,078 - 11,891,498 10,313,186 9,288,702 32,507,464 Charge for the year - 1,036,256 7,149,011 2,887,162 539,246 365,413 11,977,088 Disposals - - - (1,374,354) - - (1,374,354)

At 31 December 2012 Rs - 2,050,334 7,149,011 13,404,305 10,852,432 9,654,115 43,110,197

NET BOOK VALUE

At 31 December 2012 Rs 36,500,000 50,455,591 78,883,287 25,021,082 3,102,050 2,819,125 196,781,135

At 31 December 2011 Rs 36,500,000 48,985,922 82,312,854 18,893,058 1,242,130 863,207 188,797,171


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

(a) Property, plant and equipment include the following assets held under finance lease:

THE GROUP AND THE COMPANY

Net book Net book Cost value Cost valueRs Rs Rs Rs

Plant and machinery 50,570,000 47,840,486 52,030,919 44,299,592 Motor vehicles 32,765,176 25,078,919 15,899,755 14,273,162

Rs 83,335,176 72,919,405 67,930,674 58,572,754

(b)

(c)

RevaluedAssets revalued amount

Rs

Plant and Machinery 82,312,854

2012

THE GROUP AND THE COMPANY Plant and FreeholdMachinery land Buildings Total

Rs Rs Rs Rs

Cost 125,756,700 83,491 28,527,000 154,367,192 Accumulated depreciation 84,226,800 - 8,974,966 93,201,765

Net book value Rs 41,529,900 83,491 19,552,034 61,165,427

2011

THE GROUP AND THE COMPANY Plant and FreeholdMachinery land Buildings Total

Rs Rs Rs Rs

Cost 119,557,296 83,491 26,021,075 145,661,862 Accumulated depreciation 73,388,524 - 8,472,029 81,860,553

Net book value Rs 46,168,772 83,491 17,549,046 63,801,309

The company's freehold land and buildings were revalued by Alan Tinkler, Ramlackhan & Co., CharteredValuation Surveyors in accordance with the RICS Red Book and the International Valuation Standards. Theland and buildings have been valued on the basis of its market value, being the estimated amount for whichthe property could be exchanged between knowledgeable willing parties in an arm's length transaction. Therevaluation surplus was credited to revaluation reserves. The directors have assessed the fair value of theland and buildings at 31 December 2011 and have estimated the fair value to approximate the carrying valueas at that date.

2012 2011

The group's and the company's obligations under finance leases are secured by the lessors title to the leasedassets.

The group and the company have pledged all their property, plant and equipment having a carrying amount ofRs 123,861,730 (2011: Rs130,224,417) to secure banking facilities granted to them. The Group is not allowedto pledge these assets as security for other borrowings or to sell them to another entity.

If property, plant and equipment were stated at historical cost basis, their carrying amounts at 31 Decemberwould be as follows:

31 December 2011 Depreciated Replacement Cost

Date Basis of valuation


6. INTANGIBLE ASSETS


Software costs 2012 2011Rs Rs

COST

At 1 January 5,458,676 2,802,143 Additions - 2,656,533

At 31 December Rs 5,458,676 5,458,676

AMORTISATION

At 1 January 439,175 - Charge for the year 1,395,571 439,175

At 31 December Rs 1,834,746 439,175

CARRYING AMOUNT

At 31 December Rs 3,623,930 5,019,501

7. GOODWILL2012and2011Rs

COST

Amount recognised on acquisition Rs 651,218

IMPAIRMENT

Impairment loss recognised in the year Rs -

CARRYING AMOUNT

At 31 December Rs 651,218

The goodwill arose from the full acquisition of the minority shares in Central Distributors Co. Ltd which is a wholly ownedsubsidiary. Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs)that are expected to benefit from that busines combinations. Before recognition of impairment losses, the carryingamount of goodwill has been allocated wholly to the trading of consumer goods.

The group assesses the recoverable amount of goodwill annually or more frequently if there are indications of anyimpairment. The directors are of the opinion that no impairment has occured during the year.

The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for thevalue in use calculations are those regarding the discount rates, growth rates and expected changes to selling pricesand direct costs during the period. Management estimates discount rates using pre-tax rates that reflect current marketassessments of the time value of money and the risks specific to the CGU. The growth rates are based on industrygrowth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of futurechanges in the market.

The directors consider that the carrying amount of the intangible assets approximate its fair value.


8. INVESTMENT IN SUBSIDIARY

THE COMPANY2012and2011

At cost Rs

At 1 January and 31 December Rs 4,043,600

9. RETIREMENT BENEFIT PLAN

(a)

Pension plan

2012 2011 2012 2011

Amounts recognised in the statement of financial positions:

Present value of funded obligations 55,178,000 46,388,000 54,199,000 44,780,000 Fair value of plan assets (84,375,000) (80,871,000) (77,558,000) (74,181,000)

Surplus on funded assets (29,197,000) (34,483,000) (23,359,000) (29,401,000) Present value of unfunded assets - - Unrecognised actuarial gains 11,617,000 18,741,000 8,465,000 15,877,000

Net asset in statement of financial position Rs (17,580,000) (15,742,000) (14,894,000) (13,524,000)

Current service cost 2,086,000 2,419,000 1,955,000 2,103,000 Contributions by employees - - - - Interest on obligation 4,415,000 4,155,000 4,290,000 3,925,000 Expected return on plan assets (7,863,000) (8,101,000) (7,230,000) (7,347,000) Net actuarial gains recognised in period (476,000) (1,067,000) (385,000) (905,000)

Total, included in "employee benefits expense" Rs (1,838,000) (2,594,000) (1,370,000) (2,224,000)

Amounts recognised in statement of comprehensive income:

The Company holds 100% (2011: 100%) of the issued share capital of Central Distributors Co Ltd, a company incorporatedin Mauritius, which trades in consumer goods.

The directors have valued the unquoted investment at cost which in their opinion reflects fairly the value of the investments.

Retirement benefit asset

The pension plan is a final salary defined contribution plan for employees and is wholly funded. The assets of the planare held and administered independently by The Mauritius Business and Management Limited.

The plan provides for a pension at retirement and a benefit in death or disablement in service before retirement.

THE GROUP THE COMPANY


9. RETIREMENT BENEFIT PLAN (CONT'D)

(a)

2012 2011 2012 2011

Movements in Asset recognised in statement of financial position:At 01 January (15,742,752) (13,105,752) (13,524,752) (11,257,752) Net expense recognised in the statement of comprehensive income (1,838,000) (2,594,000) (1,370,000) (2,224,000) Contributions and benefits paid - (43,000) - (43,000)

At 31 December Rs (17,580,752) (15,742,752) (14,894,752) (13,524,752)

Actual return on plan assets Rs 8,094,000 3,297,000 7,236,000 2,933,000

Movement in the Present Value of the Defined Benefit Obligations were as follows:

At 01 January 46,388,000 42,565,000 44,780,000 41,392,000 Interest cost 4,415,000 4,155,000 4,290,000 3,925,000 Current service cost 2,086,000 2,419,000 1,955,000 2,103,000 Past service cost - - - - Benefits paid (4,590,000) (4,471,000) (3,859,000) (4,379,000) Curtailment/settlement (gain)/loss on obligation Actuarial (gain)/loss on obligation 6,879,000 1,720,000 7,033,000 1,739,000

At 31 December Rs 55,178,000 46,388,000 54,199,000 44,780,000

Movement in the Fair Value of the Plan Assets were as follows:At 01 January 80,871,000 82,002,000 74,181,000 75,584,000 Expected return on plan assets 7,863,000 8,101,000 7,230,000 7,347,000 Contributions to plan assets - 43,000 - 43,000 Benefits paid out of plant assets (4,590,000) (4,471,000) (3,859,000) (4,379,000) Actuarial gain/(loss) on plan assets (balancing figure) 231,000 (4,804,000) 6,000 (4,414,000)

At 31 December Rs 84,375,000 80,871,000 77,558,000 74,181,000

The major Asset Categories as Percentage of Plan Assets were as follows:

- Equities - Overseas 4% 4% 4% 4%- Equities - Local 59% 54% 59% 54%- Fixed interest securities - Overseas 0% 0% 0% 0%- Fixed interest securities - Local 2% 0% 2% 0%- Property 17% 28% 17% 28%- Loans & Fixed deposits 7% 13% 7% 13%- Cash & Other 11% 1% 11% 1%

Total 100% 100% 100% 100%

The principal actuarial assumptions at end of year were as follows:Discount rate 9.0% 10.0% 9.0% 10.0%Expected rate of return on plan assets 9.0% 10.0% 9.0% 10.0%Future salary increases 7.5% 8.0% 7.5% 8.0%Future pensions increases 3.0% 3.0% 3.0% 3.0%Actuarial table for employee mortality A1967/70(2) A1967/70(2)

Retirement benefit asset (cont'd)THE GROUP THE COMPANY



(a)

2012 2011 2012 2011

The expected rate of return on plan assets at end of year were as follows:Equities - Overseas 10.0% 11.0% 10.0% 11.0%Equities - Local 10.0% 11.0% 10.0% 11.0%Fixed interest securities - Overseas 9.0% 10.0% 9.0% 10.0%Fixed interest securities - Local 9.0% 10.0% 9.0% 10.0%Property 9.5% 10.5% 9.5% 10.5%Loan & Fixed deposits 9.0% 10.0% 9.0% 10.0%Cash & other 4.5% 5.5% 4.5% 5.5%

Additional disclosure on assets issued or used by reporting entity

Percentage of assets at end of year

Assets held in the entity's own financial 0.0% 0.0% 0.0% 0.0%Property occupied by the entity 0.0% 0.0% 0.0% 0.0%Other assets used by the entity 0.0% 0.0% 0.0% 0.0%

History of obligations, assets and experience adjustments:

2012 2011 2010 2009 2008THE GROUP

Present value of defined benefit obligations 84,375,000 80,871,000 82,002,000 71,272,216 62,015,044 Fair value of plan assets (55,178,000) (46,388,000) (42,565,000) (37,249,151) (40,758,621)

Surplus Rs 29,197,000 34,483,000 39,437,000 34,023,065 21,256,423

Experience adjustments on:Plan liabilities (defined benefit obligations) (1,180,000) (1,720,000) 1,883,000 1,908,422 (7,542,947) Plan assets 231,000 (4,804,000) 5,380,000 3,897,161 (9,064,583)

THE COMPANY

Present value of defined benefit obligations 77,558,000 74,181,000 75,584,000 65,574,728 57,108,167 Fair value of plan assets (54,199,000) (44,780,000) (41,392,000) (36,434,557) (39,175,029)

Surplus Rs 23,359,000 29,401,000 34,192,000 29,140,171 17,933,138

Experience adjustments on:Plan liabilities (defined benefit obligations) (1,463,000) (1,739,000) 1,863,000 1,304,000 (7,167,382) Plan assets 6,000 (4,414,000) 5,162,000 3,587,000 (8,307,028)

Expected employer contributions were Nil for 2013 and Rs 46,000 for 2012.

Retirement benefit asset (cont'd)

Year


MARGARINE INDUSTRIES LIMITED 43NOTES TO THE FINANCIAL STATEMENTS (CONT'D)FOR THE YEAR ENDED 31 DECEMBER 2012


State pension plan

2012 2011 2012 2011Rs Rs Rs Rs

National Pension Scheme contribution expensed. Rs 1,117,848 891,747 967,347 671,495

10. INVENTORIES, AT COST

2012 2011 2012 2011Rs Rs Rs Rs

41,202,600 39,237,699 41,202,600 39,237,699 Finished goods 29,785,375 29,814,817 10,594,755 9,363,583 Goods in transit 23,572,925 16,274,274 20,509,876 12,968,907 Others 3,787,002 3,213,479 3,787,002 3,213,479

Rs 98,347,902 88,540,269 76,094,233 64,783,668

The inventories have been pledged for banking facilities.

11. TRADE AND OTHER RECEIVABLES

2012 2011 2012 2011Rs Rs Rs Rs

57,909,117 53,445,897 39,997,434 39,583,477 Allowance for doubtful debts (469,129) (1,065,430) (398,969) (700,145)

57,439,988 52,380,467 39,598,465 38,883,332 12,253,606 17,921,964 8,720,508 12,386,636

- - 6,523,239 7,082,042 5,518,765 5,218,685 5,518,765 5,218,685

Rs 75,212,359 75,521,116 60,360,977 63,570,695




Amount due by related companies

Raw materials

Trade receivables

Other receivables and prepaymentsAmount due by subsidiary

44MARGARINE INDUSTRIES LIMITEDFOR THE YEAR ENDED 31 DECEMBER 2012

11. TRADE AND OTHER RECEIVABLES (CONT'D)

The directors consider that the carrying amount of trade and other receivables approximates their fair value.

Ageing of past due but not impaired

2012 2011 2012 2011Rs Rs Rs Rs

60-90 days 6,726,952 4,548,309 4,293,262 3,163,988 90 days - 180 days 1,598,618 2,442,720 1,385,375 1,882,125

Rs 8,325,570 6,991,029 5,678,637 5,046,113

Allowance for doubtful debts

2012 2011 2012 2011Rs Rs Rs Rs

At 1 January 1,065,430 1,303,682 700,145 515,791 Impairment losses recognised on receivables 251,226 741,519 181,067 535,891 Impairment losses written off as uncollectible (847,527) (979,771) (482,243) (351,537)

At 31 December Rs 469,129 1,065,430 398,969 700,145

12. STATED CAPITAL THE GROUP AND THE COMPANY

2012 2011Rs Rs

Issued and fully paid300,239 Ordinary shares of Rs100 each Rs 30,023,900 30,023,900

(a) The right to vote on poll for every share held at a meeting of the Company on any resolution;(b) The right to an equal share in dividend authorised by the Board;(c) The right to an equal share in the distribution of the surplus assets of the Company, on winding up.

Trade receivables of the group include Rs15,316,897 (2011: Rs11,985,952) which have been financed by a factoringcompany with recourse after 90 days if the debts have not been recovered.

THE COMPANY


Each of the above share confer to its holder the following rights:

Included in the group's and the Company's trade receivable balance are debtors with a carrying amount of Rs8,325,570 (2011: Rs 6,991,029 ) for the group and Rs 5,678,637 (2011: Rs 5,046,113) for the Company, which arepast due at the reporting date for which the group and the Company have not provided as there has not been asignificant change in credit quality and the amounts are still considered recoverable. The average age of thesereceivables is 75 days.

Before accepting any new customer, the group and the Company assess the potential customer’s credit quality anddefines credit limits by customer and these are reviewed on a regular basis.

The average credit period on sales of goods and services is 73 days (2011: 69 days) for the group and 74 days (2011:72 days) for the Company. The group and the Company have recognised allowance for doubtful debts against tradereceivables above 180 days by reference to past default experience.

In determining the recoverability of a trade receivable, the group and the Company consider any change in the creditquality of the trade receivable from the date credit was initially granted up to the reporting date. The concentration ofcredit risk is limited due to the customer base being large and unrelated. Accordingly, the directors believe that there isno further credit provision required in excess of the allowance for doubtful debts.

THE GROUP


13. REVALUATION RESERVES THE GROUP

AND THE COMPANY

Rs

At 1 January 2011 44,547,933 Other comprehensive income 31,233,889

At 31 December 2011 75,781,822 Movement to retained earnings (1,841,454)

At 31 December 2012 Rs 73,940,368

14. LOANS

2012 2011 2012 2011Rs Rs Rs Rs

Unsecured loans 4,000,000 1,000,000 - - Secured bank loans 66,209,499 62,944,185 45,597,200 45,000,000

Rs 70,209,499 63,944,185 45,597,200 45,000,000 Repayable as follows:Repayable within one year 69,612,299 63,944,185 45,000,000 45,000,000

597,200 - 597,200 -

Rs 70,209,499 63,944,185 45,597,200 45,000,000

15. TAXATION

(a) Tax liability

2012 2011 2012 2011Rs Rs Rs Rs

At 1 January 703,496 2,371,053 703,496 2,371,053 (Overprovision)/Underprovision in income tax in previous year (63,225) 132,776 (63,225) 132,776 Tax deducted at source (18,602) - (18,602) - Paid during the year (5,067,943) (6,293,977) (4,992,782) (6,293,977) Provision for the year 5,055,166 3,983,674 4,868,457 3,983,674 Corporate Social Responsibility 531,156 509,970 531,156 509,970 At 31 December Rs 1,140,048 703,496 1,028,500 703,496

The bank loans are secured by floating charges on the property, plant and equipment and inventories of the group and theCompany and bear interest at Prime Lending Rate PLR-0.25% and PLR+0.75% p.a. The current weighted averageeffective interest rate on the bank loans is 7.80% p.a. (2011: 7.93%).


Between two and five years

Income tax is calculated at the rate of 15% (2011: 15%) for the group and the company on the profit for the year asadjusted for income tax purposes.


The group has entered into an agreement with a factoring company to finance the trade receivables with recourse to thegroup in the event the debts are not recovered within 90 days. The group is charged a commission of 0.75% on invoicestransferred to the factoring company and interest rate of PLR + 0.75% p.a.


15. TAXATION (CONT'D)

(b) Tax charge

2012 2011 2012 2011Rs Rs Rs Rs

Provision for the year 5,055,166 3,983,673 4,868,457 3,983,673 income tax in previous year (63,225) 132,776 (63,225) 132,776 Tax deducted at source (18,602) - (18,602) - Corporate Social Responsibility 531,156 509,970 531,156 509,970 Deferred tax movement 985,483 1,067,262 985,483 1,067,262

Tax charge Rs 6,489,979 5,693,681 6,303,270 5,693,681

(c) Tax reconciliation

2012 2011 2012 2011Rs Rs Rs Rs

Profit before tax Rs 34,375,235 35,997,310 32,877,520 33,516,358

Tax at 15% 5,156,285 5,399,596 4,931,628 5,027,454 Effect of:Net tax effect of non-taxable and other items 971,029 208,682 903,711 23,481

(63,225) 132,776 (63,225) 132,776 Deferred tax not recognised (105,266) (557,344) - - Corporate Social Responsibility 531,156 509,970 531,156 509,970

Tax charge Rs 6,489,979 5,693,680 6,303,270 5,693,681

(d) Deferred tax

Deferred tax is calculated on all temporary differences under the liability method at the rate of 15% (2011:15%).

THE GROUP AND THE COMPANY2012 2011Rs Rs

At 1 January 17,504,884 17,263,800 Charge to profit or loss 985,484 1,067,261 Charge to Other Comprehensive Income - (826,177)

At 31 December Rs 18,490,368 17,504,884


Under provision in tax liability in previous years



15. TAXATION (CONT'D)

(d) Deferred tax (Cont'd)

Deferred tax liabilities/(assets) arise from the following:

At 1 Charge Charge to other At 31 Charge Charge to other At 31January to profit or comprehensive December to profit or comprehensive December

2011 loss income 2011 loss income 2012Rs Rs Rs Rs Rs Rs Rs

Deferred tax liabilities

Accelerated capital allowances 9,196,134 1,184,112 - 10,380,246 1,232,953 - 11,613,199 Retirement benefit assets (1,308,548) (456,900) - (1,765,448) (452,970) - (2,218,418) Revaluation reserves 7,687,551 - (826,177) 6,861,374 - - 6,861,374

Deferred tax assets

Retirement benefit obligations 1,688,663 340,050 - 2,028,713 205,500 - 2,234,213

Net deferred tax liabilities Rs 17,263,800 1,067,262 (826,177) 17,504,885 985,483 - 18,490,368



16. RETIREMENT BENEFIT OBLIGATIONS

Unfunded pensions

2012 2011 2012 2011Rs Rs Rs Rs

Proportion of the unfunded post retirement obligations Rs 18,491,496 14,716,750 14,789,447 11,769,650

Charge to the statement of comprehensive income Rs 3,774,747 3,807,500 3,019,797 3,046,000

Amount recognised in the statement of financial position:2012 2011

Present value of unfunded obligation 139,929,000 128,415,000 Unrecognised actuarial (loss)/gain (3,101,000) 3,214,000

Rs 136,828,000 131,629,000 Amount recognised in the statement of comprehensive income:

2012 2011

Current service cost 2,741,000 2,714,000 Interest cost 12,358,000 12,516,000

Rs 15,099,000 15,230,000

Movement in liability recognised in the statement of financial 2012 2011

At 1 January 108,082,200 108,157,200 Total expense as above 15,094,000 15,230,000 Contributions paid (9,900,000) (9,213,000)

At 31 December Rs 113,276,200 114,174,200

Movement in the present value of the defined benefit obligations were as follows:2012 2011

At 1 January 128,415,000 129,652,000 Current service cost 2,741,000 2,714,000 Interest cost 12,358,000 12,516,000 Benefits paid (9,900,000) (9,213,000)Liability (gain)/loss 6,315,000 (7,254,000)

Rs 139,929,000 128,415,000

Movement in the present value of the plan assets were as follows:-2012 2011

At 1 January - -Employer contributions 9,900,000 9,213,000 Benefits paid (9,900,000) (9,213,000)

At 31 December Rs - -


Quality Beverages Limited ('QBL') a related company operates an unfunded defined benefit plan for some of the directors which provides for a pension at retirement. The company is a party to a contractual arrangement with ('QBL') whereby it bears a proportion of the retirement benefit obligations in respect of common directors/officers.

The retirement benefit obligations information for the QBL plan as a whole as required by IAS 19 are as follows:


16. RETIREMENT BENEFIT PLANS (CONT'D)

The history of experience adjustments is as follows:-2012 2011 2010 2009 2008

Rs Rs Rs Rs Rs

Present value of defined benefit obligation (139,929,000) (128,415,000) (129,652,000) (104,693,000) (89,901,000) Fair value of plan assets - - - - -

Deficit Rs (139,929,000) (128,415,000) (129,652,000) (104,693,000) (89,901,000)

Liability experience (loss)/gain Rs 409,000 7,254,000 (2,660,000) 3,289,000 (79,000)

The principal actuarial assumptions used for accounting purposes are:-2012 2011

% %

Discount rate 9 10Future salary increases 6 6Future pension increases 3 3Medical benefit inflation 9 10Passage benefit inflation 6 6Car benefit inflation 6 6Driver's allowance inflation 6 6

17. OBLIGATIONS UNDER FINANCE LEASES

Leasing arrangements

Fair value

The fair value of the finance lease liabilities is approximately equal to their carrying amount.

Finance lease liabilities

2012 2011 2012 2011Rs Rs Rs Rs

Amounts payable under finance leases:

Within one year 16,414,078 14,186,380 13,148,961 10,747,012 Between two to five years 33,800,829 38,030,781 30,328,170 33,437,331

50,214,907 52,217,161 43,477,131 44,184,343 Less: Future finance charges (6,737,776) (8,032,818) - -

Present value of minimumlease payments Rs 43,477,131 44,184,343 43,477,131 44,184,343

Expected employer contributions for the year 2013 - Rs10,494,000.

Retirement benefit obligations (unfunded pensions) have been based on the report dated 12 February 2013 submitted byAON Hewitt, actuaries and consultants.

lease paymentMinimum lease payment

Finance leases relate to plant and machinery and motor vehicles with lease terms ranging from 5 to 7 years. The group andthe company have options to purchase the assets for a nominal amount at the conclusion of the lease agreements. Thegroup's and the company's obligation under finance leases are secured by the lessors' title to the leased assets.

THE GROUP AND THE COMPANY Present value of minimum


17. OBLIGATION UNDER FINANCE LEASES (CONT'D)

2012 2011Rs Rs

Included in the financial statements as:

Current liability 13,148,961 10,747,012 Non-current liability 30,328,170 33,437,331

Rs 43,477,131 44,184,343

18. TRADE AND OTHER PAYABLES

2012 2011 2012 2011Rs Rs Rs Rs

Trade payables 56,423,429 33,099,710 48,892,377 29,956,228 Other payables and accruals 11,176,371 10,159,065 9,522,574 8,163,701 Amount due to subsidiary - - 121,624 183,128 Amount due to related company 23,241,138 25,820,114 19,191,814 21,959,681

Rs 90,840,938 69,078,889 77,728,389 60,262,738

19. REVENUE2012 2011 2012 2011Rs Rs Rs Rs

Sales of margarine products 304,509,023 296,298,091 304,509,023 296,298,091 Sales of consumer goods 70,130,758 66,456,665 - -

Rs 374,639,781 362,754,756 304,509,023 296,298,091

20. OTHER INCOME

2012 2011 2012 2011Rs Rs Rs Rs

Sundry receipts 2,433,314 712,758 4,233,315 2,512,759 Interest 463,785 472,017 631,352 675,607 Grant Income 163,868 81,934 163,868 81,934

- (300,646) - (300,646) -

Rs 2,760,322 1,266,709 4,727,889 3,270,300

21. FINANCE COSTS

2012 2011 2012 2011Rs Rs Rs Rs

Interest payable on:- Bank loans 3,548,817 2,867,232 2,636,007 1,848,597 - Bank overdrafts 1,821,017 1,331,948 1,518,684 991,109 - Finance leases 3,850,720 3,323,704 3,850,720 3,323,704

Rs 9,574,374 7,522,884 8,005,411 6,163,410

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoingcosts. The average credit period on purchases is 3 months. The group and the company have financial riskmanagement policies to ensure that all payables are paid within the credit timeframe.



Loss on disposal of property, plant and equipment





22. PROFIT FOR THE YEARProfit for the year has been arrived at after (crediting)/charging:

2012 2011 2012 2011Rs Rs Rs Rs

234,037,005 239,363,350 176,887,225 183,772,693

Staff costs 40,070,001 36,608,151 36,491,542 32,657,607 Depreciation and amortisation 13,372,659 8,382,253 13,372,658 8,382,253 Gain/(loss) on foreign exchange 98,514 (869,182) 381,341 (455,330)

251,226 741,519 181,067 535,891

Staff costs are analysed as follows:Salaries and allowances 38,133,255 35,437,651 34,841,745 31,878,607 Defined benefit plans 1,936,746 1,170,500 1,649,797 779,000

40,070,001 36,608,151 36,491,542 32,657,607

23. EARNINGS PER SHARE2012 2011Rs Rs

Earnings per share Rs 92.88 100.93

2012 2011Rs Rs

Rs 27,885,256 30,303,629

Number of ordinary shares in issue 300,239 300,239

24. CASH AND CASH EQUIVALENTS

2012 2011 2012 2011Rs Rs Rs Rs

Cash in hand and at bank 11,029,203 14,568,934 5,721,640 13,550,013 Bank overdrafts (7,351,609) (8,600,149) (7,351,609) (2,612,805)

Rs 3,677,594 5,968,785 (1,629,969) 10,937,208

25. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

2012 2011 2012 2011Rs Rs Rs Rs

Property, plant and equipment purchased Rs 21,011,697 14,099,830 21,011,697 14,099,830

Financed as follows:Cash disbursed 9,114,753 3,421,018 9,114,753 3,421,018 Finance leases 11,896,944 10,678,812 11,896,944 10,678,812

Rs 21,011,697 14,099,830 21,011,697 14,099,830

Profit for the year attributable to owners of the company used

Impairment losses recognised on trade receivables


Cost of inventories recognised as an expense

The bank overdrafts are secured by floating charges over the property, plant and equipment of the group and the company.


The profit and number of ordinary shares used in the calculation of earnings per share are as follows:



26. DIVIDEND

27. RELATED PARTY TRANSACTIONS

THE COMPANY2012 2011 2012 2011Rs Rs Rs Rs

(i) Sales of goods and services

Sales of goods:

- Fellow subsidiaries 5,472 137,560 3,780 137,560 - Companies having same management 10,914 2,161 4,974 2,161

16,386 139,721 8,754 139,721

Sales of services:

- Subsidiary - - 1,800,000 2,573,998 - Fellow subsidiaries 317,500 - 317,500 -

Rs 317,500 - 2,117,500 2,573,998

(ii) Purchase of goods and services

Purchase of goods:- Subsidiary - - 518,229 353,241 - Fellow subsidiaries 20,790,774 23,028,712 8,160,247 10,548,972 - Companies having same management 1,283,389 1,356,896 1,283,389 1,316,896

Rs 22,074,163 24,385,608 9,961,865 12,219,109

(iii) Interest received

- Subsidiary - - 173,493 218,205 - Fellow subsidiaries 425,289 425,000 425,289 425,000

Rs 425,289 425,000 598,782 643,205

THE GROUP

The group and the Company are making the following disclosures in respect of related party transactions and balances.

By a Board resolution dated 07 December 2012, the directors proposed that a dividend of Rs70 (2011: Rs60) will bepaid to the shareholders in respect of the current year. The proposed dividend amounting to Rs21,016,730 was paidon 27 December 2012 (2011: Rs18,014,340).


27. RELATED PARTY TRANSACTIONS (CONT'D)

THE COMPANY2012 2011 2012 2011Rs Rs Rs Rs

(iii) Outstanding balances

Receivable from:- Subsidiary - - 5,523,239 4,082,042 - Fellow subsidiaries 518,765 218,083 518,765 218,083 - Companies having same management - 602 - 602

Rs 518,765 218,685 6,042,004 4,300,727

Loans from:- Subsidiary - - 1,000,000 3,000,000 - Fellow subsidiaries 5,000,000 5,000,000 5,000,000 5,000,000

Rs 5,000,000 5,000,000 6,000,000 8,000,000

Payables to:- Subsidiary - - 121,624 183,128 - Fellow subsidiaries 19,154,728 25,515,093 19,152,695 21,656,651 - Companies having same management 4,086,410 305,021 39,119 303,030

Rs 23,241,138 25,820,114 19,313,438 22,142,809

The amounts due by and to related companies are unsecured, interest free and repayable on demand.

(iv) Retirement benefit - group plan

Retirement benefit liability

Fellow subsidiary Rs 18,491,496 14,716,750 14,789,447 11,769,650

Charge to the statement of comprehensive income Rs 3,774,747 3,807,500 3,019,797 3,046,000

(v) Compensation paid to key management personnel

28. CONTINGENT LIABILITIES2012 2011Rs Rs

Bank guarantees and performance bonds to third parties Rs 756,571 777,467

Guarantee to secure liabilities of subsidiary Rs 10,000,000 10,000,000

29. FINANCIAL INSTRUMENTS

THE GROUP

There were no compensation paid to key management personnel for the year under review (2011: Nil).

The directors consider that no liabilities will arise as the probability for default in respect of the guarantees is remote.

In its ordinary operations, the group and the company are exposed to various risks such as capital risk, foreign currency risks,interest rate risks, credit risks and liquidity risks. The group and the company have devised on a central basis a set of specificpolicies for managing these exposures.


29. FINANCIAL INSTRUMENTS (CONT'D)

Capital risk management

Gearing Ratio

The gearing ratio at the year end was as follows:

2012 2011 2012 2011Rs Rs Rs Rs

Debt (i) 121,038,238 116,728,677 96,425,939 91,797,148 Cash and cash equivalents (11,029,203) (14,568,934) (5,721,640) (13,550,013)

Net Debt Rs 110,009,035 102,159,743 90,704,299 78,247,135

Equity (ii) Rs 153,225,410 152,093,925 153,057,623 153,237,144

Net debt to equity ratio 72% 67% 59% 51%

(i) Debt is defined as long and short term borrowings and bank overdrafts. (ii) Equity includes all capital and reserves of the group and the company.

Significant accounting policies

Categories of financial instruments

2012 2011 2012 2011Rs Rs Rs Rs

Financial assets

69,518,185 65,338,286 56,914,611 60,316,721 11,029,203 14,568,934 5,721,640 13,550,013

Rs 80,547,388 79,907,220 62,636,251 73,866,734 Financial liabilities

70,209,499 63,944,185 45,597,200 45,000,000 43,477,130 44,184,343 43,477,130 44,184,343 87,369,021 68,263,013 74,256,474 59,689,201

- 18,014,340 - 18,014,340 7,351,609 8,600,149 7,351,609 2,612,805

Rs 208,407,259 203,006,030 170,682,413 169,500,689

The group and the Company manage their capital to ensure that entities in the group and the Company will be able tocontinue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equitybalance. The group's and the company's overall strategy remains unchanged from 2011.


Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis ofmeasurement and the basis on which income and expenses are recognised, in respect of each class of financial assetand financial liability and equity instruments are disclosed in note 3 to the financial statements.


The capital structure of the group and the Company consists of debt, which includes the borrowings disclosed in notes14,17 and 24, cash and cash equivalents and equity attributable to owners of the company, comprising issued capital,reserves and retained earnings as disclosed in the statements of changes in equity.

Trade and other payables

Bank overdraftsDividend payable

Trade and other receivables Cash and bank balances

LoansObligations under finance leases



Foreign currency risk management

Currency profile

2012 2011 2012 2011Financial assets Rs Rs Rs Rs

Mauritian Rupees 73,183,103 71,874,359 58,527,406 62,818,369 United States Dollars 3,461,779 4,585,103 3,097,098 5,524,885 Euro 1,248,933 1,293,377 792,588 5,517,702 South African Rand and others 2,653,573 2,154,381 219,158 5,778

Rs 80,547,388 79,907,220 62,636,251 73,866,734 Financial liabilitiesMauritian Rupees 159,700,298 171,415,042 128,533,669 146,592,604 United States dollars 11,872,826 13,580,690 9,367,877 9,930,544 Euro 34,581,883 17,433,088 32,663,844 12,593,306 South African Rand and others 2,252,252 577,210 117,024 384,235

Rs 208,407,259 203,006,030 170,682,413 169,500,689

Foreign currency sensitivity analysis

The group and the Company are mainly exposed to the USD and the EURO.

Impact of a 10% appreciation of the Mauritian Rupee:-

THE GROUP

2012 2011 2012 2011Rs Rs Rs Rs

Profit or loss Rs 841,105 899,559 3,333,295 1,613,971

THE COMPANY

2012 2011 2012 2011Rs Rs Rs Rs

Profit or loss Rs 627,078 440,566 3,187,126 707,560

USD impact EURO impact

The following table details the group's and the Company's sensitivity to a 10% increase and decrease in the MauritianRupee against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency riskinternally to key management personnel and represents management's assessment of the reasonably possible change inforeign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary itemsand adjusts their translation at the period end for a 10% change in foreign currency rates. A positive number belowindicates an increase in profit or a decrease in loss where the Mauritian Rupee strengthens 10% against the relevantcurrency. For a 10% weakening of the Mauritian against the relevant currency, there would be an equal and oppositeimpact on the profit or loss, and the balances below would be negative.

The group and the company are exposed to the risk that the exchange rate of the Mauritian rupee relative to the currencieslisted below may change in a manner which has a material effect on the reported values of the group's and the company’sassets and liabilities.

The profit or loss is mainly attributable to the exposure outstanding on USD and EURO receivables and payables at yearend in the Company.

USD impact EURO impact

The currency profile of the group's and the company’s financial assets and financial liabilities are summarised as follows:





Outstanding contracts Average Foreign Notionalexchange currency Value Fair Value

Rs Rs Rs

Less than 3 months 38.56 670,000 25,831,950 (401,350)

Credit risk management

Interest rate risk

Interest rate sensitivity analysis

Fair values

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the group's and thecompany’s profit for the year ended 31 December 2012 would decrease/increase by Rs602,205 and Rs479,144 (2011:the profit would increase/decrease by Rs583,643 and Rs458,986 respectively. This is mainly attributable to the group'sand the company’s exposure to interest rates on its variable rate borrowings.

The group and the company do not have significant concentration of risk on the trade receivables due to their largenumber of customers, spread across diverse industries and geographical areas.

The group and the company are exposed to interest rate risk as entities in the group borrow funds at both fixed andfloating interest rates. The group and the Company managed the risk by maintaining an appropriate mix between fixedand floating rate borrowings.

It is the policy of the group and the company to enter into forward foreign exchange contracts to cover specific foreigncurrency payments and receipts. However there were no outstanding forward foreign contracts as at 31 December 2012.Forward foreign currency contracts outstanding at 31 December 2011 were as follows :

Except where stated elsewhere, the carrying amounts of the company’s financial assets and financial liabilitiesapproximate their fair values due to the short-term nature of the balances involved.

The group's and the company’s credit risk are primarily attributable to trade receivables which are unsecured. Theamounts presented in the statement of financial position are net of allowances for doubtful receivables, estimated bymanagement based on prior experience and represents the group's and the company’s maximum exposure to credit risk.

Forward foreign exchange contract

Buy EURO

The company entered into forward exchange contracts (for terms of exceeding 3 months) to purchase raw materials fromsuppliers in Germany to hedge against the exchange rate risk arising from these purchases.

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to thecompany. The group and the company have adopted a policy of only dealing with creditworthy counterparties, as ameans of mitigating the risk of financial loss from defaults. Credit exposure is controlled by counterparty limits that areapproved and reviewed by key management on a regular basis.

The sensitivity analysis below have been determined based on the exposure to interest rates for the non-derivativeinstruments at the reporting date. For floating rate liabilities, the analysis is prepared assuming the amount of liabilityoutstanding at the reporting date was outstanding for the whole year. A 50 basis point increase or decrease is used whenreporting interest rate risk internally to key management personnel and represents management’s assessment of thereasonably possible change in interest rates.



Liquidity risk management

Liquidity and interest risk table

THE GROUPWeightedAverageeffective Less than 3 months

interest rate 1 month 1 - 3 months to 1 year 1 - 5 years Total2012 Rs Rs Rs Rs Rs

Non-Interest bearing - 87,369,021 - - 597,200 87,966,221 Finance lease liability 8.45% 1,368,041 4,104,122 10,941,915 33,800,829 50,214,907 Variable interest rates instruments 7.93% 41,064,784 37,300,200 - - 78,364,984

129,801,846 41,404,322 10,941,916 34,398,029 216,546,112

WeightedAverageeffective Less than 3 months


Non-Interest bearing - 87,093,229 - - - 87,093,229 Finance lease liability 9.93% 1,189,142 3,566,015 9,431,223 38,030,781 52,217,161 Variable interest rates instruments 7.93% 28,774,905 41,778,889 - - 70,553,794

117,057,276 45,344,904 9,431,223 38,030,781 209,864,184

THE COMPANYWeightedAverageeffective Less than 3 months


Non-Interest bearing - 74,256,474 - - 597,200 74,853,674 Finance lease liability 8.45% 1,368,041 4,104,122 10,941,915 33,800,829 50,214,907 Variable interest rates instruments 7.74% 17,416,609 36,287,745 - 53,704,354

93,041,124 40,391,867 10,941,916 34,398,029 178,772,935

WeightedAverageeffective Less than 3 months


Non-Interest bearing - 78,277,078 - - - 78,277,078 Finance lease liability 9.83% 1,189,142 3,566,015 9,431,223 38,030,781 52,217,161 Variable interest rates instruments 7.93% 12,673,221 35,691,250 - - 48,364,471

92,139,441 39,257,265 9,431,223 38,030,781 178,858,710

Cash flow hedges

The following tables detail the remaining contractual maturity for non-derivative financial liabilities. The table have been drawn up based on theundiscounted cash flows of financial liabilities based on the earliest date on which they can be required to pay. The table includes both interest andprincipal cash flows.

The Group has access to unused financing facilities at the reporting date. The Group expects to meet its other obligations from operating cashflows. The Group expects to maintain current debt to equity ratio.

The group and the Company manage liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities bycontinuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The company enters into forward contracts to purchase raw materials to cover specific requirements within 50% to 60% of the exposure generated.In the current year, the company has designated the forward oil and fats contracts as cash flow hedging. The company utlilises a rollover hedgingstrategy, using contract with terms of up to 12 months. Upon the maturity of a forward contract, the company enters into a new contract designatedas a separate hedging relationship.



Cash flow hedges (Cont'd)


Outstanding contracts Contract Fair value Contract Fair value2012 2012 2011 2011Rs Rs Rs Rs

Cash flow hedgesLess than 1 year 84,444,770 (1,045,518) 69,220,103 4,691,523

30. SEGMENT INFORMATION

Products and services from which reportable segments derive their revenues.

Segment revenue and segment results

2012 2011 2012 2011Rs Rs Rs Rs

Manufacturing 304,509,023 296,298,091 40,882,931 39,679,769 Trading 70,648,988 66,809,906 3,240,169 4,058,631

Total of all segments 375,158,011 363,107,997 44,123,100 43,738,400 Eliminations (518,229) (353,241) (173,492) (218,206)

Rs 374,639,781 362,754,756 43,949,609 43,520,194

Finance costs (9,574,374) (7,522,884)

Profit before tax 34,375,235 35,997,310 Taxation (6,489,979) (5,693,681)

Profit for the year Rs 27,885,256 30,303,629

Intersegment sales amounted to Rs 518,229 (2011: Rs353,241) for the year ended 31 December 2012.

Trading - trading of consumer goods

Manufacturing - the manufacturing and sale of margarine and related products

The following table details the forward oil and fats contracts outstanding as at reporting date:

Segment resultSegment revenue

The accounting policies of the reportable segments are the same as the group's accounting policies described in note3. Segment profit represents the profit earned by each segment without allocation of investment revenue, finance costsand income taxes. This is the measure reported to the chief operating decision maker for the purpose of resourceallocation and assessment of segment performance.

The company has entered into forward oil and fats contracts (for terms not exceeding 12 months) to purchase rawmaterials from suppliers in Germany and Malaysia.

As at 31 December 2012 there has been no ineffectiveness recognised in profit or loss arising from the hedges.

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the group thatare regularly reviewed by the chief operating decision maker in order to allocate resources to the segments and toassess their performance.

The information reported to the group's chief operating decision maker for the purposes of resource allocation andassessment of segment performance is focussed on the operating divisions which are manufacturing and trading. Theprincipal products and services of each of these divisions are as follows:


30. SEGMENT INFORMATION (CONT'D)

Segment assets and liabilities

2012 2011 2012 2011Rs Rs Rs Rs

Manufacturing 361,520,267 353,289,400 188,943,776 181,843,876 Trading 51,743,478 46,209,113 44,481,257 41,012,843

Total segment assets and liabilities 413,263,745 399,498,513 233,425,032 222,856,719 Eliminations (10,037,246) (10,657,552) (3,054,360) (4,318,064) Unallocated - - 19,630,417 18,208,380

Consolidated assetsand liabilities Rs 403,226,499 388,840,961 250,001,089 236,747,036

Other segment information

2012 2011 2012 2011Rs Rs Rs Rs

Manufacturing 13,372,658 8,382,253 21,011,697 16,756,363 Trading - - - -

Rs 13,372,658 8,382,253 21,011,697 16,756,363

Revenue from major products and services2012 2011Rs Rs

Margarine 304,509,023 296,298,091 Foodstuffs 70,130,758 66,456,665

Rs 374,639,781 362,754,756

Information about major customers

There are no customers that individually represent more than 10% of the group revenues.

Geographical segments

The group's operations are located in Mauritius only.

31. CAPITAL COMMITMENTS

Authorised by the Board of Directors but not contracted for:2012 2011Rs Rs

Commitments for the acquisition of property, plant and equipment Rs 35,500,000 26,400,000

32. ULTIMATE HOLDING AND HOLDING COMPANY

The Company considers Currimjee Industries Limited, a company incorporated in Mauritius, as the holding company andFakhary Ltd, a company incorporated in Mauritius, as the ultimate holding company.

Depreciation and amortisation Additions to non-current assets

Assets Liabilities

APPENDIX IMARGARINE INDUSTRIES LIMITEDTRADING AND PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31 DECEMBER 2012

2012 2011Rs Rs

SALES 304,509,023 296,298,091

LESS: COST OF SALES

Stock at 1 January 9,363,583 6,314,749

ADD: COST OF PRODUCTION

Raw materials used 178,118,397 186,821,527 Wages and commissions 7,751,471 6,532,807 Pension fund contribution (359,926) (551,781) Fuel, electricity and water 4,948,063 4,821,500 Repairs and maintenance 1,930,298 1,456,381 Laboratory expenses 840,528 636,184 Depreciation on building, plant and machinery 8,185,267 5,790,926 Insurance and Other 105,821 177,386

Stock at 31 December 10,594,755 9,363,583

200,288,747 202,636,096

GROSS PROFIT 104,220,276 93,661,996

Other income 4,727,889 3,270,300

LESS: EXPENSES

Administrative expenses (Appendix II) 40,194,494 33,954,419 Selling and distribution expenses (Appendix III) 13,052,453 10,708,231 Marketing expenses (Appendix III) 14,818,288 12,589,876

(68,065,234) (57,252,527)

OPERATING PROFIT 40,882,931 39,679,768

FINANCE COSTS (8,005,411) (6,163,410)

PROFIT FOR THE YEAR BEFORE TAXATION 32,877,520 33,516,358

TAXATION (6,303,270) (5,693,681)

PROFIT FOR THE YEAR Rs 26,574,250 27,822,677

APPENDIX II

FOR THE YEAR ENDED 31 DECEMBER 2012

2012 2011Rs Rs

1. ADMINISTRATIVE EXPENSES

Administrative expenses

Salaries and allowances 19,433,995 19,265,014 Retirement benefit costs 3,019,797 3,046,000 Pension fund contribution (551,687) (1,059,219) Travelling expenses 1,754,371 1,631,656 Telecommunications 1,762,521 999,001 Legal charges and professional charges 2,400,174 1,930,250 Postage and stationery 1,023,210 899,844 Depreciation - computer equipment 539,246 473,517 Amortisation - Software 1,395,571 439,175 Provision for bad debts 181,067 535,891 General expenses 3,393,362 1,855,490

34,351,627 30,016,619

Staff welfare expenses 3,249,478 2,799,680

Establishment expenses

Rates 174,977 185,175 Depreciation - furniture and fittings 365,413 280,218

540,390 465,393 Motor vehicle expenses

Depreciation - motor vehicles 2,052,999 672,726

2,052,999 672,726

40,194,494 33,954,418

2. SELLING AND DISTRIBUTION EXPENSES

Salaries and allowances

Salaries, wages and allowances 7,656,279 6,080,786 Pension fund contribution (458,387) (656,000)

7,197,892 5,424,786 Selling and distribution costs

Depreciation - Motor vehicle 834,163 725,691 Motor vehicle running expenses 5,020,398 4,557,754

5,854,561 5,283,445

Rs 13,052,453 10,708,231

3. MARKETING EXPENSES

Advertising Rs 14,818,288 12,589,876

MARGARINE INDUSTRIES LIMITEDTRADING AND PROFIT AND LOSS ACCOUNT

MARGARINE INDUSTRIES LIMITED

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MARGARINE INDUSTRIES LIMITED