notes - Mauritius Housing MHC

Annual Report
2001 - 2002

Mauritius Housing Company Ltd
MHC Building, Révérend Jean Lebrun Street, Port-Louis, Mauritius
Tel : (230) 212 0244 / 2803 / 6281 - Fax : (230) 212 3325
E-mail: mhc@mhc.intnet.mu

CONTENTS
1. Our Vision 4
2. Our Mission 5
3. The origin of the Company 6
4. Registered Office 7
5. Branches & Locations 7
6. Board of Directors 8
7. Senior Management 9
8. Auditors 9
9. Chairman’s Report 10
10. Managing Director’s Report 15
11. Audited Final Accounts 28
ANNUAL REPORT 2001 - 2002
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3

Vision
Our Vision
To become the preferred provider
of housing finance in Mauritius
4

Mission
Our Mission
To help as many families as possible
to become owners of a house and to be at the forefront
of housing development in the country.
5

The
ORIGIN
of the
Company
Mauritius Housing Corporation was formed in 1963 following the split of the then Mauritius Agriculture
Bank under the Mauritius Housing Corporation Ordinance 1962 and was later governed by the
Mauritius Housing Corporation Act 1974. M.H.C. LTD was incorporated as a public company on 12th
December 1989 under the Companies Act 1989 and took over the operations of the Corporation in May
1990.
The Company changed name twice: first to MHC LTD on 1st May 1991 and then to its present name
Mauritius Housing Company Ltd on 18th February 1994.
Over 40 years the institution has been serving the country with great dedication and helped about 60,000
families to become owner of a house.
ANNUAL REPORT 2001 - 2002
6

REGISTERED
OFFICE
MHC Building,
Reverend Jean Lebrun Street, Port Louis
Tel: 212 0244/ 212 2803 Fax: (230) 212 3325
HEAD
OFFICE
MHC Building,
Reverend Jean Lebrun Street, Port Louis
Tel: 212 0244/ 212 2803 Fax: (230) 212 3325
CENTRAL FLACQ
BRANCH
CUREPIPE
BRANCH
Manhattan Heights
Rue Lees, Curepipe
Tel: 676 0245/46 - Fax: 676 0248
ANNUAL REPORT 2001 - 2002
Gallery Riverland
Sairally Lane
Tel: 413 5139/40 - Fax: 413 5138
GOODLANDS
BRANCH
Royal Road
Tel: 282 1460 - Fax: 282 1461
RODRIGUES
BRANCH
Rue Morrisson
Port Mathurin
Tel: 831 1787 - Fax: 831 1788
7

BOARD
of
The
Directors
Mr. M. GUJADHUR Chairman (up to January 2002)
Dr. M. A. KODABACCUS Chairman (from January 2002)
Mr. L. D. UNMOLE
Mr. K. DAWONAUTH
Managing Director
Senior Financial and Management Analyst,
Ministry of Finance, Rep Government of Mauritius
Mrs. K. BHOOJEDHUR-OBEEGADOO
Ms. A. J. N. MAULLOO
Managing Director, SICOM Ltd.
Permanent Secretary, Ministry of Housing and Lands,
(up to October 2001)
Mrs N. BOODHOO
Permanent Secretary, Ministry of Housing and Lands
(from January 2002)
Mr. V. MULLOO
Permanent Secretary, Ministry of Social Security, National Solidarity and Senior
CitizensWelfare,Rep National Pensions Fund (up to May 2002)
Mrs. A. RAMPHUL-PUNCHOO Representing State Investment Corporation Ltd. (up to January 2002)
Mr. A. SALAUROO Representing State Investment Corporation Ltd. (from January 2002)
ANNUAL REPORT 2001 - 2002
Mr. S. AYADASSEN President of MHC Staff Association (up to February 2002)
Mr. B. NUCKCHEDDY President of MHC Staff Association (from February 2002)
Mr. D. MAYWAH Secretary of MHC Staff Association (up to February 2002)
Mr. S. MAUDARUN Secretary of MHC Staff Association (from February 2002)
Mr. K. NARROO
Company Secretary
8

SENIOR
Management
Mr. L. D UNMOLE
Managing Director
Mr WONG POW FA Chief Manager (Retired w.e.f 10/01/03)
Mr. R. K. MUDALIAR
Mr. A. NOBAUB
Mr. V. PACKIRY POULLE
Mr. M. CHINTARAM
Officer in Charge, Accounts Department
Manager, Information Systems
Manager, Technical Department
Manager, Personnel & AdministrationDepartment
Mrs. M. LAMALETIE Manager, Mortages Department (Retired w.e.f 13/11/02)
ANNUAL REPORT 2001 - 2002
Auditors
Grant Thornton
Fairfax House
LEGAL
Advisers
21, Mgr Gonin Street,
Port-Louis
Me P Balmanno S.A
Me A Robert CBE, SEM (Jr)
Me G Ollivry Q.C.
9

CHAIRMAN’S REPORT
10

The Directors are pleased to present their Annual
Report together with the audited accounts of the
company for the year ended 30th June 2002.
The Board is proud to report that the overall
performance of the company for the financial year
2001-2002 was satisfactory.
The Directors have complied with the provision of the Companies Act 2001 in the preparation of
the financial statements, thereby ensuring that the accounts give a true and fair view of the state
of affairs of the company. Messrs Grant Thornton, our new auditors, have audited our accounts
and reported favourably thereon.
OPERATING
Results
* MHC achieved a net profit of Rs 131.6 million for 2002, an increase of 9.8% over last year.
The net profit margin as at 30th June 2002 stood at 23%.
ANNUAL REPORT 2001 - 2002
* The return on equity was 17.1 % for the financial year 2001/2002.
* Interest income reached Rs 620.7 million, up by Rs 46.4 million from last year.
* An amount of Rs 19.73 million equivalent to 15% of net profit was transferred to the General
Reserve Fund. The latter was created to cover business contingencies.
DIVIDENDS
and
Reserves
* Total dividends proposed for the year will amount to Rs 17.1 million, worked out in line with our
Dividend Policy. This will represent a 14% growth over the amount paid for in financial year
2000/2001.
* Reserves broke the Rs 1 billion mark to reach Rs 1.19 billion over the year under review, with a
healthy 25.2% rise as compared to the previous financial year.
* Shareholders’ funds totalled Rs 1.29 billion at 30th June 2002. Net assets value per share was
Rs 579.20 over the year.
11

Competition is getting fiercer in the market. Organisations that aim to survive have no choice but
to respond to this challenge. MHC will therefore, undertake a radical overhaul in the way it
manages its human resources and carry out value-added management. Besides being a customeroriented
company, we promote the development of our employees. Through constant participation
of our employees, we believe that we shall be able to satisfy the ever-increasing expectations of our
customers and shareholders.
The weekly management committee is chaired by the Managing Director and provides a forum
reviewing and managing MHC’s business interests. All operational matters are conveyed for
analysis, consultation and decision by an active involvement of the various heads of
sections/departments. Staff is regularly kept informed of all major decisions pertaining to the
company through staff meetings, circulars and memoranda.
MANAGEMENT
and
Staff
The Directors thank Board members and Staff who left
office during the financial year 2001/02 and welcome all
those who have joined the Company.
* Mr S Seebaluck, Financial Controller, resigned on 9th January 2002.
* Mrs Ramkoosalsing (attorney) and Mr R Abeeluck (architect) joined office during the year.
ANNUAL REPORT 2001 - 2002
* Mr M. Gujadhur, Chairman of the Board since December 2000, resigned in January 2002.
* Dr M.A Kodabaccus was appointed Chairman as from January 2002.
* Director A.J.N.Maulloo (representing Ministry of Housing and Lands) resigned in October
2001 and was replaced by Mrs N.Boodhoo.
* Mrs A. Ramphul-Punchoo (representing State Investment Corporation Ltd) resigned in
January
2002 whilst Mr A.Salauroo joined the Board to replace her.
* Messrs S.Ayadassen and D.Maywah (representing MHC staff) were in the Board till February,
after which they were replaced by Mr B.Nuckcheddy and Mr S.Maudarun.
12

CORPORATE
Governance
MHC is committed to good corporate governance principles as we believe that they provide
confidence to employees, clients and the shareholders.
* The Board consists of a non-executive Chairman, a Chief Executive and seven non-executive
Directors from different business spheres. To reflect more transparency in the company’s overall
operations and especially to recognize the importance of employees as a stakeholder in the
company, two staff members are appointed as non-executive Directors of the Board.
Normal Board Meetings are carried out monthly; Special Board Meetings are held as and when
urgent and important issues arise. All major policies and operational matters are submitted by
management to the Board for discussion. Board approval is sought in matters like MHC’s
strategic plan, policy decisions, significant capital expenditure, housing loans exceeding Rs 1.5
million, appointment of staff or special loans to companies with Housing Development
Certificates.
ANNUAL REPORT 2001 - 2002
The roles of the Chairman and those of the Managing Director as the Chief Executive Officer of
the organisation are separated and well defined.
The Directors can seek the advice and services of the Company Secretary. They have full and
timely access to all relevant information.
The shareholders determine the remuneration of the Chairman, the Managing Director and the
non-executive Directors.
* External Auditors
The Company has started to rotate its auditors. This year Messrs Grant Thornton was appointed
as external auditors.
* Internal Audit Department
The internal Audit Department is headed by a professional Accountant and works in all
independence. We intend to further reinforce the internal auditing function.
13

PROSPECTS
The core objective of MHC is to cater for the housing needs of Mauritians. However, the progress
of the Company is closely linked to the economic performance of Mauritius and to the company’s
progressive strides in offering quality services/products as well as new ones. Mortgage finance is
a small market though with a large number of competitors. Overall, MHC’s two-fold strategy in
the short term will involve consolidating its market share in its core activities and broadening its
product/service base. Though 2003 will be a difficult year with rampant competition, MHC
through products and services differentiation is confident to create more wealth for its
shareholders.
APPRECIATION
On behalf of the Board of Directors, I would like to express my appreciation and thanks to the
members of Staff and Management for their significant contribution to the company’s success.
Without their dedication and hardwork, the results achieved during the past year would not have
been possible. Board Members have equally been very supportive in all decisions taken during the
year and I wish to thank them for their guidance, advices and fruitful contribution at Board
Meetings.
ANNUAL REPORT 2001 - 2002
Dr M.A KODABACCUS
Chairman
14

MANAGING DIRECTOR’S REPORT
15

MANAGING DIRECTOR’S REPORT TO THE SHAREHOLDERS
I am pleased to submit to you our Management Report on the
operations and affairs of the company for the year ended
30th June 2002.
The economic performance of Mauritius was underpinned by
ECONOMIC
Review
a real GDP growth rate of 4.6% for the financial year ended
June 2002. Inflation was contained at 6.3% for the year. The
performance of the main sectors was mixed. Sugar
production fell by 11.7%. Tourism earnings grew by 27.6 %.
The growth momentum in the EPZ sector fell by 4% due to prolonged weakness of the Euro,
economic slowdown of our main markets and our rising unit labour cost. Against the backdrop of
the economy’s performance, the ‘business and financial services’ sector was more promising.
The Bank of Mauritius revised its lending rate by 25 points twice during the year bringing it to
11.5%. These cuts were basically intended to boost up domestic activity which due to low
investment and high unemployment was more or less sluggish In spite of these declines in interest
rates, monetary policy remained relatively tight overall, with high premiums being observed on
real interest rates. In 2001/02, the financial services sector grew by 13.6%. The banking sub-sector
experienced a 6.5% growth in housing construction finance over the year, followed by a 6.1%
growth by insurance companies. MHC registered a modest growth of 2.8% in its core business. As
at June 2002 the construction sector experienced a growth rate of 8.5%, while residential
buildings grew by 2.6% and owner-occupied dwellings by 3%.
ANNUAL REPORT 2001 - 2002
Against this economic background and
especially where the situation of excess
liquidity in the money market still prevailed,
IN A Nutshell
MHC has had to fence its way forwards in its drive to consolidate its acquired share of the
mortgage market and to remain in the forefront of housing development in the country.
Competitors, especially the commercial banks, became even fiercer and the fall in the Lombard
Rate did not arrange matters at all.
16

However, MHC’s dedication to place the interest of the client at the center of all its actions -
whether development of products, provision of services and office infrastructural renovation -
proved to be rewarding.
The constant simplification of our administrative procedures, enhancement of both products and
ANNUAL REPORT 2001 - 2002
IN A
Nutshell
services offered and the development of new products have enabled MHC to generate
business to the tune of Rs 620.7 million for the Financial Year. Gross profit increased from
Rs 166.9 million to Rs 170.9 million whilst Net Profit from Rs 119.8 million to Rs 131.6 million.
Total Mortgage Assets have now climbed to Rs 5,061million (Rs 4924.1million as at last year);
MHC’s commitment to Government vision of “Un toit pour chaque famille mauricienne” is,
therefore, reinforcing year by year.
During the financial year 2001/02, the long outstanding problematic issue of raising of funds to
finance the operations of the Company was successfully addressed through direct raising of funds
from the public.
17

REVIEW
of the year’s
performance
3.1 Gross Operating Income
Operating income experienced a rise of Rs 46.4 million during the financial year 2001/02 rising from 574.3 million to
Rs 620.7 million. This item consists of interest on housing loan, interest subsidy from Government in relation to
Government Sponsored Loans (GSL) and interest on bank deposits.
Turnover (consisting of interest on housing loan and interest subsidy from the Government) increased from Rs 541.9
million in FY 2000-2001 to Rs 549.7 million during FY 2001/02. The bulk of interest income originated from normal
housing loans with a share of 79%; this result being the consequence of the rectification of the mix of normal loans
and GSL in the Housing Loans Portfolio.
The sharp increase in interest on bank deposits from Rs 7.2 million to Rs 40.1 million was due to the building up of fund
needed to finance mainly the joint BPML/MHC construction of a residential complex at the Ebène Cybercity site.
3.2 Interest Expense
Interest expense rose by 10.4% from Rs 407.4 million during the FY 2000/01 to Rs 449.8 million during FY 2001/02.
ANNUAL REPORT 2001 - 2002
This rise was largely attributed to the increased amount provided for interest accrued on PEL accounts and the effect
of interest provided for the last loans taken from NPF/NSF started to be felt.
3.3 Profit
Net Profit increased by Rs 11.7 million for the period ended 30.06.02 i.e. a 9.8% increase over last year’s. With a
realized net profit of Rs 131.6 million, dividend proposed to shareholders will increase by 14% at Rs 17.1 million. The
year after year increase in the results of the operations and activities of the Company clearly shows the strength of the
Company despite the ever-increasing competitive environment in which it is evolving.
18

Reserves have in consequence increased to Rs1,195 million i.e an increase of 25% over last year’s.
REVIEW
of the year’s
performance
ANNUAL REPORT 2001 - 2002
REVIEW
of the year’s
performance
3.4 SOME RATIOS
3.4.1 INTEREST COVER
Interest Cover at 1.38 times shows how comfortable the interest expenses can be met from the total operating income.
3.4.2 CURRENT RATIO
Current Ratio has improved to 2.4. This shows the ease with which the Company could meet its short-term obligations
and other commitments. The improvement in the Current Ratio contributed also in the general enhancement of the
corporate image.
19

REVIEW
of the year’s
performance
3.4.3 Return on Capital Employed (ROCE)
ROCE worked out to 10.2%.
3.4.4 Earnings per Share (EPS)
EPS continued to increase. At the end of the Financial Year EPS was at Rs 13.16 against Rs 11.98 for the FY 2001. In
line with the progress and growth of the Company achieved, the wealth of the shareholders accordingly witnessed a
positive growth.
3.5 Mortgage Assets
Though competition in the mortgage market was tight net mortgage assets of the MHC broke the Rs 5 billion mark
during the year under review to reach Rs 5.061 billion. This represented a 3% increase over last year’s mortgage
portfolio.
This result has been achieved through MHC’s responsiveness to the market. The existing procedures were revisited to
streamline the loan sanctioning process so as to provide a better service to the clients. The various prevailing interest rates
applying to the different schemes were harmonized into a single interest rate. Besides, the interest rate was reduced from
13/14% p.a. to 12.5% p.a. All products, be it housing loans for purchase of land, purchase of property, construction,
ANNUAL REPORT 2001 - 2002
extension, renovation , purchase or construction of a second
housing unit, refinancing, were offered to the public since
January 2002 at 12.5% p.a. During the year a new mortgage
product was developed and offered to the public - our Land
Loan. The Land loan Scheme was worked out to meet the
increasing demand of many Mauritians who as a step towards
homeownership want to acquire a plot of land. The Land
Loan Scheme has since then proved to be popular.
20

3.5.1 Loans Approved
During the year 1815 loans totalling Rs 406 453 000 were approved as follows:
NUMBER
AMOUNT (RS)
Normal Loans 1385 313,231,000
3.5.2 Government Sponsored Loans (GSL)
6.5 % Government
Sponsored Loans 164 36,649,000
10 % Government
Sponsored Loans 266 56,573,000
TOTAL 1815 406,453,000
The total number of GSL approved during the year totalled Rs 93,222,000. The share of GSL out of total loans
approved stood at 23.38%. A breakdown of the GSL figures showed that the share of 6.5% GSL was 39.3% (Rs
36,649,000.- for 164 approved loans), whilst that of 10% GSL was 60.7% (Rs 56,573,000 - for 266 approved loans).
Total grant amount paid to eligible clients on behalf of Government was Rs 4,306,000.- over the past year. The review
of the respective mix of GSL and normal loans in our Loans portfolio has reduced the financial burden of Government
in terms of interest subsidy and refund of grant paid to the public on behalf of Government. This has also reduced
MHC’s dependency on Government.
6.5% GSL APPROVED (MAURITIUS & RODRIGUES) 10% GSL APPROVED (MAURITIUS & RODRIGUES)
Financial Yr Number Total (Rs) Grant (Rs)
1998/1999 292 56,636,000 7,563,200
Financial Year Number Total (Rs)
1998/1999 338 72,071,000
ANNUAL REPORT 2001 - 2002
1999/2000 211 44,183,000 5,882,900
2000/2001 212 43,038,000 5,620,600
2001/2002 164 36,649,000 4,306,000
1999/2000 272 56,829,000
2000/2001 254 49,822,000
2001/2002 266 56,573,000
REVIEW
of the year’s
performance
21

3.5.3 Non-Subsidised/ Normal Loans
Normal loans approved during the year reached Rs 313.2 million with 1,385 loans. The
share of normal approved loans out of total loans was 77.06%.
REVIEW
of the year’s
performance
TOTAL NORMAL LOANS APPROVED (MAURITIUS & RODRIGUES)
Financial Year Number Total (Rs)
1998/1999 1421 303,066,000
1999/2000 1560 331,853,000
2000/2001 1232 270,813,000
2001/2002 1385 313,231,000
While the number of loans approved has only slightly increased, the amount on the other hand has grown by 15.7%
over the Financial Year.
3.5.4 Loans approved in Rodrigues
Loans approved at our Rodrigues branch totalled Rs 6.75 million for the year and were as shown below:
ANNUAL REPORT 2001 - 2002
TOTAL LOANS APPROVED - (RODRIGUES)
Financial Yr Number Total (Rs) Grant
1999/2000 110 18,744,000 237,000
2000/2001 95 18,430,000 390,000
2001/2002 48 6,750,000 180,000
22

3.5.5
TOTAL LOANS APPROVED - (MAURITIUS - RODRIGUES) OVER THE YEAR
Financial Year Number Total (Rs)
1998/1999 2,051 431,773,000
1999/2000 2,043 432,865,000
2000/2001 1,698 363,673,000
2001/2002 1,815 406,453,000
3.5.6 Loans Disbursed
Total loan amount disbursed during the year amounted to Rs 362.33 million, with Rs 351.093 for Mauritius and Rs
11.24 million for Rodrigues.
3.6 RAISING OF FUNDS - HOUSING DEPOSIT CERTIFICATES (HDCS)
The problematic issue crippling the Company for years was successfully addressed during the year. Borrowing from
its traditional lenders was becoming more and more expensive and that made MHC less able to withstand competition
ANNUAL REPORT 2001 - 2002
from other financial institutions. Thus, management revived the Authorisation to transact deposit-taking business
initially secured from Bank of Mauritius since 1994/95. It boldly and wisely introduced the Housing Deposit
Certificate (HDC) as a major funding tool for MHC in September 2001. The HDC has since enabled MHC to raise
funds directly from the public and stand on its own feet regarding the funding of its operations. In fact HDC has
proved to be so successful that within a few months deposits accepted exceeded expectation.
As at June 2002, the Company mobilized deposits to the tune of Rs 380 million, which exceeded the targeted amount
of Rs 300 million. Deposits collected from institutions amounted to Rs 32.7 million whilst individuals contributed
about Rs 347 million . Hence HDCs enabled MHC for the first time since its existence to refrain from borrowing from
its usual lending institutions at high rates of interest. The cost of funds improved drastically and MHC was thus able
to review its mortgage interest rates for normal loans from 13/14% p.a. to 12.5% p.a. as from January 2002.
This depicts the credibility of MHC in the eyes of the public, as a sound financial institution where they can invest
their money safely.
REVIEW
of the year’s
performance
23

3.7. PLAN EPARGNE LOGEMENT
(PEL)
The drain of PEL
capital has been
contained. This year witnessed an
increase in our PEL from Rs 483.3 million
to Rs 518.1 million. The PEL scheme is
being revisited to make it more attractive.
ANNUAL REPORT 2001 - 2002
REVIEW
of the year’s
performance
24

3.8 NEW SCHEMES/ SERVICES
With the drive to serve the clients better, and better management has adopted a culture of
continuous product and service development/innovation
3.8.1 Land Loan Scheme
Buying a plot of land and starting construction simultaneously
warrant a lot of funds and many potential clients are finding this beyond their means. To cater for this market segment
MHC introduced a Land Loan Scheme in July 2001. This helps all those who want to buy a plot of land but who cannot
afford immediate construction. As at 30th June 2002, a total amount of Rs 40.6 million was approved for such loans
thus enabling 142 families to benefit from this Scheme.
3.8.2 Architectural Services
REVIEW
of the year’s
performance
The Company introduced the provision of architectural services to the public in July 2001. These services include
type-plan as well as tailor-made plan at affordable price. This constitutes an added value to the various services MHC
already offers to its clients. Now for a nominal fee people from the low income group can benefit from professional
architectural services. During the Financial Year under review 28 clients have already availed of such facilities.
ANNUAL REPORT 2001 - 2002
3.8.3 In-house execution of Fixed Charge Documents
Our Legal Department has been reinforced to extend the facility of execution of fixed charge documents to more
clients. Most of our clients now choose to have their loan documentation finalised by MHC for a reasonable fee.
However, the client still has the flexibility to choose his own Notary.
3.9 BRANCHES & DECENTRALISATION
As announced last year, we have successfully launched a new branch at Curepipe in September 2001. This branch is
now serving all our clients and the public in general living in the Southern part of the island and on the central
plateau. The branch is offering the whole range of products and services offered at the Head Office and has already
become popular.
During the year the branch approved Rs 45.4 million housing loans and accepted Rs 10.1 million and Rs 50.4 million
in PEL and HDC Deposit respectively.
25

The Flacq and the Rodrigues branches will also be upgraded to offer a better service to
the clients.
Decentralisation exercise was pursued during the year. MHC organized some seminars
and talks with targettted groups/organizations to disseminate MHC’s activities and the
products and services offered.
3.10 JOINT VENTURE WITH BUSINESS PARKS OF MAURITIUS (BPML)
I will close my review with MHC’s successful teaming up with BPML in the prestigious construction project of a
residential complex and a recreational complex at the Ebene Cybercity site. This shows the credibility and corporate
image that the MHC enjoys as a leading housing finance in the country. In fact MHC was sollicited to share its 39
years of experience and expertise in construction/estate management, with BPML. The project comprises the
construction and ultimate disposal of 210 housing units over a land of 8.44 hectares with:
* 56 two-bedroom apartments;
* 100 three-bedroom apartments and
* 54 bungalows
This strategic joint venture entails the following spillover effects to MHC:
(i)
(ii)
(iii)
short term investment yielding a good return
potential clients for the purchase of the apartment/bungalows and
enhancement of the Company’s image.
The CyberVillage project demonstrates the Company’s proactive stance as it will pave the way to other prospective
mega projects. It equally marks the MHC’s venture into an IT economy.
ANNUAL REPORT 2001 - 2002
The project is targeted to be completed by June 2003. MHC and BPML have already accepted to temporarily
handover the Residential Complex to the Comité Organisateur des Jeux des Iles during the games to provide
accommodation to the participating athletes. This occupation will be given free of charge as MHC’s and BPML’s
contribution to the games.
MHC’s participation in this prestigious project at national level clearly demonstrates the credibility of the Company
in the eyes of the nation and above all its ability for fulfillment.
26

The strength of the company is depicted below.
REVIEW
of a Financial
performance
FINANCIAL HIGHLIGHTS
2000/01 2001/02
Rs M
Rs M
Interest Income 574.33 620.74
Net Profit 119.8 131.55
Net Assets 5111.3 5792.07
Retained Earnings 634.62 729.34
Mortgage Assets 4924.1 5041
Shareholders’ Funds 1105.5 1295.4
PEL (capital deposited) 487.74 523.99
EVOLUTION OF KEY FINANCIAL ITEMS
2001/02 2000/01* 1999/00 1998/99
Rs M Rs M Rs M Rs M
Total Income 650.1 609.9 598.3 616.0
ANNUAL REPORT 2001 - 2002
Net Profit 131.6 119.8 106.6 151.2
Net Assets 5792.1 5111.3 4904.6 4559.3
Mortgage Assets 5061 4924.1 4897.6 4506.2
Fixed Assets 229.7 126.4 123.2 118.9
Reserves 1195.4 1005.5 876.5 860.7
Long Term Liabilities4496.7 4005.8 3928.1 3598.6
EPS 13.2 12.0 10.7 15.1
ROCE 10.2 10.8 10.9 15.7
Current Ratio 2.4 1.7 1.1 1.1
* restated figures
L D UNMOLE
Managing Director
27

AUDITED FINANCIAL
STATEMENTS
REPORT FROM THE SECRETARY 29
AUDITORS’ REPORT 29-31
INCOME STATEMENT 32
BALANCE SHEET 33-34
STATEMENT OF CHANGES IN EQUITY 35
CASH FLOW STATEMENT 36
NOTES TO THE FINANCIAL STATEMENTS 37-56
ANNUAL REPORT 2001 - 2002
28

REPORT FROM THE SECRETARY TO THE MEMBERS OF MAURITIUS HOUSING
COMPANY LTD UNDER SECTION 166(d) OF THE COMPANIES ACT 2001
I certify that I have filed with the Registrar all such returns as are required of the Company under the Companies Act
2001, which came into effect on 1st December 2001.
Mr Kreshan Narroo
Company Secretary
Date:
AUDITORS’ REPORT TO THE MEMBERS OF MAURITIUS HOUSING COMPANY LTD
We have audited the financial statements of Mauritius Housing Company Ltd on pages 7 to 28 which have been
ANNUAL REPORT 2001 - 2002
prepared in accordance with the accounting policies set out on pages 11 and 12.
DIRECTORS’ RESPONSIBILITIES
The directors are responsible for the preparation of financial statements which are in accordance with and comply
with the Mauritius Companies Act 2001 and International Accounting Standards, and which present fairly the
financial position of the Company at 30 June 2002 and of its financial performance, changes in equity and cash flows
for the year then ended. 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.
29

AUDITORS’ RESPONSIBILITIES
It is our responsibility to form an independent opinion, based on our audit, on those
financial statements and to report our opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with International Standards on Auditing. An audit includes examination, on
a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an
assessment of the significant estimates and judgements made by the directors in the preparation of the financial
statements, and of whether the accounting policies are appropriate to the Company’s circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered
necessary in order to provide us with sufficient evidence to give reasonable assurance as to whether the financial
statements are free from material misstatement. In forming our opinion, we also evaluated the overall adequacy of
the presentation of information in the financial statements. We believe that our audit provides a reasonable basis for
our opinion.
We have no relationship with, or any interests in the Company other than in our capacity as auditors.
OPINION
We have obtained all the information and explanations that we have required.
In forming our opinion we draw attention to the following matters:
(i)
We were appointed auditors on 22 February 2002 and in consequence did not report on the financial
ANNUAL REPORT 2001 - 2002
(ii)
statements for the year ended 30 June 2001.
As part of its housing programmes, the Company has provided secured housing loans facilities to a number
of low income earners. The amount outstanding, after provision for bad debts of Rs 56M, at 30 June 2002
amounted to Rs 258M and is included under secured loans in the balance sheet. The directors have assessed
the recoverability of these secured loans and are of the opinion that there is enough evidence to believe that
the full amount of Rs 258M is recoverable and hence the provision for bad debts made in these financial
statements is adequate. We have, therefore, relied upon the directors’ assurance that the amount of Rs 258M
is fairly stated in these financial statements.
30

Auditors’ report to the members of Mauritius Housing Company Limited (cont.)
Opinion (cont.)
In view of the significance of the above two matters we consider that they should be drawn to your attention but our
opinion is not qualified in this respect.
IN OUR OPINION
(a) proper accounting records have been kept by the Company as far as appears from our examination of those
records; and
(b) the financial statements present fairly the financial position of the Company at 30 June 2002 and of its
financial performance, changes in equity and cash flows for the year then ended and comply with the
Mauritius Companies Act 2001 and International Accounting Standards.
Grant Thornton
Chartered Accountants
ANNUAL REPORT 2001 - 2002
A S HAJEE ABDOULA, FCA
Signing Partner
Date: 18. Oct 2002
31

FINANCIAL
statements
INCOME STATEMENT - FOR THE YEAR ENDED 30 JUNE 2002
Notes 2002 2001
Rs’000
Rs’000
Interest income 2 620,737 574,327
Interest expense 3 (449,822) (407,413)
Net interest income 170,915 166,914
Other income 4 29,397 35,596
200,312 202,510
Operating expenses 5 (66,558) (57,464)
Operating profit before provision 6 133,754 145,046
General provision 12 (2,200) (25,208)
Net profit 131,554 119,838
Dividends 7 (17,102) (15,000)
Transfer to General Reserve 8 (19,733) (17,976)
Retained profit for the year 94,719 86,862
Rs
Rs
Earnings per share 9 13.16 11.98
ANNUAL REPORT 2001 - 2002
The notes on pages 11 to 28 form an integral part of these financial statements.
32

BALANCE SHEET - 30 JUNE 2002
Notes 2002 Restated 2001
Rs’000
Rs’000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 10 224,940 121,572
Housing estates 11 4,783 4,783
Non-current receivables 12 4,961,925 4,736,109
5,191,648 4,862,464
CURRENT ASSETS
Trade and other receivables 13 287,137 398,620
Cash in hand and at bank 731,871 229,957
1,019,008 628,577
TOTAL ASSETS 6,210,656 5,491,041
ANNUAL REPORT 2001 - 2002
The notes on pages 11 to 28 form an integral part of these financial statements.
33

BALANCE SHEET - 30 JUNE 2003
EQUITY AND LIABILITIES
CAPITAL AND RESERVES
Share capital 14 100,000 100,000
Revaluation and other reserves 15 466,058 320,269
Revenue reserves 16 729,341 634,622
1,295,399 1,054,891
NON-CURRENT LIABILITIES
Borrowings 17 3,000,167 3,003,031
Retirement benefit obligations 18 16,480 15,410
PEL and other savings accounts 19 1,248,024 780,973
Long term liability - NHDC 20 231,999 257,035
4,496,670 4,056,449
CURRENT LIABILITIES
Trade and other payables 21 44,332 40,107
Borrowings 17 357,153 324,594
Dividends 7 17,102 15,000
418,587 379,701
TOTAL EQUITY AND LIABILITIES 6,210,656 5,491,041
ANNUAL REPORT 2001 - 2002
Approved by the Board of Directors on 16 Oct 2002
Mr L. D. Unmole )
DIRECTORS
Mr K. Dawonauth )
The notes on pages 11 to 28 form an integral part of these financial statements.
34

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2002
Share
Revaluation
Capital and other Reserves Revenue Reserves Total
Rs’000 Rs’000 Rs’000 Rs’000
Balance at 1 July 2000 100,000 278,088 598,410 976,498
Net movement on reserves - 42,181 (17,976) 24,205
Dividends - - (15,000) (15,000)
Net profit for the year - - 119,838 119,838
Prior year adjustment (Note 16)- -- - (50,650) (50,650)
Balance at 30 June 2001-restated 100,000 320,269 634,622 1,054,891
Balance at 1 July 2001 100,000 320,269 634,622 1,054,891
Net movement on reserves - 145,789 (19,733) 126,056
Dividends - - (17,102) (17,102)
Net profit for the year - - 131,554 131,554
Balance at 30 June 2002 100,000 466,058 729,341 1,295,399
ANNUAL REPORT 2001 - 2002
The notes on pages 11 to 28 form an integral part of these financial statements.
FINANCIAL
statements
35

CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2002
2002 2001
Rs’000
Rs’000
OPERATING ACTIVITIES
Cash generated from operations (Note 22) 583,651 538,691
Interest received 32,406 8,794
Interest paid (381,804) (385,759)
Net cash from operating activities 234,253 161,726
INVESTING ACTIVITIES
Subsidies received and offset 16,030 14,411
Subsidies granted (5,624) (4,854)
Purchase of property, plant and equipment (4,511) (11,580)
Disposal of property, plant and equipment 365 1,279
Purchase of foreclosed property (7,909) -
Disposal of foreclosed property 1,711 -
Disposal of housing estates - 794
Secured loan granted - net (136,905) (26,509)
PEL and other savings accounts 414,846 37,984
Interest on pension fund - 5,485
Net cash from/(used in) investing activities 278,003 17,010
FINANCING ACTIVITIES
Repayment of debentures (92,786) (92,786)
Proceeds from long term borrowings 278,517 410,754
Payments on long term borrowings (195,157) (488,332)
Payments on long term liability (25,036) (26,350)
Dividends paid (15,000) (15,000)
Net cash (used in)/from financing activities (49,462) (211,714)
ANNUAL REPORT 2001 - 2002
Increase/(decrease) in cash and cash equivalents 462,794 (32,978)
MOVEMENT IN CASH AND CASH EQUIVALENTS
At 1 July 2001 166,422 199,400
Increase/(decrease) 462,794 (32,978)
At 30 June (Note 22) 629,216 166,422
The notes on pages 11 to 28 form an integral part of these financial statements.
36

NOTES
financial
to the
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2002
1. ACCOUNTING POLICIES
The principal accounting policies adopted by the Company are as follows:
(a) Basis of preparation
The financial statements are prepared in accordance with and comply with International Accounting
Standards and under the historical cost convention as modified by the revaluation of freehold land
and buildings.
(b) Property, plant and equipment
All property, plant and equipment are initially recorded at cost. Land and buildings are subsequently shown
at market value, based on triennial valuations by external independent valuers, less subsequent depreciation
for property. All other property, plant and equipment are stated at historical cost less depreciation.
Increases in the carrying amount arising on revaluation are credited to revaluation and other reserves in
shareholders’ equity. Decreases that offset previous increases of the same asset are charged against the
revaluation reserve; all other decreases are charged to the income statement.
Depreciation is calculated to write off the cost of each asset or its revalued amount to its residual value
ANNUAL REPORT 2001 - 2002
over its estimated useful life, with the exception of foreclosed property and freehold land.
The annual rates used are as follows:
Freehold buildings 2% Reducing balance basis
Improvement to leasehold property 10% Straight line basis
Furniture and equipment 10 & 33 1/3% Straight line basis
Motor vehicles 20% Straight line basis
Where the carrying amount of an asset is greater that its estimated recoverable amount, it is written down immediately to its
recoverable amount.
Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying amount and are
taken into account in determining operating profit. On disposal of revalued assets, amounts in revaluation and other reserves
relating to these assets are transferred to the income statement.
37

NOTES
financial
to the
STATEMENTS
1. ACCOUNTING POLICIES (Contd)
FOR THE YEAR ENDED 30 JUNE 2002
(c)
Housing Estates
Housing Estates are valued at cost
(d)
Interest receivable
Interest on secured loans is recognised as income in the income statement of the accounting period
in which it is receivable.
(e)
Penalty on late payments
There is a surcharge equivalent to 10% of the monthly repayment that is not made within fifteen days
from the last day of the month when the payment falls due. This surcharge is accounted for in the
income statement as and when received.
(f)
Loans receivable - short term
Short term loans receivable represents the portion of loans receivable within one year.
(g)
Life assurance
ANNUAL REPORT 2001 - 2002
(h)
Secured loan holders are required to make contribution to the Company which provides life assurance cover
for a sum equal to the balance outstanding of their account. 90% of the contribution is credited to Life
Assurance Reserve and the remaining 10%, representing the Company’s charge for the administration of
the scheme, is credited to the income statement.
Retirement benefit obligations
The Company contributes to a defined benefit plan for its staff. The cost of providing benefits is determine
during the projected unit credit method so as to spread the regular cost over the service lives of employees
in accordance with the advice of qualified actuaries who carry out a full valuation of plans every five years.
38

NOTES
financial
to the
STATEMENTS
(i)
(j)
Actuarial gains and losses which exceed 10 per cent of the greater of the present value of the Company’s
pension obligations and fair value of plan assets are amortised over the expected average remaining
working lives of the participating employees.
The amount recognised in the balance sheet represents the present value of the defined benefit obligation
as adjusted for unrecognised actuarial gains and losses and unrecognised past service cost, and as reduced
by the fair value of plan assets. Any asset resulting from this calculation is limited to unrecognised
actuarial losses and past service cost, plus the present value of available refunds and reductions in future
contributions to the plan.
Interest subsidy and grants
Interest subsidy and interest on grants receivable from Government of Mauritius in respect of Government
Sponsored Loans are accounted on an accrual basis for current year’s claims.
General reserve
The Company has decided to set up a General Reserve which will act as a buffer for any contingencies that
may arise. This new policy requires that 15% of the net profit be transferred to a General Reserve Account
every year.
ANNUAL REPORT 2001 - 2002
39

NOTES
financial
to the
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2002
2. INTEREST INCOME
2002 2001
Rs’000
Rs’000
Interest on housing loans 489,470 473,894
Interest subsidy from Government of Mauritius 60,226 68,046
Interest on Government grants 22,700 24,606
Interest on bank deposits 40,093 7,194
Other interests 8,248 587
620,737 574,327
3.INTEREST EXPENSE
2002 2001
Rs’000
Rs’000
Bank overdrafts 3 1,491
Bank and other loans repayable by instalments
within one year 5,470 5,571
between one to five years 7,408 19,070
after more than five years 254,623 216,381
Other loans not repayable by instalments 1,054 1,116
ANNUAL REPORT 2001 - 2002
Debentures 85,641 95,485
Exceptional Saving Scheme - 98
Plan Epargne Logement 57,447 45,873
Others - 1,215
NHDC loans 18,935 21,113
Housing Deposit Certificates 19,241 -
449,822 407,413
40

NOTES
financial
to the
STATEMENTS
4. OTHER INCOME
2002 2001
Rs’000
Rs’000
Administration fees and other commissions 24,662 33,084
Rent received 1,914 1,908
Profit on disposal of fixed assets 364 279
Gain on disposal of housing estates - 325
Policy fees and charges on loans 1,878 -
Others 579 -
29,397 35,596
ANNUAL REPORT 2001 - 2002
41

NOTES
financial
to the
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2002
5. OPERATING EXPENSES
2002 2001
Rs’000
Rs’000
ANNUAL REPORT 2001 - 2002
Salaries 33,885 30,426
Depreciation 7,690 7,300
Staff pension contributions 5,514 4,101
Maintenance and repairs 2,082 2,366
Travelling 3,982 3,107
Staff welfare, training and study schemes 1,921 1,810
General expenses 1,145 1,695
Electricity 1,457 1,171
Leave passages 630 1,135
Printing and stationery 1,317 770
Telephone 1,028 480
Motor vehicles running expenses 601 375
Directors’ emoluments 1,374 369
Audit fees 197 325
Professional fees 589 30
Family protection schemes 303 301
Entertainment expenses 182 225
Software maintenance costs 260 193
Rent - Flacq branch 180 180
Rent ñ Curepipe branch 500 -
Advertising 643 177
Overseas mission 83 165
Postage 180 152
Rent Rodrigues branch 120 118
Legal fees and expenses 132 99
Bank charges 60 67
Donations 25 50
Loss on disposal of foreclosed property 217 -
Other expenses 261 -
66,558 57,464
42

NOTES
financial
to the
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2002
6. OPERATING PROFIT BEFORE PROVISION
2002 2001
Rs’000
Rs’000
Operating profit before provision is arrived at after:
Charging
Depreciation on property, plant and equipment 7,690 7,300
Directors’ emoluments (see note (a) below) 1,374 369
Auditors’ remuneration 275 325
Staff costs (see note (b) below) 39,399 34,527
(a) Directors’ emoluments
2002 2001
Rs’000
Rs’000
ANNUAL REPORT 2001 - 2002
Full time director 877 -
Part time directors 497 369
1,374 369
(b)
Analysis of staff costs
2002 2001
Rs’000
Rs’000
Wages and salaries 33,885 30,426
Pension costs 5,514 4,101
39,399 34,527
The number of employees at the end of the year was: 156 169
43

NOTES
financial
to the
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2002
7. DIVIDENDS
2002 2001
Rs’000
Rs’000
Proposed - Rs 1.71 per share (2001: Rs 1.50 per share) 17,102 15,000
8. GENERAL RESERVE
2002 2001
Rs’000
Rs’000
At 01 July 61,666 43,690
Transfer from income statement 19,733 17,976
At 30 June 81,399 61,666
In consistency with the Company’s policy, 15% of the net profit has been transferred to a General Reserve Account.
9. EARNINGS PER SHARE
2002 2001
Net profit Rs’000 131,554 119,838
ANNUAL REPORT 2001 - 2002
Number of shares used in calculation 10,000,000 10,000,000
Earnings per share Rs 13.16 11.98
44

NOTES
financial
to the
STATEMENTS
10. PROPERTY, PLANT AND EQUIPMENT
Foreclosed Freehold Improvement to Freehold Furniture
Property Land Leasehold Property Buildings & Equipment Motor Vehicle Total
Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000
COST OR VALUATION
At 1 July 2001
Cost 12,471 8,686 185 12,675 54,862 8,657 97,536
Valuation - 28,415 - 50,763 - - 79,178
12,471 37,101 185 63,438 54,862 8,657 176,714
Valuation - 89,004 - 11,562 - - 100,566
Additions 7,909 - - - 3,871 640 12,420
Disposals (1,929) - - - - (1,452) (3,381)
At 30 June 2002 18,451 126,105 185 75,000 58,733 7,845 286,319
Cost 18,451 8,686 185 12,675 58,733 7,845 106,575
Valuation - 117,419 - 62,325 - - 179,744
At 30 June 2002 18,451 126,105 185 75,000 58,733 7,845 286,319
DEPRECIATION
At 1 July 2001 185 5,812 44,708 4,437 55,142
Charge for the year 1,503 4,618 1,569 7,690
Disposals adjustment - - - - - (1,453) (1,453)
At 30 June 2002 - - 185 7,315 49,326 4,553 61,379
NET BOOK VALUES
At 30 June 2002 18,451 126,105 - 67,685 9,407 3,292 224,940
At 30 June 2001 12,471 37,101 - 57,626 10,154 4,220 121,572
ANNUAL REPORT 2001 - 2002
45

NOTES
financial
to the
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2002
10. PROPERTY, PLANT AND EQUIPMENT (Contd)
The Company’s land and buildings were revalued in 1998/1999 and 2001/2002 respectively, on an open market existing
use basis, by Mr P. Ramrekha an independent Chartered Valuation Surveyor. The book values of the properties were
adjusted to the revalued amounts and the resultant surplus was credited to revaluation reserve in shareholders’ equity . If
the land and buildings were stated on the historical cost basis, the net book values would be as follows:
2002 2001
Rs’000
Rs’000
Cost 25,193 25,193
Accumulated depreciation (3,985) (3,804)
Net book values 21,208 21,389
11. HOUSING ESTATES
2002 2001
Rs’000
Rs’000
At cost
At 1 July 2001 4,783 5,252
Disposals - (469)
At 30 June 2002 4,783 4,783
12. NON-CURRENT RECEIVABLES
2002 2001
(a)
Secured loans
Rs’000
Rs’000
ANNUAL REPORT 2001 - 2002
Total loans advanced 5,117,277 4,978,172
Provision for doubtful debts (see note (a)) (56,263) (54,063)
5,061,014 4,924,109
Portion of loans receivable within one year
shown under current assets (Note 13) (99,089) (188,000)
4,961,925 4,736,109
46

NOTES
financial
to the
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2002
12. NON-CURRENT RECEIVABLES (Contd)
2002 2001
Rs’000
Rs’000
(a) Provision for doubtful debts
At 1 July 2001 54,063 28,855
Movement during the year (2,200) 25,208
At 30 June 2002 56,263 54,063
In line with general accepted accounting practice with regard to financial institutions, a general provision for doubtful debts
has been made in these financial statements. This provision has been increased from 0.5% to 1.1% for the year under review.
13. TRADE AND OTHER RECEIVABLES
2002 2001
Rs’000
Rs’000
Trade receivables 38,035 48,166
Other debtors and prepayments 15,566 18,069
Secured loans-short term receivables (Note 12) 99,089 188,000
Grants (see note (a) below) 133,979 144,385
BPML/MHC cybercity project 468 -
287,137 398,620
ANNUAL REPORT 2001 - 2002
(a)
GRANTS - Government of Mauritius
2002 2001
Rs’000
Rs’000
At 1 July 2001 144,385 153,942
Subsidies granted during the year 5,624 4,854
Grants receivable during the year (16,030) (14,411)
At 30 June 2002 133,979 144,385
14. SHARE CAPITAL
Issued and Authorised fully paid
2002 &2001 2002 & 2001
Rs’000
Rs’000
Ordinary shares of Rs 10 each 250,000 100,000
47

NOTES
financial
to the
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2002
15. REVALUATION AND OTHER RESERVES
At 1 July Movements during the year At 30 June
2001 DR CR 2002
Rs’000 Rs’000 Rs’000 Rs’000
Building Insurance Reserve 68,706 61 15,017 (a) 83,662
Life Assurance Reserve 92,467 15,100 (b) 25,079 (c) 102,446
Mortgage Insurance Reserve 5,331 - 555 (d) 5,886
Foreclosed Properties Reserve 854 - - 854
EDF Revolving Fund 12,067 - 12,067
Revaluation Reserves 79,178 - 100,566 (g) 179,744
General Reserve (note (f)) 61,666 - 19,733 (e) 81,39
320,269 15,161 160,950 466,058
(a)
(b)
(c)
(d)
(e)
(f)
(g)
90% of house insurance premiums received during the year.
Secured loans to deceased customers, written off during the year.
90% of life assurance contributions received during the year.
90% of mortgage insurance premiums received during the year.
15% of net profit for the year transferred to General Reserve during the year.
Estates Equalisation Reserve and Gervaise Reserve have been reclassified as General Reserve.
Revaluation of land and buildings owned by the Company with the exception of foreclosed property.
16. REVENUE RESERVES 2002 2001
Rs’000
Rs’000
ANNUAL REPORT 2001 - 2002
At 01 July 2001 (as previously reported) 685,272 598,410
Prior year adjustment (see note below) (50,650) -
Restated balance at 01 July 2001 634,622 598,410
Profit for the year 131,554 119,838
Transfer to General Reserve (19,733) (17,976)
Dividends (17,102) (15,000)
At 30 June 2002 729,341 685,272
48

NOTES
financial
to the
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2002
Prior year adjustment
At 30 June 2002, the Company has carried out a recomputation exercise with regard to interest payable on PEL Deposits
Accounts. This exercise has revealed interest of RS 50,650,000 as being under provided in respect of prior years. Hence, the
opening revenue reserves have been restated to reflect this under provision of interest payable on PEL Deposits Accounts.
17. BORROWINGS
2002 2001
Rs’000
Rs’000
Current
Bank overdrafts(secured) 102,655 63,535
Debentures (see note (a) below) 92,786 92,786
Short term loans (see note (b) below) 161,712 168,273
357,153 324,594
Non-current
Debentures (see note (a) below) 770,713 863,499
Loan capital (see note (b) below) 2,173,023 2,083,101
Loan - Government of Mauritius (see note (c) below) 56,431 56,431
ANNUAL REPORT 2001 - 2002
3,000,167 3,003,031
Total borrowings 3,357,320 3,327,625
2002 2001
Rs’000
Rs’000
(A) DEBENTURES
9% MHC, 29 November 2003 - BOM 300,000 300,000
9.98% MHC, 06 April 2008 - SBM 135,000 157,500
9.75% MHC, 12 May 2005 - SICOM 21,428 28,571
10% MHC, 12 May 2008 - SICOM 30,000 35,000
8.5% MHC, 04 June 2008 - IOIB 51,000 59,500
9.75% MHC, 6 September 2005 - SICOM 28,571 35,714
10% MHC, 6 September 2008- SICOM 35,000 40,000
9.65% MHC 4 October 2008 - SBM 87,500 100,000
9.65% MHC 11 October 2008 - SBM 175,000 200,000
863,499 956,285
Less: Repayable within one year shown as short term loan (92,786) (92,786)
770,713 863,499
The above debentures are guaranteed by the Government of Mauritius.
49

NOTES
FOR THE YEAR ENDED 30 JUNE 2002
financial
to the
STATEMENTS
(B) See list on pages 22 and 23.
Debentures contd
(C)
Loan - Government of Mauritius
Interest free loan from Government of Mauritius and with no fixed repayment terms.
(D)
Borrowings - Loan Capital
18. RETIREMENT BENEFIT OBLIGATIONS
Retirement benefit obligations comprise of the Company’s staff pension fund and of other post retirement benefits.
The pension scheme is a defined benefit plan and the assets of the plan are held separately from those of the Company and
are administered by the State Insurance Company of Mauritius Ltd.
The amounts recognised in the balance sheet are as follows:
2002 2001
Rs’000
Rs’000
Net liability on funded obligations (note (a)) 5,920 4,850
Funds kept within the Company 10,560 10,560
16,480 15,410
ANNUAL REPORT 2001 - 2002
2002 2001
Rs’000
Rs’000
(a) Funded obligations
Present value of funded obligations 105,580 94,700
Fair value of plan assets (88,120) (82,250)
17,460 12,450
Unrecognised actuarial loss (11,540) (7,600)
Net liability 5,920 4,850
50

NOTES
FOR THE YEAR ENDED 30 JUNE 2002
18. RETIREMENT BENEFIT OBLIGATIONS (CONTD)
financial
to the
STATEMENTS
The amounts recognised in the income statement are as follows:
2002 2001
Rs’000
Rs’000
Current service cost 4,500 4,101
Interest cost 9,950 8,500
Expected return on plan assets (9,170) (8,500)
Actuarial loss recognised 234 -
Total included in staff costs 5,514 4,101
Actual return on plan assets 3,710 3,800
Movement in the liability recognised in the balance sheet:
2002 2001
ANNUAL REPORT 2001 - 2002
Rs’000
Rs’000
At 1 July
- as previously reported 4,850 -
- effect of adopting IAS 19 - 4,760
- as restated 4,850 4,760
Total expenses as above 5,514 4,101
Contributions paid (4,444) (4,011)
5,920 4,850
2002 & 2001
Main assumptions:
Discount rate 10.5%
Expected return 11.0%
Pension increase 7.5%
Salary increase 8.5%
51

NOTES
FOR THE YEAR ENDED 30 JUNE 2002
financial
to the
STATEMENTS
19. PEL AND OTHER SAVINGS ACCOUNTS
Restated
2002 2001
Rs’000
Rs’000
Capital 903,990 487,742
Interest payable 342,777 239,921
Other savings accounts 1,257 2,660
1,248,024 730,323
Prior year adjustment (Note 16) - 50,650
1,248,024 780,973
20. LONG TERM LIABILITY - NHDC
2002 2001
Rs’000
Rs’000
At 1 July 2001 257,035 283,385
Effect of accounting for interest on Malaysian Loans (25,036) (26,350)
At 30 June 2002 231,999 257,035
21. TRADE AND OTHER PAYABLES
2002 2001
ANNUAL REPORT 2001 - 2002
Rs’000
Rs’000
Trade payables 38,552 33,906
Other creditors and accruals 5,780 6,201
44,332 40,107
52

NOTES
FOR THE YEAR ENDED 30 JUNE 2002
financial
to the
STATEMENTS
22. NOTES TO THE CASH FLOW STATEMENT
(a) Cash generated from operations
2002 2001
Rs’000
Rs’000
Net profit 131,554 119,838
Adjustments for:
Depreciation 7,690 7,300
Profit on sale of property, plant and equipment (364) (279)
Loss on sale of foreclosed properties 217 (315)
Profit on sale of housing estates - (325)
Retirement benefit obligations 1,070 90
Interest expense 449,822 407,413
ANNUAL REPORT 2001 - 2002
Interest income (48,220) (7,781)
Interest on pension fund - (5,485)
Changes in working capital:
trade and other receivables 12,167 (7,706)
trade and other payables 4,225 521
other reserves 25,490 24,205
pension fund - 1,215
Cash generated from operations 583,651 538,691
53

NOTES
financial
to the
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2002
(b)
Cash and cash equivalents
2002 2001
Rs’000
Rs’000
Cash at bank and in hand 5,595 6,557
Short term bank deposits 726,276 223,400
Bank overdrafts (102,655) (63,535)
Cash and cash equivalents 629,216 166,422
23. COMMITMENTS
2002 2001
Rs’000
Rs’000
(a) Loans approved but not yet disbursed 117,771 98,339
(b)
Business Parks of Mauritius Limited (BPML) and the Company will jointly develop/manage an integrated
residential and recreational complex, on a plot of land of 9.8 hectares belonging to BPML, within the business
zone of Ebène Cybercity. The total cost of project is estimated at around Rs 495 M and the financing and
return will be shared equally by both parties.
24. TAXATION
Further to The Mauritius Housing Corporation (Transfer of Undertaking) Act 1989, all rights and priviledges of the Mauritius
Housing Corporation have been transferred to Mauritius Housing Company Ltd. The provisions of this Act has also
ANNUAL REPORT 2001 - 2002
dispensed the Company from any income tax liability.
54

NOTES
financial
to the
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2002
25. FINANCIAL SUMMARY
Restated
Restated
2002 2001 2000 1999 1998
Rs’000 Rs’000 Rs’000 Rs’000 Rs’000
Share capital 100,000 100,000 100,000 100,000 100,000
Net profit 131,554 119,838 106,609 151,215 131,485
Retained earnings 729,341 634,622 598,410 606,976 475,761
Other reserves 466,058 320,269 278,088 253,712 150,948
Dividends 17,102 15,000 15,000 20,000 15,000
26. CONTINGENCIES
(a) There exists a dispute between the Company and the National Housing Development Company Ltd (NHDC) in
respect of the rate of interest applicable on the amount payable to NHDC regarding loans granted to common
NHDC/MHC clients. Provision has been made in these financial statements at the rate of 8% as compared to 9%
claimed by NHDC. At the date of the audit, the matter is still under consideration by the Company and NHDC.
ANNUAL REPORT 2001 - 2002
(b)
At 30 June 2002, the Company has no material litigation or claims outstanding, pending or threatened against
it, which would have a material adverse effect on the Company’s financial position or financial results.
27. REPORTING CURRENCY
The financial statements are presented in Mauritian Rupees since this is the currency in which the majority of
the Company’s transactions are denominated.
28. CHANGE IN LEGISLATION
The Companies Act 1984 was repealed as from 1 December 2001 and was replaced by the Companies Act 2001.
55

NOTES
FOR THE YEAR ENDED 30 JUNE 2002
financial
to the
STATEMENTS
29. CLAIM FOR INTEREST DIFFERENTIAL TO GOVERNMENT
The final claim for the subsidy scheme on Government Sponsored Loans and grants at 30 June 2002.
Rs’000
Interest differential 63,062
Grants 39,399
Administration cover 8,388
Housing deposit bonus 1,212
PEL bonus 1,073
113,134
Less adjustments for prior years (3,236)
Amount due by the Government 109,898
Amount received from the Government (100,000)
Net amount due by the Government 9,898
ANNUAL REPORT 2001 - 2002
56