Corporate Governance Report - The United Basalt Products Ltd
Corporate Governance Report - The United Basalt Products Ltd
Corporate Governance Report - The United Basalt Products Ltd
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Annual <strong>Report</strong>
Notice of Annual Meeting<br />
Financial Highlights and Ratios<br />
Value Added Statement<br />
Group Structure<br />
<strong>Corporate</strong> Information<br />
Directors’ Profiles<br />
Chairman’s <strong>Report</strong><br />
<strong>Corporate</strong> <strong>Governance</strong> <strong>Report</strong><br />
Other Statutory Disclosures<br />
Secretary’s Certificate<br />
Independent Auditors’ <strong>Report</strong><br />
Balance Sheets<br />
Income Statements<br />
Statements of Changes in Equity<br />
Cash Flow Statements<br />
Notes to the Financial Statements<br />
Proxy Form<br />
3<br />
4<br />
6<br />
7<br />
9<br />
10<br />
11<br />
15<br />
20<br />
25<br />
26<br />
27<br />
28<br />
29<br />
31<br />
32<br />
67<br />
Dear Shareholder,<br />
<strong>The</strong> Board of Directors is pleased to present to you the Annual <strong>Report</strong> of <strong>The</strong> <strong>United</strong> <strong>Basalt</strong> <strong>Products</strong> <strong>Ltd</strong><br />
and of the Group for the year ended June 30, 2008, the contents of which are listed below.<br />
This report was approved by the Board of Directors on September 24, 2008.<br />
Thierry Lagesse<br />
Chairman<br />
Jean-Michel Giraud<br />
Managing Director
Notice of<br />
Annual Meeting<br />
Notice is hereby given that the Annual Meeting of Shareholders of the Company will be held at its registered office,<br />
Trianon, Quatre Bornes, on Wednesday November 19, 2008 at 15.00 hours for the following purposes:<br />
1. To receive, approve and adopt the Minutes of Proceedings of the preceding Annual Meeting held on<br />
December 21, 2007.<br />
2. To receive, approve and adopt the Audited Financial Statements for the year ended June 30, 2008 and reports<br />
of the Directors thereon.<br />
3. To re-appoint Mr Jean Giraud, aged above 70, to continue to hold office as Director of the Company until the<br />
next Annual Meeting in accordance with Section 138 (6) of the Companies Act 2001.<br />
4. To re-appoint Mr J. Cyril Lagesse, aged above 70, to continue to hold office as Director of the Company until<br />
the next Annual Meeting in accordance with Section 138 (6) of the Companies Act 2001.<br />
5. To re-appoint Ernst & Young as Auditors for the year ending June 30, 2009 and to authorise the Board of Directors<br />
to fix their remuneration.<br />
By Order of the Board<br />
Christophe Quevauvilliers F.C.C.A.<br />
Company Secretary<br />
September 24, 2008<br />
A member of the Company entitled to attend and vote at this meeting may appoint a proxy<br />
(whether a member or not) to attend and vote on his/her behalf. <strong>The</strong> instrument appointing<br />
a proxy or any general power of attorney shall be deposited at the registered office of the<br />
Company, Trianon, Quatre Bornes, not less than twenty-four hours before the time fixed for<br />
the holding of the meeting or else the instrument of proxy shall not be treated as valid.<br />
A proxy form is included at the end of the Annual <strong>Report</strong> for this purpose.<br />
For the purpose of this Annual Meeting, the Directors have resolved, in compliance with<br />
Section 120 (3) of the Companies Act 2001, that the shareholders who are entitled to<br />
receive notice of the meeting and attend such meeting shall be those shareholders whose<br />
names are registered in the share register of the Company as at October 21, 2008.<br />
Annual <strong>Report</strong><br />
3
Financial Highlights<br />
and Ratios June 30, 2008<br />
Net Assets per share (Rs)<br />
80<br />
70<br />
60<br />
50<br />
40<br />
30<br />
20<br />
10<br />
0<br />
Shareholders’ Fund (Rs’000)<br />
1,600,000<br />
1,400,000<br />
1,200,000<br />
1,000,000<br />
800,000<br />
600,000<br />
400,000<br />
200,000<br />
0<br />
2005<br />
2005<br />
Share Price (Rs)<br />
43.00<br />
42.00<br />
41.00<br />
40.00<br />
39.00<br />
38.00<br />
37.00<br />
40.62<br />
894,404<br />
41.60<br />
2005<br />
42.09<br />
2006<br />
929,688<br />
2006<br />
42.40<br />
2006<br />
70.18<br />
2007<br />
1,550,378<br />
2007<br />
38.90<br />
2007<br />
74.26<br />
2008<br />
1,640,581<br />
2008<br />
43.00<br />
2008<br />
2,000,000<br />
1,500,000<br />
1,000,000<br />
Earnings per share (Rs)<br />
7.00<br />
6.00<br />
5.00<br />
4.00<br />
3.00<br />
2.00<br />
1.00<br />
0<br />
Dividend per share (Rs)<br />
2.50<br />
2.00<br />
1.50<br />
1.00<br />
0.50<br />
0<br />
Revenue (Rs’000)<br />
500,000<br />
0<br />
3.31<br />
2005<br />
2005<br />
1,079,155<br />
2005<br />
2.78<br />
2006<br />
2006<br />
1,355,677<br />
2006<br />
1.54<br />
2007<br />
2007<br />
1,404,405<br />
2007<br />
7.17<br />
2008<br />
2008<br />
1,718,721<br />
2008<br />
THE GROUP<br />
2008 2007<br />
Income Statement Rs’000 Rs’000<br />
Revenue 1,718,721 1,404,405<br />
EBITDA 285,860 214,571<br />
Depreciation and amortisation (123,874) (111,288)<br />
Operating profit 161,986 103,283<br />
Net finance costs (94,137) (76,225)<br />
Share of results of associates 29,323 11,748<br />
Exceptional items 85,249 11,233<br />
Profit before taxation 182,421 50,039<br />
Profit for the year 158,814 34,216<br />
Rs Rs<br />
Earnings per share 7.17 1.54<br />
Earnings per share excluding exceptional items 3.31 1.03<br />
Dividend per share 2.00 1.50<br />
2008 2007<br />
Balance Sheet Rs’000 Rs’000<br />
Total assets 2,888,088 2,837,927<br />
Interest bearing debts 920,954 1,011,751<br />
Borrowings excluding bank overdraft 628,156 679,373<br />
Shareholders’ interests 1,640,581 1,550,378<br />
Rs Rs<br />
Net assets value per share 74.26 70.18<br />
Financial Ratios 2008 2007<br />
Before After<br />
Revaluation<br />
Operating margin - % 9.42 7.35 7.35<br />
Interest cover - times 2.29 1.34 1.34<br />
Dividend cover - times 3.59 1.03 1.03<br />
Return on equity - % 9.66 3.47 2.20<br />
Return on assets - % 5.49 1.20 1.20<br />
Debt to equity – times 0.56 1.03 0.65<br />
4 Annual <strong>Report</strong> Annual <strong>Report</strong><br />
5
Value Added<br />
Statement<br />
Year ended June 30,<br />
2008 2007<br />
Rs’000 Rs’000<br />
Sale of goods and services 1,718,721 1,404,405<br />
Less: Payment to suppliers for materials and services (1,102,432) (973,484)<br />
Value added 616,289 430,921<br />
Other operating income 64,220 62,192<br />
Total wealth created 680,509 493,113<br />
Distributed as follows:<br />
Employees<br />
Salaries, wages and other benefits 238,722 221,490<br />
Providers of capital<br />
Dividends 44,183 33,138<br />
Interest on borrowings 123,549 101,079<br />
Dividends to minority shareholders 2,271 1,271<br />
170,003 135,488<br />
Government and parastatal corporations<br />
Income tax (current and deferred) 23,607 15,823<br />
Environment protection fee 7,304 6,600<br />
Licences and permits 2,726 1,562<br />
33,637 23,985<br />
Reinvested in the Group to maintain and develop operations<br />
Depreciation and amortisation 123,874 111,288<br />
Retained profit 114,273 862<br />
238,147 112,150<br />
Total wealth distributed and retained 680,509 493,113<br />
THE UNITED BASALT PRODUCTS LTD<br />
Subsidiaries as at June 30, 2008<br />
* Via UBP International <strong>Ltd</strong><br />
100 %<br />
100 %<br />
100 %<br />
100 %<br />
76.5%<br />
100 %<br />
100 %<br />
100 %<br />
100 %<br />
100 %<br />
Marbella Espace Maison Ltée<br />
Compagnie de Gros Cailloux Ltée<br />
Société d’Investissement Rodriguais<br />
UBP International <strong>Ltd</strong><br />
Ste Marie Crushing Plant <strong>Ltd</strong><br />
100 % Société des Petits Cailloux<br />
Marbella <strong>Ltd</strong><br />
Land Reclamation <strong>Ltd</strong><br />
Stone & Bricks Co <strong>Ltd</strong><br />
<strong>The</strong> Stone Masters Co <strong>Ltd</strong><br />
Pricom <strong>Ltd</strong><br />
Associates as at June 30, 2008<br />
Operational<br />
Dormant<br />
THE UNITED BASALT PRODUCTS LTD<br />
Group Structure<br />
June 30, 2008<br />
75.9 % Welcome Industries <strong>Ltd</strong><br />
100 % UBP Madagascar<br />
71.7% <strong>United</strong> Granite Product (Pvt) <strong>Ltd</strong><br />
100 % DHK Metal Crusher (Pvt) <strong>Ltd</strong><br />
100 % Sheffield Trading (Pvt) <strong>Ltd</strong><br />
46% Produits <strong>Basalt</strong>iques du Nord Ltée<br />
34% Prochimad Mines et Carrières*<br />
30% Pre-Mixed Concrete <strong>Ltd</strong><br />
25% Sud Concassage Ltée<br />
25% Cement Transport <strong>Ltd</strong><br />
20% Compagnie d’Exploitation Agricole Ltée<br />
30% Compagnie des Transport Réunis<br />
6 Annual <strong>Report</strong> Annual <strong>Report</strong><br />
7
Board of Directors<br />
Thierry Lagesse - Chairman<br />
François Boullé<br />
Marc Freismuth<br />
Jean Giraud<br />
Jean Michel Giraud<br />
Joël Harel<br />
J. Cyril Lagesse<br />
Alternate: Arnaud Lagesse<br />
Raymond Lagesse<br />
Jean Claude Maingard<br />
E. Jean Mamet<br />
<strong>Corporate</strong> <strong>Governance</strong> Committee<br />
Thierry Lagesse - Chairman<br />
Marc Freismuth<br />
Joël Harel<br />
Audit Committee<br />
E. Jean Mamet - Chairman<br />
François Boullé<br />
Joël Harel<br />
<strong>Corporate</strong><br />
Information<br />
Managing Director<br />
Jean Michel Giraud<br />
Company Secretary<br />
Christophe Quevauvilliers F.C.C.A.<br />
Auditors<br />
Ernst & Young<br />
Bankers<br />
<strong>The</strong> Mauritius Commercial Bank <strong>Ltd</strong><br />
Barclays Bank PLC<br />
HSBC (Mauritius) <strong>Ltd</strong><br />
State Bank of Mauritius <strong>Ltd</strong><br />
AfrAsia Bank <strong>Ltd</strong><br />
Legal Form<br />
<strong>The</strong> <strong>United</strong> <strong>Basalt</strong> <strong>Products</strong> <strong>Ltd</strong> is a public<br />
company incorporated in Mauritius and<br />
listed on the Official Market of the Stock<br />
Exchange of Mauritius<br />
Registered Office<br />
Trianon, Quatre Bornes, Mauritius<br />
Annual <strong>Report</strong><br />
9
Directors’<br />
Profiles<br />
Thierry Lagesse Chairman<br />
Mr Thierry Lagesse was appointed Director of the Company in<br />
December 1989 and subsequently Chairman of the Board in<br />
December 2002. Born in 1953, Mr Lagesse holds a ‘Maîtrise des<br />
Sciences de Gestion’ from the University of Paris Dauphine. He has<br />
been the founder and Executive Chairman of the Palmar Group<br />
of Companies for the last twenty-eight years, an international<br />
textile and garment manufacturing group. He has also been<br />
the promoter of both Companhia de Sena, a sugar estate and<br />
a sugar processing and refining factory in Mozambique, and<br />
Parabole Réunion SA, a Direct to Home Satellite TV company in<br />
the media and communication fields across the islands of the<br />
Indian Ocean. Mr Lagesse sits on the Board of several major<br />
Mauritian companies and is also the Chairman of Flacq <strong>United</strong><br />
Estates <strong>Ltd</strong>, Phoenix Beverages <strong>Ltd</strong>, Compagnie d’Investissement<br />
et de Développement Ltée and Director of Ireland Blyth <strong>Ltd</strong><br />
and Sun Resorts <strong>Ltd</strong>. He is a member of the Mauritius Chamber<br />
of Agriculture and was, in 1995, Chairperson of the Mauritius<br />
Export Processing Zone Association.<br />
François Boullé<br />
Mr François Boullé was appointed alternate Director to late<br />
Mr Jacques Lagesse in 1998 and full-fledged Director of the<br />
Company in May 2004. Born in 1948, Mr Boullé holds a degree<br />
from the ‘Institut d’Etudes Politiques de Paris (Sciences Po – Section<br />
Economique et Financière). He is currently the Managing Director of<br />
Suchem <strong>Ltd</strong>, a company specialized in importation and distribution<br />
of chemicals for textiles and other industries, plastic raw materials<br />
and sprayers for agriculture.<br />
Marc Freismuth<br />
Mr Marc Freismuth was appointed Director of the Company<br />
in March 2006. Born in France in 1952, Mr Freismuth holds a<br />
‘Diplôme d’Etudes Supérieures de Sciences Economiques’ from<br />
the University of Panthéon-Sorbonne (Paris). He was Lecturer at<br />
the University of Montpellier up to July 1988, when he decided<br />
to join the University of Mauritius as Lecturer in management<br />
and finance until July 1994. Whilst in this position, Mr Freismuth<br />
contributed to the setting up of the Stock Exchange of Mauritius<br />
as consultant to the ‘Stock Exchange Commission’ and member of<br />
the ‘Listing Committee’. Mr Freismuth is currently self-employed as<br />
a consultant in management and finance. He also sits as Director<br />
on the Board of several public companies.<br />
Jean Giraud<br />
Mr Jean Giraud was appointed Director of the Company in October<br />
1956. Born in 1919, Mr Giraud was one of the founder members<br />
of the Company of which he was the Manager from 1953 to<br />
1984. He has contributed largely to establish the reputation of<br />
the Company over the years and to its participation in most of the<br />
major infrastructure projects of the country.<br />
Jean Michel Giraud<br />
Mr Jean Michel Giraud joined the Company in 1974 and became<br />
General Manager in 1984, succeeding his father in this position.<br />
He was appointed Managing Director in November 2004. Born in<br />
1950, Mr Giraud is the Chairman of Pre-mixed Concrete <strong>Ltd</strong> and<br />
sits on several Boards within the Group. Former President of the<br />
Mauritius Turf Club, he is currently the President of the Mauritius<br />
Tennis Federation.<br />
Joël Harel<br />
Mr Joël Harel was appointed alternate Director to Mr Jean Raymond<br />
Harel in May 2004 and became full-fledged Director of the<br />
Company with effect from July 1, 2006. Born in 1967, Mr Harel<br />
holds a National Higher Diploma in Mechanical Engineering from<br />
Cape Technikon in Cape Town. He is currently the Projects Manager<br />
at Emineo <strong>Ltd</strong>, a company in partnership with Robert Le Maire <strong>Ltd</strong>,<br />
involved in proposing engineering solutions and in the realisation<br />
of projects locally and overseas, mainly in the sugar sector.<br />
J. Cyril Lagesse<br />
Mr J. Cyril Lagesse was appointed Director of the Company in<br />
November 1958. Well-known entrepreneur, Mr Lagesse, born in<br />
1932, took over his father’s business in 1969 (Mon Loisir S.E.) and<br />
set up the ‘Compagnie d’Investissement et de Développement Ltée’<br />
in the early 1970’s, to take advantage of the diverse investment<br />
opportunities that arose while Mauritius moved towards greater<br />
industrialisation. Since then, the ‘Groupe Mon Loisir’(GML) has<br />
grown in size and is now the major shareholder of several other<br />
well-established firms. Mr Lagesse also sits on the Board of several<br />
of the country’s most prestigious companies, some of which are<br />
listed on the Stock Exchange of Mauritius.<br />
Raymond Lagesse<br />
Mr Raymond Lagesse was appointed full-fledged Director of the<br />
Company in replacement of Mr Clément Lagesse in October 2004.<br />
Born in 1958, Mr Lagesse holds a certificate in Technical Road<br />
Transportation and a Diploma in Management. He is currently<br />
the Chairman of Freight & Transit Co. <strong>Ltd</strong> (Group) and manages<br />
Mechanical Transport Co. <strong>Ltd</strong>, a company specialized in the Road<br />
Haulage industry. Mr Lagesse also sits on the Board of several<br />
companies in Mauritius and Madagascar.<br />
Arnaud Lagesse<br />
Mr Arnaud Lagesse was appointed alternate Director to<br />
Mr J. Cyril Lagesse in March 1994. Born in 1968, Mr Lagesse holds a<br />
‘Maîtrise de Gestion’ from the University of Aix-Marseille III, France<br />
and is a graduate of the ‘Institut Supérieur de Gestion’, France.<br />
He also completed an Executive Education Program at INSEAD<br />
Fontainebleau, France. He joined the ‘Groupe Mon Loisir’(GML) in<br />
1995 as Finance and Administrative Director, and was appointed as<br />
Chief Executive Officer in August 2005. He also participated in the<br />
National <strong>Corporate</strong> <strong>Governance</strong> Committee as a member of the<br />
Board. He is a member of the Board of several of the country’s major<br />
companies and is the Chairman of Naïade Resorts <strong>Ltd</strong>, Mauritius<br />
Stationery Manufacturers <strong>Ltd</strong>, Robert Le Maire <strong>Ltd</strong>, AfrAsia Bank <strong>Ltd</strong><br />
and various other companies. Mr Lagesse is an ex-President of the<br />
Mauritius Chamber of Agriculture, the Mauritius Sugar Producers<br />
Association and the Sugar Industry Pension Fund. Mr Lagesse is<br />
also a member of Audit Committees of various companies.<br />
Jean Claude Maingard<br />
Mr Jean Claude Maingard was appointed Director of the Company in<br />
November 2007 in replacement of Mr Jean Paul Adam. Born in 1946,<br />
Mr Maingard holds a Diploma in Quantity Surveying from the University<br />
of Cape Town and is an associate of the Royal Institute of Chartered<br />
Surveyors UK and Mauritius (A.R.I.C.S.). In 1972 he joined General<br />
Construction Co. <strong>Ltd</strong>, a well-known firm of building and civil engineering<br />
contractors operating in Mauritius for almost fifty years. He was appointed<br />
Executive Director in 1986 and Managing Director from 1998 to 2006.<br />
Mr Maingard is currently the Chairman of this prestigious company.<br />
E. Jean Mamet<br />
Dear Shareholder,<br />
On behalf of the Board of Directors,<br />
I am pleased to comment on the<br />
operations and results of <strong>The</strong> <strong>United</strong><br />
<strong>Basalt</strong> <strong>Products</strong> <strong>Ltd</strong> and of the Group<br />
for the year ended June 30, 2008<br />
and to share with you our future<br />
developments and projects.<br />
Review of Activities<br />
and Results<br />
Revenue<br />
<strong>The</strong> Group’s revenue improved from<br />
Rs 1.4 billion in 2007 to Rs 1.7 billion<br />
this year, an increase of 22.4%. This<br />
rise is attributable to a significant<br />
increase in the revenue from both<br />
our Espace Maison and core business<br />
activities. <strong>The</strong> market for our core<br />
business products locally was almost<br />
stable whilst our prices were increased<br />
to compensate for rises in production<br />
costs. This situation is explained to<br />
some extent by the general effects<br />
of inflation on the purchasing power<br />
of private individual builders, the<br />
absence of major public infrastructure<br />
projects, the delay in some hotel and<br />
Integrated Resort Schemes (I.R.S.)<br />
projects and the fierce competition<br />
that prevailed on the market.<br />
Results<br />
<strong>The</strong> Group’s results for the year were<br />
positively affected by a significant<br />
exceptional profit made on the sale of<br />
non-strategic investments. <strong>The</strong> Group’s<br />
operating profit increased significantly<br />
from Rs 103.2 million in 2007 to Rs 161.9<br />
million this year after having recognised<br />
a provision of Rs 9 million on slowmoving<br />
inventories. <strong>The</strong> Company’s<br />
operating profit increased to Rs 143.7<br />
million this year from Rs 120.7 million<br />
in 2007 whilst that of Marbella Espace<br />
Maison Ltée moved from an operating<br />
loss of Rs 17.2 million in 2007 to an<br />
operating profit of Rs 4.6 million<br />
this year, a significant turnaround.<br />
This performance is to some extent<br />
due to the widening of our range of<br />
products and services, our improved<br />
purchasing workforce and the<br />
strengthening of our presence in this<br />
segment of activities.<br />
As mentioned in our previous annual<br />
report, a major part of our quoted<br />
Chairman’s<br />
<strong>Report</strong><br />
available-for-sale investments and our<br />
25.5% stake in Highway Properties <strong>Ltd</strong>,<br />
an associate company which owns<br />
the Trianon Shopping Park buildings,<br />
were disposed of during the year.<br />
<strong>The</strong>se realisations resulted in an<br />
exceptional profit of Rs 29.8 million<br />
and Rs 65.4 million respectively.<br />
As regards foreign operations, our<br />
subsidiary company in Madagascar<br />
experienced a significant rise in<br />
activities due to contracts obtained<br />
in the region of Tamatave and ended<br />
up with a profit of Rs 3.5 million for<br />
the year compared to a loss of Rs<br />
10.7 million in 2007. In Sri Lanka the<br />
market conditions did not improve.<br />
Our subsidiary company incurred<br />
a loss of Rs 9.1 million for the year<br />
compared to Rs 5.6 million in 2007.<br />
Consequently, the goodwill on<br />
acquisition of our subsidiary in Sri<br />
Lanka was impaired by Rs 10 million<br />
and disclosed as part of exceptional<br />
items in this year’s income statement.<br />
Despite this impairment loss, the<br />
Board is still confident about future<br />
prospects in that country.<br />
10 Annual <strong>Report</strong><br />
Mr E. Jean Mamet was appointed Director of the Company in November<br />
2004 and is currently the Chairman of the Audit Committee. Born in<br />
1943, Mr Mamet is a fellow member of the Association of Chartered<br />
Certified Accountants. He has been in practice for forty-three years<br />
involved in auditing and consulting services up to 2003, when he<br />
retired as Managing Partner of Ernst & Young Mauritius. He is currently<br />
the Vice Chairman of <strong>The</strong> Mauritius Commercial Bank <strong>Ltd</strong>.<br />
Annual <strong>Report</strong><br />
11
Chairman’s<br />
<strong>Report</strong> (continued)<br />
Our subsidiary, Compagnie de Gros<br />
Cailloux Ltée made a profit after tax<br />
of Rs 2 million for the year compared<br />
to Rs 8.9 million in 2007. <strong>The</strong> sugar<br />
crop was an average one with a total<br />
of 1,950 tons (2007: 2,133 tons)<br />
of sugar sold at a reduced price of<br />
Rs 18,620 per ton. This drop in<br />
profits is to a large extent due to the<br />
revaluation of the standing crop at<br />
a reduced future price of sugar. <strong>The</strong><br />
non-sugar revenues, made up of sale<br />
of plants from our nursery, increased<br />
significantly during the year. This<br />
upward trend is likely to persist given<br />
the drop expected in the price of<br />
sugar by 2009-2010.<br />
Our share of results from associate<br />
companies increased from Rs 11.7<br />
million in 2007 to Rs 29.3 million<br />
this year. <strong>The</strong> results of our associate<br />
Highway Properties <strong>Ltd</strong> were recognised<br />
up to May 10, 2008, date on which our<br />
stake was disposed of.<br />
Finance Costs<br />
<strong>The</strong> Group’s finance costs rose from<br />
Rs 101.1 million in 2007 to Rs 123.5<br />
million this year due to the financing of<br />
overseas operations and the servicing<br />
of long-term borrowings.<br />
Earnings and Dividend<br />
<strong>The</strong> Group’s profit for the year<br />
increased from Rs 34.2 million in 2007<br />
to Rs 158.8 million this year. Earnings<br />
per share increased from Rs 1.54 in<br />
2007 to Rs 7.17 this year. Excluding<br />
exceptional items, the earnings per<br />
share increased from Rs 1.03 in 2007<br />
to Rs 3.31 this year.<br />
Consequently, an increased dividend<br />
of Rs 2.00 per share (2007: Rs 1.50)<br />
was declared by the Company on<br />
June 11, 2007 and paid on July 21, 2008.<br />
Financial Situation<br />
<strong>The</strong> Group’s financial situation was<br />
positively affected by the investments<br />
disposed of during the year. <strong>The</strong> sale<br />
of our stake in Highway Properties <strong>Ltd</strong><br />
gave rise to the refund of a loan<br />
amounting to Rs 123 million receivable<br />
from that associate company, disclosed<br />
as other financial asset on the balance<br />
sheet for the previous year. <strong>The</strong> total<br />
cash inflow generated amounted to<br />
Rs 210 million. Out of these funds,<br />
Rs 192 million was used to anticipate<br />
the refund of the ten-year-period loan<br />
contracted in 2004 to finance the<br />
acquisition of Compagnie de Gros<br />
Cailloux Ltée.<br />
Investments in property, plant and<br />
equipment amounted to Rs 181.8<br />
million (2007: Rs 191.3 million) for<br />
the year under review, out of which<br />
Rs 28.1 million was financed through<br />
leasing facilities. Besides financing<br />
new developments, this amount<br />
was mostly spent as part of normal<br />
recurring capital expenditure for<br />
upgrading and replacement of plant<br />
and equipment for both our core<br />
business and Espace Maison activities,<br />
locally and overseas. <strong>The</strong> major items<br />
of capital expenditure comprise the<br />
installation of a new primary crusher<br />
at our plant in Plaine Magnien, the<br />
acquisition of a new concrete mixer<br />
for our PPB concrete slab factory, the<br />
acquisition of quarrying equipments<br />
and a new batching and mixing<br />
plant for our subsidiary company<br />
Sainte Marie Crushing Plant <strong>Ltd</strong>.<br />
<strong>The</strong> other significant group cash<br />
outflows comprise the servicing of<br />
the remaining term loans and the<br />
funding of operations in Madagascar<br />
and Sri Lanka.<br />
As already mentioned, a major part of<br />
quoted available-for-sale investments<br />
was disposed of during the year. <strong>The</strong><br />
remaining available-for-sale investments<br />
were revalued at Rs 71.3 million as at<br />
the balance sheet date giving rise<br />
to a fair value reserve loss of Rs 1.7<br />
million due to the downward trend<br />
experienced on the Semdex since<br />
February 2008. Once the trend is<br />
reversed, the Board of Directors<br />
intends to pursue its disposal strategy<br />
in view of financing future capital<br />
expenditure and thus keep the level<br />
of borrowings at a minimum.<br />
<strong>The</strong> Group’s total assets moved from<br />
Rs 2.8 billion in 2007 to Rs 2.9 billion this<br />
year, total borrowings from Rs 1 billion<br />
to Rs 921 million and shareholders’<br />
interests from Rs 1.5 billion to<br />
Rs 1.6 billion. Consequently, the<br />
Group’s debt to equity ratio improved<br />
from 0.65 times in 2007 to 0.56 times<br />
this year, whilst the Group’s net assets<br />
value (NAV) per share increased from<br />
Rs 70.18 to Rs 74.26 this year.<br />
Developments<br />
and Projects<br />
As part of developments and projects<br />
for our core business activities,<br />
the recently acquired plot of land<br />
of eleven acres next to our site at<br />
Geoffroy Road was landscaped in<br />
view of transferring our PPB concrete<br />
slab factory and the re-engineering<br />
of our crushing plant following the<br />
request from the land owners of our<br />
plant at La Mecque to recover the site<br />
for property development projects. At<br />
Terre Rouge, the production of blocks<br />
was ceased and the site is now a sales<br />
point for blocks produced by our plant<br />
at Poudre d’Or, thereby benefiting<br />
from economies of scale. As part of<br />
improving our service, two trucks<br />
fitted with cranes were acquired for the<br />
transport of blocks all over the island.<br />
Furthermore, iron bars were imported<br />
and sold on our sites with satisfying<br />
results. In Madagascar, besides the<br />
acquisition of lorries and loaders for<br />
the supply of new contracts, some<br />
34 hectares of land were acquired in<br />
Tamatave for quarrying and property<br />
developments.<br />
<strong>The</strong> budget for the financial year 2008-<br />
2009 provides further investments for<br />
enhancing and improving the capacity<br />
of our core business production<br />
units and our quarrying operations<br />
including the production of blocks<br />
on our site at St Julien. <strong>The</strong> abovementioned<br />
transfer of our PPB concrete<br />
slab factory and the re-engineering of<br />
our plant at Geoffroy Road constitute<br />
a major capital expenditure which<br />
should span over the next two<br />
financial years. At the time of writing,<br />
the EIA permit for these projects has<br />
been obtained.<br />
As regards our Espace Maison<br />
activities, much effort and resources<br />
were put into advertising and<br />
communication to build up the<br />
branding and corporate image of our<br />
outlets. In terms of developments and<br />
projects, the budget for financial year<br />
2008-2009 provides for the extension<br />
of our warehouse at Roche-Bois, the<br />
upgrading and extension of our<br />
marble factory and the acquisition of<br />
lorries aimed at improving the delivery<br />
service. Further investments are being<br />
engaged in land and buildings for<br />
the construction of a fourth Espace<br />
Maison retail store in Flacq which is<br />
due to open in October 2009.<br />
As regards our subsidiary company<br />
Compagnie de Gros Cailloux Ltée,<br />
the nursery is being continuously<br />
extended to satisfy the increasing<br />
demand. A landscaping division is<br />
being considered in an aim to widen<br />
our range of services and increase the<br />
non-sugar income on a permanent<br />
basis. A ‘Festival du Jardin’ was<br />
organised in November 2007. <strong>The</strong><br />
event was a success and is becoming<br />
a yearly event.<br />
In terms of property development,<br />
the residential compounds project<br />
referred to in our previous annual<br />
report is being developed with the<br />
input of foreign and local consultants<br />
as well as estate agents. <strong>The</strong> benefit<br />
of such projects is that it enables<br />
maximum use of our own building<br />
materials and fittings and involves<br />
our major clients engaged in the<br />
contracting business. <strong>The</strong> conversion<br />
permit was obtained under the Sugar<br />
Industry eight hundred acres scheme<br />
for which 10 acres of land was given<br />
to the State. <strong>The</strong> installation of an<br />
electrical network to connect the coal<br />
power plant project of CT Power <strong>Ltd</strong><br />
at Pointe-aux-Caves was altered at<br />
our demand to avoid the site of our<br />
project. <strong>The</strong> master plan prepared by<br />
foreign consultants is being modified<br />
to make optimum use of the site<br />
location and characteristics.<br />
Future Prospects<br />
<strong>The</strong> trend noted in our revenue since<br />
July 2008 is encouraging for the future.<br />
In terms of our core business, the<br />
prospects are good locally, given the<br />
announced hotel, road infrastructure<br />
and property development projects.<br />
However, no significant improvement<br />
is being foreseen in the private<br />
dwellings’ market. As regards our<br />
Espace Maison activities, the forecasts<br />
are good given our future expansion<br />
plan aiming at more proximity to the<br />
market. In terms of foreign operations,<br />
both of our entities are focussing on<br />
potential business opportunities with<br />
important development projects both<br />
in Tamatave, Madagascar and in the<br />
harbour of Colombo in Sri Lanka.<br />
Assuming favourable economic<br />
conditions and the timely realisation<br />
of projects, the results for the financial<br />
year 2008-2009 are likely to show an<br />
improvement over those of 2007-<br />
2008, ignoring exceptional items of<br />
revenue.<br />
Acknowledgements<br />
On behalf of the Board of Directors,<br />
I wish to acknowledge with thanks<br />
the continuous efforts made by the<br />
Managing Director, his management<br />
team and the personnel during the<br />
year under review.<br />
I also wish to express my thanks and<br />
appreciation to my fellow-members<br />
of the Board of Directors for their<br />
support and contribution.<br />
Thierry Lagesse<br />
Chairman<br />
September 24, 2008<br />
12 Annual <strong>Report</strong> Annual <strong>Report</strong><br />
13
<strong>The</strong> <strong>United</strong> <strong>Basalt</strong> <strong>Products</strong> <strong>Ltd</strong> was incorporated as a public company in July 1953.<br />
<strong>The</strong> shares of the Company are listed on the Official Market of the Stock Exchange of<br />
Mauritius since 1989.<br />
Company’s Constitution<br />
In December 2004, the shareholders adopted a new Constitution which is in compliance<br />
with the provisions of the Companies Act 2001 and those of the Listing Rules of the<br />
Stock Exchange of Mauritius.<br />
<strong>The</strong> salient features of the Constitution are as follows:<br />
■ the Company has full capacity to carry on and/or undertake any business activity<br />
■ the Company has full rights, powers and privileges<br />
■ the Company may acquire and hold its own shares<br />
■ fully paid up shares are transferable without restriction<br />
■ the quorum for a meeting of shareholders is 6 shareholders, present or represented,<br />
holding at least 35% of the share capital of the Company<br />
■ the Board of Directors shall consist of not less than 7 or more than 15 Directors<br />
■ the quorum for a Board meeting is 4 Directors when the Board consists of 7<br />
members and 5 Directors when the Board consists of more than 7 members<br />
■ the Chairman has a casting vote in case of equality of votes at either a Board<br />
meeting or a shareholders’ meeting<br />
■ the Directors have the power to appoint any person to be a Director, either<br />
to fill a casual vacancy or as an addition to the existing Directors but so that<br />
the total number of Directors does not at any time exceed the number fixed<br />
by the Constitution. Any Director so appointed shall hold office only until the<br />
next following Annual Meeting of shareholders and shall then be eligible for reelection<br />
■ a Director is not required to hold shares in the Company<br />
■ the Company may indemnify and/or insure any Director or employee of the<br />
Company or a related corporation<br />
Shareholding Structure<br />
<strong>The</strong> Company has no Ultimate Holding Company. <strong>The</strong> shareholding structure of the<br />
Group at June 30, 2008 is as detailed on page 7. <strong>The</strong> names of common Directors are<br />
as detailed in Other Statutory Disclosures on page 21.<br />
Substantial Shareholders<br />
<strong>Corporate</strong><br />
<strong>Governance</strong><br />
<strong>Report</strong><br />
<strong>The</strong> list of shareholders holding more than 5% of the share capital of the Company at<br />
June 30, 2008 is as detailed in Other Statutory Disclosures on page 23.<br />
Annual <strong>Report</strong><br />
15
<strong>Corporate</strong> <strong>Governance</strong><br />
<strong>Report</strong> (continued)<br />
Shareholding Profile<br />
<strong>The</strong> share ownership analysis at June 30, 2008 was as follows:<br />
Size of shareholding Number of Number of Percentage<br />
shareholders shares owned (%)<br />
1 - 500 636 120,894 0.55<br />
501 – 1,000 208 158,764 0.72<br />
1,001 – 5,000 555 1,378,211 6.24<br />
5,001 – 10,000 148 1,084,753 4.91<br />
10,001 – 50,000 167 3,326,406 15.06<br />
50,001 – 100,000 26 1,813,899 8.21<br />
100,001 – 250,000 16 2,598,730 11.76<br />
250,001 – 1,000,000 9 4,381,521 19.83<br />
Over 1,000,000 2 7,228,524 32.72<br />
Total 1,767 22,091,702 100.00<br />
Category of shareholders Number of Number of Percentage<br />
shareholders shares owned (%)<br />
Individuals 1,567 6,873,504 31.11<br />
Insurance and assurance companies 18 1,749,473 7.92<br />
Pension and provident funds 32 2,335,675 10.57<br />
Investment and trust companies 37 8,033,800 36.37<br />
Other corporate bodies 113 3,099,250 14.03<br />
Total 1,767 22,091,702 100.00<br />
Shareholders’ Agreement<br />
To the knowledge of the Company, there is no shareholders’ agreement.<br />
Share Price Information<br />
At time of writing, the share of the Company is quoted at Rs 44.00 on the Official Market of the Stock Exchange of<br />
Mauritius with a Price Earnings Ratio (PER) of 28.57, a Dividend Yield of 4.55% and a Price to Net Assets Value (NAV)<br />
of 0.63. Please refer to Financial Highlights and Ratios on pages 4 and 5 for indicators and share price movements.<br />
Dividend Policy<br />
<strong>The</strong> Company has no formal set dividend policy. <strong>The</strong> payment of dividends depends on the Company’s performance,<br />
its cash flow position, its debt servicing requirements and its future investments needs and growth opportunities. In<br />
so doing, the Board of Directors attempts to distribute a yearly dividend which, under normal circumstances, should<br />
remain sustainable in the medium to long term.<br />
On June 11, 2008 the Company declared a dividend of Rs 2.00 per share in respect of the financial year under review. This<br />
dividend was paid in full on July 21, 2008 to all ordinary shareholders registered at close of business on June 25, 2008.<br />
Please refer to Financial Highlights and Ratios on page 4 for a summary of the dividend paid per ordinary share over<br />
the past four years.<br />
Shareholders’ Calendar of Events<br />
Financial year end : June<br />
Declaration of dividend : June<br />
Payment of dividend : July<br />
Annual Meeting of shareholders : November<br />
This year the dividend payment date has been changed from June to July.<br />
Board of Directors<br />
<strong>The</strong> Company has a unitary Board composed of ten Directors with an adequate mix of executive, non-executive and<br />
independent non-executive Directors. Please refer to Directors’ Profiles on page 4 for an update of their profiles.<br />
According to the Constitution, the Board shall consist of a minimum of seven and a maximum of fifteen Directors. <strong>The</strong><br />
quorum for a Board meeting is 4 Directors when the Board consists of 7 members and 5 Directors when the Board<br />
consists of more than 7 members.<br />
<strong>The</strong> primary role of the Board of Directors is to protect and enhance shareholders’ value. <strong>The</strong> Board may discharge its<br />
responsibilities by delegating certain duties to Board Committees and to Management.<br />
Directors’ Category, Interests and Dealings in Shares<br />
<strong>The</strong> Directors’ and alternate Directors’ category and interests in the ordinary shares of the Company are set out in the<br />
table on page 22 – Other Statutory Disclosures.<br />
<strong>The</strong> Directors ensure that they follow the principles set out in the Model Code on Securities Transactions by Directors<br />
as detailed in Appendix 6 of the Listing Rules of the Stock Exchange of Mauritius. Details of Directors’ dealings in shares<br />
of the Company are as depicted in the table about Directors’ interests in the ordinary shares of the Company on page<br />
22 – Other Statutory Disclosures.<br />
Directors’ Directorships<br />
<strong>The</strong> directorships of the Directors of the Company in other companies listed on the Official Market of the Stock Exchange<br />
of Mauritius at June 30, 2008 were as follows:<br />
<strong>The</strong> other Directors of the Company did not have any directorships in companies listed on the Official Market of the<br />
Stock Exchange of Mauritius at June 30, 2008.<br />
■ BMH – Belle Mare Holding <strong>Ltd</strong><br />
■ IBL – Ireland Blyth <strong>Ltd</strong><br />
■ IGF – IPRO Growth Fund <strong>Ltd</strong><br />
■ MCB – <strong>The</strong> Mauritius Commercial Bank <strong>Ltd</strong><br />
■ MSM – Mauritius Stationery Manufacturers <strong>Ltd</strong><br />
BMH IBL IGF MCB MSM NRL PBL SRL SWAN<br />
Directors<br />
Thierry Lagesse ■ ■ ■ ■ ■ ■<br />
Marc Freismuth ■<br />
J. Cyril Lagesse ■ ■ ■ ■ ■ ■<br />
E. Jean Mamet ■ ■<br />
Alternate Directors<br />
Arnaud Lagesse ■ ■ ■ ■<br />
■ NRL – Naïade Resorts <strong>Ltd</strong><br />
■ PBL – Phoenix Beverages <strong>Ltd</strong><br />
■ SRL – Sun Resorts <strong>Ltd</strong><br />
■ SWAN – Swan Insurance Company <strong>Ltd</strong><br />
16 Annual <strong>Report</strong> Annual <strong>Report</strong><br />
17
<strong>Corporate</strong> <strong>Governance</strong><br />
<strong>Report</strong> (continued)<br />
Board Committees<br />
In order to fulfil its obligations and duties, the Board has delegated certain responsibilities to Board Committees to<br />
ensure full review of specific matters. A <strong>Corporate</strong> <strong>Governance</strong> Committee and an Audit Committee were set up with<br />
clearly defined terms of reference. <strong>The</strong>se Board Committees report to the Board on their activities and recommend<br />
specific matters to the Board for its approval.<br />
<strong>Corporate</strong> <strong>Governance</strong> Committee<br />
Chairman : Thierry Lagesse<br />
Members : Marc Freismuth<br />
Joël Harel<br />
<strong>The</strong> <strong>Corporate</strong> <strong>Governance</strong> Committee is also responsible for Nomination and Remuneration aspects of the Code. Its<br />
main duties are to determine the policy on <strong>Corporate</strong> <strong>Governance</strong> in accordance with the principles of the Code of<br />
<strong>Corporate</strong> <strong>Governance</strong>, to advise and make recommendations to the Board of Directors on all aspects of <strong>Corporate</strong><br />
<strong>Governance</strong> and to report thereon. <strong>The</strong> committee met once during this financial year.<br />
<strong>The</strong> remuneration of the Chairman and of each member of the committee for the year ended June 30, 2008 amounted<br />
to Rs 5,000.<br />
Audit Committee<br />
Chairman : E. Jean Mamet<br />
Members : François Boullé<br />
Joël Harel<br />
<strong>The</strong> Audit Committee Charter was approved by the Board of Directors on May 20, 2005. <strong>The</strong> main duty of the<br />
committee is to approve the financial statements before submission to the Board of Directors. <strong>The</strong> Audit Committee also<br />
assists the Board of Directors in carrying out its responsibilities relating to internal control systems and procedures. <strong>The</strong><br />
committee also monitors the role and scope of work of internal and external auditors, including the identification of any<br />
risk areas, and ensures compliance with legal and regulatory provisions and the articles of association. <strong>The</strong> committee<br />
met four times this year, mainly to review all published financial statements, to review the reports of both internal and<br />
external auditors and to assess and make recommendations to the Board on auditors’ remuneration.<br />
<strong>The</strong> remuneration of the Chairman and of each member of the committee for the year ended June 30, 2008 amounted<br />
to Rs 60,000 and Rs 40,000 respectively.<br />
Meetings Attendance Board <strong>Corporate</strong> Audit<br />
<strong>Governance</strong> Committee<br />
Committee<br />
Thierry Lagesse 7 out of 7 1 out of 1 -<br />
Jean Paul Adam C.B.E. * 2 out of 3 - -<br />
François Boullé 6 out of 7 - 4 out of 4<br />
Marc Freismuth 7 out of 7 1 out of 1 -<br />
Jean Giraud 0 out of 7 - -<br />
Jean Michel Giraud 7 out of 7 - -<br />
Joël Harel 6 out of 7 1 out of 1 4 out of 4<br />
J. Cyril Lagesse 5 out of 7 - -<br />
Raymond Lagesse 7 out of 7 - -<br />
Jean Claude Maingard * 4 out of 4 - -<br />
E. Jean Mamet 5 out of 7 - 4 out of 4<br />
* Mr Jean Claude Maingard was appointed as Director on November 19, 2007 in replacement of Mr Jean Paul Adam<br />
who resigned in October 2007, effective as from after the last Annual Meeting held on December 21, 2007.<br />
Remuneration Philosophy Statement<br />
<strong>The</strong> <strong>Corporate</strong> <strong>Governance</strong> Committee has been delegated to act as Nomination and Remuneration Committee. As<br />
such it is responsible for making recommendations with regard to determining and developing the Company’s general<br />
policy on executive and senior management remuneration, determining specific remuneration packages for Executive<br />
Directors of the Company and the level of remuneration of Non-executive Directors, taking into consideration the<br />
market trend and the Group’s performance.<br />
Please refer to Other Statutory Disclosures on page 22 for a table of total emoluments and benefits received by the<br />
Directors from the Company and subsidiary companies.<br />
Related Party Transactions<br />
Please refer to note 28 on page 61 – Notes to the Financial Statements.<br />
Employee Share Option Plan<br />
<strong>The</strong> Company does not have any Employee Share Option Plan.<br />
Key Risks Identification and Management<br />
<strong>The</strong> Directors are ultimately responsible for the adequacy and effectiveness of the internal control system to ensure<br />
that the Company carries on its activities in an orderly manner and in minimisation of all potential risks. In so doing,<br />
the Board relies on the internal audit function to report on any weaknesses and recommendations thereon. Regular<br />
internal audit visits were conducted and reported to the Audit Committee, and ultimately to the Board of Directors,<br />
the objective being to ensure the effective and efficient use of available resources and ascertaining the accuracy of<br />
information used in the preparation of financial statements.<br />
Financial Risks<br />
Please refer to note 3 on pages 45 to 47 – Notes to the Financial Statements<br />
Social, Ethical, Safety, Health and Environmental Policies and Practices<br />
<strong>The</strong> policies and practices of the Company in terms of social aid comprise of financial assistance to various school projects,<br />
sport federations and sponsorships to children of employees for school and tertiary training courses. As such, the André<br />
Bazerque primary school at Camp-Levieux, being part of the ‘Zones d’Education Prioritaire’ (ZEP), has been sponsored<br />
for the last five years. Marbella Espace Maison Ltée, via its personnel, is also engaged in a social aid programme aimed<br />
at sponsoring various projects in the vicinity of each of our Espace Maison retail stores. Espace Jardin and Cie de Gros<br />
Cailloux Ltée has launched a campaign in collaboration with the ‘Mauritian Wildlife Foundation’ in view of protecting<br />
the endemic plants of Mauritius and financially assisting the Foundation.<br />
In terms of safety, health and environmental issues, our policy is to ensure that our production plants are equipped<br />
to run in such a way as to minimise causing damage to the environment and neighbourhoods. As regards the health<br />
and safety of our employees, a department was created to increase the awareness of employees on security and health<br />
issues by insisting on the use of protective clothing and accessories.<br />
Donations<br />
Please refer to Other Statutory Disclosures on page 23 for details of donations made during the year.<br />
Christophe Quevauvilliers<br />
Company Secretary<br />
September 24, 2008<br />
18 Annual <strong>Report</strong> Annual <strong>Report</strong><br />
19
Other Statutory<br />
Disclosures June 30, 2008<br />
(Pursuant to Section 221 of the Companies Act 2001)<br />
Activities<br />
<strong>The</strong> principal activity of the Group remains the manufacture and sale of building materials<br />
which consist mainly of our core products: aggregates, rocksand and hollow concrete<br />
blocks. Other products include precast concrete slabs, various concrete building components<br />
including paving-blocks and roof tiles, imported floor and wall tiles, sanitary ware and a<br />
complete range of home building products, fittings and tools. Services rendered consist<br />
mainly of engineering works by the Company’s workshop and contracting services.<br />
As from July 2005, all the commercial activity under Espace Maison was transferred to a<br />
separate legal entity, namely Marbella Espace Maison Ltée.<br />
SUBSiDiARy COMPAniES<br />
Sainte Marie Crushing Plant <strong>Ltd</strong><br />
Messrs: Thierry Lagesse - Chairman<br />
Jean Michel Giraud<br />
Richard Koenig<br />
Raymond Lagesse<br />
Welcome industries <strong>Ltd</strong><br />
Messrs: Thierry Lagesse - Chairman<br />
Jacques Brousse de Laborde<br />
Jean Michel Giraud<br />
Mr Jacques Brousse de Laborde resigned as Director<br />
with effect from July 1, 2008 and was replaced by<br />
Mr Christophe Quevauvilliers.<br />
Marbella Espace Maison Ltée<br />
Messrs: Jean Michel Giraud - Chairman<br />
François Boullé<br />
Marc Freismuth<br />
Jean Giraud<br />
Joël Harel<br />
J. Cyril Lagesse<br />
Raymond Lagesse<br />
Thierry Lagesse<br />
Jean Claude Maingard<br />
- Appointed on November 19, 2007<br />
in replacement of Mr Jean Paul Adam.<br />
E. Jean Mamet<br />
Mr Jean Paul Adam C.B.E. resigned in October 2007,<br />
effective as from December 21, 2007.<br />
Marbella <strong>Ltd</strong><br />
Messrs: Jean Michel Giraud - Chairman<br />
François Boullé<br />
Joël Harel<br />
Land Reclamation <strong>Ltd</strong><br />
Messrs: Jean Michel Giraud - Chairman<br />
François Boullé<br />
Jean Giraud<br />
Joël Harel<br />
Mr Louis Raoul Harel resigned on May 15, 2008.<br />
<strong>The</strong> Stone Masters Co. <strong>Ltd</strong><br />
Messrs: Jean Michel Giraud - Chairman<br />
Jean Giraud<br />
Joël Harel<br />
UBP international <strong>Ltd</strong><br />
Messrs: Thierry Lagesse - Chairman<br />
Jean Michel Giraud<br />
Louis Raoul Harel<br />
UBP Madagascar<br />
Mr: Gino Guness - Manager<br />
<strong>United</strong> Granite <strong>Products</strong> (Pvt.) <strong>Ltd</strong><br />
Messrs: Jean Michel Giraud - Chairman<br />
Joseph Albert<br />
Jacques Brousse de Laborde<br />
A. Mahir Didi<br />
Hussain Saad Hasim<br />
Eddy Mancienne<br />
Mr Mohamed Umar Maniku resigned<br />
on December 17, 2007 whilst<br />
Mr Jacques Brousse de Laborde resigned<br />
with effect from July 1, 2008.<br />
Compagnie de Gros Cailloux Ltée<br />
Messrs: Thierry Lagesse - Chairman<br />
François Boullé<br />
Jacques Brousse de Laborde<br />
Jean Michel Giraud<br />
Joseph Vaudin<br />
Mr Jacques Brousse de Laborde resigned as<br />
Director with effect from July 1, 2008 and<br />
was replaced by Mr Christophe Quevauvilliers.<br />
Pricom <strong>Ltd</strong><br />
Messrs: Thierry Lagesse - Chairman<br />
Jean Michel Giraud<br />
Joël Harel<br />
20 Annual <strong>Report</strong><br />
Stone & Bricks Co. <strong>Ltd</strong><br />
Messrs: Jean Michel Giraud - Chairman<br />
Jean Giraud<br />
Joël Harel<br />
Annual <strong>Report</strong><br />
21<br />
Directors<br />
Members of the Board of Directors at June 30, 2008 were:<br />
THE COMPAny<br />
Messrs: Thierry Lagesse - Chairman<br />
François Boullé<br />
Marc Freismuth<br />
Jean Giraud<br />
Jean Michel Giraud<br />
Joël Harel<br />
J. Cyril Lagesse - alternate: Arnaud Lagesse<br />
Raymond Lagesse<br />
Jean Claude Maingard - Appointed on November 19, 2007 in replacement of Mr Jean Paul Adam.<br />
E. Jean Mamet<br />
Mr Jean Paul Adam C.B.E. resigned in October 2007, effective as from December 21, 2007.
Other Statutory<br />
Disclosures (continued)<br />
Directors’ Remuneration<br />
Total remuneration and benefits received by the Directors from the Company and its subsidiary companies were as follows:<br />
2008 2007<br />
Executive Non-Executive Executive Non-Executive<br />
Rs’000 Rs’000 Rs’000 Rs’000<br />
<strong>The</strong> Company 6,894 1,134 4,578 1,134<br />
Subsidiary Companies:<br />
Sainte Marie Crushing Plant <strong>Ltd</strong> - 120 - 96<br />
Welcome Industries <strong>Ltd</strong> - - - -<br />
Marbella Espace Maison Ltée - - - -<br />
Marbella <strong>Ltd</strong> - - - -<br />
Land Reclamation <strong>Ltd</strong> - - - -<br />
Stone & Bricks Co. <strong>Ltd</strong> - - - -<br />
<strong>The</strong> Stone Masters Co. <strong>Ltd</strong> - - - -<br />
UBP International <strong>Ltd</strong> - - - -<br />
UBP Madagascar - - - -<br />
<strong>United</strong> Granite <strong>Products</strong> (Pvt.) <strong>Ltd</strong> - - - -<br />
Compagnie de Gros Cailloux Ltée - - - -<br />
Pricom <strong>Ltd</strong> - - - -<br />
Directors’ and Senior Officers’ Interests in Shares<br />
<strong>The</strong> Directors’, alternate Directors’ and Senior Officers’ interests in the ordinary shares of the Company at June 30,<br />
2008 were as follows:<br />
Category June 30, 2008 June 30, 2007<br />
no. of ordinary shares No. of ordinary shares<br />
Direct indirect Direct Indirect<br />
Directors<br />
Thierry Lagesse - Chairman NICB 930 150,077 930 20,077<br />
François Boullé INED - 39,673 - 39,673<br />
Marc Freismuth INED - - - -<br />
Jean Giraud INED 5,075 - 5,075 -<br />
Jean Michel Giraud ED 2,987 2,105 2,547 2,105<br />
Joël Harel INED - - - -<br />
J. Cyril Lagesse NED 742 - 742 -<br />
Raymond Lagesse INED - - 19,507 32,500<br />
Jean Claude Maingard NED - - N/A N/A<br />
E. Jean Mamet INED - 1,500 - 1,500<br />
Alternate Directors<br />
Arnaud Lagesse NED - 7,877 - 23,655<br />
Senior Officers<br />
Rémi de Gersigny * - - - -<br />
Christophe Quevauvilliers ** 500 - - -<br />
■ ED – Executive Director ■ NED – Non-Executive Director<br />
■ INED – Independent Non-Executive Director ■ NICB – Non-Independent Chairman of the Board<br />
* Mr Rémi de Gersigny is the Operations and Project Manager.<br />
** Mr Christophe Quevauvilliers is the Finance Manager and Company Secretary.<br />
None of the Directors, alternate Directors and Senior Officers of the Company had an interest in the shares of the<br />
subsidiary companies.<br />
Directors’ Service Contracts<br />
Except for Mr Jean Michel Giraud who has a contract of employment with the Company, there are no service contracts<br />
between the Company and any of the Directors.<br />
Directors’ and Officers’ Insurance and Indemnification<br />
<strong>The</strong> Directors and Officers of the Company benefit from an indemnity insurance cover for liabilities incurred while<br />
performing their duties, to the extent permitted by law.<br />
Statement of Directors’ Responsibilities<br />
in respect of the preparation of financial statements and internal control.<br />
<strong>The</strong> Directors are responsible for the proper maintenance of accounting records which disclose at any time, and with reasonable<br />
accuracy, the financial position of the Group and the Company. <strong>The</strong>y are also responsible for safeguarding the assets of the<br />
Group and the Company and for taking reasonable steps to prevent and detect any fraud and other irregularities.<br />
<strong>The</strong> Directors are also responsible for the preparation and presentation of financial statements for each financial year,<br />
and in so doing they are required to:<br />
■ select and apply consistently suitable accounting policies<br />
■ comply with the provisions of the Companies Act 2001 and the International Financial <strong>Report</strong>ing Standards (IFRS),<br />
and to explain any departure therefrom<br />
■ use the going-concern basis wherever appropriate<br />
<strong>The</strong> Directors acknowledge that they have exercised their responsibilities as described above for the financial year under review<br />
and report that nothing has been brought to their attention which could indicate any material breakdown in the internal<br />
control systems and cause a material impact on the trading and financial position of the Group and the Company.<br />
Shareholders<br />
Substantial Shareholders<br />
Shareholders holding more than 5% of the share capital of the Company at June 30, 2008 were as follows:<br />
Shareholders Number of shares % Holding<br />
Compagnie d’Investissement et de Développement Ltée 5,140,206 23.26<br />
Forward Investment and Development Enterprises <strong>Ltd</strong> 2,088,318 9.45<br />
Except for the above, no person had any material interest of 5% or more in the ordinary share capital of the Company.<br />
Contracts of Significance<br />
No Director or any substantial shareholder were materially interested, either directly or indirectly, in a contract of<br />
significance entered into by the Company or its subsidiaries.<br />
Donations<br />
<strong>The</strong> Company and its subsidiary companies have donated Rs 776,111 during the year ended June 30, 2008 (2007: Rs 746,045).<br />
Auditors<br />
<strong>The</strong> auditors’ remuneration was as follows:<br />
<strong>The</strong> Group <strong>The</strong> Company<br />
2008 2007 2008 2007<br />
Rs’000 Rs’000 Rs’000 Rs’000<br />
Audit fees 1,222 1,042 675 595<br />
Non-audit fees 250 125 232 107<br />
<strong>The</strong> auditors, Ernst & Young, have expressed their willingness to continue in office and a resolution for their<br />
re-appointment is being proposed at the Annual Meeting of shareholders.<br />
On behalf of the Board<br />
Thierry Lagesse Jean Michel Giraud<br />
Chairman Managing Director<br />
September 24, 2008<br />
22 Annual <strong>Report</strong> Annual <strong>Report</strong><br />
23
Secretary’s<br />
Certificate<br />
June 30, 2008<br />
I certify that, to the best of my knowledge and belief, the Company has filed with<br />
the Registrar of Companies all such returns as are required of the Company under<br />
the Companies Act 2001.<br />
Christophe Quevauvilliers<br />
Company Secretary<br />
September 24, 2008<br />
Annual <strong>Report</strong><br />
25