Financial Statements - The United Basalt Products Ltd

Head Office: Trianon, Quatre-Bornes - Tel: 454 1964 - Fax: 454 8043 - Email: info@ubpgroup.com 

ANNUAL REPORT 09 

annual report 09

Dear Shareholder, 

The Board of Directors is pleased to present to you the Annual Report of The United Basalt Products Ltd for 

the year ended June 30, 2009, the contents of which are listed thereafter. 

This report was approved by the Board of Directors on September 23, 2009. 

Thierry Lagesse 

Chairman 

Jean-Michel Giraud 

Managing Director 

Notice of Annual Meeting 2 

Corporate Information 4 

Board of Directors and Board Committees 5 

Directors’ Profiles 6 

Group Structure 7 

Financial Highlights and Ratios 8 

Value Added Statement 10 

Chairman’s Report 11 

Corporate Governance Report 15 

Corporate Social Responsibility 24 

Other Statutory Disclosures 26 

Secretary’s Certificate 31 

Independent Auditors’ Report 32 

Balance Sheets 33 

Income Statements 34 

Statements of Changes in Equity 35 

Cash Flow Statements 37 

Notes to the Financial Statements 38 

Proxy Form 75

A shareholder 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 19, 

2009. 

2 THE UNITED BASALT PRODUCTS LTD | ANNUAL REPORT 2009 

to Shareholders 

Notice is hereby given that the Annual Meeting of Shareholders of 

the Company will be held at its registered office, Trianon, Quatre 

Bornes, on Thursday November 12, 2009 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 November 19, 2008. 

2. To receive, approve and adopt the Audited Financial 

Statements for the year ended June 30, 2009 and reports of 

the Directors thereon. 

3. 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. 

4. To appoint as Director of the Company, Mr Jacques de 

Navacelle who was nominated by the Board and who offers 

himself for appointment. 

5. To re-appoint Ernst & Young as Auditors for the year ending 

June 30, 2010 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 23, 2009

Information 

LEGAL FORM 

The United Basalt Products Ltd is a public company incorporated 

in Mauritius and listed on the Stock Exchange of Mauritius. 

REGISTERED OFFICE 

Trianon, Quatre Bornes, Mauritius 

AUDITORS 

Ernst & Young 

BANKERS 

The Mauritius Commercial Bank Ltd 

Barclays Bank PLC 

HSBC (Mauritius) Ltd 

State Bank of Mauritius Ltd 

AfrAsia Bank Ltd 

and Board Committees 

BOARD OF DIRECTORS 

Thierry Lagesse - Chairman 

François Boullé 

Marc Freismuth 

Jean Michel Giraud - Managing Director 

Joël Harel 

J. Cyril Lagesse 

• Alternate : Arnaud Lagesse 

Raymond Lagesse 

Jean Claude Maingard 

E. Jean Mamet 

Jacques de Navacelle 

CORPORATE GOVERNANCE COMMITTEE 



Joël Harel 

AUDIT COMMITTEE 

E. Jean Mamet - Chairman 


Joël Harel 

COMPANY SECRETARY 

Christophe Quevauvilliers F.C.C.A. 

4 THE UNITED BASALT PRODUCTS LTD | ANNUAL REPORT 2009 THE UNITED BASALT PRODUCTS LTD | ANNUAL REPORT 2009 

5


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-nine 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 

other major listed and non listed Mauritian companies 

and is also the Chairman of Flacq United Estates Ltd, 

Phoenix Beverages Ltd, Compagnie d’Investissement 

et de Developpement Limitée and Ireland Blyth Ltd 

and Director of 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. 


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 rawmaterials 

and sprayers for agriculture. 

Directors’ 

Jean Michel Giraud 

Mr Jean Michel Giraud joined the Company in 1974 and 

became General Manager in 1984 succeeding his father 

at 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. Mr Giraud was President of the Mauritius 

Turf Club and 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. 

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. 


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 currently 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. 


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 a member of the Royal Institute of 

Chartered Surveyors (M.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 

fifty years now. He was appointed Executive Director 

in 1986 and was Managing Director from 1998 to 2006. 

Mr Maingard is since the Chairman of this Company. 

E. Jean Mamet 

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. 

THE UNITED BASALT PRODUCTS LTD 

June 30, 2009 

Subsidiaries as at June 30, 2009 

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 

Structure 

THE UNITED BASALT PRODUCTS LTD 

75.9 % Welcome Industries Ltd 

100 % 

71.7 % 

UBP Madagascar 

United Granite Product (Pvt) Ltd 

100 % DHK Metal Crusher (Pvt) Ltd 

100 % Sheffield Trading (Pvt) Ltd 


Mr Jacques de Navacelle was appointed Director of 

46% Produits Basaltiques du Nord Ltée 

the Company in December 2008 in replacement of 

Mr Jean Giraud. Born in 1946, Mr de Navacelle started 

a banking career in Paris in 1971. In 1978, he joined 

34 % Prochimad Mines et Carrières* 


Barclays Bank with whom he worked for twenty years, 

occupying various managerial positions with increasing 

30% Pre-Mixed Concrete Ltd 

Mr Marc Freismuth was appointed Director of the 

responsibilities within the bank in Europe. In 1998, 

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 has been lecturer at the University 


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 

Mr de Navacelle was appointed Managing Director 

of Barclays Bank PLC, Mauritius. On May 1, 2005 he 

joined the Mauritius Union Assurance Co. Ltd as Chief 

Executive Officer and was appointed Director of the 

Associates as at June 30, 2009 

25% Sud Concassage Ltée 

of Montpellier up to July 1988 when he decided to join 

the University of Mauritius as lecturer in management 

in 1969 (Mon Loisir S.E.) and set up the ‘Compagnie 

d’Investissement et de Développement Ltée’ in the early 

company in May 2006. Mr de Navacelle is presently the 

Chairman of Transparency Mauritius and of Compagnie 

25% Cement Transport Ltd 

and finance up to July 1994. Whilst at this position, 

Mr Freismuth has contributed to the setting up of the 

Stock Exchange of Mauritius as consultant to the ‘Stock 

1970’s, to take advantage of the diverse investment 

opportunities that arose, while Mauritius moved towards 

greater industrialisation. Since then, the ‘Groupe 

de Beau Vallon Ltée and Director of Mon Trésor 

Mon Désert and Harel Frères Ltd. 

20% Compagnie Mauricienne d’Entreprise Ltée 

Exchange Commission’ and member of the ‘Listing 

Committee’. Mr Freismuth is currently self-employed as 

consultant in management and finance. He also sits as 

Director on the Board of several public companies. 

Mon Loisir’(GML) grew 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 

Operational 

Dormant 

30% Compagnie des Transport Réunis 

are listed on the Stock Exchange of Mauritius. 

* Via UBP International Ltd 

6 THE UNITED BASALT PRODUCTS LTD | ANNUAL REPORT 2009 THE UNITED BASALT PRODUCTS LTD | ANNUAL REPORT 2009 7

Rs 

80 

70 

60 

50 

40 

30 

20 

10 

0 

Rs 

60 

50 

40 

30 

20 

10 

0 

Financial Highlights 

Net Assets per share 

40.62 42.09 70.18 74.26 77.83 

05 06 07 08 09 

Share Price 

41.60 42.40 38.90 43.00 53.00 

05 06 07 08 09 

Earnings per share 

Rs 

8.00 

7.00 

6.00 

5.00 

4.00 

3.00 

2.00 

1.00 

0 

3.31 2.78 1.54 

7.17 6.76 

05 06 07 08 09 

June 30, 2009 

Rs 

3.00 

2.50 

2.00 

1.50 

1.00 

0.50 

0 

Rs’000 

2,500 

2,000 

1,500 

1,000 

500 

0 

Shareholders’ Fund 

Rs’000 

1,800 

1,600 

1,400 

1,200 

1,000 

800 

600 

400 

200 

0 

Dividend per share 

Revenue 

897,404 929,688 1,550,378 1,640,581 1,719,452 

05 06 07 08 09 

2.00 2.00 1.50 1.50 

2.00 2.60 

04 05 06 07 08 09 

1,079,115 1,355,677 1,404,405 1,718,721 2,034,310 

05 06 07 08 09 

8 THE UNITED BASALT PRODUCTS LTD | ANNUAL REPORT 2009 THE UNITED BASALT PRODUCTS LTD | | ANNUAL REPORT 2009 17 9 

The Group 

Income Statement 

2009 2008 

Rs’000 Rs’000 

Revenue 2,034,310 1,718,721 

EBITDA 369,316 294,091 

Depreciation and amortisation (137,355) (132,105) 

Operating profit 231,961 161,986 

Net finance costs (90,226) (94,137) 

Share of results of associates 32,660 29,323 

Exceptional items 2,574 85,249 

Profit before tax 176,969 182,421 

Profit for the year 147,532 158,814 

Rs Rs 

Earnings per share 6.76 7.17 

Earnings per share excluding exceptional items 6.65 3.31 

Dividend per share 2.60 2.00 

Balance Sheet 

2009 2008 

Rs’000 Rs’000 

Total assets 2,980,301 2,888,088 

Interest bearing debts 972,316 920,954 

Borrowings excluding bank overdraft 761,796 628,156 

Shareholders’ interests 1,719,452 1,640,581 

Rs Rs 

Net assets value per share 77.83 74.26 

Financial Ratios 2009 2008 

Operating margin - % 11.40 9.42 

Interest cover - times 2.47 2.29 

Dividend cover - times 2.60 3.59 

Return on equity - % 8.69 9.66 

Return on assets - % 5.01 5.49 

Debt to equity – times 0.56 0.56

June 30, 

2009 

Employees 42% 

Providers of capital 21% 

Government and parastatal corporations 5% 

Reinvested in the group 32% 

June 30, 

2008 

Employees 34% 

Providers of capital 24% 

Government and parastatal corporations 5% 

Reinvested in the group 37% 

Value Added 

June 30, June 30, 

2009 2008 

Rs’000 Rs’000 

Sale of goods and services 2,034,310 1,718,721 

Paid to suppliers for materials and services (1,351,599) (1,079,244) 

Value added 677,086 634,520 

Other operating income 76,320 64,220 

Total wealth created 753,406 698,740 

Distributed as follows: 

Employees 

Salaries and other benefits 

Providers of capital 

315,310 238,722 

Dividend 57,438 44,183 

Interest paid on borrowings 100,230 123,549 

Dividend to minority shareholders 1,400 2,271 

Government and parastatal corporations 

159,068 170,003 

Income tax (current and deferred) 29,437 23,607 

Environment protection fee 8,659 7,304 

Licences and permits 1,794 2,726 

39,890 33,637 

Reinvested in the group to maintain and develop operations 

Depreciation, amortisation and impairment 147,148 142,105 

Retained profit 91,990 114,273 

239,138 256,378 

Total wealth distributed and retained 753,406 698,740 

Chairman’s 

Dear Shareholder, 

On behalf of the Board of Directors, I am 

pleased to present my report on the operations 

and results of The United Basalt Products Ltd 

and of the Group for the year ended June 30, 

2009 and to give you an insight of present and 

future developments and projects. 

I wish to express my gratitude and thanks to 

Mr Jean Giraud for his fifty-five years of fruitful 

service to the Group. In 1953, Mr Giraud lead a 

group of three companies engaged in crushing 

activities to form The United Basalt Products 

Ltd of which he became the General Manager 

up to 1984. He was appointed Director of the 

Company in October 1956 until he resigned in 

December 2008. Mr Giraud largely contributed 

to establish the reputation of the Company 

over the years. 

Review of Operations and 

Results 

Revenue from operations 

Despite the economic crisis situation, the 

revenue of the Group increased from Rs 1.7 

billion in 2008 to reach Rs 2 billion this year, 

representing an increase of 18.3%. This rise is 

attributable to an increase in revenue from both 

our core business and Espace Maison activities. 

The total sales volume of our core business 

products locally increased slightly whilst our 

selling prices were increased to compensate 

for rising production costs caused mainly by 

an increase in the cost of boulders supply. 

In terms of our Espace Maison activities, the 

revenue trend was up to our expectations and 

considered satisfactory given the presence of 

a new competitor on the market. 

Despite the absence of major public 

infrastructure projects and the drop in the 

private dwelling’s market, the demand was 

sustained due to the completion of previously 

initiated hotel, Integrated Resort Schemes 

(I.R.S.) and other property development 

projects. As regards our foreign operations, 

the revenue of our subsidiary in Madagascar 

was sustained whilst in Sri Lanka, our revenue 

for the year under review increased slightly. 

Results 

The operating profit of the Group increased 

significantly from Rs 161.9 million in 2008 

to Rs 231.9 million this year. The operating 

profit of the Company increased from Rs 143.7 

million in previous year to Rs 207.4 million 

this year, a rise from 14.8% to 18% of revenue. 

This rise is attributable to an improved sales 

mix experienced in favour of our higher margin 

core business products and to higher profits 

made from our other concrete-based products 

and our marble factory. The operating profit 

of Marbella Espace Maison Ltée increased 

from Rs 4.6 million in 2008 to Rs 10.6 million 

this year resulting to this subsidiary ending up 

making a net profit for the first time this year. 

This improvement is the result of the widening 

of our range of products and services, improved 

purchasing and continuous promotions aiming 

at reducing slow-moving inventories. 


Chairman’s (cont’d...) 

In the financial year 2007-2008, a major 

part of our quoted available-for-sale 

investments and the shares in our ex 

associate company Highway Properties 

Ltd were disposed of. These realisations 

resulted in an exceptional profit of Rs 29.8 

million and Rs 65.4 million respectively. 

In April 2009, the Board accepted an 

offer to dispose of its 20% stake in 

Compagnie d’Exploitation Agricole Ltée 

(CEAL), an associate company engaged 

in sugar cane mechanical harvesting and 

the improvement of agricultural land. 

This transaction was effected for a total 

consideration amounting to Rs 42 million 

and resulted in an exceptional profit of 

Rs 12.3 million being realised by the Group 

this year. The disposal related only to the 

operations and excluded the investment 

portfolio and the land and buildings. 

The quoted shares within the portfolio were 

disposed of whilst the land and buildings 

were transferred to a sister company, 

Compagnie Mauricienne d’Entreprise Ltée 

(CMEL), and are being rented out to the 

new owners. These transactions gave rise 

to an exceptional dividend of Rs 13.8 million 

which was re-injected into CMEL as deposit 

on shares. This dividend was included in the 

Company’s finance revenue for the year. 

In terms of our foreign entities, the level 

of activities of our subsidiary company 

in Madagascar was sustained due to the 

availability of some contracts in the region 

of Tamatave and resulted in an increase 

in profit from Rs 3.5 million in 2008 to 

Rs 6.3 million for the year under review. 

In Sri Lanka, despite a rise in revenue, 

the market conditions were worse than in 

previous year and forced our profit margins 

downwards. Consequently, our subsidiary 

company incurred a loss of Rs 14.2 million 

for the year compared to Rs 9.1 million in 

2008. As a result, the remaining goodwill 

on acquisition of this latter subsidiary was 

impaired by Rs 9.8 million and disclosed 

as part of exceptional items in the income 

statement for the year. 

Despite of this impairment loss, the Board 

is expecting signs of post-civil war recovery 

to generate future prospects in this country. 

Our subsidiary, Compagnie de Gros 

Cailloux Ltée made a profit after tax of Rs 5 

million for the year under review compared 

to Rs 2 million in 2008. The sugar crop 

harvest was again an average one with 

a total of 1,954 tons (2008: 1,950 tons) of 

sugar sold at a reduced price of Rs 17,427 

per ton (2008: Rs 18,620 per ton). This rise 

in profits is also due to the increase in nonsugar 

revenues, made up principally of sale 

of plants from our nursery. 

Our share of results from associate 

companies increased from Rs 29.3 million in 

2008 to Rs 32.6 million this year. The results 

of our associate, Compagnie d’Exploitation 

Agricole Ltée were recognised up to 

April 14, 2009, date on which our stake was 

disposed of. 

Finance revenue and costs 

The finance revenue of the Group decreased 

from Rs 29.4 million in 2008 to Rs 10.1 

million this year caused mainly by a drop in 

interest income resulting from the refund 

of the Rs 123 million shareholder loan to 

Highway Properties Ltd, an ex associate 

company disposed of in May 2008. 

The finance costs of the Group dropped 

from Rs 123.5 million in 2008 to Rs 100.3 

million this year due to a reduction in 

lending rates and an improved cash flow 

situation. 

EPS and dividend 

The profit of the Group for the year 

decreased from Rs 158.8 million in 2008 

to Rs 147.5 million this year. Earnings per 

share of the Group likewise decreased from 

Rs 7.17 in 2008 to Rs 6.76 this year. However, 

earnings per share excluding exceptional 

items increased significantly from Rs 3.31 in 

2008 to Rs 6.65 this year. 

Consequently, on June 3, 2009 a dividend 

of Rs 2.60 per share (2008: Rs 2.00) was 

declared by the Company in respect of the 

financial year under review. This dividend, 

representing nearly 5% of the quoted share 

price when declared, was paid in half on 

June 29, 2009 and the second half is due 

for payment on September 29, 2009. 

Financial Situation 

The financial situation of the Group 

improved during the year under review. 

Total assets increased from Rs 2.9 billion 

in 2008 to Rs 3 billion this year, total 

borrowings from Rs 921 million to Rs 972 

million and shareholders’ interests from 

Rs 1.6 billion to Rs 1.7 billion. The debt to 

equity ratio remained stable at 0.56 times 

whilst the net assets value (NAV) per share 

increased from Rs 74.27 in 2008 to Rs 77.83 

this year. 

During the year, Marbella Espace Maison 

Ltée contracted a new loan to refund 

amounts due to the Company whilst the 

latter converted part of its borrowings from 

short-term to medium-term. 

For the year under review, the investment of 

the Group in property, plant and equipment 

amounted to Rs 229.2 million (2008: 

Rs 181.8 million), out of which Rs 27.4 million 

was financed through leasing facilities. This 

amount was spent for new developments 

and projects as well as part of normal 

recurring capital expenditure for upgrading 

and replacement of plant and equipments 

both locally and overseas. In terms of our 

core business activities, the major items 

of capital expenditure comprised of the 

installation of a new tertiary crusher on our 

plant at Plaine Magnien, the acquisition 

of loaders, hammers and trucks for our 

quarrying operations, a new batching plant 

for our subsidiary company Sainte Marie 

Crushing Plant Ltd and major equipments 

for our subsidiary in Madagascar. 

In terms of our Espace Maison activities, 

the incurred capital expenditure for the 

year comprised of the acquisition of trucks for 

the transport service to our clients and forklifts 

for our new warehouse. 

The other significant group cash outflows 

comprised of the servicing of long term 

borrowings and the financing of operations in 

Madagascar and Sri Lanka. 

In the financial year 2007-2008, a major part 

of quoted available-for-sale investments 

was disposed of. The remaining investment 

portfolio was valued at Rs 54.5 million as at June 

30, 2009 resulting in a fair value reserve loss 

of Rs 16.8 million due to the decreasing trend 

experienced on the Semdex. Once the trend 

recovers significantly, the Board of Directors 

intends to dispose of the quoted securities to 

finance future capital expenditure and keep 

the level of borrowings at a minimum. 

Developments and Projects 

The developments and projects for our core 

business activities comprised of the installation 

of a new block-making plant on our site at 

St Julien, the acquisition of two more trucks 

fitted with cranes for the transport of blocks 

and the landscaping of eleven acres of land 

acquired in 2006 next to our site at Geoffroy. 

This landscaping work is being made in view of 

the re-engineering of our crushing plant given 

the need to remove our plant of La Mecque 

from the site currently being leased. As regards 

our foreign operations, a reconditioned crusher 

was sent to our subsidiary in Madagascar 

to cater for new contracts in the region of 

Tamatave. 

Besides providing for the enhancement and 

replacement of plant and equipments for 

our core business production units and our 

quarrying operations, the capital expenditure 

budget for the financial year 2009-2010 

provides a major investment for the reengineering 

of our plant at Geoffroy for the 

reason mentioned above. The transfer and 

upgrading of our PPB concrete slab factory 

initially planned for the financial year 2009- 

2010 has been postponed. 

The budget for 2009-2010 also provides for 

the acquisition of a multipurpose press for our 

recently launched concrete recycling project. 

The aim behind this project is to facilitate our 

clients concerned by the demolition of hotels 

and other buildings and to recover the concrete 

and iron bars for reprocessing, thereby 

protecting the environment from the dumping 

of waste. 

In terms of developments and projects for our 

Espace Maison activities, the extension of our 

warehouse at Roche-Bois was completed in 

May this year, the upgrading and extension of 

our marble factory was partly done whilst the 

land for our fourth retail store project at Flacq 

was secured. The capital expenditure budget 

for the financial year 2009-2010 provides for 

a major part of the construction of the new 

store at Flacq which is now due to open in 

October 2010. The budget also provides for the 

construction of a clearance sales store next to 

our existing outlet at Trianon. 

As regards our subsidiary company, Compagnie 

de Gros Cailloux Ltée, a landscaping division 

was created in an aim to widen our range of 

services and increase the non-sugar revenue of 

the company. In November 2008 the ‘Festival 

du Jardin’ was once again organised with 

the objective of promoting our products and 

services and to make people visit our property. 

In terms of property development, the project 

referred to in our previous annual reports is 

being modified with the expertise of local 

and foreign consultants to favour more land 

parcelling and less house compounds than 

initially planned, the reason for this being 

that the economic crisis situation has had a 

significant impact on the purchasing power of 

potential buyers. As mentioned previously, the 

conversion permit for the land was obtained 

and the electrical network plan to connect the 

coal power plant project of CT Power Ltd at 

Pointe-aux-Caves was modified at our demand. 

At time of writing, the EIA permit process is 

under way. 

Outlook 

Recent economic indicators for Mauritius 

denote only a 6% drop in foreign direct 

investments for the first semester of 2009 and 

an expected economic growth rate of 2.5% for 

the year whilst some signs of slow economic 

recovery are being noted worldwide. 

Our revenue since July 2009 is equivalent to 

that of the same period in the previous financial 

year. However, the numerous announced road 

infrastructure projects, the hotel projects already 

in progress, the major residential projects 

(R.E.S. and I.R.S.) expected to start in the coming 

year, the shopping malls, office and residential 

projects in the region of Trianon and Réduit and 

the Airport upgrading project are encouraging 

for our future performance both in terms of our 

core business and Espace Maison activities. 

In terms of our activities in Madagascar and Sri 

Lanka, the future performance depends to a 

large extent on the prevailing political climate 

to favour investments in major infrastructure 

development projects. In conclusion, and 

assuming the timely realisation of the above 

mentioned projects, the results of the Group 

for the financial year 2009-2010, ignoring 

exceptional items of revenue, are likely to be 

satisfactory. 

Appreciation 

On behalf of the Board of Directors, I wish to 

express my thanks and appreciation to the 

Managing Director, his management team and 

the personnel for the rewarding efforts made 

during the year under review. 

I also wish to thank my fellow-members of 

the Board of Directors for their support and 

contribution. 


Chairman 

September 23, 2009 


Corporate Governance 

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 

The shareholders adopted a new Constitution in 2004 which complies with the provisions of 

The Companies Act 2001 and those of the Listing Rules of the Stock Exchange of Mauritius. 

Its salient features 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 re-election 

• 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 shareholding structure of the Group at June 30, 2009 is as detailed on page 7. The Company 

has no Ultimate Holding Company. The list of common Directors is as detailed on pages 26 and 27 

of Other Statutory Disclosures. 

THE UNITED BASALT PRODUCTS LTD | ANNUAL REPORT 2009 15

Corporate Governance (cont’d...) 

Substantial Shareholders 

Shareholders holding more than 5% of the share capital of the Company at June 30, 2009 were as follows: 

Number % 

Shareholders 

of shares Holding 

Compagnie d’Investissement et de Développement Ltée 5,524,866 25.01 

Forward Investment and Development Enterprises Ltd 2,088,318 9.45 

Shareholding Profile 

The share ownership and the categories of shareholders at June 30, 2009 were as follows: 

Number of Number of Percentage 

Size of shareholding 

shareholders shares owned (%) 

1 - 500 673 123,501 0.56 

501 –- 1,000 215 164,839 0.75 

1,001 - 5,000 545 1,360,730 6.16 

5,001 - 10,000 152 1,114,086 5.04 

10,001 –- 50,000 160 3,247,686 14.70 

50,001 - –100,000 29 1,896,590 8.58 

100,001 - 250,000 16 2,544,018 11.52 

250,001 -– 1,000,000 8 4,027,068 18.23 

Over 1,000,000 2 7,613,184 34.46 

Total 1,800 22,091,702 100.00 

Shareholding Profile 

Category of shareholders 

Number of Number of Percentage 

shareholders shares owned (%) 

Individuals 1,597 6,977,552 31.59 

Insurance and assurance companies 18 1,745,838 7.90 

Pension and provident funds 34 2,432,605 11.01 

Investment and trust companies 39 8,423,460 38.13 

Other corporate bodies 112 2,512,246 11.37 

Total 1,800 22,091,702 100.00 

Shareholders’ Agreement 

There is no shareholders’ agreement to the knowledge of the Company. 

Share Price Information 

Please refer to page 8 of Financial Highlights and Ratios for indicators and share price movements at June 30, 2009. 

At time of writing the share of the Company is quoted at Rs 65.00 on the Official Market of the Stock Exchange 

of Mauritius compared to Rs 44.00 on September 24, 2008, date of the previous Annual Report. The Price 

Earnings Ratio (PER) is at 9.07, the Dividend Yield at 4 % and the Price to Net Assets Value (NAV) at 0.88. 

The Company is ranked amongst the ten best performers of the Stock Exchange of Mauritius in terms of total 

return for year 2009 to date. 

Dividend Policy 

The Company has no formal set dividend policy. The payment of dividend is subject to the Company’s 

performance, its cash flow position, its debt servicing requirements and its future investment 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 3, 2009 the Company declared a dividend of Rs 2.60 per share in respect of the financial year 2008- 

2009. This dividend was paid in half on June 29, 2009 to all ordinary shareholders registered at close of 

business on June 22, 2009. The second half is due for payment on September 29, 2009. 

Please refer to page 8 of Financial Highlights and Ratios for a summary of the dividend paid per ordinary share 

over the past five years. 

Shareholders’ Calendar of Events 

The calendar of key events is as follows: 

Financial year end : June 

Declaration of dividend : June 

Payment of dividend : July / September 

Annual Meeting of shareholders : November 

This year the dividend payment date has been changed from July to July and September. 

The Abridged Financial Statements of the Group are published quarterly in November, February, May and 

September each year. 



Board of Directors 

According to the Company’s Constitution, the Board shall consist of a minimum of 7 and a maximum of 15 

Directors. The Company is currently headed by a unitary Board of 10 Directors comprising of 3 Non-Executive 

Directors, 6 Independent Non-Executive Directors and one Executive Director. 

The Directors bring a wide range of experience and skills to the Board and ensure that their other responsibilities 

do not interfere with their responsibilities as Director of the Company. Please refer to page 6 on Directors’ 

Profiles for an update of their profiles. 

The quorum for Board meetings 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 also ensures 

that the Company has clear strategies and objectives and may discharge its responsibilities by delegating 

certain duties to Board Committees and to Management. The role of the Chairman and the Managing Director 

are clearly separated. The Chairman has no executive or management responsibilities. He is elected by the 

members of the Board of Directors and also acts as Chairman at meetings of shareholders. 

Appointment and Re-Election of Directors 

According to the Company’s Constitution, the Board of Directors has 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 

re-election. 

The Corporate Governance Committee of the Board also serves as the Nomination Committee. The role of 

the Committee is to review the composition of the Board of Directors and Board Committees and to make 

recommendations to the Board for the approval of candidates to fill any vacancy arising on the Board or as an 

addition to the existing Directors. 

Mr Jacques de Navacelle was appointed as Director on December 17, 2008 in replacement of Mr Jean Giraud. 

In accordance with the Company’s Constitution, a resolution for the re-election of Mr de Navacelle will be 

submitted at the forthcoming Annual Meeting of shareholders of the Company. A resolution for the re-election 

of 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 will also be submitted. 

Belle Mare Holding Ltd - BMH 

Ireland Blyth Ltd - IBL 

IPRO Growth Fund Ltd - IGF 

The Mauritius Commercial Bank Ltd - MCB 

Mauritius Stationery Manufacturers Ltd - MSM 

Naïade Resorts Ltd - NRL 

Phoenix Beverages Ltd - PBL 

Sun Resorts Ltd - SRL 

Swan Insurance Company Ltd - SWAN 

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 28 of Other Statutory Disclosures. 

The Directors of the Company use their best endeavours to 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 28 of Other Statutory Disclosures. 

During the year under review, none of the Directors dealt in the shares of the Company. 

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, 2009 were as follows: 

Directors 




E. Jean Mamet 

Alternate Directors 


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, 2009. 

Board Meetings 

BMH IBL IGF MCB MSM NRL PBL SRL SWAN 

The Chairman and the Managing Director, assisted by the Company Secretary, are responsible for fixing 

the agenda for each Board meeting. During the year under review, the Board met eight times to approve the 

operating and capital expenditure budget for financial year 2008-2009, the audited financial statements 

and the Annual Report for year ended June 30, 2008, the remuneration of auditors, the unaudited abridged 

group quarterly financial statements, the nomination of a Director, the disposal of investments, the 

declaration of a dividend and other development projects. Decisions were also taken by way of resolutions 

in writing, signed by all the Directors. 



Board Committees 

In order to fulfil its obligations and duties, the Board has delegated certain duties and responsibilities to Board 

Committees to ensure full review of specific matters. This delegation does not however reduce the overall 

responsibilities of the Board. 

The Corporate Governance Committee and the Audit Committee were set up in 2005 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 

The composition of the Corporate Governance Committee is as follows: 

Chairman : Thierry Lagesse 

Members : Marc Freismuth 

Joël Harel 

The main duties of the Corporate Governance Committee 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 Corporate 

Governance Committee is also responsible for Nomination and Remuneration aspects of the Code. 

The Committee met once during the financial year 2008-2009 to review corporate governance issues, to 

consider the nomination of a new Director and to make recommendations on the remuneration policy of 

Directors, Committee members and key management personnel. 

The remuneration of the Chairman and of each member of the Corporate Governance Committee for the year 

ended June 30, 2009 amounted to Rs 10,000. 

Audit Committee 

The composition of the Audit Committee is as follows: 

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 ensure the integrity of accounting and financial reporting and to assist 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. The Committee has the authority 

to conduct investigations into any matter within its scope of responsibilities and to engage any firm of 

professionals it sees fit to provide independent expert advice. 

The Committee met six times during the financial year 2008-2009, mainly to review and recommend to the 

Board for approval the audited financial statements and the Annual Report for year ended June 30, 2008, the 

unaudited abridged group quarterly financial statements, the appointment and terms of reference of a new 

firm to act as internal auditor and the remuneration of internal and external auditors. The Committee also 

assessed and made recommendations on the policy for slow-moving inventories and reviewed the reports of 

both internal and external auditors. 

The remuneration of the Chairman and of each member of the Audit Committee for the year ended June 30, 

2009 amounted to Rs 120,000 and Rs 80,000 respectively. 

Internal Audit Function 

The internal audit function is responsible for providing assurance to the Board regarding the implementation, 

operation and effectiveness of internal control and risk management. The objective is to provide an 

independent review and appraisal on the adequacy of the internal control framework within the organisation, 

to ascertain the extent of compliance to procedures, policies, regulations and legislation, to facilitate good risk 

management practices and to recommend improvements in control, performance and productivity within the 

Group. 

During the year under review, the internal auditor carried out regular visits on all production and sales sites to 

ensure the controls and procedures are adhered to and to improve on processes where necessary in order to 

minimise risks areas. Inventories were closely monitored and procedures were set to minimise pilferage within 

our Espace Maison retail stores. The internal audit function also monitored the implementation of a new IT 

system for our core business operations. 

On the recommendation of the Audit Committee, the Board of Directors has decided to appoint a new firm to 

perform the internal audit function. 

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 to make 

recommendations via the Audit Committee, 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 53 to 55 of Notes to the Financial Statements 



Meetings Attendance 

Board 

Corporate Governance 

Committee 

Audit Committee 

Thierry Lagesse 8 out of 8 1 out of 1 

François Boullé 8 out of 8 6 out of 6 

Marc Freismuth 6 out of 8 1 out of 1 

Jean Giraud* 0 out of 4 

Jean Michel Giraud 8 out of 8 

Joël Harel 4 out of 8 1 out of 1 6 out of 6 

J. Cyril Lagesse 5 out of 8 

Raymond Lagesse 8 out of 8 

Jean Claude Maingard 5 out of 8 

E. Jean Mamet 5 out of 8 6 out of 6 

Jacques de Navacelle* 3 out of 4 

* Mr Jacques de Navacelle was appointed as Director on December 17, 2008 in replacement of Mr Jean Giraud. 

Securities Act 2005 

In accordance with the provisions of The Securities Act 2005, the Company registered itself as a reporting 

issuer with the Financial Services Commission (FSC) and identified its insiders according to the definitions 

within the Act. All the insiders and their associates were required to disclose their interest in the shares of the 

Company and in those of the associates of the Company. This information was then forwarded to the FSC and 

thereafter any movement thereon. 

Remuneration Philosophy Statement 

The Corporate Governance Committee also serves as Nomination and Remuneration Committee. As such it is 

responsible for making recommendations with regard to determining and developing the company’s general 

remuneration policy, determining specific remuneration packages for executive Directors of the Company and 

senior management and the level of remuneration of non-executive Directors taking into consideration the 

market trend and the Group’s performance. 

Please refer to pages 27 of Other Statutory Disclosures for a table of total emoluments and benefits received 

by the Directors from the Company and subsidiary companies. 

Employee Share Option Plan 

The Company does not have any Employee Share Option Plan. 

Social, Ethical, Safety, Health and Environmental Policies and Practices 

The policies and practices of the Group in terms of social aid are as detailed on page 24 on Corporate Social 

Responsibility. 

In terms of ethics, the Company strongly expect all its employees to act in a professional manner amongst 

colleagues and with our customers and suppliers. 

In terms of safety, health and environmental issues, the policy of the Company is to ensure that the 

production units are equipped to run in such a way to minimise causing damage to the environment and the 

neighbourhoods. As regards the health and safety of our employees, regular training sessions are provided to 

ensure health and safety practices are applied and to help increase the awareness of employees on security 

and health issues by insisting on the use of protective clothing and accessories. 

Related Party Transactions 

Please refer to Note 29 on page 70 of Notes to the Financial Statements 

Donations 

Please refer to page 29 of Other Statutory Disclosures for details of donations made during the year. 

Christophe Quevauvilliers 




Corporate Social Responsibility (CSR) is a concept that is 

very much evolving and for which there is no universally 

agreed definition of what it should involve. It is generally 

accepted that it is the way in which companies integrate 

social, environmental and economic concerns into their 

values, decision-making processes and activities in a 

responsible and transparent manner, and it is therefore a 

way of implementing best practices, increasing prosperity 

and improving society. 

The main fields concerned by the UBP Group’s CSR strategy 

are education, sports, culture and environment. 

In the educational field, UBP is involved with the ZEP project 

initiated by the Ministry of Education in 2003. This project 

is a clear example of the desire of the private sector and the 

government to improve and assist in the development of 

children living in less-favoured regions. 

We have been involved in this project since its beginning, 

supporting the Andre Bazerque Government School in 

Rose Hill for pedagogical projects and to improve pupils’ 

well-being. The Company also delegates a representative 

to contribute to the effective management of the school. 

Projects achieved are as follows: 

• A Liaison Officer was employed to provide a link 

between parents and children 

• Various educational projects were introduced to assist 

in areas such as reading and writing 

• Educational outings were organised 

• A Science Room and a Library were created 

• Psychological support was given to pupils outside 

school hours 

• The school environment was improved. 

We are also very active in the regions surrounding our main 

production and sales sites to help the inhabitants through 

various educational, social and sports projects. 

We also contributed to the Fondation Joseph Lagesse which 

gives assistance to selected existing charities working in 

the areas of education, health and human rights. 

Besides the above, UBP also offers seven scholarships 

annually to children of employees to support them from 

CPE to HSC level. 

Our subsidiary company, Marbella Espace Maison Ltée, 

has also set up its own CSR programme. Wishing to play 

an active role in the Mauritian society, the company 

contributes to regional and national development in sectors 

such as education, quality of life, promotion of culture and 

environment protection. 


Social Responsibility 

At regional level, it carried out the following projects in 

2008/2009: 

• The refurbishment of the Paille en Queue nursery 

school in Market Avenue, Tamarin 

• The restoration of the grounds of the Etoile nursery 

school in Black River 

• The support of an educational project set up by the 

Pointe Tamarin association. 

At national level, Espace Maison has taken part in 

promoting awareness and protecting endemic plants in 

association with the Mauritian Wildlife Foundation. 

The Group has always been involved in sports for reasons of 

shared values. This year, we supported Stephan Buckland, 

the football training centre for the northern region and 

tennis, ‘petanque’, volleyball and basketball tournaments. 

Our financial support also caters for arts & culture through 

help to artists and sponsorship of events. 

The Group is also concerned by the protection of the 

environment and has this year launched a concrete 

recycling project aiming at reducing the level of demolition 

waste dumping. 

Lokotrack 

Last, but not least, we have been delighted to contribute 

to the making of a new television programme produced by 

the MCCI, named 100% Challenge, which promotes local 

enterprises and provides awareness of developments in 

the country. 

Following the introduction of the new law requiring a 

statutory 2% levy on company profits for the setting up 

of a CSR fund, the UBP Group is committed to intensify 

its support to corporate social activities.

Disclosures 

(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. 

The Group is also involved in the sale of agricultural products through one of its subsidiaries. 

Directors 

Members of the Board of Directors at June 30, 2009 were: 

The Company 

Messrs: Thierry Lagesse - Chairman 




Joël Harel 

J. Cyril Lagesse - alternate : Arnaud Lagesse 



E. Jean Mamet 

Jacques de Navacelle - Appointed on December 17, 2008 in replacement Mr Jean Giraud. 

Subsidiary Companies 

Marbella Espace Maison Ltée 

Messrs: Jean Michel Giraud - Chairman 



Joël Harel 





E. Jean Mamet 

Jacques de Navacelle - Appointed on December 17, 

2008 in replacement Mr Jean Giraud. 

Compagnie de Gros Cailloux Ltée 




Christophe Quevauvilliers - Appointed on July 1, 2008 

in replacement Mr Jacques Brousse de Laborde. 

Joseph Vaudin 

Welcome Industries Ltd 



Christophe Quevauvilliers - Appointed on July 1, 2008 

in replacement Mr Jacques Brousse de Laborde. 

UBP International Ltd 



Louis Raoul Harel 

UBP Madagascar 

Mr : Gino Guness - Manager 

United Granite Products (Pvt.) Ltd 


Joseph Albert 

Rémi de Gersigny - Appointed on May 25, 2009. 

A. Mahir Didi 

Hussain Saad Hasim 

Eddy Mancienne 

Christophe Quevauvilliers - Appointed on May 25, 2009. 

Mr Jacques Brousse de Laborde resigned as Director with effect as 

from July 1, 2008. 

Sainte Marie Crushing Plant Ltd 



Richard Koenig 


Marbella Ltd 



Joël Harel 

Land Reclamation Ltd 



Jean Giraud 

Joël Harel 

Stone & Bricks Co. Ltd 


Jean Giraud 

Joël Harel 

The Stone Masters Co. Ltd 


Jean Giraud 

Joël Harel 

Pricom Ltd 



Joël Harel 

Director’s Remuneration 

Total remuneration and benefits received by the Directors from the Company and its subsidiary companies were as follows: 

2009 2008 

Executive Non-Executive Executive Non-Executive 

Rs’000 Rs’000 Rs’000 Rs’000 


Subsidiary Companies : 

8,950 1,576 6,894 1,134 

Marbella Espace Maison Ltée - - - - 

Compagnie de Gros Cailloux Ltée - - - - 

Welcome Industries Ltd - - - - 

UBP International Ltd - - - - 

UBP Madagascar - - - - 

United Granite Products (Pvt.) Ltd - - - - 

Sainte Marie Crushing Plant Ltd - 120 - 120 

Marbella Ltd - - - - 

Land Reclamation Ltd - - - - 

Stone & Bricks Co. Ltd - - - - 

The Stone Masters Co. Ltd - - - - 

Pricom Ltd - - - - 


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. 

Disclosures (cont’d...) 

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, 2009 

were as follows : 

Category 

June 30, 2009 

No. of ordinary shares 

June 30, 2008 

No. of ordinary shares 

Direct Indirect Direct Indirect 

Directors 

Thierry Lagesse - Chairman NICB 930 150,077 930 150,077 

François Boullé INED - 39,673 - 39,673 

Marc Freismuth INED - - - - 

Jean Michel Giraud ED 2,987 2,105 2,987 2,105 

Joël Harel INED - - - - 

J. Cyril Lagesse NED 742 - 742 - 

Raymond Lagesse INED - - - - 

Jean Claude Maingard NED - - - - 

E. Jean Mamet INED - 1,500 - 1,500 


Alternate Directors 

INED - - N/A N/A 


Senior Officers 

NED - 7,877 - 7,877 

Rémi de Gersigny * - - - - 

Christophe Quevauvilliers ** 500 - 500 - 

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 Senior 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 and performance of the Company and the Group. 

They are also responsible for safeguarding the assets of the Company and the Group and for taking reasonable 

steps to prevent and detect 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 

• make judgements and estimates that are reasonable and prudent 

• comply with the provisions of the Companies Act 2001 and the International Financial Reporting Standards 

(IFRS), and explain any material departure thereto 

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

Company will continue in business in the foreseeable future. 

The Directors acknowledge that they have exercised their responsibilities as described above and confirm that 

they have complied with the above requirements in preparing the financial statements for the financial year 

under review. 

The Directors report that nothing has come to their attention which could indicate any material breakdown in 

the functioning of internal control systems and have a material impact on the trading and financial position of 

the Company and the Group. 

Shareholders 

Substantial Shareholders 

Shareholders holding more than 5% of the share capital of the Company at June 30, 2009 were as follows : 

Number % 

of shares Holding 

Compagnie d’Investissement et de Développement Ltée 5,524,866 25.01 

Forward Investment and Development Enterprises Ltd 2,088,318 9.45 

Except for the above, no other entity or individual had an interest of 5% or more in the ordinary share capital 

of the Company. 

Contracts of Significance 

No Director or any substantial shareholder had a material interest, 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 849,388 during the year ended June 30, 2009 

(2008: Rs 776,111). 

Auditors 

The auditors’ remuneration was as follows: 

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 

The Group The Company 

2009 2008 2009 2008 

Rs’000 Rs’000 Rs’000 Rs’000 

Audit fees 1,462 1,222 775 675 

Non-audit fees 138 250 102 232 



June 30, 2009 

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 



Certificate 



Independent 

June 30, 2009 

Report on the financial statements 

We have audited the financial statements of The United 

Basalt Products Ltd (the “Company”), and its subsidiaries 

(the “Group”), which comprise the balance sheets as at 

June 30, 2009 and the income statements, statements 

of changes in equity and cash flow statements for the 

year then ended and a summary of significant accounting 

policies and other explanatory notes. 

Directors’ responsibility for the 

financial statements 

The Directors are responsible for the preparation and fair 

presentation of these financial statements in accordance 

with International Financial Reporting Standards and 

in compliance with the requirements of the Mauritian 

Companies Act 2001. This responsibility includes: 

designing, implementing and maintaining internal control 

relevant to the preparation and fair presentation of financial 

statements that are free from material misstatement, 

whether due to fraud or error; selecting and applying 

appropriate accounting policies; and making accounting 

estimates that are reasonable in the circumstances. 

Auditors’ responsibility 

Our responsibility is to express an opinion on these 

financial statements based on our audit. We conducted 

our audit in accordance with International Standards on 

Auditing. Those Standards require that we comply with 

ethical requirements and plan and perform the audit 

to obtain reasonable assurance whether the financial 

statements are free from material misstatement. 

An audit involves performing procedures to obtain audit 

evidence about the amounts and disclosures in the 

financial statements. The procedures selected depend on 

the auditors’ judgement, including the assessment of the 

risks of material misstatement of the financial statements, 

whether due to fraud or error. In making those risk 

assessments, the auditors consider internal control relevant 

to the Company’s preparation and fair presentation of the 

financial statements in order to design audit procedures 

that are appropriate in the circumstances, but not for the 

purpose of expressing an opinion on the effectiveness of 

the Company’s internal controls. An audit also includes 

evaluating the appropriateness of accounting policies used 

and the reasonableness of accounting estimates made by 

the directors, as well as evaluating the overall presentation 

of the financial statements. 

We believe that the audit evidence we have obtained is 

sufficient and appropriate to provide a basis for our audit 

opinion 

Opinion 

In our opinion, the financial statements give a true and fair 

view of the financial positions of the Company and the 

Group at June 30, 2009 and of their financial performances 

and cash flows for the year then ended in accordance with 

International Financial Reporting Standards and comply 

with the Mauritian Companies Act 2001. 

Other matter 

This report, including the opinion, has been prepared for and 

only for the Company’s members, as a body, in accordance 

with Section 205 of the Mauritian Companies Act 2001 and 

for no other purpose. We do not, in giving this opinion, 

accept or assume responsibility for any other purpose or 

to any other person to whom this report is shown or into 

whose hands it may come save where expressly agreed by 

our prior consent in writing. 

Report on other Legal & Regulatory 

Requirements - Companies Act 2001 

We have no relationship with or interests in the Company 

other than in our capacities as auditors and tax advisors, 

and dealings in the ordinary course of business. 

We have obtained all the information and explanations we 

have required. 

In our opinion, proper accounting records have been kept 

by the Company as far as appears from our examination of 

those records. 

Ernst & Young Gérald Lincoln, A.C.A. 

Port Louis 

Mauritius 


The Notes on pages 38 

to 73 form an integral 

part of these financial 

statements. Auditors’ 

report on page 32. 

Balance 

as at June 30, 2009 


Notes 

2009 2008 2009 2008 

ASSETS Rs’000 Rs’000 Rs’000 Rs’000 

Non-current assets 

Property, plant and equipment 4 1,725,631 1,634,434 942,436 909,211 

Investment properties 5 26,289 29,254 162,741 134,036 

Bearer biological assets 6 20,474 19,204 - - 

Intangible assets 7 17,545 28,866 8,622 10,051 

Investments in subsidiary companies 8 - - 559,255 561,255 

Investments in associates 9 100,252 132,513 13,964 27,853 

Available-for-sale investments 10 54,531 71,361 47,468 64,298 

Other financial asset 11 13,795 - 13,795 - 

Deferred tax assets 12 3,188 2,531 1,598 1,339 

1,961,705 1,918,163 1,749,879 1,708,043 

Current assets 

Consumable biological assets 13 32,168 30,311 - - 

Inventories 14 555,471 537,765 230,730 191,885 

Trade and other receivables 15 420,577 393,916 575,131 631,904 

Cash in hand and at bank 16 10,380 7,933 562 831 

1,018,596 969,925 806,423 824,620 

Total assets 2,980,301 2,888,088 2,556,302 2,532,663 

EQUITY AND LIABILITIES 

Equity 

Share capital 17(a) 220,917 220,917 220,917 220,917 

Reserves 17(b) 1,498,535 1,419,664 1,287,083 1,196,178 

Equity shareholders of the parent 1,719,452 1,640,581 1,508,000 1,417,095 

Minority interests 17,255 20,083 - - 

1,736,707 1,660,664 1,508,000 1,417,095 

Non-current liabilities 

Borrowings 18 406,162 221,687 309,046 215,880 

Retirement benefit obligations 19 83,685 78,683 65,829 62,216 

489,847 300,370 374,875 278,096 

Current liabilities 

Borrowings 18 566,154 699,267 527,964 682,176 

Trade and other payables 20 137,895 158,723 97,943 94,582 

Dividend 27 28,719 49,793 28,719 44,183 

Taxation 12 20,979 19,270 18,801 16,531 

753,747 927,053 673,427 837,472 

Total equity and liabilities 2,980,301 2,888,088 2,556,302 2,532,663 

These financial statements were approved by the Board of Directors on September 23, 2009 and signed on its behalf by: 

Thierry Lagesse Jean Michel Giraud 

Chairman Managing Director 







Statements 

Year ended June 30, 2009 


Notes 2009 2008 2009 2008 

Rs’000 Rs’000 Rs’000 Rs’000 

Revenue 21 2,034,310 1,718,721 1,151,470 970,666 

Operating profit 22 231,961 161,986 207,409 143,753 

Finance revenues 23 10,094 29,412 44,837 66,912 

Finance costs 24 (100,320) (123,549) (92,454) (124,206) 

Share of results of associates 9 32,660 29,323 - - 

174,395 97,172 159,792 86,459 

Exceptional items 25 2,574 85,249 25,139 86,446 

Profit before tax 176,969 182,421 184,931 172,905 

Income tax expense 12 (29,437) (23,607) (19,758) (16,728) 

Profit for the year 147,532 158,814 165,173 156,177 

Attributable as follows : 

Equity shareholders of the parent 149,428 158,456 165,173 156,177 

Minority interests (1,896) 358 - - 

147,532 158,814 165,173 156,177 

Earnings per share ( Rs ) 26 6.76 7.17 7.48 7.07 







Changes in Equity 

Attributable to equity shareholders of the parent 

Fair 

Share Share Associate Revaluation Value Translation Retained Minority 

Notes Capital Premium Companies Reserve Reserve Reserve Earnings Total Interests Total 

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 


At July 1, 2007 220,917 7,354 67,569 568,746 93,805 (4,964) 596,951 1,550,378 21,464 1,571,842 

Fair value adjustment of 

available-for-sale investments - - - - (1,783) - - (1,783) - (1,783) 

Realised gain on disposal of 


Share of reserve in associate - - 521 - - - - 521 - 521 

Currency translation adjustment - - - - - 9,285 - 9,285 532 9,817 

Profit for the year - - - - - - 158,456 158,456 358 158,814 

Dividend 27 - - - - - - (44,183) (44,183) (2,271) (46,454) 

At June 30, 2008 220,917 7,354 68,090 568,746 59,929 4,321 711,224 1,640,581 20,083 1,660,664 

At July 1, 2008 220,917 7,354 68,090 568,746 59,929 4,321 711,224 1,640,581 20,083 1,660,664 



Currency translation adjustment - - - - - 3,711 - 3,711 468 4,179 

Profit for the year - - - - - - 149,428 149,428 (1,896) 147,532 

Dividend 27 - - - - - - (57,438) (57,438) (1,400) (58,838) 

At June 30, 2009 220,917 7,354 68,090 568,746 43,099 8,032 803,214 1,719,452 17,255 1,736,707 









Changes in Equity 

Fair 

Share Share Revaluation Value Retained 

Notes Capital Premium Reserve Reserve Earnings Total 

The Company Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 

At July 1, 2007 220,917 7,354 446,969 89,143 574,594 1,338,977 


available-for-sale investments - - - (1,783) - (1,783) 

Realised gain on disposal of 


Profit for the year - - - - 156,177 156,177 

Dividend 27 - - - - (44,183) (44,183) 

At June 30, 2008 220,917 7,354 446,969 55,267 686,588 1,417,095 

At July 1, 2008 220,917 7,354 446,969 55,267 686,588 1,417,095 



Profit for the year - - - - 165,173 165,173 

Dividend 27 - - - - (57,438) (57,438) 

At June 30, 2009 220,917 7,354 446,969 38,437 794,323 1,508,000 

Cash Flow 



Notes 

2009 2008 2009 2008 

Operating activities Rs’000 Rs’000 Rs’000 Rs’000 


Adjustment for: 

Depreciation of property, plant and equipment 124,519 121,600 82,670 84,933 

Depreciation of investment properties 2,965 2,274 9,110 9,339 

Amortisation and impairment of intangible assets 14,039 13,274 3,377 2,550 

Movement in retirement benefit obligations 5,002 3,052 3,613 2,363 

Profit on disposal of property, plant and equipment (592) (670) (592) (670) 

Write off of property, plant and equipment - 196 - 196 

Share of results of associates (32,660) (29,323) - - 

Exceptional items (12,367) (95,249) (25,139) (86,446) 

Finance costs 100,320 123,549 92,454 124,206 

Finance revenues (10,094) (29,412) (44,837) (66,912) 

Movement in bearer biological assets (1,270) (1,499) - - 

Movement in consumable biological assets (1,857) 1,440 - - 

Movement in working capital: 

- Inventories (17,706) (168,410) (38,845) (48,485) 

- Trade and other receivables (26,661) 5,395 56,773 13,702 

- Trade and other payables (20,829) (3,111) 3,361 10,431 

Cash generated from operations 299,778 125,527 326,876 218,112 

Interest paid (100,320) (123,549) (92,454) (124,206) 

Interest received 7,689 19,209 8,137 31,209 

Dividend paid - The Company (72,902) - (72,902) - 

Dividend paid - Minority shareholders (3,671) (949) - - 

Income tax paid (22,419) (18,172) (17,747) (15,479) 

Net cash from operating activities 108,155 2,066 151,910 109,636 

Investing activities 

Purchase of investment in subsidiary net of cash balance acquired - - - (199,975) 

Proceeds from issue of shares - 1,826 - - 

Proceeds from other financial assets - 123,052 - 123,052 

Purchase of property, plant and equipment (201,834) (151,943) (92,985) (67,619) 

Purchase of investment properties - - (38,978) - 

Purchase of intangible assets (2,718) (5,490) (1,948) (4,042) 

Proceeds from disposal of property, plant and equipment 15,141 9,480 592 7,446 

Proceeds from disposal of investments 41,034 100,645 41,034 100,645 

Purchase of investment in associate (6) - (6) - 

Other financial asset (13,795) - (13,795) - 

Dividend received from associates 30,295 18,407 30,295 7,553 

Dividend received from other equity investments 2,405 10,203 6,405 28,150 

Net cash (used in)/from investing activities (129,478) 106,180 (69,386) (4,790) 

Financing activities 

Loans received 260,968 192,990 163,208 190,751 

Loans repayments (124,391) (245,886) (124,391) (245,886) 

Leasing repayments (30,296) (21,536) (27,406) (22,768) 

Net cash from /(used in) financing activities 106,281 (74,432) 11,411 (77,903) 

Increase in cash and cash equivalents 84,958 33,813 93,935 26,943 

Movement in cash and cash equivalents 

At July 1, (284,865) (323,824) (278,880) (305,823) 

Exchange difference (233) 5,146 - - 

Movement 84,958 33,813 93,935 26,943 

At June 30, 16 (200,140) (284,865) (184,945) (278,880) 


Financial Statements 


1. CORPORATE INFORMATION 

The United Basalt Products Ltd is a public company incorporated and domiciled in Mauritius and listed on the official 

market of the Stock Exchange of Mauritius. Its registered office is situated at Trianon, Quatre Bornes. 

The main activities of the Company and its subsidiaries are the manufacture and sale of building materials, provision 

of engineering and contracting services and sale of agricultural products. 

The Group’s and the Company’s financial statements for the year ended June 30, 2009 were authorised for issue 

by the Board of Directors on September 23, 2009 and the balance sheets were signed on the Board’s behalf by 

Mr Thierry Lagesse and Mr Jean Michel Giraud. The financial statements will be submitted to the shareholders for 

approval at the next annual meeting. 

2. ACCOUNTING POLICIES 

2.1 Basis of Preparation 

The financial statements have been prepared under the historical cost basis as modified by the revaluation of 

land and buildings, available-for-sale investments and consumable biological assets which are stated at their 

fair value as disclosed in the accounting policies hereafter. The financial statements are presented in Mauritian 

Rupees and all values are rounded to the nearest thousand (Rs’000) except when otherwise indicated. 

Statement of compliance 

The consolidated financial statements of The United Basalt Products Ltd and all its subsidiaries have been 

prepared in accordance with International Financial Reporting Standards (IFRS). 

Basis of consolidation 

The consolidated financial statements incorporate the financial statements of The United Basalt Products Ltd 

and its subsidiaries as at June 30, 2009. 

All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group 

transactions that are recognised in assets, are eliminated in full. 

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains 

control, and continue to be consolidated until the date that such control ceases. 

Minority interests represent the portion of profit and loss and net assets not held by the Group and are presented 

separately in the income statement and within equity in the consolidated balance sheet, separately from parent 

shareholders’ equity. Acquisitions of minority interests are accounted for using the parent entity extension 

method, whereby, the difference between the consideration and the book value of the share of the net assets 

acquired is recognised as goodwill. 

2.2 Changes in Accounting Policy and Disclosures 

The accounting policies adopted are consistent with those of the previous financial year except that the 

Company has adopted the following IFRS and IFRIC interpretations as of July 1, 2008: 

∑ • IFRIC 11/IFRS 2 Group and Treasury Share Transactions 

∑ • IFRIC 12 – Service Concession Arrangements 

• IFRIC 14/IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding 

Requirements and their Interaction 

∑ • IAS 39/IFRS 7 October 2008 (Amendments) Reclassification of Financial Assets 

∑ • IFRIC 13 Customer Loyalty Programmes 

IFRIC 11/IFRS 2 - Group and Treasury Share Transactions 

The Group has adopted IFRIC Interpretation 11 in so far as it applies to consolidated financial statements. 

This interpretation requires arrangements whereby an employee is granted rights to an entity’s equity 

instruments to be accounted for as an employee-settled scheme, even if the entity buys the instruments from 

another party, or the shareholders provide the equity instruments needed. The Group amended its accounting 

policy accordingly. The Group has not issued instruments caught by this interpretation. 

IFRIC 12 - Service Concession Arrangements 

IFRIC 12 applies to service concession operators and explains how to account for the obligations undertaken 

and rights received in service concession arrangements. No member of the Group is a service concession 

operator and, therefore, this interpretation has no impact on the Group. 

IFRIC 14/IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction 

The limit on a defined benefit asset, minimum funding requirements and their interaction, provides guidance 

on assessing the limit in IAS 19 on the amount of the surplus that can be recognised as an asset under IAS 

19 Employee Benefits. It also explains how the pension asset or liability may be affected by a statutory or 

contractual minimum funding requirement. This interpretation does not have any impact on the Group’s 

financial statements, as it is not subject to any minimum funding requirements. 

IAS 39/IFRS 7 October 2008 (Amendments) - Reclassification of Financial Assets 

These amendments allow reclassifications of certain financial instruments held-for-trading to either held-tomaturity, 

loans and receivables or available-for-sale categories. The amendments also allow the transfer of 

certain instruments from available-for-sale to loans and receivables. The Group did not make use of these 

amendments to reclassify any of its financial instruments between the effective date of these amendments 

which is July 1, 2008 and June 30, 2009. There is thus no impact on the Group’s financial statements. 

IFRIC 13 - Customer Loyalty Programmes 

This interpretation requires customer loyalty credits to be accounted for as a separate component of the sales 

transaction in which they are granted. A portion of the fair value of the consideration received is allocated to 

the award credits and deferred. This is then recognised as revenue over the period that the award credits are 

redeemed. There has been no impact on the Group’s financial statements. 



Year ended June 30, 2009 (cont’d...) 

2.3 Accounting Standards and Interpretations not Yet Effective 

The following standards, amendments to existing standards and interpretations were in issue but not yet 

effective. They are mandatory for accounting periods beginning on or after the specified dates: 

• IFRS 8 Operating Segments (effective as from January 1, 2009) 

∑ • IFRIC 15 Agreements for the Construction of Real Estate (effective as from January 1, 2009) 

∑ • IFRIC 16 Hedges of a Net Investment in a Foreign Operation (effective from October 1, 2008) 

• IFRIC 17 Distributions of Non-Cash Assets to Owners (effective from July 1, 2009) 

∑ • IFRIC 18 Transfers of Assets from Customers (effective from July 1, 2009) 

∑ • IAS 1 Presentation of Financial Statements - Revised May 2008 (effective from January 1, 2009) 

∑ • IAS 16 Property, Plant and Equipment - Revised May 2008 (effective from January 1, 2009) 

∑ • IAS 19 Employee Benefits - Revised May 2008 (effective from January 1, 2009) 

∑ • IAS 20 Government Grants and Disclosure of Government Assistance - Revised May 2008 

(effective from January 1, 2009) 

∑ • IAS 23 Borrowing Costs –Revised May 2008 (effective from January 1, 2009) 

∑ • IAS 27 Consolidated and Separate Financial Statements - Revised May 2008 

(effective from July 1, 2009) 

∑ • IAS 28 Investments in Associates - Revised May 2008 (effective from January 1, 2009) 

∑ • IAS 29 Financial Reporting in Hyperinflationary Economies - Revised May 2008 


∑ • IAS 31 Interests in Joint Ventures - Revised May 2008 (effective from January 1, 2009) 

∑ • IAS 32 Financial Instruments: Presentation - Revised May 2008 (effective from January 1, 2009) 

∑ • IAS 36 Impairment of Assets - Revised May 2008 (effective from January 1, 2009) 

∑ • IAS 38 Intangible Assets - Revised May 2008 (effective from January 1, 2009) 

∑ • IAS 39 Financial Instruments: Recognition and Measurement - Revised May 2008 


∑ • IAS 40 Investment Property - Revised May 2008 (effective from January 1, 2009) 

∑ • IAS 41 Agriculture - Revised May 2008 (effective from January 1, 2009) 

∑ • IFRS 1 First-time Adoption of International Financial Reporting Standards - Revised May 2008 


∑ • IFRS 2 Share-Based Payment - Revised May 2008 (effective from January 1, 2009) 

∑ • IFRS 3 Business Combinations – Revised May 2008 (effective for business combinations for which 

the acquisition date is on or after the beginning of the first annual reporting period beginning 

on or after July 1, 2009 ) 

∑ • IFRS 5 Non-current Assets Held for Sale and Discontinued Operations - Revised May 2008 

(effective from July 1, 2009) 

The Group is still evaluating the effect of these new or revised standards and interpretations on its financial 

statements. No early adoption is intended by the Board of Directors. 

2.4 Significant Accounting Judgements and Estimates 

The preparation of financial statements in conformity with IFRS requires management to make estimates and 

assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and 

liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the 

reporting year. Actual results could differ from those estimates. 

Judgements 

In the process of applying the Group’s accounting policies, management has made the following judgements, apart 

from those involving estimations, which have the most significant effect on the amounts recognised in the financial 

statements: 

Operating lease commitments - Group as lessee 

The entity has entered into leases for motor vehicles, plant and equipment. The Group has determined that it does not 

retain all the significant risks and rewards of ownership of these assets. 

Estimates and assumptions 

The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet 

date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities 

within the next financial year are discussed below: 

Useful lives and residual values of property, plant and equipment 

Determining the carrying amounts of property, plant and equipment requires the estimation of the useful lives and 

residual values of these assets which carry a degree of uncertainty. The directors have used historical information 

relating to the Group and the relevant industries in which the Group’s entities operate in order to best determine the 

useful lives and residual values of property, plant and equipment. 

Fair valuation of land and buildings 

In preparing these financial statements, the Directors have obtained from an independent professional valuer the 

estimated fair value of the Group’s land and buildings which is disclosed in the notes to the financial statements. 

These estimates have been based on the market data regarding current yield on similar properties. The actual amount 

of the land and buildings could therefore differ significantly from the estimates in the future. 

Retirement and other post employment benefits 

The cost of defined benefit pension plans and other post employment medical benefits is determined using actuarial 

valuations. The actuarial valuation involves making assumptions about discount rates, expected rates of return on 

assets, future salary increases, mortality rates and future pension increases. Due to the long term nature of these 

plans, such estimates are subject to significant uncertainty. 

Valuation of standing cane 

The fair value of biological assets is based on the estimated net present value of future cash flows for the coming crop. 

Standing cane valuation has been arrived at based on an estimate of the future cash flows arising on a normal crop, 

with sugar proceeds being adjusted for the drop in sugar price as well as estimated foreign currency movements and 

budgeted costs and applying a suitable discount rate in order to calculate the net present value. The actual results 

could differ from the related accounting estimates and management considers it has used its best estimates to arrive 

at the value of the biological assets. 




2.5 Summary of Significant Accounting Policies 

(a) Property, plant and equipment 

Except for properties which have been revalued, plant and equipment are recorded at cost, excluding the 

costs of day-to-day servicing less accumulated depreciation and accumulated impairment value. Such cost 

includes the cost of replacing part of such plant and equipment when that cost is incurred, if the recognition 

criteria are met. Likewise, when a major inspection is performed, the cost is recognised in the carrying 

amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repairs 

and maintenance costs are recognised in the income statement as incurred. 

Increases in the carrying amount arising on revaluation are credited to the revaluation reserve in equity. 

Decreases that offset previous increases of the same asset are charged against the revaluation reserve to 

the extent that the decrease does not exceed the amount held in the revaluation reserve in respect of that 

same asset; all other decreases are charged to the income statement. 

The carrying values of property, plant and equipment are reviewed for impairment when events or changes 

in circumstances indicate that the carrying value may not be recoverable. A review of the carrying amounts 

is also performed at each balance sheet date to determine whether there is any indication of impairment 

loss being suffered. 

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 that asset are transferred to retained earnings. 

Leasehold land is not capitalised and the lease payments are charged to the income statement on an 

accrual basis. Upfront payment on leasehold land and buildings are capitalised and amortised over the 

lease period. 

Depreciation is calculated on the straight-line method to write off the cost or valuation of each asset to its 

residual value over its estimated useful life. 

The principal annual rates are: 

Freehold properties 

% 

2 to 5 

Leasehold properties Over lease period 

Plant and equipment 10 to 33 

Motor vehicles 20 

An item of property, plant and equipment is derecognised upon disposal or when no future economic 

benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset 

calculated as the difference between the net disposal proceeds and the carrying amount of the asset is 

included in the income statement in the year the asset is derecognised. 

The useful lives and residual values of all property, plant and equipment are reviewed and adjusted if 

appropriate at each financial year end. 

(b) Investment properties 

Investment properties are accounted for using the cost model. The properties are stated at historical cost 

less accumulated depreciation and any impairment in value. 

Depreciation is calculated on the straight-line method at a rate of 2% to 5% per annum. 

The Directors regularly revalue the properties for disclosure purposes. 

(c) Biological assets 

Bearer biological assets 

Bearer biological assets comprise of sugar-cane ratoons and are made up of plantation costs capitalised 

and amortised over seven years. 

Consumable biological assets 

Consumable biological assets represent standing cane and plants stated at fair value. The fair value is the 

present value of expected net cash flows from the cane discounted at the relevant market determined pre-tax 

rate 

(d) Intangible assets 

Goodwill 

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of 

the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities 

and contingent liabilities. Following initial recognition, goodwill is measured at cost less any accumulated 

impairment losses. Goodwill is reviewed for impairment annually or more frequently if events or changes in 

circumstances indicate that the carrying value may be impaired. 

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition 

date, allocated to each of the Group’s cash-generating units, or groups of cash-generating units, that are 

expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities 

of the Group are assigned to those units or groups of units. Each unit or group of units to which the goodwill 

is so allocated: 

∑ • represents the lowest level within the Group at which the goodwill is monitored for internal management 

purposes; and 

• is not larger than a segment based on either the Group’s primary or the Group’s secondary reporting 

format determined in accordance with IAS 14 Segment Reporting. 

Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cashgenerating 

units), to which the goodwill relates. Where the recoverable amount of the cash-generating 

unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognised. 

Where goodwill forms part of a cash-generating unit (group of cash-generating units) and part of the 

operation within that unit is disposed of, the goodwill associated with the operation disposed of is included 

in the carrying amount of the operation when determining the gain or loss on disposal of the operation. 

Goodwill disposed of in this circumstance is measured based on the relative values of the operation 

disposed of and the portion of the cash-generating unit retained. 

Negative goodwill represents the excess of the acquirer’s interest in the fair values of the identifiable 

net assets and liabilities acquired over the cost of acquisition. It is recognised as income in the income 

statement. Negative goodwill arising from the acquisition of an associated company is deducted from the 

carrying amount of that associated company. Negative goodwill arising from the acquisition of a subsidiary 

or a jointly controlled entity is shown as a deduction from the assets of the enterprise presenting the 

financial statements in the same balance sheet classification as goodwill. 




2.5 Summary of Significant Accounting Policies (cont’d...) 

(d) Intangible assets (cont’d...) 

Other intangible assets 

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible 

assets acquired in a business combination is the fair value as at the date of acquisition. Following initial 

recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated 

impairment losses. Internally generated intangible assets, excluding capitalised development costs, are 

not capitalised and expenditure is charged against profits in the year in which the expenditure is incurred. 

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with 

finite lives are amortised over the useful economic life and assessed for impairment whenever there is an 

indication that the intangible asset may be impaired. The amortisation period and the amortisation method 

for an intangible asset with a finite useful life is reviewed at least at each financial year-end. Changes in 

the expected useful life or the expected pattern of consumption of future economic benefits embodied 

in the asset is accounted for by changing the amortisation period or method, as appropriate, and treated 

as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is 

recognised in the income statement in the expense category consistent with the function of the intangible asset. 

The estimated useful life of computer software is 6 years. 

(e) Investment in subsidiaries 

Financial statements of the Company 

Investments in subsidiary companies are carried at cost which is the aggregate of the fair values, at the date 

of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the acquirer, 

in exchange for control of the acquiree, plus any costs directly attributable to the business combination. 

The carrying amount is reduced to recognise any impairment in the value of individual investments. 

The impairment loss is taken to the income statement. 

Consolidated financial statements 

The consolidated financial statements incorporate the financial statements of the Company and entities 

controlled by the Company (its subsidiaries). Subsidiaries are consolidated from the date on which control 

is transferred to the Group and cease to be consolidated from the date on which control is transferred out 

of the Group. 

(f) Investments in associates 

An associate is an entity in which the Group has significant influence and which is neither a subsidiary nor 

a joint venture. 

In the Company’s separate financial statements, investments in associates are stated at cost. The carrying 

amount is reduced to recognise any impairment in the value of the investment. 

In the consolidated financial statements, the Group’s investments in its associate are accounted for under 

the equity method of accounting. 

Under the equity method, the investment in the associate is carried in the balance sheet at cost plus post 

-acquisition changes in the Group’s share of net assets of the associate. Goodwill relating to an associate 

is included in the carrying amount of the investment and is not amortised. After application of the equity 

method, the Group determines whether it is necessary to recognise any additional impairment loss with 

respect to the Group’s net investment in the associate. The income statement reflects the share of the 

results of operations of the associate. Where there has been a change recognised directly in the equity of 

the associate, the Group recognises its share of any changes and discloses this, when applicable, in the 

statement of changes in equity. 

(g) Borrowing costs 

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, 

which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, 

are added to the cost of those assets, until such time as the assets are substantially ready for their intended 

use or sale. Investment income earned on the temporary investment of specific borrowings pending their 

expenditure on qualifying assets is deducted from the cost of those assets. All other borrowing costs are 

recognised in the income statement in the period in which they are incurred. 

(h) Impairment of financial assets 

The Group assesses at each balance sheet date whether there is any objective evidence that a financial 

asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to 

be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that 

has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an 

impact on the estimated future cash flows of the financial asset or the group of the financial assets that can 

be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors 

is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the 

probability that they will enter bankruptcy or other financial reorganisation and where observable data 

indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears 

or economic conditions that correlate with defaults. 

Due from loans and advances to customers 

For amounts due from loans and advances to customers carried at amortised cost, the Group first 

assesses individually whether objective evidence of impairment exists individually for financial assets 

that are individually significant, or collectively for financial assets that are not individually significant. If the 

Group determines that no objective evidence of impairment exists for an individually assessed financial 

asset, whether significant or not, it includes the asset in a group of financial assets with similar credit 

risk characteristics and collectively assesses them for impairment. Assets that are individually assessed 

for impairment and for which an impairment loss is, or continues to be recognised are not included in a 

collective assessment of impairment. 

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured 

as the difference between the asset’s carrying amount and the present value of estimated future cash flows 

(excluding future expected credit losses that have not been incurred). The carrying amount of the asset is 

reduced through the use of an allowance account and the amount of the loss is recognised in the income 

statement. Interest income continues to be accrued on the reduced carrying amount based on the original 

effective interest rate of the asset. Loans together with the associated allowance are written off when 

there is no realistic prospect of future recovery and all collateral has been realised or has been transferred 

to the group. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases 

because of an event occurring after the impairment was recognised, the previously recognised impairment 

loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the 

recovery is recognised in the income statement. 

The present value of the estimated future cash flows is discounted at the financial asset’s original effective 

interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the 

current effective interest rate. 





(h) Impairment of financial assets (cont’d...) 

Available-for-sale financial investments 

For available-for-sale financial investments, the Group assesses at each balance sheet date whether there 

is objective evidence that an investment or a group of investments is impaired. 

In the case of equity investments classified as available-for-sale, objective evidence would include a 

significant or prolonged decline in the fair value of the investment below its cost. Where there is evidence of 

impairment, the cumulative loss - measured as the difference between the acquisition cost and the current 

fair value, less any impairment loss on that investment previously recognised in the income statement - is 

removed from equity and recognised in the income statement. Impairment losses on equity investments are 

not reversed through the income statement; increases in their fair value after impairment are recognised 

directly in equity. 

If there is objective evidence that an impairment loss on an unquoted equity instrument that is not carried 

at fair value because its fair value cannot be reliably measured, or on a derivative asset that is linked to and 

must be settled by delivery of such an unquoted equity instrument has been incurred, the amount of the loss 

is measured as the difference between the asset’s carrying amount and the present value of estimated future 

cash flows discounted at the current market rate of return for a similar financial asset. 

(i) Foreign currency translation 

The consolidated financial statements are presented in rupees, which is the Company’s functional and 

presentation currency. Each entity in the Group determines its own functional currency and items included in 

the financial statements of each entity are measured using the functional currency. Transactions in foreign 

currencies are initially recorded at the functional currency rate ruling at the date of the transaction. Monetary 

assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of 

exchange ruling at the balance sheet date. Non-monetary items that are measured in terms of historical 

cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. 

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at 

the date when the fair value was determined. 

As at the reporting date, the assets and liabilities of the foreign subsidiaries are translated into the 

presentation currency of The United Basalt Products Ltd (the Mauritian Rupee) at the rate of exchange 

ruling at the balance sheet date and, their income statements are translated at the weighted average 

exchange rates for the year. The exchange differences arising on the translation are taken directly to a 

separate component of equity. On disposal of a foreign entity, the deferred cumulative amount recognised 

in equity relating to that particular foreign operation is recognised in the income statement. 

(j) Financial instruments 

Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group has 

become a party to the contractual provisions of the instrument. Financial assets in the scope of IAS 39 

are classified as either financial assets at fair value through profit or loss, loans and receivables, heldto-maturity 

investments or available-for-sale financial assets, as appropriate. When financial assets are 

recognised initially, they are measured at fair value, plus, in the case of investments not at fair value 

through profit or loss, directly attributable transaction costs. Purchases or sales of financial assets that 

require delivery within a time frame established by regulation or convention in the market place (regular 

way purchase) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell 

the asset. The Group determines the classification of its financial assets after initial recognition and, where 

allowed and appropriate, re-evaluates this designation at each financial year-end. 

The Group’s accounting policies in respect of the main financial instruments are set out below: 

Investments (other than in subsidiaries and associates) 

Investments in equity securities (other than in subsidiaries and associates) are treated as available-for-sale 

financial assets. 

Available-for-sale financial assets are those non-derivative financial assets that are designated as availablefor-sale 

or are not classified as financial assets at fair value through profit or loss, loans and receivables or 

held-to-maturity investments. After initial recognition available-for-sale financial assets are measured at 

fair value with gains or losses being recognised as a separate component of equity until the investment is 

derecognised or until the investment is determined to be impaired at which time the cumulative gain or loss 

previously reported in equity is included in the income statement. 

The fair value of investments that are actively traded in organised financial markets is determined by 

reference to quoted market bid prices at the close of business on the balance sheet date. For investments 

where there is no active market, the fair value is determined using valuation techniques. Such techniques 

include using recent arm’s length market transactions; reference to the current market value of another 

instrument, which is substantially the same; and discounted cash flow analysis. However, available-for-sale 

investments which do not have a quoted market price and whose fair value cannot be reliably measured are 

carried at cost, less any impairment loss. 

Loans and receivables 

Loans and receivables are non-derivative financial assets with fixed and determinable payments that 

are not quoted in an active market. After initial measurement, such assets are carried at amortised cost 

using effective interest method less any allowance for impairment. Gains and losses are recognised in the 

income statement when the loans and receivables are derecognised or impaired, as well as through the 

amortisation process. 

Borrowings 

All loans and borrowings are initially recognised at the fair value of the consideration received less directly 

attributable transaction costs. 

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised 

cost using the effective interest method. 

Gains and losses are recognised in the income statement when the liabilities are derecognised as well as 

through the amortisation process. 





(j) Financial instruments (cont’d...) 

Trade receivables 

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using 

the effective interest method, less provision for impairment. A provision for impairment of trade receivables 

is established when there is objective evidence that the Group will not be able to collect all amounts due 

according to the original terms of the receivables. Significant financial difficulties of the debtor, probability 

that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments 

(more than one year overdue) are considered indicators that the trade receivable is impaired. The amount 

of the provision is the difference between the asset’s carrying amount and the present value of estimated 

future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is 

reduced through the use of an allowance for credit losses account, and the amount of the loss is recognised 

in the income statement. When a trade receivable is uncollectible, it is written off against the allowance 

account for trade receivables. Subsequent recoveries of amounts previously written off are credited to the 

income statement. 

Trade payables 

Trade payables are stated at their nominal value which approximates their fair value. 

Cash and cash equivalents 

Cash and short-term deposits in the balance sheet comprise cash at banks and in hand. 

For the purpose of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents 

as defined above, net of bank overdrafts. 

Equity instruments 

Equity instruments are recorded at the proceeds received, net of direct issue costs. 

(k) Derecognition of financial instruments 

Financial assets 

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) 

is derecognised when: 

∑ • the rights to receive cash flows from the asset have expired; or 

∑ • the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation 

to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ 

arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the 

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

asset, but has transferred control of the asset. 

When the Group has transferred its rights to receive cash flows from an asset or has entered into a ‘passthrough’ 

arrangement, and has neither transferred nor retained substantially all the risks and rewards of the 

asset nor transferred control of the asset, a new asset is recognised to the extent of the Group’s continuing 

involvement in the asset. 

Continuing involvement that takes the form of a guarantee over the transferred asset, is measured at the 

lower of the original carrying amount of the asset and the maximum amount of consideration that the 

Group could be required to repay. 

Financial liabilities 

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or 

expires. When an existing financial liability is replaced by another from the same lender on substantially 

different terms, or the terms of an existing liability are substantially modified, such an exchange or 

modification is treated as a derecognition of the original liability and the recognition of a new liability, and 

the difference in the respective carrying amounts is recognised in the income statement. 

(l) Offsetting of financial instruments 

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet if, and 

only if, there is a currently enforceable right to offset the recognised amounts and there is the intention to 

settle on a net basis, or to realise the assets and settle the liabilities simultaneously. 

(m) Inventories 

Inventory items are valued at the lower of cost and net realisable value. Costs incurred in bringing each 

product to its present location and conditions are accounted for using average cost method. 

Net realisable value (NRV) is the estimated selling price in the ordinary course of business, less estimated 

costs of completion and the estimated costs necessary to make the sale. 

Work-in-progress consists of cost incurred on works performed but not yet completed and invoiced at 

balance sheet date. 

(n) Provisions 

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of 

a past event, it is probable that an outflow of resources embodying economic benefits will be required 

to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the 

Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the 

reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. 

The expense relating to any provision is presented in the income statement net of any reimbursement. 

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate 

that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in 

the provision due to the passage of time is recognised as a borrowing cost. 

(o) Retirement benefit obligations 

The Group operates a final salary defined benefit plan which requires contributions to be made to the fund. 

The assets of the plan are held independently and administered by the Anglo-Mauritius Assurance Society 

Limited. The cost of providing benefit under the plan is determined using the projected unit credit actuarial 

valuation method. Actuarial gains and losses are recognised as income or expense when the net cumulative 

unrecognised actuarial gains and losses at the end of the previous reporting period exceeded 10% of the 

higher of the defined benefit obligation and the fair value of plan assets at that date. These gains or losses 

are recognised over the expected average remaining working lives of the employees participating in the 

plan. 

The past service costs are recognised as an expense on a straight line basis over the average period until 

the benefits become vested. If the benefits have already vested, immediately following the introduction of, 

or changes to, a pension plan, past service costs are recognised immediately. 

The defined benefit asset or liability comprises the present value of the defined benefit obligation (using a 

discount rate based on high quality corporate bonds), less past service costs not yet recognised and less 

the fair value of plan assets out of which the obligations are to be settled. Plan assets are assets that are 

held by a long-term employee benefit fund or qualifying insurance policies. Plan assets are not available 

to the creditors of the Group nor can they be paid directly to the Group. Fair value is based on market price 

information and in the case of quoted securities it is the published bid price. The value of any plan asset 

recognised is restricted to the sum of any past service costs not yet recognised and the present value of any 

economic benefits available in the form of refunds from the plan or reductions in the future contributions to 

the plan. 





(o) Retirement benefit obligations (cont’d...) 

Where employees are not covered under any pension plan, the present value of severance allowances 

payable under the Labour Act 1975 has been calculated independently by a qualified actuary. The expected 

cost of these benefits is accrued over the service lives of employees on a similar basis to that for the defined 

benefit plan. The present value of severance allowances has been disclosed as unfunded obligations under 

retirement benefit obligations. 

(p) Leases 

The determination of whether an arrangement is, or contains a lease is based on the substance of the 

arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the 

use of a specific asset or assets and the arrangement conveys a right to use the asset. 

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership 

of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, 

if lower, at the present value of the minimum lease payments. Lease payments are apportioned between 

the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the 

remaining balance of the liability. Finance charges are charged directly to the income statement. 

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the 

lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term. 

Operating lease payments are recognised as an expense in the income statement on a straight-line basis 

over the lease term. 

(q) Revenue 

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and 

the revenue can be reliably measured. The following specific recognition criteria must also be met before 

revenue is recognised: 

Sales of goods 

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to 

the buyer, usually on delivery of the goods, and the amount of revenue can be measured reliably. 

Rendering of services 

Revenue from rendering of services is recognised upon completion of the work usually upon invoicing. 

Interest 

Revenue is recognised as the interest accrues (taking into account the effective yield on the asset). 

Investment income 

Investment income is recognised when the shareholder’s right to receive payment has been established. 

Rental income 

Rental income is recognised on an accrual basis. 

(r) Taxes 

Current income tax 

Current income tax assets and liabilities for the current and prior periods are measured at the amount 

expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute 

the amount are those that are enacted or substantively enacted at the balance sheet date. 

Deferred tax 

Deferred income tax is provided using the liability method on temporary differences at the balance sheet date 

between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. 

Deferred tax liabilities are recognised for all taxable temporary differences, except: 

• where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in 

a transaction that is not a business combination and, at the time of the transaction, affects neither the 

accounting profit nor taxable profit or loss; and 

∑ • in respect of taxable temporary differences associated with investments in subsidiaries, associates 

and interests in joint ventures, where the timing of the reversal of the temporary differences can be 

controlled and it is probable that the temporary differences will not reverse in the foreseeable future. 

∑ 

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused 

tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against 

which the deductible temporary differences, and the carry-forward of unused tax credits and unused tax 

losses can be utilised except: 

• where the deferred income tax asset relating to the deductible temporary difference arises from the 

initial recognition of an asset or liability in a transaction that is not a business combination and, at the 

time of the transaction, affects neither the accounting profit nor taxable profit or loss; and 

• in respect of deductible temporary differences associated with investments in subsidiaries, associates 

and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable 

that the temporary differences will reverse in the foreseeable future and taxable profit will be available 

against which the temporary differences can be utilised. 

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to 

the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the 

deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each 

balance sheet date and are recognised to the extent that it has become probable that future taxable profit 

will allow the deferred tax asset to be recovered. 

The principal temporary differences arise from depreciation on property, plant and equipment, revaluations of 

certain non-current assets, tax losses carried forward and on retirement benefit obligations. 

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the 

year when the asset is realised or the liability is settled. 

Income tax relating to items recognised directly in equity is recognised in equity and not in the income 

statement. 

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off 

current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and 

the same taxation authority. 





(r) Taxes (cont’d...) 

Value Added Tax 

Revenues, expenses and assets are recognised net of the amount of value added tax except: 

• where the value added tax incurred on a purchase of assets or services is not recoverable from the 

taxation authority, in which case the value added tax is recognised as part of the cost of acquisition of 

the asset or as part of the expense item as applicable; and 

∑ • receivables and payables that are stated with the amount of value added tax included. 

The net amount of value added tax recoverable from, or payable to, the taxation authority is included as part 

of receivables or payables in the balance sheet. 

(s) Dividend 

Dividend is recognised as liability in the period in which it is declared by the Company. Proposed dividend 

is not recognised as liability. 

(t) Exceptional items 

Exceptional items are significant items, of an unusual nature, identified by management as warranting 

separate disclosure. 

(u) Segmental reporting 

A business segment is a group of assets and operations engaged in providing products or services that are 

subject to risks and returns that are different from those of other business segments. 

The Group and the Company’s business segments consist of core business activities, retail and agriculture. 

Most of its activity is performed in Mauritius. 

Accordingly, there are no material geographical segments that need to be reported separately. 

(v) Related parties 

For the purposes of these financial statements, parties are considered to be related to the Group if they 

have the ability, directly or indirectly, to control the Group or exercise significant influence over the Group in 

making financial and operating decisions, or vice versa, or where the Group is subject to common control or 

common significant influence. Related parties may be individuals or other entities. 

3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES 

The Group’s financial liabilities comprise bank loans and overdrafts, finance leases, unsecured loans and trade and 

other payables. The main purpose of these financial liabilities is to raise finance for the Group’s operations. The Group 

has loan and receivables, trade and other receivables, and cash and bank balances that arise from its operations. 

The Group also holds available-for-sale financial investments. 

The main risks arising from the Group’s financial instruments are credit risk, interest rate risk, liquidity risk and 

foreign currency risk. A description of the various risks to which the Group is exposed is shown below as well as 

the approach taken by management to control and mitigate those risks. 

(a) Credit risk 

Credit risk relates to the possibility of default by customers and agents in settling their obligations to the 

Group. The Group has established internal policies to determine the credit worthiness and reliability of potential 

customers. In addition, receivable balances are monitored on an ongoing basis. The maximum exposure is the 

carrying amount as disclosed in Note 15. 

With respect to credit risk arising from other financial assets of the Group which comprise cash and cash 

equivalents, available for sale financial investments and other financial assets, the Group’s exposure to credit 

risk arises from default of the counterparty with a maximum exposure equal to the carrying amount of these 

instruments. 

(b) Interest rate risk 

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because 

of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates 

primarily to the Group’s borrowings with floating interest rates. The Group’s policy is to manage its interest cost 

using a mix of fixed and variable rate debts. 

The following table demonstrates through the impact on variable rate borrowings, the sensitivity of the Group’s 

and the Company’s profit before tax to a reasonable possible change in interest rates with all other variables 

held constant. There is no impact on the Group’s and the Company’s equity. 


2009 2008 2009 2008 

Increase/Decrease in basis point Rs’000 Rs’000 Rs’000 Rs’000 

+ 50 (5,359) (3,135) (4,750) (3,085) 

- 25 2,680 1,567 2,375 1,542 




3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d...) 

(c) Liquidity risk 

This refers to the possibility of default by the Group to meet its obligations because of unavailability of funds 

to meet both operational and capital requirements. The Group monitors its risk to a shortage of funds using a 

recurring liquidity planning tool. This tool considers the maturity of both its financial investments and financial 

assets (e.g. accounts receivables and other financial assets), the maturity of its financial obligations and 

projected cash flows from operations. Moreover, the Group has access to various types of funding like leasing, 

loans and share capital. 

The following table summarises the maturity profile of the Group’s financial liabilities at June 30, based on 

contractual undiscounted payment. 

On Less than 3 to 12 1 to 5 Above 

demand 3 months months years 5 years Total 

The Group Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 

At June 30, 2009 

Interest bearing 

loans and borrowings 454,204 17,921 101,762 375,664 39,849 989,400 

Trade and other payables - 137,895 - - - 137,895 

454,204 155,816 101,762 375,664 39,849 1,127,295 

At June 30, 2008 




523,273 204,726 138,009 156,530 76,326 1,098,964 


At June 30, 2009 




429,191 114,840 88,690 277,358 39,849 949,928 

At June 30, 2008 




510,186 140,407 134,475 149,846 76,326 1,010,240 

(d) Foreign currency risk 

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate 

because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange 

rates relates primarily to the Group’s operating activities. The Group does not have a policy to hedge against 

foreign currency risk. 

The following table demonstrates due to changes in the fair value of monetary assets and liabilities the sensitivity 

of the Group’s profit before tax to a reasonably possible change in Euro and US Dollar exchange rates, with all 

other variables held constant. There is no impact on the Group’s equity. 


2009 2008 

Increase/Decrease in exchange rate Rs’000 Rs’000 

Euro +5% (595) (914) 

Euro -10% 1,192 1,829 

US dollar +5% (50) (92) 

US dollar -10% 99 183 

(e) Capital management 

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and 

healthy capital ratios in order to support its business and maximize shareholders value. 

The Group manages its capital structure and makes adjustments to it in the light of changes in economic 

conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to 

shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, 

policies or processes during the years ended June 30, 2009 and June 30, 2008. 

The Group monitors capital using a gearing ratio which represents interest bearing loans and borrowings 

divided by equity. The Group’s policy is to keep the gearing ratio at less than one. Capital comprises of equity 

attributable to the equity holders of the parent. 


2009 2008 2009 2008 

Rs’000 Rs’000 Rs’000 Rs’000 

Interest bearing loans and borrowings 972,316 920,954 837,010 898,506 

Equity 1,719,452 1,640,581 1,508,000 1,417,095 

Gearing ratio 56% 56% 56% 63% 




4. PROPERTY, PLANT AND EQUIPMENT 

Freehold 

Land and Leasehold Plant and Motor 

Buildings Properties Equipment Vehicles Total 

The Group Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 

COST OR VALUATION 

At July 1 , 2007 1,212,659 53,391 1,187,830 73,486 2,527,366 

Additions 34,629 20,667 106,823 19,744 181,863 

Disposals (200) - (7,224) (4,300) (11,724) 

Exchange differences (284) (159) (6,138) (531) (7,112) 

At July 1 , 2008 1,246,804 73,899 1,281,291 88,399 2,690,393 

Additions 76,812 101 136,743 15,537 229,193 

Disposals - - (18,189) (2,959) (21,148) 

Exchange differences 3,081 - (608) 121 2,594 

At June 30 , 2009 1,326,697 74,000 1,399,237 101,098 2,901,032 

DEPRECIATION 

At July 1 , 2007 5,210 3,836 898,733 33,390 941,169 

Charge for the year 38,205 2,258 65,393 15,744 121,600 

Disposals adjustment (4) - (171) (3,662) (3,837) 

Exchange differences 142 (14) (2,831) (270) (2,973) 

At July 1 , 2008 43,553 6,080 961,124 45,202 1,055,959 


Disposals adjustment - - (3,640) (2,959) (6,599) 

Exchange differences 1,002 - 974 (454) 1,522 

At June 30 , 2009 64,872 8,307 1,046,609 55,613 1,175,401 

NET BOOK VALUES 

At June 30 , 2009 1,261,825 65,693 352,628 45,485 1,725,631 

At June 30 , 2008 1,203,251 67,819 320,167 43,197 1,634,434 

Included in the above, assets under finance lease Plant and Motor Total Total 

comprise the following: Equipment Vehicles 2009 2008 

The Group Rs’000 Rs’000 Rs’000 Rs’000 

Cost 94,481 70,948 165,429 142,453 

Accumulated depreciation (50,632) (24,974) (75,606) (56,378) 

Net Book Values 43,849 45,974 89,823 86,075 

Bank borrowings are secured by 

fixed and floating charges over 

the assets of the Group. 

Leased liabilities are effectively 

secured as the rights to the 

leased assets revert to the lessor 

in event of default. 

The revaluations were carried 

out by Societe D’Hotman De 

Speville, independent valuer, on 

May 30, 2007. The fair value has 

been determined by reference to 

market-based evidence. 

Freehold 

Land and Leasehold Plant and Motor 

Buildings Properties Equipment Vehicles Total 

The Company Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 

COST OR VALUATION 

At July 1, 2007 642,002 43,126 959,152 42,730 1,687,010 

Additions 26,710 - 59,398 8,395 94,503 

Disposals (200) - (6,319) (3,171) (9,690) 

At July 1, 2008 668,512 43,126 1,012,231 47,954 1,771,823 

Additions 25,453 - 82,482 6,797 114,732 

Disposals - - (2,200) (2,959) (5,159) 

Transfer from investment properties 1,292 - - - 1,292 

At June 30, 2009 695,257 43,126 1,092,513 51,792 1,882,688 

DEPRECIATION 

At July 1, 2007 12,326 2,672 748,337 17,062 780,397 


Disposals adjustment (4) - - (2,714) (2,718) 

At July 1 , 2008 42,062 4,828 791,407 24,315 862,612 


Disposals adjustment - - (2,200) (2,959) (5,159) 

Transfer from investment properties 129 - - - 129 

At June 30 , 2009 55,058 6,984 850,251 27,959 940,252 


At June 30 , 2009 640,199 36,142 242,262 23,833 942,436 

At June 30, 2008 626,450 38,298 220,824 23,639 909,211 

Included in the above, assets under finance lease Plant and Motor Total Total 

comprise the following: Equipment Vehicles 2009 2008 

The Company Rs’000 Rs’000 Rs’000 Rs’000 

Cost 94,481 56,607 151,088 133,247 




If the land and buildings were measured using the cost model, 2009 2008 2009 2008 

the carrying amounts would be as follows: Rs’000 Rs’000 Rs’000 Rs’000 

Cost 894,254 814,361 371,720 346,267 




58 

The Directors’ valuation of 

the investment properties in 

reference to market-based 

evidence at June 30, 2009 was 

Rs 49.2 m (2008: Rs. 46.9 m) for 

the Group and Rs 189.0 m (2008: 

Rs 150.0 m) for the Company. 

No direct operating expenses 

were incurred on the investment 

properties during the year 

(2008: Rs. Nil). 

Goodwill has been impaired 

by Rs 9.8 m reflecting the full 

impairment of the carrying value 

of the goodwill arising on the 

acquisition of United Granite 

Products (Pvt) Ltd and Pricom Ltd. 



5. INVESTMENT PROPERTIES 

6. BEARER BIOLOGICAL ASSETS 

7. INTANGIBLE ASSETS 


2009 2008 2009 2008 

Rs’000 Rs’000 Rs’000 Rs’000 

COST 

At July 1, 45,216 45,216 172,699 172,699 

Additions - - 38,978 - 

Transfer to property, plant and equipment - - (1,292) - 

At June 30 , 45,216 45,216 210,385 172,699 

DEPRECIATION 

At July 1, 15,962 13,688 38,663 29,324 

Charge for the year 2,965 2,274 9,110 9,339 

Transfer to property, plant and equipment - - (129) - 

At June 30, 18,927 15,962 47,644 38,663 


At June 30, 26,289 29,254 162,741 134,036 


2009 2008 

Rs’000 Rs’000 

At July 1, 19,204 17,705 

Plantation cost 6,895 6,456 

Amortisation (5,625) (4,957) 

At June 30, 20,474 19,204 


Computer Computer 

Software Goodwill Total Software 

Rs’000 Rs’000 Rs’000 Rs’000 

COST 

At July 1, 2007 18,442 46,344 64,786 14,942 

Additions 5,490 - 5,490 4,042 

At July 1, 2008 23,932 46,344 70,276 18,984 

Additions 2,718 - 2,718 1,948 

At June 30, 2009 26,650 46,344 72,994 20,932 

AMORTISATION 

At July 1, 2007 7,017 21,119 28,136 6,383 

Amortisation charge and impairment 3,274 10,000 13,274 2,550 

At July 1, 2008 10,291 31,119 41,410 8,933 

Amortisation charge and impairment 4,246 9,793 14,039 3,377 

At June 30, 2009 14,537 40,912 55,449 12,310 


At June 30, 2009 12,113 5,432 17,545 8,622 

At June 30, 2008 13,641 15,225 28,866 10,051 

All subsidiaries are incorporated 

in the Republic of Mauritius 

except for UBP Madagascar which 

is incorporated in the Republic of 

Madagascar and United Granite 

Products (Pvt) Ltd which is 

incorporated in Sri Lanka. 

8. INVESTMENTS IN SUBSIDIARY COMPANIES 

Particulars of interests in the Group’s subsidiary companies: 

Nominal Value 

Class of of Investment % Holding 

OPERATIONAL Shares Rs’000 2009 2008 

Marbella Espace Maison Ltée Ordinary 200,000 100.0 100.0 

Compagnie de Gros Cailloux Ltée Ordinary 8,400 100.0 100.0 

Société d’ Investissement Rodriguais Parts in société 100 100.0 100.0 

Welcome Industries Ltd Ordinary 1,631 75.9 75.9 

U.B.P. International Ltd Ordinary 280 100.0 100.0 

U.B.P. Madagascar Ordinary 36 100.0 100.0 

United Granite Products (Pvt) Ltd Ordinary 31,996 71.7 71.7 

Sainte Marie Crushing Plant Ltd Ordinary 9,600 76.5 76.5 

DORMANT 

9. INVESTMENT IN ASSOCIATES 


2009 2008 

Rs’000 Rs’000 

At July 1, 561,255 361,280 

Additions - 199,975 

Impairment (2,000) - 

At June 30, 559,255 561,255 

Marbella Ltd Ordinary 3,200 100.0 100.0 

Land Reclamation Ltd Ordinary 2,000 100.0 100.0 

Stone and Bricks Co Ltd Ordinary 350 100.0 100.0 

The Stone Masters Co Ltd Ordinary 100 100.0 100.0 

Pricom Ltd Ordinary 2,000 100.0 100.0 


2009 2008 2009 2008 

Rs’000 Rs’000 Rs’000 Rs’000 

COST 

At July 1, 132,513 127,147 27,853 38,741 

Additions 6 - 6 - 

Disposals (28,666) (2,084) (13,895) (10,888) 

Share of results 32,660 29,323 - - 

Share of tax (5,966) (3,987) - - 

Share of reserves - 521 - - 

Dividend (30,295) (18,407) - - 

At June 30, 100,252 132,513 13,964 27,853 


All associates are incorporated in 

the Republic of Mauritius except 

for Prochimad Mines et Carrières 

SARL which is incorporated in 

the Republic of Madagascar. 



9. INVESTMENT IN ASSOCIATES (cont’d...) 

Class of % Holding 

Particulars of interests in the Group’s associate companies: Shares 2009 2008 

Produits Basaltiques du Nord Ltée Ordinary 46.0 46.0 

Prochimad Mines et Carrières SARL Ordinary 34.0 34.0 

Pre-mixed Concrete Ltd Ordinary 30.0 30.0 

Sud Concassage Ltée Ordinary 25.0 25.0 

Cement Transport Ltd Ordinary 25.0 25.0 

Compagnie Mauricienne d’ Entreprise Ltée Ordinary 20.0 - 

Compagnie des Transports Reunis Ltée Ordinary 30.0 30.0 

Compagnie d’ Exploitation Agricole Ltée Ordinary - 20.0 


The following is a summary of aggregated 2009 2008 

financial information of the Group’s associates: Rs’000 Rs’000 

Total revenues 840,825 711,630 

Total results 64,443 68,431 

Total assets 441,335 709,160 

Total liabilities 124,867 260,279 

10. AVAILABLE-FOR-SALE INVESTMENTS 


Quoted Unquoted Total Total 

2009 2008 

Rs’000 Rs’000 Rs’000 Rs’000 

At July 1, 59,422 11,939 71,361 108,004 

Additions - - - 545 

Disposals - - - (35,405) 

Fair value adjustments (16,830) - (16,830) (1,783) 

At June 30, 42,592 11,939 54,531 71,361 


At July 1, 52,412 11,886 64,298 100,941 

Additions - - - 545 

Disposals - - - (35,405) 

Fair value adjustments (16,830) - (16,830) (1,783) 

At June 30, 35,582 11,886 47,468 64,298 

The loan receivable is 

unsecured, bears no interest 

and has no repayment terms. 

Unused tax losses of the Group that have 

not been recognised as deferred tax 

assets amounted to Rs 23m (2008: 

Rs 37m). Deferred tax assets have not 

been recognised in respect of the losses 

due to the unpredictability of future profit 

streams to utilise these losses. 

11. OTHER FINANCIAL ASSET 

12. TAXATION 

60 THE UNITED BASALT PRODUCTS LTD | ANNUAL REPORT 2009 THE UNITED BASALT PRODUCTS LTD | ANNUAL REPORT 2009 61 

The Group and 


2009 2008 

Rs’000 Rs’000 

Loan receivable from associate company 13,795 - 


2009 2008 2009 2008 

(a) In the income statements: Rs’000 Rs’000 Rs’000 Rs’000 

Income tax on the adjusted profit for the year 

at 15% (2008: 15%) 24,315 19,270 20,017 16,531 

(Over)/under provision of income tax in previous year (187) 1,303 - 903 

Over provision of deferred tax in previous years (788) (28) (538) - 

Share of tax of associates 5,966 3,987 - - 

Deferred tax charge/(credit) (see note (d) below) 131 (925) 279 (706) 

Charge for the year 29,437 23,607 19,758 16,728 

(b) In the balance sheets: 

At July 1, 19,270 16,869 16,531 15,089 

Payment during the year (21,031) (17,745) (16,570) (15,479) 

Tax withheld (1,388) (427) (1,177) - 

Income tax charge 24,128 20,573 20,017 16,921 

At June 30, 20,979 19,270 18,801 16,531 

(c) Deferred tax: 

The amounts presented in the balance sheets are 

as follows: 

Deferred tax assets 3,391 2,889 1,598 1,339 

Deferred tax liabilities (203) (358) - - 

Net deferred tax assets 3,188 2,531 1,598 1,339 

(d) Movement in deferred tax: 

At July 1, 2,531 1,578 1,339 633 

Over provision of deferred tax in previous years 788 28 538 - 

Deferred tax (charge)/credit (131) 925 (279) 706 

At June 30, 3,188 2,531 1,598 1,339 

(e) Deferred tax assets and liabilities are attributable to the following: 

Deferred tax liabilities 

- Accelerated capital allowances (14,618) (15,752) (14,243) (14,102) 

Deferred tax assets 

- Employee benefit obligations 11,706 11,420 9,874 9,332 

- Provision for bad debts 5,283 5,933 5,150 5,375 

- Provision for obsolete stock 817 930 817 734 

17,806 18,283 15,841 15,441 

Net deferred tax assets 3,188 2,531 1,598 1,339

Consumable biological assets 

are stated at their fair values. 

The amount of write down of 

inventories recognised as an 

expense is Rs 9 m (2008: Rs 14 m) 

which is recognised in the income 

statement. 

Bank borrowings are secured by 

fixed and floating charges over the 

assets of the Group. 



12. TAXATION (cont’d...) 


(f) The tax on profit differs from the theoretical 

amount that would arise using the basic 2009 2008 2009 2008 

corporate tax rate as follows: Rs’000 Rs’000 Rs’000 Rs’000 


Tax calculated at the rate of 15% 26,545 30,720 27,740 25,936 

Tax effect of : 

Non-allowable expenses 4,014 8,705 712 6,913 

Depreciation on non-qualifying assets 1,413 1,340 1,413 1,313 

Other deductible items (914) (1,417) - - 

Consolidation adjustment 1,067 2,137 - - 

Income exempt from tax (3,468) (18,341) (9,569) (18,337) 

Deferred tax assets not recognised 1,754 (812) - - 

Income tax (over)/under provided in previous year (187) 1,303 - 903 

Deferred tax over provided in previous year (787) (28) (538) - 

Income tax expense 29,437 23,607 19,758 16,728 

13. CONSUMABLE BIOLOGICAL ASSETS 

14. INVENTORIES 


2009 2008 

Rs’000 Rs’000 

Standing canes 15,711 15,619 

Plants 16,457 14,692 

32,168 30,311 


2009 2008 2009 2008 

Rs’000 Rs’000 Rs’000 Rs’000 

Raw materials and spares 142,349 107,669 108,302 97,745 

Work in progress 51,813 34,303 31,407 28,573 

Finished goods 361,164 394,610 91,021 65,567 

Others 145 1,183 - - 

555,471 537,765 230,730 191,885 

Trade and other receivables are 

non-interest bearing and are 

generally on 30 to 90 days’ terms. 

Other receivables are non-interest 

bearing and have an average term 

of 6 months. 

For terms and conditions relating 

to related party receivables, refer 

to Note 29. 

15. TRADE AND OTHER RECEIVABLES 

As at June 30, the ageing analysis of trade receivables was as follows: 

Movements in the provision for impairment of receivables were as follows: 

16. CASH AND CASH EQUIVALENTS 


2009 2008 2009 2008 

Rs’000 Rs’000 Rs’000 Rs’000 

Trade receivables 265,762 251,681 132,568 120,760 

Receivables from subsidiary companies - - 377,949 454,639 

Receivables from associate companies 28,767 19,626 28,767 19,626 

Other receivables and prepayments 126,048 122,609 35,847 36,879 

420,577 393,916 575,131 631,904 

Neither 

past due Past due but not impaired 

Total nor impaired < 30 days 30 - 60 days 61 - 90 days > 90 days 

The Group Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 

2009 265,762 97,599 45,200 33,791 26,119 63,053 

2008 251,681 83,525 57,996 31,845 12,630 65,685 


2009 2008 2009 2008 

Individually impaired Rs’000 Rs’000 Rs’000 Rs’000 

At July 1, 38,299 39,148 32,449 35,298 

Charge for the year 2,328 2,000 - - 

Utilised - (1,191) - (1,191) 

Release (635) (1,658) (635) (1,658) 

At June 30, 39,992 38,299 31,814 32,449 


2009 2008 2009 2008 

Rs’000 Rs’000 Rs’000 Rs’000 

Cash resources 10,380 7,933 562 831 

Bank overdraft (Note 18) (210,520) (292,798) (185,507) (279,711) 

(200,140) (284,865) (184,945) (278,880) 

62 THE UNITED BASALT PRODUCTS LTD | ANNUAL REPORT 2009 THE UNITED BASALT PRODUCTS LTD | ANNUAL REPORT 2009 63 


2009 132,568 41,667 31,152 22,332 10,919 26,498 

2008 120,760 39,927 33,830 18,209 8,591 20,203



16. CASH AND CASH EQUIVALENTS (cont’d...) 

The acquisition of property, plant and equipment was financed as follows: 


2009 2008 2009 2008 

Non-cash transactions Rs’000 Rs’000 Rs’000 Rs’000 

Total acquisition cost (Note 4) 229,193 181,863 114,732 94,503 

Financed by cash (201,834) (151,943) (92,985) (67,619) 

Financed by finance leases 27,359 29,920 21,747 26,884 

17. SHARE CAPITAL AND RESERVES 

The Group and The Company 

2009 2008 2009 2008 

(a) Share capital Number Number Rs’000 Rs’000 

Authorised: 

Ordinary shares of Rs. 10. each 22,091,702 22,091,702 220,917 220,917 

Issued and fully paid: 

Ordinary shares of Rs. 10. each 22,091,702 22,091,702 220,917 220,917 


2009 2008 2009 2008 

(b) Reserves Rs’000 Rs’000 Rs’000 Rs’000 

Share premium 7,354 7,354 7,354 7,354 

Associate companies (note (i)) 68,090 68,090 - - 

Revaluation reserve (note (ii)) 568,746 568,746 446,969 446,969 

Fair value reserve (note (iii)) 43,099 59,929 38,437 55,267 

Translation reserve (note (iv)) 8,032 4,321 - - 

Retained earnings 803,214 711,224 794,323 686,588 

1,498,535 1,419,664 1,287,083 1,196,178 

(i) Associate companies represent reserves other than retained earnings arising on consolidation of associates. 

(ii) The revaluation reserve is used to record increases in the fair value of land and buildings and decreases to the extent that 

such decrease relates to an increase on the same asset previously recognised in equity. 

(iii) The fair value reserve records fair value changes on available-for-sale financial assets. 

(iv) The translation reserve is used to record exchange differences arising from the translation of the financial statements of 

overseas subsidiaries. 

Bank loans and overdrafts are 

secured by fixed and floating 

charges on the Group’s assets 

and bear interest between PLR 

+0.5% and PLR +1.5% per annum. 

Unsecured loans are repayable at 

call. The rates of interest at June 

30, 2009 was 7.75% (2008:10.5%). 

Leasing finance carries interest 

at an annual rate between 8.5% 

and 13.25%. Leased liabilities are 

effectively secured as the rights 

to the leased assets revert to the 

lessor in the event of default. 

18. BORROWINGS 


2009 2008 2009 2008 

Non-current Rs’000 Rs’000 Rs’000 Rs’000 

Bank loans 348,349 163,289 258,349 162,740 

Obligations under finance lease 57,813 58,398 50,697 53,140 

406,162 221,687 309,046 215,880 

Current 

Bank overdrafts 210,520 292,798 185,507 279,711 

Bank loans 87,000 148,692 77,000 147,000 

Unsecured loans 243,684 230,475 243,684 230,475 

Obligations under finance lease 24,950 27,302 21,773 24,990 

566,154 699,267 527,964 682,176 

Total borrowings 972,316 920,954 837,010 898,056 

Bank loans are payable as follows: 

Within one year 87,000 148,692 77,000 147,000 

After one year and before two years 81,250 22,549 51,250 22,000 

After two years and before five years 227,250 66,000 167,250 66,000 

After five years 39,849 74,740 39,849 74,740 

435,349 311,981 335,349 309,740 

Finance lease liabilities: 

Minimum lease payments: 




After five years - 1,586 - 1,586 

99,847 104,987 87,445 95,732 

Future finance charges on finance leases (17,084) (19,287) (14,975) (17,602) 

Present value of finance lease liabilities 82,763 85,700 72,470 78,130 

The present value of finance lease liabilities 

may be analysed as follows: 




After five years - 1,528 - 1,528 

82,763 85,700 72,470 78,130 




19. RETIREMENT BENEFIT OBLIGATIONS 


(a) The amounts recognised in 2009 2008 2009 2008 

the balance sheets are as follows : Rs’000 Rs’000 Rs’000 Rs’000 

Present value of funded obligations 140,997 124,475 129,605 114,632 

Fair value of plan assets (118,298) (108,543) (107,811) (99,429) 

22,699 15,932 21,794 15,203 

Present value of unfunded obligations 77,552 67,257 59,704 51,270 

Unrecognised actuarial losses (16,566) (4,506) (15,669) (4,257) 

Liability in the balance sheets 83,685 78,683 65,829 62,216 

(b) The amounts recognised in the income statements are as follows : 

Current service cost 8,425 6,653 6,278 5,311 

Interest cost 19,714 17,306 17,113 14,948 

Scheme expenses 312 286 248 252 

Cost of incurring risk benefits 1,920 1,060 1,720 895 

Expected return on plan assets (11,104) (9,917) (10,138) (9,119) 

Past service cost - - (171) - 

Actuarial losses/(gains) recognised 765 (135) 378 (59) 

Total included in staff costs 20,032 15,253 15,428 12,228 

Actual return on plan assets 6,123 8,364 6,002 7,892 

(c ) Movement in the liability recognised in the balance sheets : 

At July 1, 78,683 75,631 62,216 59,854 

Total expenses as above 20,032 15,253 15,428 12,228 

Contributions paid (15,030) (12,201) (11,815) (9,866) 

At June 30, 83,685 78,683 65,829 62,216 

(d) Changes in present value of the defined benefit obligations: 

Opening defined benefit obligations 191,732 164,430 165,902 142,556 

Current service cost 8,425 6,653 6,278 5,311 

Interest cost 19,714 17,306 17,113 14,948 

Employees’ contribution 25 25 - - 

Past service cost - - (171) - 

Actuarial losses 7,845 11,573 7,653 10,477 

Benefits paid (9,192) (8,255) (7,466) (7,390) 

Closing defined benefit obligations 218,549 191,732 189,309 165,902 


2009 2008 2009 2008 

(e) Changes in fair value of plan assets are as follows: Rs’000 Rs’000 Rs’000 Rs’000 

Opening fair value of plan assets 108,543 97,846 99,429 90,278 

Expected return 11,104 9,917 10,138 9,119 

Contributions by employer 14,003 10,849 11,815 7,585 

Scheme expenses (312) (286) (248) (252) 

Cost of insuring risk benefits (1,920) (1,060) (1,721) (894) 

Employees’ contribution 25 25 - - 

Actuarial gains (4,981) (1,555) (4,136) (1,298) 

Benefits paid (8,164) (7,193) (7,466) (5,109) 

Closing fair value of plan assets 118,298 108,543 107,811 99,429 

(f) The Group expects to contribute Rs 10.1m to its defined benefit plans in the year ending June 30, 2010. 

The Company expects to contribute Rs 8.4m to its defined benefit plans in the year ending June 30, 2010. 

2009 2008 2007 2006 

(g) Obligations, assets and experience adjustments 


Rs’000 Rs’000 Rs’000 Rs’000 

Defined benefit obligations (218,549) (191,732) (164,720) (153,981) 

Fair value of plan assets 118,298 108,543 97,846 84,417 

Deficit (99,794) (83,189) (66,874) (69,564) 

Experience adjustment on plan assets (4,981) (1,555) 720 (27) 

Experience adjustment on plan liabilities (7,845) (11,573) 5,359 2,287 


Defined benefit obligations (189,309) (165,902) (142,556) (133,455) 

Fair value of plan assets 107,811 99,429 90,278 78,232 

Deficit (81,498) (66,473) (52,278) (55,223) 

Experience adjustment on plan assets (4,136) (1,298) 415 (126) 

Experience adjustment on plan liabilities (7,653) (10,477) 4,554 1,999 


(h) The major categories of plan assets as a percentage 2009 2008 2009 2008 

of the fair value of total plan assets are as follows: % % % % 

Local equities 38 38 38 38 

Overseas equities 22 22 22 22 

Fixed interest 35 35 35 35 

Properties 5 5 5 5 

Others - - - - 

100 100 100 100 

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, 

applicable to the period over which the obligation is to be settled. 


The principal assumptions used were as follows : The Company 

2009 2008 

% % 

Discount rate 10.00 10.50 

Rate of return on plan assets 10.50 10.50 

Future salary increase 8.00 8.00 


Trade payables are non-interest 

bearing and are normally settled on 

60-day terms. 

Other payables are non-interest 

bearing and have an average term of 

6 months. 




20. TRADE AND OTHER PAYABLES 

21. REVENUE 


2009 2008 2009 2008 

Rs’000 Rs’000 Rs’000 Rs’000 

Trade payables 107,606 77,631 40,512 45,814 

Other payables and accruals 30,288 81,092 57,431 48,768 

137,895 158,723 97,943 94,582 


2009 2008 2009 2008 

Revenue is analysed as follows : Rs’000 Rs’000 Rs’000 Rs’000 

Sale of goods 1,883,718 1,629,823 1,080,457 910,244 

Rendering of services 150,592 88,898 71,013 60,422 

2,034,310 1,718,721 1,151,470 970,666 

22. OPERATING PROFIT 

Operating profit is arrived at after: 


2009 2008 2009 2008 

(a) Crediting: Rs’000 Rs’000 Rs’000 Rs’000 

- Rental income 9,114 8,932 22,002 21,532 

- Other operating income 66,614 54,618 58,637 49,072 

- Profit on disposal of property, plant and equipment 592 670 592 670 

(b) Charging : 

- Cost of sales 1,397,176 1,214,478 719,473 643,338 

- Administrative expenses 458,820 383,935 277,280 230,971 

- Selling and distribution costs 22,673 22,542 28,539 23,878 

Included in cost of sales and operating expenses are : 

Depreciation of property, plant and equipment 

- owned assets 95,929 98,616 57,084 63,764 

- leased assets 28,590 22,984 25,586 21,169 

Depreciation of investment properties 2,965 2,274 9,110 9,339 

Cost of inventories recognised as expenses 1,123,039 925,032 582,575 500,196 

Amortisation of bearer biological assets 5,625 4,957 - - 

Amortisation of intangible assets 4,246 3,274 3,377 2,550 

Staff costs (note (i)) 315,310 238,722 217,942 176,534 

(i) Analysis of staff costs: 

-Wages and salaries 289,007 218,831 198,816 160,921 

-Social security costs 11,283 8,763 6,399 5,407 

-Pension costs 15,020 11,128 12,727 10,206 

315,310 238,722 217,942 176,534 

Basic and diluted earnings 

per share were the same for 

both years since there were 

no transactions in respect of 

ordinary shares with dilutive 

potential. 

23. FINANCE REVENUES 

24. FINANCE COSTS 

25. EXCEPTIONAL ITEMS 

26. EARNINGS PER SHARE 


2009 2008 2009 2008 

Rs’000 Rs’000 Rs’000 Rs’000 

Investment income: 

- Quoted 1,493 3,553 1,493 3,462 

- Unquoted 912 6,650 35,207 32,241 

Interest income 7,689 19,209 8,137 31,209 

10,094 29,412 44,837 66,912 


2009 2008 2009 2008 

Rs’000 Rs’000 Rs’000 Rs’000 

Interest is payable on : 

Bank overdrafts 18,698 30,413 16,783 29,178 

Bank loans 42,090 58,780 37,097 58,780 

Leases 14,447 12,067 13,489 11,498 

Others 25,085 22,289 25,085 24,750 

100,320 123,549 92,454 124,206 


2009 2008 2009 2008 

Rs’000 Rs’000 Rs’000 Rs’000 

Profit on sale of available-for-sale investments - 29,813 - 29,813 

Profit on sale of associate 12,367 65,436 27,139 56,633 

Impairment of goodwill (9,793) (10,000) - - 

Impairment of subsidiary - - (2,000) - 

2,574 85,249 25,139 86,446 


2009 2008 2009 2008 

Profit attributable to equity holders 

of the parent (Rs’000) 149,428 158,456 165,174 156,177 

Number of shares in issue 22,091,702 22,091,702 22,091,702 22,091,702 

Earnings per share (Rs) 6.76 7.17 7.48 7.07 




27. DIVIDEND 


2009 2008 

Dividend on ordinary shares: Rs’000 Rs’000 

Dividend of Rs 1.30 per share paid 28,719 - 

Dividend of Rs 1.30 per share declared (2008: Rs 2.00 per share) 28,719 44,183 

57,438 44,183 

28. FAIR VALUES 

The fair value of the financial assets and financial liabilities of the Group and the Company approximates their carrying value. 

29. RELATED PARTY TRANSACTIONS 

Enterprises Directors and Enterprises with 

Subsidiary Associate Under Common Key Management Common Major 

The Company Companies Companies Management Personnel Shareholders 

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 

(a) Nature of transactions 

Purchase of goods 

and services 103,570 79,696 200,461 180,656 36,837 34,206 513 69 16,664 13,616 60,879 56,382 

Purchase of property, 

plant and equipment 44,374 1,853 438 - 151 - 32,135 - - 795 12,275 1,058 

Sale of goods 

and services 400,468 321,808 90,609 50,161 166,212 109,578 140,226 117,219 3,022 1,232 8,082 6,435 

Management fees 24,990 20,075 - - 8,375 4,840 10,616 9,157 - - - - 

Interest received 8,000 31,150 11 35 - 19,150 - - - - - - 

Interest paid 7,182 7,567 8,000 12,000 556 545 - - 1,106 1,350 5,509 5,637 

(b) Outstanding balances 

at June 30, 

Amounts receivable 184,875 310,712 19,494 25,551 28,767 19,626 49,203 42,289 2,757 2,037 2,131 1,331 

Amounts payable 5,582 11,268 134,787 278,479 1,047 2,723 - - - - 5,478 3,940 

Loans receivable 335,679 267,763 - - 13,795 - - - - - - - 

Loans payable 29,960 61,501 - 1,500 1,600 2,600 - - 12,360 11,301 16,000 47,600 

Provision for 

impairment 107,013 107,013 - - - - - - - - - - 


2009 2008 

(c) Compensation of key management personnel Rs’000 Rs’000 

Short term employee benefits 40,222 34,002 

Post-employment benefits 3,595 2,714 

43,817 36,716 

Terms and conditions of transactions with related parties: 

The sales to and purchases from related parties are made at normal market prices. Outstanding balances at the 

year-end are unsecured, interest free and settlement occurs in cash. There have been no guarantees provided 

or received for any related party receivables and payables. At each financial year, an assessment of provision 

for impairment is undertaken through the examination of the financial position of the related party and the 

market in which the related party operates. 

30. CONTRACTS OF SIGNIFICANCE 

Except for transactions as disclosed in Note 29 on related party transactions, the Group did not have any 

contract of significance as defined by the Listing Rules of the Stock Exchange of Mauritius with any of its 

Directors and controlling shareholders. 

31. CAPITAL COMMITMENTS 


2009 2008 2009 2008 

Capital expenditure : 

Contracted for but not provided 

Rs’000 Rs’000 Rs’000 Rs’000 

in the financial statements - 14,925 - 10,925 

Approved by the Directors but not contracted for 248,435 164,251 211,976 141,258 

248,435 179,176 211,976 152,183 

The expenditure for property, plant and equipment will be financed by cash generated from Group activities 

and from available and new borrowing facilities. 

32. CONTINGENT LIABILITIES 

At June 30, 2009, the Group had contingent liabilities in respect of bank guarantees arising in the ordinary 

course of business from which it is anticipated that no material liabilities would arise. 

33. SUBSEQUENT EVENT 

No material adjusting and non-adjusting events have arisen between the balance sheet date and the date the 

financial statements were authorised for issue. 

34. OPERATING LEASE COMMITMENTS 



2009 2008 

Future minimum rentals payable under operating leases are as follows: Rs’000 Rs’000 

Within one year 13,557 8,258 

After one year and before two years 13,670 8,258 

After two years and before five years 29,167 17,244 

After five years - 1,213 

56,394 34,973 




35. SEGMENTAL INFORMATION 


Consolidation 

Building Materials Agriculture adjustments Total 

Retail Core Business 

2009 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 

Revenue 680,933 1,383,760 62,886 (93,269) 2,034,310 

Operating profit 10,644 215,459 5,858 - 231,961 

Net finance costs (6,775) (48,736) (420) (34,295) (90,226) 

Share of results of associates - - - 32,660 32,660 

Exceptional items - 25,139 - (22,565) 2,574 

Profit before tax 3,869 191,862 5,438 (24,200) 176,969 

Income tax expense - (23,145) (327) (5,965) (29,437) 

Profit after tax 3,869 168,717 5,111 (30,165) 147,532 

Minority interests - - - 1,896 1,896 

Profit for the year 3,869 168,717 5,111 (28,269) 149,428 

Other segment information: 

Segment assets 461,526 2,934,874 490,643 (1,006,994) 2,880,049 

Investments in associates - 15,323 - 84,929 100,252 

Total segment assets 461,526 2,950,197 490,643 (922,065) 2,980,301 

Total segment liabilities 327,831 1,521,905 20,048 (626,190) 1,243,594 

Capital expenditure: 

Property, plant and equipment 15,044 210,384 3,765 - 229,193 

Intangible assets 30 2,688 - - 2,718 

Depreciation, amortisation and impairment 10,049 129,229 7,870 - 147,148 

2008 

Revenue 547,814 1,196,254 53,653 (79,000) 1,718,721 

Operating profit 4,646 154,135 3,205 - 161,986 

Net finance costs (9,988) (58,136) (228) (25,785) (94,137) 

Share of results of associates - - - 29,323 29,323 

Exceptional items - 86,446 - (1,197) 85,249 

Profit/(loss) before tax (5,342) 182,445 2,977 2,341 182,421 

Income tax expense - (18,759) (948) (3,900) (23,607) 

Profit/(loss) after tax (5,342) 163,686 2,029 (1,559) 158,814 

Minority interests - - - (358) (358) 

Profit/(loss) for the year (5,342) 163,686 2,029 (1,917) 158,456 

Other segment information: 

Segment assets 464,084 2,982,072 486,665 (1,177,246) 2,755,575 

Investments in associates - 29,213 - 103,300 132,513 

Total segment assets 464,084 3,011,285 486,665 (1,073,946) 2,888,088 

Total segment liabilities 334,259 1,561,251 21,136 (689,222) 1,227,424 

Capital expenditure: 

Property, plant and equipment 5,263 174,641 1,959 - 181,863 

Intangible assets 1,448 4,042 - - 5,490 

Depreciation, amortisation and impairment 8,378 127,028 6,699 - 142,105 

36. FINANCIAL REVIEW 

2009 2008 2007 

The Group Rs’m Rs’m Rs’m 

Share capital 220.9 220.9 220.9 

Reserves 1,498.5 1,419.7 1,329.5 

Shareholders’ interests 1,719.4 1,640.6 1,550.4 

Assets 2,980.3 2,888.1 2,837.9 

Liabilities 1,243.6 1,227.4 1,266.1 

Revenue 2,034.3 1,718.7 1,404.4 

Profit before tax 176.9 182.4 50.0 

Income tax expense (29.4) (23.6) (15.8) 

Profit for the year 147.5 158.8 34.2 

Dividend 57.4 44.2 33.1 

Rs Rs Rs 

Net assets value per share 77.83 74.26 70.18 

Earnings per share 6.76 7.17 1.54 

Dividend per share 2.60 2.00 1.50 

2009 2008 2007 

The Company Rs’m Rs’m Rs’m 

Share capital 220.9 220.9 220.9 

Reserves 1,287.1 1,196.2 1,118.1 

Shareholders’ interests 1,508.0 1,417.1 1,339.0 

Assets 2,556.3 2,532.7 2,475.3 

Liabilities 1,048.3 1,115.6 1,136.3 

Revenue 1,151.5 970.7 870.6 

Profit before tax 184.9 172.9 60.2 

Income tax expense (19.7) (16.7) (12.7) 

Profit for the year 165.2 156.2 47.5 

Dividend 57.4 44.2 33.1 

Rs Rs Rs 

Net assets value per share 68.26 64.15 60.61 

Earnings per share 7.48 7.07 2.15 

Dividend per share 2.60 2.00 1.50 


1. A member of the 

Company entitled to 

attend and vote at this 

meeting may appoint 

a proxy of his/her 

own choice (whether a 

member or not) to 

attend and vote on 

his/her behalf. 

2. Please mark in the 

appropriate box how 

you wish to vote. If no 

specific direction as 

to voting is given, the 

proxy will exercise his/ 

her discretion as to 

how he/she votes. 

3. The instrument 

appointing a proxy or 

any general power of 

attorney, duly signed, 

should 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. 

I/We 

of being a member/members of the above-named Company, 

do hereby appoint ………………………………………… 

of failing him/her,… 

of…………………………………………………………… 

as my/our proxy to vote for me/us and on my/our behalf at the Annual Meeting of the Company to be held on Thursday 

November 12, 2009 at 15.00 hours and at any adjournment thereof. 

I/We direct my/our proxy to vote in the following manner: For Against Abstain 

1 To receive, approve and adopt the Minutes of Proceedings of the preceding 

Annual Meeting held on November 19, 2008. 

2 To receive, approve and adopt the Audited Financial Statements for the 

year ended June 30, 2009 and reports of the Directors thereon. 

3 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. 

4 To appoint as Director of the Company, Mr Jacques de Navacelle who was 

nominated by the Board and who offers himself for appointment. 

5 To re-appoint Ernst & Young as Auditors for the year ending June 30, 2010 

and to authorise the Board of Directors to fix their Meeting in accordance 

with sec 138 (6) of the Companies Act 2001. 

Dated this day of 2009 

Signature(s) 

Form

Financial Statements - The United Basalt Products Ltd

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