Corporate Governance Report - The United Basalt Products Ltd

Annual Report

Notice of Annual Meeting
Financial Highlights and Ratios
Value Added Statement
Group Structure
Corporate Information
Directors’ Profiles
Chairman’s Report
Corporate Governance Report
Other Statutory Disclosures
Secretary’s Certificate
Independent Auditors’ Report
Balance Sheets
Income Statements
Statements of Changes in Equity
Cash Flow Statements
Notes to the Financial Statements
Proxy Form
3
4
6
7
9
10
11
15
20
25
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67
Dear Shareholder,
The Board of Directors is pleased to present to you the Annual Report of The United Basalt Products Ltd
and of the Group for the year ended June 30, 2008, the contents of which are listed below.
This report was approved by the Board of Directors on September 24, 2008.
Thierry Lagesse
Chairman
Jean-Michel Giraud
Managing Director

Notice of
Annual Meeting
Notice is hereby given that the Annual Meeting of Shareholders of the Company will be held at its registered office,
Trianon, Quatre Bornes, on Wednesday November 19, 2008 at 15.00 hours for the following purposes:
1. To receive, approve and adopt the Minutes of Proceedings of the preceding Annual Meeting held on
December 21, 2007.
2. To receive, approve and adopt the Audited Financial Statements for the year ended June 30, 2008 and reports
of the Directors thereon.
3. To re-appoint Mr Jean Giraud, aged above 70, to continue to hold office as Director of the Company until the
next Annual Meeting in accordance with Section 138 (6) of the Companies Act 2001.
4. To re-appoint Mr J. Cyril Lagesse, aged above 70, to continue to hold office as Director of the Company until
the next Annual Meeting in accordance with Section 138 (6) of the Companies Act 2001.
5. To re-appoint Ernst & Young as Auditors for the year ending June 30, 2009 and to authorise the Board of Directors
to fix their remuneration.
By Order of the Board
Christophe Quevauvilliers F.C.C.A.
Company Secretary
September 24, 2008
A member of the Company entitled to attend and vote at this meeting may appoint a proxy
(whether a member or not) to attend and vote on his/her behalf. The instrument appointing
a proxy or any general power of attorney shall be deposited at the registered office of the
Company, Trianon, Quatre Bornes, not less than twenty-four hours before the time fixed for
the holding of the meeting or else the instrument of proxy shall not be treated as valid.
A proxy form is included at the end of the Annual Report for this purpose.
For the purpose of this Annual Meeting, the Directors have resolved, in compliance with
Section 120 (3) of the Companies Act 2001, that the shareholders who are entitled to
receive notice of the meeting and attend such meeting shall be those shareholders whose
names are registered in the share register of the Company as at October 21, 2008.
Annual Report
3

Financial Highlights
and Ratios June 30, 2008
Net Assets per share (Rs)
80
70
60
50
40
30
20
10
0
Shareholders’ Fund (Rs’000)
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
2005
2005
Share Price (Rs)
43.00
42.00
41.00
40.00
39.00
38.00
37.00
40.62
894,404
41.60
2005
42.09
2006
929,688
2006
42.40
2006
70.18
2007
1,550,378
2007
38.90
2007
74.26
2008
1,640,581
2008
43.00
2008
2,000,000
1,500,000
1,000,000
Earnings per share (Rs)
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0
Dividend per share (Rs)
2.50
2.00
1.50
1.00
0.50
0
Revenue (Rs’000)
500,000
0
3.31
2005
2005
1,079,155
2005
2.78
2006
2006
1,355,677
2006
1.54
2007
2007
1,404,405
2007
7.17
2008
2008
1,718,721
2008
THE GROUP
2008 2007
Income Statement Rs’000 Rs’000
Revenue 1,718,721 1,404,405
EBITDA 285,860 214,571
Depreciation and amortisation (123,874) (111,288)
Operating profit 161,986 103,283
Net finance costs (94,137) (76,225)
Share of results of associates 29,323 11,748
Exceptional items 85,249 11,233
Profit before taxation 182,421 50,039
Profit for the year 158,814 34,216
Rs Rs
Earnings per share 7.17 1.54
Earnings per share excluding exceptional items 3.31 1.03
Dividend per share 2.00 1.50
2008 2007
Balance Sheet Rs’000 Rs’000
Total assets 2,888,088 2,837,927
Interest bearing debts 920,954 1,011,751
Borrowings excluding bank overdraft 628,156 679,373
Shareholders’ interests 1,640,581 1,550,378
Rs Rs
Net assets value per share 74.26 70.18
Financial Ratios 2008 2007
Before After
Revaluation
Operating margin - % 9.42 7.35 7.35
Interest cover - times 2.29 1.34 1.34
Dividend cover - times 3.59 1.03 1.03
Return on equity - % 9.66 3.47 2.20
Return on assets - % 5.49 1.20 1.20
Debt to equity – times 0.56 1.03 0.65
4 Annual Report Annual Report
5

Value Added
Statement
Year ended June 30,
2008 2007
Rs’000 Rs’000
Sale of goods and services 1,718,721 1,404,405
Less: Payment to suppliers for materials and services (1,102,432) (973,484)
Value added 616,289 430,921
Other operating income 64,220 62,192
Total wealth created 680,509 493,113
Distributed as follows:
Employees
Salaries, wages and other benefits 238,722 221,490
Providers of capital
Dividends 44,183 33,138
Interest on borrowings 123,549 101,079
Dividends to minority shareholders 2,271 1,271
170,003 135,488
Government and parastatal corporations
Income tax (current and deferred) 23,607 15,823
Environment protection fee 7,304 6,600
Licences and permits 2,726 1,562
33,637 23,985
Reinvested in the Group to maintain and develop operations
Depreciation and amortisation 123,874 111,288
Retained profit 114,273 862
238,147 112,150
Total wealth distributed and retained 680,509 493,113
THE UNITED BASALT PRODUCTS LTD
Subsidiaries as at June 30, 2008
* Via UBP International Ltd
100 %
100 %
100 %
100 %
76.5%
100 %
100 %
100 %
100 %
100 %
Marbella Espace Maison Ltée
Compagnie de Gros Cailloux Ltée
Société d’Investissement Rodriguais
UBP International Ltd
Ste Marie Crushing Plant Ltd
100 % Société des Petits Cailloux
Marbella Ltd
Land Reclamation Ltd
Stone & Bricks Co Ltd
The Stone Masters Co Ltd
Pricom Ltd
Associates as at June 30, 2008
Operational
Dormant
THE UNITED BASALT PRODUCTS LTD
Group Structure
June 30, 2008
75.9 % Welcome Industries Ltd
100 % UBP Madagascar
71.7% United Granite Product (Pvt) Ltd
100 % DHK Metal Crusher (Pvt) Ltd
100 % Sheffield Trading (Pvt) Ltd
46% Produits Basaltiques du Nord Ltée
34% Prochimad Mines et Carrières*
30% Pre-Mixed Concrete Ltd
25% Sud Concassage Ltée
25% Cement Transport Ltd
20% Compagnie d’Exploitation Agricole Ltée
30% Compagnie des Transport Réunis
6 Annual Report Annual Report
7

Board of Directors
Thierry Lagesse - Chairman
François Boullé
Marc Freismuth
Jean Giraud
Jean Michel Giraud
Joël Harel
J. Cyril Lagesse
Alternate: Arnaud Lagesse
Raymond Lagesse
Jean Claude Maingard
E. Jean Mamet
Corporate Governance Committee
Thierry Lagesse - Chairman
Marc Freismuth
Joël Harel
Audit Committee
E. Jean Mamet - Chairman
François Boullé
Joël Harel
Corporate
Information
Managing Director
Jean Michel Giraud
Company Secretary
Christophe Quevauvilliers F.C.C.A.
Auditors
Ernst & Young
Bankers
The Mauritius Commercial Bank Ltd
Barclays Bank PLC
HSBC (Mauritius) Ltd
State Bank of Mauritius Ltd
AfrAsia Bank Ltd
Legal Form
The United Basalt Products Ltd is a public
company incorporated in Mauritius and
listed on the Official Market of the Stock
Exchange of Mauritius
Registered Office
Trianon, Quatre Bornes, Mauritius
Annual Report
9

Directors’
Profiles
Thierry Lagesse Chairman
Mr Thierry Lagesse was appointed Director of the Company in
December 1989 and subsequently Chairman of the Board in
December 2002. Born in 1953, Mr Lagesse holds a ‘Maîtrise des
Sciences de Gestion’ from the University of Paris Dauphine. He has
been the founder and Executive Chairman of the Palmar Group
of Companies for the last twenty-eight years, an international
textile and garment manufacturing group. He has also been
the promoter of both Companhia de Sena, a sugar estate and
a sugar processing and refining factory in Mozambique, and
Parabole Réunion SA, a Direct to Home Satellite TV company in
the media and communication fields across the islands of the
Indian Ocean. Mr Lagesse sits on the Board of several major
Mauritian companies and is also the Chairman of Flacq United
Estates Ltd, Phoenix Beverages Ltd, Compagnie d’Investissement
et de Développement Ltée and Director of Ireland Blyth Ltd
and Sun Resorts Ltd. He is a member of the Mauritius Chamber
of Agriculture and was, in 1995, Chairperson of the Mauritius
Export Processing Zone Association.
François Boullé
Mr François Boullé was appointed alternate Director to late
Mr Jacques Lagesse in 1998 and full-fledged Director of the
Company in May 2004. Born in 1948, Mr Boullé holds a degree
from the ‘Institut d’Etudes Politiques de Paris (Sciences Po – Section
Economique et Financière). He is currently the Managing Director of
Suchem Ltd, a company specialized in importation and distribution
of chemicals for textiles and other industries, plastic raw materials
and sprayers for agriculture.
Marc Freismuth
Mr Marc Freismuth was appointed Director of the Company
in March 2006. Born in France in 1952, Mr Freismuth holds a
‘Diplôme d’Etudes Supérieures de Sciences Economiques’ from
the University of Panthéon-Sorbonne (Paris). He was Lecturer at
the University of Montpellier up to July 1988, when he decided
to join the University of Mauritius as Lecturer in management
and finance until July 1994. Whilst in this position, Mr Freismuth
contributed to the setting up of the Stock Exchange of Mauritius
as consultant to the ‘Stock Exchange Commission’ and member of
the ‘Listing Committee’. Mr Freismuth is currently self-employed as
a consultant in management and finance. He also sits as Director
on the Board of several public companies.
Jean Giraud
Mr Jean Giraud was appointed Director of the Company in October
1956. Born in 1919, Mr Giraud was one of the founder members
of the Company of which he was the Manager from 1953 to
1984. He has contributed largely to establish the reputation of
the Company over the years and to its participation in most of the
major infrastructure projects of the country.
Jean Michel Giraud
Mr Jean Michel Giraud joined the Company in 1974 and became
General Manager in 1984, succeeding his father in this position.
He was appointed Managing Director in November 2004. Born in
1950, Mr Giraud is the Chairman of Pre-mixed Concrete Ltd and
sits on several Boards within the Group. Former President of the
Mauritius Turf Club, he is currently the President of the Mauritius
Tennis Federation.
Joël Harel
Mr Joël Harel was appointed alternate Director to Mr Jean Raymond
Harel in May 2004 and became full-fledged Director of the
Company with effect from July 1, 2006. Born in 1967, Mr Harel
holds a National Higher Diploma in Mechanical Engineering from
Cape Technikon in Cape Town. He is currently the Projects Manager
at Emineo Ltd, a company in partnership with Robert Le Maire Ltd,
involved in proposing engineering solutions and in the realisation
of projects locally and overseas, mainly in the sugar sector.
J. Cyril Lagesse
Mr J. Cyril Lagesse was appointed Director of the Company in
November 1958. Well-known entrepreneur, Mr Lagesse, born in
1932, took over his father’s business in 1969 (Mon Loisir S.E.) and
set up the ‘Compagnie d’Investissement et de Développement Ltée’
in the early 1970’s, to take advantage of the diverse investment
opportunities that arose while Mauritius moved towards greater
industrialisation. Since then, the ‘Groupe Mon Loisir’(GML) has
grown in size and is now the major shareholder of several other
well-established firms. Mr Lagesse also sits on the Board of several
of the country’s most prestigious companies, some of which are
listed on the Stock Exchange of Mauritius.
Raymond Lagesse
Mr Raymond Lagesse was appointed full-fledged Director of the
Company in replacement of Mr Clément Lagesse in October 2004.
Born in 1958, Mr Lagesse holds a certificate in Technical Road
Transportation and a Diploma in Management. He is currently
the Chairman of Freight & Transit Co. Ltd (Group) and manages
Mechanical Transport Co. Ltd, a company specialized in the Road
Haulage industry. Mr Lagesse also sits on the Board of several
companies in Mauritius and Madagascar.
Arnaud Lagesse
Mr Arnaud Lagesse was appointed alternate Director to
Mr J. Cyril Lagesse in March 1994. Born in 1968, Mr Lagesse holds a
‘Maîtrise de Gestion’ from the University of Aix-Marseille III, France
and is a graduate of the ‘Institut Supérieur de Gestion’, France.
He also completed an Executive Education Program at INSEAD
Fontainebleau, France. He joined the ‘Groupe Mon Loisir’(GML) in
1995 as Finance and Administrative Director, and was appointed as
Chief Executive Officer in August 2005. He also participated in the
National Corporate Governance Committee as a member of the
Board. He is a member of the Board of several of the country’s major
companies and is the Chairman of Naïade Resorts Ltd, Mauritius
Stationery Manufacturers Ltd, Robert Le Maire Ltd, AfrAsia Bank Ltd
and various other companies. Mr Lagesse is an ex-President of the
Mauritius Chamber of Agriculture, the Mauritius Sugar Producers
Association and the Sugar Industry Pension Fund. Mr Lagesse is
also a member of Audit Committees of various companies.
Jean Claude Maingard
Mr Jean Claude Maingard was appointed Director of the Company in
November 2007 in replacement of Mr Jean Paul Adam. Born in 1946,
Mr Maingard holds a Diploma in Quantity Surveying from the University
of Cape Town and is an associate of the Royal Institute of Chartered
Surveyors UK and Mauritius (A.R.I.C.S.). In 1972 he joined General
Construction Co. Ltd, a well-known firm of building and civil engineering
contractors operating in Mauritius for almost fifty years. He was appointed
Executive Director in 1986 and Managing Director from 1998 to 2006.
Mr Maingard is currently the Chairman of this prestigious company.
E. Jean Mamet
Dear Shareholder,
On behalf of the Board of Directors,
I am pleased to comment on the
operations and results of The United
Basalt Products Ltd and of the Group
for the year ended June 30, 2008
and to share with you our future
developments and projects.
Review of Activities
and Results
Revenue
The Group’s revenue improved from
Rs 1.4 billion in 2007 to Rs 1.7 billion
this year, an increase of 22.4%. This
rise is attributable to a significant
increase in the revenue from both
our Espace Maison and core business
activities. The market for our core
business products locally was almost
stable whilst our prices were increased
to compensate for rises in production
costs. This situation is explained to
some extent by the general effects
of inflation on the purchasing power
of private individual builders, the
absence of major public infrastructure
projects, the delay in some hotel and
Integrated Resort Schemes (I.R.S.)
projects and the fierce competition
that prevailed on the market.
Results
The Group’s results for the year were
positively affected by a significant
exceptional profit made on the sale of
non-strategic investments. The Group’s
operating profit increased significantly
from Rs 103.2 million in 2007 to Rs 161.9
million this year after having recognised
a provision of Rs 9 million on slowmoving
inventories. The Company’s
operating profit increased to Rs 143.7
million this year from Rs 120.7 million
in 2007 whilst that of Marbella Espace
Maison Ltée moved from an operating
loss of Rs 17.2 million in 2007 to an
operating profit of Rs 4.6 million
this year, a significant turnaround.
This performance is to some extent
due to the widening of our range of
products and services, our improved
purchasing workforce and the
strengthening of our presence in this
segment of activities.
As mentioned in our previous annual
report, a major part of our quoted
Chairman’s
Report
available-for-sale investments and our
25.5% stake in Highway Properties Ltd,
an associate company which owns
the Trianon Shopping Park buildings,
were disposed of during the year.
These realisations resulted in an
exceptional profit of Rs 29.8 million
and Rs 65.4 million respectively.
As regards foreign operations, our
subsidiary company in Madagascar
experienced a significant rise in
activities due to contracts obtained
in the region of Tamatave and ended
up with a profit of Rs 3.5 million for
the year compared to a loss of Rs
10.7 million in 2007. In Sri Lanka the
market conditions did not improve.
Our subsidiary company incurred
a loss of Rs 9.1 million for the year
compared to Rs 5.6 million in 2007.
Consequently, the goodwill on
acquisition of our subsidiary in Sri
Lanka was impaired by Rs 10 million
and disclosed as part of exceptional
items in this year’s income statement.
Despite this impairment loss, the
Board is still confident about future
prospects in that country.
10 Annual Report
Mr E. Jean Mamet was appointed Director of the Company in November
2004 and is currently the Chairman of the Audit Committee. Born in
1943, Mr Mamet is a fellow member of the Association of Chartered
Certified Accountants. He has been in practice for forty-three years
involved in auditing and consulting services up to 2003, when he
retired as Managing Partner of Ernst & Young Mauritius. He is currently
the Vice Chairman of The Mauritius Commercial Bank Ltd.
Annual Report
11

Chairman’s
Report (continued)
Our subsidiary, Compagnie de Gros
Cailloux Ltée made a profit after tax
of Rs 2 million for the year compared
to Rs 8.9 million in 2007. The sugar
crop was an average one with a total
of 1,950 tons (2007: 2,133 tons)
of sugar sold at a reduced price of
Rs 18,620 per ton. This drop in
profits is to a large extent due to the
revaluation of the standing crop at
a reduced future price of sugar. The
non-sugar revenues, made up of sale
of plants from our nursery, increased
significantly during the year. This
upward trend is likely to persist given
the drop expected in the price of
sugar by 2009-2010.
Our share of results from associate
companies increased from Rs 11.7
million in 2007 to Rs 29.3 million
this year. The results of our associate
Highway Properties Ltd were recognised
up to May 10, 2008, date on which our
stake was disposed of.
Finance Costs
The Group’s finance costs rose from
Rs 101.1 million in 2007 to Rs 123.5
million this year due to the financing of
overseas operations and the servicing
of long-term borrowings.
Earnings and Dividend
The Group’s profit for the year
increased from Rs 34.2 million in 2007
to Rs 158.8 million this year. Earnings
per share increased from Rs 1.54 in
2007 to Rs 7.17 this year. Excluding
exceptional items, the earnings per
share increased from Rs 1.03 in 2007
to Rs 3.31 this year.
Consequently, an increased dividend
of Rs 2.00 per share (2007: Rs 1.50)
was declared by the Company on
June 11, 2007 and paid on July 21, 2008.
Financial Situation
The Group’s financial situation was
positively affected by the investments
disposed of during the year. The sale
of our stake in Highway Properties Ltd
gave rise to the refund of a loan
amounting to Rs 123 million receivable
from that associate company, disclosed
as other financial asset on the balance
sheet for the previous year. The total
cash inflow generated amounted to
Rs 210 million. Out of these funds,
Rs 192 million was used to anticipate
the refund of the ten-year-period loan
contracted in 2004 to finance the
acquisition of Compagnie de Gros
Cailloux Ltée.
Investments in property, plant and
equipment amounted to Rs 181.8
million (2007: Rs 191.3 million) for
the year under review, out of which
Rs 28.1 million was financed through
leasing facilities. Besides financing
new developments, this amount
was mostly spent as part of normal
recurring capital expenditure for
upgrading and replacement of plant
and equipment for both our core
business and Espace Maison activities,
locally and overseas. The major items
of capital expenditure comprise the
installation of a new primary crusher
at our plant in Plaine Magnien, the
acquisition of a new concrete mixer
for our PPB concrete slab factory, the
acquisition of quarrying equipments
and a new batching and mixing
plant for our subsidiary company
Sainte Marie Crushing Plant Ltd.
The other significant group cash
outflows comprise the servicing of
the remaining term loans and the
funding of operations in Madagascar
and Sri Lanka.
As already mentioned, a major part of
quoted available-for-sale investments
was disposed of during the year. The
remaining available-for-sale investments
were revalued at Rs 71.3 million as at
the balance sheet date giving rise
to a fair value reserve loss of Rs 1.7
million due to the downward trend
experienced on the Semdex since
February 2008. Once the trend is
reversed, the Board of Directors
intends to pursue its disposal strategy
in view of financing future capital
expenditure and thus keep the level
of borrowings at a minimum.
The Group’s total assets moved from
Rs 2.8 billion in 2007 to Rs 2.9 billion this
year, total borrowings from Rs 1 billion
to Rs 921 million and shareholders’
interests from Rs 1.5 billion to
Rs 1.6 billion. Consequently, the
Group’s debt to equity ratio improved
from 0.65 times in 2007 to 0.56 times
this year, whilst the Group’s net assets
value (NAV) per share increased from
Rs 70.18 to Rs 74.26 this year.
Developments
and Projects
As part of developments and projects
for our core business activities,
the recently acquired plot of land
of eleven acres next to our site at
Geoffroy Road was landscaped in
view of transferring our PPB concrete
slab factory and the re-engineering
of our crushing plant following the
request from the land owners of our
plant at La Mecque to recover the site
for property development projects. At
Terre Rouge, the production of blocks
was ceased and the site is now a sales
point for blocks produced by our plant
at Poudre d’Or, thereby benefiting
from economies of scale. As part of
improving our service, two trucks
fitted with cranes were acquired for the
transport of blocks all over the island.
Furthermore, iron bars were imported
and sold on our sites with satisfying
results. In Madagascar, besides the
acquisition of lorries and loaders for
the supply of new contracts, some
34 hectares of land were acquired in
Tamatave for quarrying and property
developments.
The budget for the financial year 2008-
2009 provides further investments for
enhancing and improving the capacity
of our core business production
units and our quarrying operations
including the production of blocks
on our site at St Julien. The abovementioned
transfer of our PPB concrete
slab factory and the re-engineering of
our plant at Geoffroy Road constitute
a major capital expenditure which
should span over the next two
financial years. At the time of writing,
the EIA permit for these projects has
been obtained.
As regards our Espace Maison
activities, much effort and resources
were put into advertising and
communication to build up the
branding and corporate image of our
outlets. In terms of developments and
projects, the budget for financial year
2008-2009 provides for the extension
of our warehouse at Roche-Bois, the
upgrading and extension of our
marble factory and the acquisition of
lorries aimed at improving the delivery
service. Further investments are being
engaged in land and buildings for
the construction of a fourth Espace
Maison retail store in Flacq which is
due to open in October 2009.
As regards our subsidiary company
Compagnie de Gros Cailloux Ltée,
the nursery is being continuously
extended to satisfy the increasing
demand. A landscaping division is
being considered in an aim to widen
our range of services and increase the
non-sugar income on a permanent
basis. A ‘Festival du Jardin’ was
organised in November 2007. The
event was a success and is becoming
a yearly event.
In terms of property development,
the residential compounds project
referred to in our previous annual
report is being developed with the
input of foreign and local consultants
as well as estate agents. The benefit
of such projects is that it enables
maximum use of our own building
materials and fittings and involves
our major clients engaged in the
contracting business. The conversion
permit was obtained under the Sugar
Industry eight hundred acres scheme
for which 10 acres of land was given
to the State. The installation of an
electrical network to connect the coal
power plant project of CT Power Ltd
at Pointe-aux-Caves was altered at
our demand to avoid the site of our
project. The master plan prepared by
foreign consultants is being modified
to make optimum use of the site
location and characteristics.
Future Prospects
The trend noted in our revenue since
July 2008 is encouraging for the future.
In terms of our core business, the
prospects are good locally, given the
announced hotel, road infrastructure
and property development projects.
However, no significant improvement
is being foreseen in the private
dwellings’ market. As regards our
Espace Maison activities, the forecasts
are good given our future expansion
plan aiming at more proximity to the
market. In terms of foreign operations,
both of our entities are focussing on
potential business opportunities with
important development projects both
in Tamatave, Madagascar and in the
harbour of Colombo in Sri Lanka.
Assuming favourable economic
conditions and the timely realisation
of projects, the results for the financial
year 2008-2009 are likely to show an
improvement over those of 2007-
2008, ignoring exceptional items of
revenue.
Acknowledgements
On behalf of the Board of Directors,
I wish to acknowledge with thanks
the continuous efforts made by the
Managing Director, his management
team and the personnel during the
year under review.
I also wish to express my thanks and
appreciation to my fellow-members
of the Board of Directors for their
support and contribution.
Thierry Lagesse
Chairman
September 24, 2008
12 Annual Report Annual Report
13

The United Basalt Products Ltd was incorporated as a public company in July 1953.
The shares of the Company are listed on the Official Market of the Stock Exchange of
Mauritius since 1989.
Company’s Constitution
In December 2004, the shareholders adopted a new Constitution which is in compliance
with the provisions of the Companies Act 2001 and those of the Listing Rules of the
Stock Exchange of Mauritius.
The salient features of the Constitution are as follows:
■ the Company has full capacity to carry on and/or undertake any business activity
■ the Company has full rights, powers and privileges
■ the Company may acquire and hold its own shares
■ fully paid up shares are transferable without restriction
■ the quorum for a meeting of shareholders is 6 shareholders, present or represented,
holding at least 35% of the share capital of the Company
■ the Board of Directors shall consist of not less than 7 or more than 15 Directors
■ the quorum for a Board meeting is 4 Directors when the Board consists of 7
members and 5 Directors when the Board consists of more than 7 members
■ the Chairman has a casting vote in case of equality of votes at either a Board
meeting or a shareholders’ meeting
■ the Directors have the power to appoint any person to be a Director, either
to fill a casual vacancy or as an addition to the existing Directors but so that
the total number of Directors does not at any time exceed the number fixed
by the Constitution. Any Director so appointed shall hold office only until the
next following Annual Meeting of shareholders and shall then be eligible for reelection
■ a Director is not required to hold shares in the Company
■ the Company may indemnify and/or insure any Director or employee of the
Company or a related corporation
Shareholding Structure
The Company has no Ultimate Holding Company. The shareholding structure of the
Group at June 30, 2008 is as detailed on page 7. The names of common Directors are
as detailed in Other Statutory Disclosures on page 21.
Substantial Shareholders
Corporate
Governance
Report
The list of shareholders holding more than 5% of the share capital of the Company at
June 30, 2008 is as detailed in Other Statutory Disclosures on page 23.
Annual Report
15

Corporate Governance
Report (continued)
Shareholding Profile
The share ownership analysis at June 30, 2008 was as follows:
Size of shareholding Number of Number of Percentage
shareholders shares owned (%)
1 - 500 636 120,894 0.55
501 – 1,000 208 158,764 0.72
1,001 – 5,000 555 1,378,211 6.24
5,001 – 10,000 148 1,084,753 4.91
10,001 – 50,000 167 3,326,406 15.06
50,001 – 100,000 26 1,813,899 8.21
100,001 – 250,000 16 2,598,730 11.76
250,001 – 1,000,000 9 4,381,521 19.83
Over 1,000,000 2 7,228,524 32.72
Total 1,767 22,091,702 100.00
Category of shareholders Number of Number of Percentage
shareholders shares owned (%)
Individuals 1,567 6,873,504 31.11
Insurance and assurance companies 18 1,749,473 7.92
Pension and provident funds 32 2,335,675 10.57
Investment and trust companies 37 8,033,800 36.37
Other corporate bodies 113 3,099,250 14.03
Total 1,767 22,091,702 100.00
Shareholders’ Agreement
To the knowledge of the Company, there is no shareholders’ agreement.
Share Price Information
At time of writing, the share of the Company is quoted at Rs 44.00 on the Official Market of the Stock Exchange of
Mauritius with a Price Earnings Ratio (PER) of 28.57, a Dividend Yield of 4.55% and a Price to Net Assets Value (NAV)
of 0.63. Please refer to Financial Highlights and Ratios on pages 4 and 5 for indicators and share price movements.
Dividend Policy
The Company has no formal set dividend policy. The payment of dividends depends on the Company’s performance,
its cash flow position, its debt servicing requirements and its future investments needs and growth opportunities. In
so doing, the Board of Directors attempts to distribute a yearly dividend which, under normal circumstances, should
remain sustainable in the medium to long term.
On June 11, 2008 the Company declared a dividend of Rs 2.00 per share in respect of the financial year under review. This
dividend was paid in full on July 21, 2008 to all ordinary shareholders registered at close of business on June 25, 2008.
Please refer to Financial Highlights and Ratios on page 4 for a summary of the dividend paid per ordinary share over
the past four years.
Shareholders’ Calendar of Events
Financial year end : June
Declaration of dividend : June
Payment of dividend : July
Annual Meeting of shareholders : November
This year the dividend payment date has been changed from June to July.
Board of Directors
The Company has a unitary Board composed of ten Directors with an adequate mix of executive, non-executive and
independent non-executive Directors. Please refer to Directors’ Profiles on page 4 for an update of their profiles.
According to the Constitution, the Board shall consist of a minimum of seven and a maximum of fifteen Directors. The
quorum for a Board meeting is 4 Directors when the Board consists of 7 members and 5 Directors when the Board
consists of more than 7 members.
The primary role of the Board of Directors is to protect and enhance shareholders’ value. The Board may discharge its
responsibilities by delegating certain duties to Board Committees and to Management.
Directors’ Category, Interests and Dealings in Shares
The Directors’ and alternate Directors’ category and interests in the ordinary shares of the Company are set out in the
table on page 22 – Other Statutory Disclosures.
The Directors ensure that they follow the principles set out in the Model Code on Securities Transactions by Directors
as detailed in Appendix 6 of the Listing Rules of the Stock Exchange of Mauritius. Details of Directors’ dealings in shares
of the Company are as depicted in the table about Directors’ interests in the ordinary shares of the Company on page
22 – Other Statutory Disclosures.
Directors’ Directorships
The directorships of the Directors of the Company in other companies listed on the Official Market of the Stock Exchange
of Mauritius at June 30, 2008 were as follows:
The other Directors of the Company did not have any directorships in companies listed on the Official Market of the
Stock Exchange of Mauritius at June 30, 2008.
■ BMH – Belle Mare Holding Ltd
■ IBL – Ireland Blyth Ltd
■ IGF – IPRO Growth Fund Ltd
■ MCB – The Mauritius Commercial Bank Ltd
■ MSM – Mauritius Stationery Manufacturers Ltd
BMH IBL IGF MCB MSM NRL PBL SRL SWAN
Directors
Thierry Lagesse ■ ■ ■ ■ ■ ■
Marc Freismuth ■
J. Cyril Lagesse ■ ■ ■ ■ ■ ■
E. Jean Mamet ■ ■
Alternate Directors
Arnaud Lagesse ■ ■ ■ ■
■ NRL – Naïade Resorts Ltd
■ PBL – Phoenix Beverages Ltd
■ SRL – Sun Resorts Ltd
■ SWAN – Swan Insurance Company Ltd
16 Annual Report Annual Report
17

Corporate Governance
Report (continued)
Board Committees
In order to fulfil its obligations and duties, the Board has delegated certain responsibilities to Board Committees to
ensure full review of specific matters. A Corporate Governance Committee and an Audit Committee were set up with
clearly defined terms of reference. These Board Committees report to the Board on their activities and recommend
specific matters to the Board for its approval.
Corporate Governance Committee
Chairman : Thierry Lagesse
Members : Marc Freismuth
Joël Harel
The Corporate Governance Committee is also responsible for Nomination and Remuneration aspects of the Code. Its
main duties are to determine the policy on Corporate Governance in accordance with the principles of the Code of
Corporate Governance, to advise and make recommendations to the Board of Directors on all aspects of Corporate
Governance and to report thereon. The committee met once during this financial year.
The remuneration of the Chairman and of each member of the committee for the year ended June 30, 2008 amounted
to Rs 5,000.
Audit Committee
Chairman : E. Jean Mamet
Members : François Boullé
Joël Harel
The Audit Committee Charter was approved by the Board of Directors on May 20, 2005. The main duty of the
committee is to approve the financial statements before submission to the Board of Directors. The Audit Committee also
assists the Board of Directors in carrying out its responsibilities relating to internal control systems and procedures. The
committee also monitors the role and scope of work of internal and external auditors, including the identification of any
risk areas, and ensures compliance with legal and regulatory provisions and the articles of association. The committee
met four times this year, mainly to review all published financial statements, to review the reports of both internal and
external auditors and to assess and make recommendations to the Board on auditors’ remuneration.
The remuneration of the Chairman and of each member of the committee for the year ended June 30, 2008 amounted
to Rs 60,000 and Rs 40,000 respectively.
Meetings Attendance Board Corporate Audit
Governance Committee
Committee
Thierry Lagesse 7 out of 7 1 out of 1 -
Jean Paul Adam C.B.E. * 2 out of 3 - -
François Boullé 6 out of 7 - 4 out of 4
Marc Freismuth 7 out of 7 1 out of 1 -
Jean Giraud 0 out of 7 - -
Jean Michel Giraud 7 out of 7 - -
Joël Harel 6 out of 7 1 out of 1 4 out of 4
J. Cyril Lagesse 5 out of 7 - -
Raymond Lagesse 7 out of 7 - -
Jean Claude Maingard * 4 out of 4 - -
E. Jean Mamet 5 out of 7 - 4 out of 4
* Mr Jean Claude Maingard was appointed as Director on November 19, 2007 in replacement of Mr Jean Paul Adam
who resigned in October 2007, effective as from after the last Annual Meeting held on December 21, 2007.
Remuneration Philosophy Statement
The Corporate Governance Committee has been delegated to act as Nomination and Remuneration Committee. As
such it is responsible for making recommendations with regard to determining and developing the Company’s general
policy on executive and senior management remuneration, determining specific remuneration packages for Executive
Directors of the Company and the level of remuneration of Non-executive Directors, taking into consideration the
market trend and the Group’s performance.
Please refer to Other Statutory Disclosures on page 22 for a table of total emoluments and benefits received by the
Directors from the Company and subsidiary companies.
Related Party Transactions
Please refer to note 28 on page 61 – Notes to the Financial Statements.
Employee Share Option Plan
The Company does not have any Employee Share Option Plan.
Key Risks Identification and Management
The Directors are ultimately responsible for the adequacy and effectiveness of the internal control system to ensure
that the Company carries on its activities in an orderly manner and in minimisation of all potential risks. In so doing,
the Board relies on the internal audit function to report on any weaknesses and recommendations thereon. Regular
internal audit visits were conducted and reported to the Audit Committee, and ultimately to the Board of Directors,
the objective being to ensure the effective and efficient use of available resources and ascertaining the accuracy of
information used in the preparation of financial statements.
Financial Risks
Please refer to note 3 on pages 45 to 47 – Notes to the Financial Statements
Social, Ethical, Safety, Health and Environmental Policies and Practices
The policies and practices of the Company in terms of social aid comprise of financial assistance to various school projects,
sport federations and sponsorships to children of employees for school and tertiary training courses. As such, the André
Bazerque primary school at Camp-Levieux, being part of the ‘Zones d’Education Prioritaire’ (ZEP), has been sponsored
for the last five years. Marbella Espace Maison Ltée, via its personnel, is also engaged in a social aid programme aimed
at sponsoring various projects in the vicinity of each of our Espace Maison retail stores. Espace Jardin and Cie de Gros
Cailloux Ltée has launched a campaign in collaboration with the ‘Mauritian Wildlife Foundation’ in view of protecting
the endemic plants of Mauritius and financially assisting the Foundation.
In terms of safety, health and environmental issues, our policy is to ensure that our production plants are equipped
to run in such a way as to minimise causing damage to the environment and neighbourhoods. As regards the health
and safety of our employees, a department was created to increase the awareness of employees on security and health
issues by insisting on the use of protective clothing and accessories.
Donations
Please refer to Other Statutory Disclosures on page 23 for details of donations made during the year.
Christophe Quevauvilliers
Company Secretary
September 24, 2008
18 Annual Report Annual Report
19

Other Statutory
Disclosures June 30, 2008
(Pursuant to Section 221 of the Companies Act 2001)
Activities
The principal activity of the Group remains the manufacture and sale of building materials
which consist mainly of our core products: aggregates, rocksand and hollow concrete
blocks. Other products include precast concrete slabs, various concrete building components
including paving-blocks and roof tiles, imported floor and wall tiles, sanitary ware and a
complete range of home building products, fittings and tools. Services rendered consist
mainly of engineering works by the Company’s workshop and contracting services.
As from July 2005, all the commercial activity under Espace Maison was transferred to a
separate legal entity, namely Marbella Espace Maison Ltée.
SUBSiDiARy COMPAniES
Sainte Marie Crushing Plant Ltd
Messrs: Thierry Lagesse - Chairman
Jean Michel Giraud
Richard Koenig
Raymond Lagesse
Welcome industries Ltd
Messrs: Thierry Lagesse - Chairman
Jacques Brousse de Laborde
Jean Michel Giraud
Mr Jacques Brousse de Laborde resigned as Director
with effect from July 1, 2008 and was replaced by
Mr Christophe Quevauvilliers.
Marbella Espace Maison Ltée
Messrs: Jean Michel Giraud - Chairman
François Boullé
Marc Freismuth
Jean Giraud
Joël Harel
J. Cyril Lagesse
Raymond Lagesse
Thierry Lagesse
Jean Claude Maingard
- Appointed on November 19, 2007
in replacement of Mr Jean Paul Adam.
E. Jean Mamet
Mr Jean Paul Adam C.B.E. resigned in October 2007,
effective as from December 21, 2007.
Marbella Ltd
Messrs: Jean Michel Giraud - Chairman
François Boullé
Joël Harel
Land Reclamation Ltd
Messrs: Jean Michel Giraud - Chairman
François Boullé
Jean Giraud
Joël Harel
Mr Louis Raoul Harel resigned on May 15, 2008.
The Stone Masters Co. Ltd
Messrs: Jean Michel Giraud - Chairman
Jean Giraud
Joël Harel
UBP international Ltd
Messrs: Thierry Lagesse - Chairman
Jean Michel Giraud
Louis Raoul Harel
UBP Madagascar
Mr: Gino Guness - Manager
United Granite Products (Pvt.) Ltd
Messrs: Jean Michel Giraud - Chairman
Joseph Albert
Jacques Brousse de Laborde
A. Mahir Didi
Hussain Saad Hasim
Eddy Mancienne
Mr Mohamed Umar Maniku resigned
on December 17, 2007 whilst
Mr Jacques Brousse de Laborde resigned
with effect from July 1, 2008.
Compagnie de Gros Cailloux Ltée
Messrs: Thierry Lagesse - Chairman
François Boullé
Jacques Brousse de Laborde
Jean Michel Giraud
Joseph Vaudin
Mr Jacques Brousse de Laborde resigned as
Director with effect from July 1, 2008 and
was replaced by Mr Christophe Quevauvilliers.
Pricom Ltd
Messrs: Thierry Lagesse - Chairman
Jean Michel Giraud
Joël Harel
20 Annual Report
Stone & Bricks Co. Ltd
Messrs: Jean Michel Giraud - Chairman
Jean Giraud
Joël Harel
Annual Report
21
Directors
Members of the Board of Directors at June 30, 2008 were:
THE COMPAny
Messrs: Thierry Lagesse - Chairman
François Boullé
Marc Freismuth
Jean Giraud
Jean Michel Giraud
Joël Harel
J. Cyril Lagesse - alternate: Arnaud Lagesse
Raymond Lagesse
Jean Claude Maingard - Appointed on November 19, 2007 in replacement of Mr Jean Paul Adam.
E. Jean Mamet
Mr Jean Paul Adam C.B.E. resigned in October 2007, effective as from December 21, 2007.

Other Statutory
Disclosures (continued)
Directors’ Remuneration
Total remuneration and benefits received by the Directors from the Company and its subsidiary companies were as follows:
2008 2007
Executive Non-Executive Executive Non-Executive
Rs’000 Rs’000 Rs’000 Rs’000
The Company 6,894 1,134 4,578 1,134
Subsidiary Companies:
Sainte Marie Crushing Plant Ltd - 120 - 96
Welcome Industries Ltd - - - -
Marbella Espace Maison Ltée - - - -
Marbella Ltd - - - -
Land Reclamation Ltd - - - -
Stone & Bricks Co. Ltd - - - -
The Stone Masters Co. Ltd - - - -
UBP International Ltd - - - -
UBP Madagascar - - - -
United Granite Products (Pvt.) Ltd - - - -
Compagnie de Gros Cailloux Ltée - - - -
Pricom Ltd - - - -
Directors’ and Senior Officers’ Interests in Shares
The Directors’, alternate Directors’ and Senior Officers’ interests in the ordinary shares of the Company at June 30,
2008 were as follows:
Category June 30, 2008 June 30, 2007
no. of ordinary shares No. of ordinary shares
Direct indirect Direct Indirect
Directors
Thierry Lagesse - Chairman NICB 930 150,077 930 20,077
François Boullé INED - 39,673 - 39,673
Marc Freismuth INED - - - -
Jean Giraud INED 5,075 - 5,075 -
Jean Michel Giraud ED 2,987 2,105 2,547 2,105
Joël Harel INED - - - -
J. Cyril Lagesse NED 742 - 742 -
Raymond Lagesse INED - - 19,507 32,500
Jean Claude Maingard NED - - N/A N/A
E. Jean Mamet INED - 1,500 - 1,500
Alternate Directors
Arnaud Lagesse NED - 7,877 - 23,655
Senior Officers
Rémi de Gersigny * - - - -
Christophe Quevauvilliers ** 500 - - -
■ ED – Executive Director ■ NED – Non-Executive Director
■ INED – Independent Non-Executive Director ■ NICB – Non-Independent Chairman of the Board
* Mr Rémi de Gersigny is the Operations and Project Manager.
** Mr Christophe Quevauvilliers is the Finance Manager and Company Secretary.
None of the Directors, alternate Directors and Senior Officers of the Company had an interest in the shares of the
subsidiary companies.
Directors’ Service Contracts
Except for Mr Jean Michel Giraud who has a contract of employment with the Company, there are no service contracts
between the Company and any of the Directors.
Directors’ and Officers’ Insurance and Indemnification
The Directors and Officers of the Company benefit from an indemnity insurance cover for liabilities incurred while
performing their duties, to the extent permitted by law.
Statement of Directors’ Responsibilities
in respect of the preparation of financial statements and internal control.
The Directors are responsible for the proper maintenance of accounting records which disclose at any time, and with reasonable
accuracy, the financial position of the Group and the Company. They are also responsible for safeguarding the assets of the
Group and the Company and for taking reasonable steps to prevent and detect any fraud and other irregularities.
The Directors are also responsible for the preparation and presentation of financial statements for each financial year,
and in so doing they are required to:
■ select and apply consistently suitable accounting policies
■ comply with the provisions of the Companies Act 2001 and the International Financial Reporting Standards (IFRS),
and to explain any departure therefrom
■ use the going-concern basis wherever appropriate
The Directors acknowledge that they have exercised their responsibilities as described above for the financial year under review
and report that nothing has been brought to their attention which could indicate any material breakdown in the internal
control systems and cause a material impact on the trading and financial position of the Group and the Company.
Shareholders
Substantial Shareholders
Shareholders holding more than 5% of the share capital of the Company at June 30, 2008 were as follows:
Shareholders Number of shares % Holding
Compagnie d’Investissement et de Développement Ltée 5,140,206 23.26
Forward Investment and Development Enterprises Ltd 2,088,318 9.45
Except for the above, no person had any material interest of 5% or more in the ordinary share capital of the Company.
Contracts of Significance
No Director or any substantial shareholder were materially interested, either directly or indirectly, in a contract of
significance entered into by the Company or its subsidiaries.
Donations
The Company and its subsidiary companies have donated Rs 776,111 during the year ended June 30, 2008 (2007: Rs 746,045).
Auditors
The auditors’ remuneration was as follows:
The Group The Company
2008 2007 2008 2007
Rs’000 Rs’000 Rs’000 Rs’000
Audit fees 1,222 1,042 675 595
Non-audit fees 250 125 232 107
The auditors, Ernst & Young, have expressed their willingness to continue in office and a resolution for their
re-appointment is being proposed at the Annual Meeting of shareholders.
On behalf of the Board
Thierry Lagesse Jean Michel Giraud
Chairman Managing Director
September 24, 2008
22 Annual Report Annual Report
23

Secretary’s
Certificate
June 30, 2008
I certify that, to the best of my knowledge and belief, the Company has filed with
the Registrar of Companies all such returns as are required of the Company under
the Companies Act 2001.
Christophe Quevauvilliers
Company Secretary
September 24, 2008
Annual Report
25