a nnual report 2011 - gamma

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Corporate information

Board Of Directors

Ah Teck Carl, BSc MPhil Ah Teck Patrice, BA Ah Teck Tommy, BSc MPhilFon Sing Alex, CBE Fon Sing Clifford, BSc How Kin Sang Cyril, ACA Moollan Adam, BSc CEng MIEE Ramdenee Dr Pitumber Rye, FRCP

Chairman Deputy Managing DirectorChief Executive OfficerElder StatesmenNon-executive DirectorManaging DirectorIndependent Non-executive DirectorIndependent Non-executive Director

Auditors

Deloitte Chartered Accountants7th Floor, Raffles Tower19 CybercityEbèneMauritius

Bankers

AfrAsia Bank LimitedBank One LimitedBarclays Bank PlcHSBCMauritius Post and Cooperative Bank LtdBramer Banking Corporation LtdSBI (Mauritius) LtdStandard Bank (Mauritius) LimitedState Bank of Mauritius LtdThe Mauritius Commercial Bank Ltd

Principal Place Of Business

Royal Road Chapman HillBeau BassinMauritius

Secretary And Transfer Office

Intercontinental Secretarial Services LtdLevel 3, Alexander House35 CybercityEbèneMauritius

Registered Office

Level 3, Alexander House35 CybercityEbèneMauritius

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Report of the directors

The Directors of Gamma-Civic Ltd present their annual report and audited financial statements for the year ended 30 June 2011.

Principal Activities

The principal activities of the group during the year under review are:

• Production of aggregates, sand and blocks• Readymix concrete and concrete products• Asphalt and roadworks• Building and civil engineering contracting• Property development and investment • Sale of construction equipment and commercial vehicles• Lottery

Gamma Materials Ltd became a jointly-controlled company in June 2011 following a strategic alliance between Société Ingenerie et Participations Financières (IPF) and Gamma-Civic Ltd.

Holcim (Mauritius) Ltd, an associate company, trades in and distributes cement.

Morning Light Co Ltd, another associate company, is the owning company of the Hilton Mauritius Resort & Spa.

Results

The group profit for the year increased to Rs 739M for the year ended 30 June 2011 (Jun 2010: Rs 126M) and turnover from the continuing operations increased by 45% to Rs 4,509M for the year ended 30 June 2011 (Jun 2010: Rs 3,115M). Turnover from the discontinued operations was Rs 1,082M (Jun 2010: Rs 814M).

Dividends

A final dividend of Rs 0.50 per share (Jun 2010: final dividend of Rs 3.50 per share) was declared on 28 September 2010 and paid in December 2010 in respect of the financial year ended 30 June 2010.

An interim dividend of Rs 3.50 per share (Jun 2010: interim dividend of Rs 0.75 per share) was declared on 11 February 2011 and paid in March 2011 in respect of the financial year ended 30 June 2011.

A special dividend of Rs40.00 per share was declared on 18 July 2011 and paid in August 2011 in respect of the year ended 30 June 2011.

Business review highlights for year ended 30 June 2011

Materials

Gamma Materials Ltd is one of the main building materials suppliers in Mauritius. In the year under review the company has continued to supply building materials to some of the major infrastructure works in the country, namely the Doctor Jeetoo Hospital, Plaine Wilhemes sewage project, the Mauritius Broadcasting Corporation Head Office, Jin Fei Infrastructure works, amongst other.

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Business review highlights for year ended 30 June 2011 (cont’d)

Materials (cont’d)

In June 2011 Gamma-Civic Ltd has entered into a strategic alliance with Société Ingenerie et Participations Financières (IPF), an investment company of Colas S.A France, a member of the Bouygues group of Companies. This has resulted in a proceeds of US$47.5M. Société IPF has a 50% interest in Gamma Materials Ltd and it has joint control and management along side Gamma-Civic Ltd in the Company.

Contracting

Gamma-Civic Construction Ltd and Gamma Civils Ltd are two operating subsidiary companies of Gamma-Civic Ltd.

The Mauritian construction sector has not been immune to the global economic slowdown. This has put pressure on our contracting business to secure projects at very competitive prices.

For the year under review, the contracting cluster has suffered major operational losses attributable to two major contracts, namely the Belle Rivière IRS villas and the Goodlands Bypass Road project, been which have now been settled with no impacts on future results. Despite the operational losses incurred of Rs86M, all works have been completed and the projects delivered to the respective clients.

Lottery

Lottotech Ltd and Reel Mada SA are the two operating subsidiary companies of Gamma-Civic Ltd operating in the lottery sector.

Lottotech Ltd has made losses for the year ended 30 June 2011, despite having contributed Rs684M to the Consolidated Fund and distributed Rs1,704M as prizes during the financial year. The poor performance is mainly attributed to the fact that the Gambling Regulatory Authority has not approved Lottotech Ltd’s application for all games in accordance with Lottotech Ltd’s proposed game plan as submitted for obtaining the licence for the Mauritius National Lottery.

Lottotech Ltd is in dispute with the Gambling Regulatory Authority regarding the non approval of games as submitted in the accepted proposal. Applications have been submitted to the Gambling Regulatory Authority for five game categories, out of which only two have been partially approved.

Reel Mada SA operates the Madagascar National Lottery which was launched in February 2011 and incurred a loss of Rs186M, out of which Rs128M was due to pre-opening and launching costs written off.

Environment

Gamma Energy Ltd, another subsidiary of Gamma-Civic Ltd, operates in the Environment cluster.

For the year under review, the company has written off a further amount of Rs43M, mainly due to legal fees for the ongoing court case at the Environment Appeal tribunal.

Property

We are currently restructuring our property cluster and for the year under review the results are satisfactory.

Our HSBC Centre and Raffles Tower properties in Ebene have positively contributed to the profit of the group.

Future prospects

Whilst on-going infrastructure contracts will continue to generate substantial works to the group, the outlook for the building sector is quite pessimistic due to a slow-down in that sector.Lottotech Ltd is presently in discussion with the relevant authorities with a view to resolving the non approval of games issue. As regards Madagascar National Lottery, the current political climate is proving to be a major challenge for our operations.

Report of the directors (cont’d)

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On behalf of the Board, we would like to thank our shareholders, customers, business partners, bankers and the Gamma team for all their support.

For and on behalf of the Board of Directors

Tommy Ah Teck Cyril How Kin SangChief Executive Officer Managing Director

28 September 2011

Report of the directors (cont’d)

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The corporate governance report(Including statutory disclosures pursuant to section 221 of the Companies Act 2001)

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1 Introductory Note

Gamma-Civic Ltd (hereinafter referred to as “Company”) is committed to Corporate Governance and protection of shareholders’ value. Good Corporate Governance is a fundamental part of the Board’s responsibility to protect and enhance long term shareholders’ value and the financial performance of the Company and Group (defined as Gamma-Civic Ltd and all its operating subsidiary companies), whilst taking into account the interest of other stakeholders.

The Company has therefore adopted the recommendations as contained in the National Code of Corporate Governance for Mauritius (the “Code”) and endeavours to comply with the Code.

2 Holding Structure/ Shareholding

Effective as from January 2011, Gamma-Civic Ltd has been reorganized into a holding and investment Company with no operational activities at the level of the holding Company. Operations are undertaken by operating subsidiary companies, which are organized into different clusters. The operating subsidiary companies are managed by a team of professional managers.

The issued stated capital of the Company as at 30 June 2011 amounted to Rs 133,250,000 made up of 13,325,000 ordinary shares of Rs10 each.

* The aggregate direct and indirect shareholdings.

The list of subsidiaries of Gamma-Civic Ltd is found in Note 7 of the Financial Statements.

The shareholders holding more than 5% of the ordinary shares of the Company at 30 June 2011 were:

No of Shares % Shareholding

Bluesilver Ltd 972,809 7.30%

Consolidated Holdings Ltd 2,064,737 15.50%

JHD Holdings Ltd 1,115,734 8.37%

Landcorp Limited 1,493,862 11.21%

Mr Chian Luck Ah Teck 920,713 6.91%

Mr Chian Tat Ah Teck 1,893,522 14.21%

Mr Chian Yew Ah Teck 755,288 5.67%

Mr Cyril How Kin Sang 921,720 6.92%

* Alex Fon Sing,Clifford Fon Sing &

Others 6.45%

Gamma-Civic Ltd

* Cyril How &Others18.13%

Others24.59%

* Ah Teck’s &Others50.83%

The corporate governance report (cont’d)(Including statutory disclosures pursuant to section 221 of the Companies Act 2001)

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3 New Constitution

On 24 August 2011, the shareholders of the Company adopted a new Constitution, which replaces the Company’s Memorandum and Articles of Association. The new Constitution is more in line with the provisions of the Companies Act 2001 and the Listing Rules of the Stock Exchange of Mauritius Ltd (SEM).

A copy of the Company’s Constitution is available for inspection, upon request made, at its registered office.

4 Board structure

The Company is presently lead by a Board of 8 Directors, comprising of 4 Executive members, 2 Non-Executive and 2 Independent Non-Executive members.

The Board recognizes the key role it plays in charting the strategic direction, development and control of the Company and endeavours to adopt the primary responsibilities as listed in the National Code of Corporate Governance for Mauritius (the Code).A Charter for the Board of Directors to establish an effective Corporate Governance framework, specific to the Company is in preparation. The values and standards which are applicable to the Company and the Group emanate from the Board of Directors.

The Board meets at least five times during any financial year.

5 The Board of Directors

The Executive Chairman of the Company presides over the meeting of Directors and Shareholders to ensure the smooth functioning of the Board and also to ensure that the Board carries its responsibilities efficiently. The Chairman provides leadership and establishes guiding principles for the Board and may be in charge of special corporate projects. The Chief Executive Officer is the principal representative of the Group’s business operations. He has a direct responsibility for business and operational decisions in the Group’s companies. The Chief Executive Officer has the general authority of the Board to manage the Group.

6 Directors’ Profiles The profiles of the individual Directors are given below:

a. Adam Issop Moollan (Independent Non-Executive Director)

Aged 45. BSc in Electrical Engineering (Northeastern University, Boston). Chartered Engineer (Engineering Council of UK). Member of the Institution of Engineering and Technology UK). Registered Engineer with the Council of Registered Professional Engineers of Mauritius. Managing Director of Elemech Ltd.

b. Alex Fon Sing (Non-Executive Director)

Aged 74. Member of the Duke of Edinburg’s Award. Honorary Consul of the Grand Duchy of Luxembourg in Mauritius. Director in several companies.


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6 Directors’ Profiles (cont’d)

c. Chian Luck Ah Teck, also called Patrice Ah Teck (Deputy Managing Director)

Aged 44. BA (Hons) Accounting and Finance (South Bank University- London) and Polytechnic Certificate in Fundamental of Accountancy (North East London Polytechnic- London). Has worked as Trainee Auditor with Nunn, Crick and Bussell, UK. From 1993 to 2000 has worked as Sales and Marketing Manager of Gamma Group and from 2000 to January 2011 occupied the post of Sales and Marketing Director. Has been appointed Deputy Managing Director of Gamma-Civic Ltd since February 2011.

d. Chian Tat Ah Teck, also called Tommy Ah Teck (Chief Executive Officer)

Aged 49. BSc (Hons) Engineering (University of Westminster) and M Phil- Mechanical Engineering (Loughborough University of Technologies). Has worked as trainee Accountant with Griffin & Partners, Chartered Accountants, London, U.K. From 1987 till January 2011 he has occupied the post of Managing Director of Gamma Group from 1987 to January 2011 and is Chief Executive Officer of Gamma-Civic Ltd since February 2011. e. Chian Yew Ah Teck, also called Carl Ah Teck (Chairman)

Aged 54. BSc (Hons) Engineering (1st class) (University of Lancaster) & M. Phil (Soil Mechanics) (University of Cambridge). Has worked as Resident Engineer with Sir Alexander Gibb & Partners Consulting Engineers, Mauritius. From 1987 to January 2011 has occupied the post of CEO of Gamma Group and is Chairman of Gamma-Civic Ltd since February 2011. f. Clifford Fon Sing (Non-Executive Director)

Aged 43. BSc (Econ) (University College London). Has joined the family business, namely the Jade Group which is specialized in Property Development & Management in 1989. Is occupying the post of Managing Director of Jade Group since 2004.

g. Cyril How Kin Sang (Managing Director)

Aged 47. Member of the Institute of Chartered Accountant in England & Wales. From 1985 to 1988 has trained as a Chartered Accountant in UK and worked with KPMG. Has joined the Gamma Group since 1989 and has occupied several posts within the Group and is the Managing Director of Gamma-Civic Ltd since February 2011. h. Dr Pitumber Rye Ramdenee (Independent Non-Executive Director)

Aged 56. Has studied medicines in Ireland (LRCP&SI). Has specialized in pediatric in South Africa (F.C.P Paeds). Director in several companies.

7 Change In Chairmanship

At the Board meeting held on 11 February 2011, Mr Chian Yew Ah Teck was unanimously appointed as Chairman. He succeeded to Mr Alex Fon Sing, who occupied that post for the past twenty five years.

Mr Alex Fon Sing has been appointed Elder Statesman and he remains a Director of the Board.


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8 Board Attendance

For the year ended 30 June 2011, the Board of Directors met as follows:

Directors Attendance

Mr Chian Yew Ah Teck 5

Mr Alex Fon Sing 5

Mr Chian Tat Ah Teck 5

Mr Paul Cyril How Kin Sang 5

Mr Chian Luck Ah Teck 5

Mr Clifford Fon Sing 5

Mr Adam Issop Moollan 5

Dr Pitumber Rye Ramdenee 4

9 Common Directors

The names of the common Directors within the holding structure at 30 June 2011 are:

Name of Director Bluesilver LtdConsolidated Holdings Ltd

JHD Holdings

LtdLandcorp Limited

Mr Chian Yew Ah Teck √ √

Mr Chian Tat Ah Teck √

Mr Cyril How Kin Sang √

Mr Chian Luck Ah Teck √ √


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A.S. Burstein Management LtdAccacias Co LtdAggregate Resources Co LtdAl-Kato Construction Co LtdBoron Investments LtdBR Capital LtdBR Hotel Resorts LtdBR Investments LtdBR Realty LtdBurford Development LtdBurford Investments LtdBurford Property LtdBurford Realty LtdCentreview Development LtdCentreview Investments LtdConcassage Albion Phare LimitéeDamalot Technical Services LtdEffluent Dynamics LtdFinepoint Property LtdFinepoint Realty LtdGamma Asia Construction LtdGamma Cement LtdGamma Civils LtdGamma-Civic Construction Holdings LtdGamma-Civic Construction LtdGamma-Civic Hotel Holdings LtdGamma-Civic LtdGamma Energy Holdings LtdGamma Energy LtdG-Traxx Equipment & Rental LtdGamma Leisure LtdGamlot Technologies LtdGlot Holdings (Mauritius) LtdGlot Management LtdLand Securities LtdLottotech LtdLottotech Management LtdLotwin Capital LtdLotwin Holdings LtdLotwin Investments LtdLotwin Technologies LtdLudgate Investments LtdLudgate Property LtdMaurilot Investments LtdNatlot Investments LtdNorth Point Holdings LtdNorth Point Stone Products LtdOsterley Investments LtdRaffles Fourth LtdRaffles Third LtdRandabel Bessamer Fowler (Mauritius) LtdReadymix LtdReel Mada SARHT Media LtdStamford Fourth LtdStamford Properties LtdTraxx LtdWestview Development LtdWestview Realty Ltd

10 Directorship


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A.S. Burstein Management LtdAccacias Co LtdAggregate Resources Co LtdBoron Investments LtdBR Capital LtdBR Hotel Resorts LtdBR Investments LtdBR Realty LtdBurford Development LtdBurford Investments LtdBurford Property LtdBurford Realty LtdCentreview Development LtdCentreview Investments LtdConcassage Albion Phare LimitéeDamalot Technical Services LtdEffluent Dynamics LtdFinepoint Property LtdFinepoint Realty LtdGamma Asia Construction LtdGamma Cement LtdGamma Civils LtdGamma-Civic Construction Holdings LtdGamma-Civic Construction LtdGamma-Civic Hotel Holdings LtdGamma-Civic LtdGamma Energy Holdings LtdGamma Energy LtdG-Traxx Equipment & Rental LtdGamma Leisure LtdGamlot Technologies LtdGlot Holdings (Mauritius) LtdGlot Management LtdLand Securities LtdLottotech LtdLottotech Management LtdLotwin Capital LtdLotwin Holdings LtdLotwin Investments LtdLotwin Technologies LtdLudgate Investments LtdLudgate Property LtdMaurilot Investments LtdNatlot Investments LtdNorth Point Holdings LtdNorth Point Stone Products LtdOsterley Investments LtdRaffles Fourth LtdRaffles Third LtdRandabel Bessamer Fowler (Mauritius) LtdReadymix LtdReel Mada SARHT Media LtdStamford Fourth LtdStamford Properties LtdTraxx LtdWestview Development LtdWestview Realty Ltd

10 Directorship (cont’d)


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11 Professional Managers

The Company has appointed professional managers for the day to day operation of the four main operating subsidiary and one jointly controlled company, under the supervision of Executive Directors, as approved by the Board of Directors.

The Board has delegated appropriate authorities to the professional managers to enable them to manage their respective companies.

The profile of the professional managers is given hereunder:

a. Gamma Civils Ltd - Roland Rakotondrasoa (General Manager)

Aged 55. Has a Civil Engineering degree at the E.E.S. Polytechnic (Madagascar). Has specialised in Road Geotechnics at CEBTP (France). Started his career as Resident Engineer (Road Control) in Madagascar. Has been closely associated with Colas International, as Engineer, Site Manager and Branch Manager for over the past 22 years, out of which he has spent 10 years with Colas Mauritius. Has joined Gamma Civils Ltd since March 2011.

b. Gamma-Civic Construction Ltd - Steve Young (General Manager)

Aged 40. B. Tech (Hons) in Civil Engineering (University of Mauritius) &. MSc in Construction Management (University of Nottingham). Registered Professional Engineer of Mauritius since June 1997 and an Associate Member of the Institution of Engineers of Mauritius. Started his career as Trainee Engineer and was promoted to Junior/Civil Structural Engineer with Servansingh Jadav & Partners. Has occupied the post of Site Agent, Resident Site Engineer, Contract Manager, Project Manager and Head of the Contract Department. Has joined Gamma-Civic Construction Ltd since December 2007.

c. Gamma Materials Ltd - Jean Pierre Bisiaux (General Manager)

Aged 64. Has studied at Paris Business School as well as law at Paris University and has graduated from the European Community Institute. Has occupied the post of General Manager with the Holcim Group. Has joined Gamma-Civic Ltd since April 2010 and is with Gamma Materials since January 2011.

d. Lottotech Ltd - Jean Pierre Desbiens (CEO)

Aged 61. Has studied Bachelor of Science Degree in Architecture. Has been directly involved in over 25 lottery startups, the most recent being Taiwan, China SWL, Ukraine, Morocco and South Africa. Has served as board member for over 30 gaming entities. Areas of expertise: International Operations; Organizational Structuring; Strategic Planning / Goals; Resource Management; P&L Responsibility; Contract Negotiations; Strategic Alliances; Revenue Growth; Product Development; Team Leadership; Mentoring / Motivation. Has joined Lottotech Ltd since June 2009.

e. Traxx Ltd - Sanjay Nursimulu (General Manager)

Aged 37. Has a BSc (Hons) Management Studies (University of Mauritius). Joined Gamma-Civic Ltd in 1996 as Management Trainee. Has been promoted to the post of Assistant Manager in 2000. From 2001 to 2006 has occupied the post of Operations Manager and is the Head of Business Unit since 2006.


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12 Board Committees

The Board has two committees, namely the Audit Committee and the Corporate Governance Committee.

These Board Committees have been formed to efficiently advance the business of the Board and to facilitate efficient decision making of the Board. The Board committees are a mechanism to assist the Board and its Directors in discharging their duties through a more comprehensive evaluation of specific issues, followed by well-considered recommendations to the Board. However, the Board remains ultimately accountable and responsible for the performance and affairs of the Company.

a. Audit Committee

The Audit Committee assists the Board in relation to its reporting of financial information, the appropriate application and amendment of accounting policies, the identification and management of risk, internal control systems and internal audit, statutory and regulatory compliance. The Committee provides a forum for effective communications between the Board and the external and internal auditors, both of whom must report to the Committee.

The Audit Committee is composed of the hereunder Directors

Mr Alex Fon Sing Non- Executive Director & Chairman

Mr Clifford Fon Sing Non-Executive Director

Mr Cyril How Kin Sang Executive Director

Mr Adam Issop Moollan Independent Non-Executive Director

Dr Pitumber Rye Ramdenee Independent Non-Executive Director

The Audit Committee holds regular quarterly meetings to scrutinize and share their views of the abridged financial statements for quarterly reporting and publication and the audited financial statements, prior to submission to the Stock Exchange of Mauritius and publication, as well as reports from the Auditors.

b. Corporate Governance Committee

The Corporate Governance Committee acts as a mechanism for making recommendations to the Board on all corporate governance matters relevant to the Company to ensure that the Board remains effective and complies with the “Code” and prevailing corporate governance principles.

The Committee is also responsible for the remuneration and nomination matters. The remuneration philosophy is geared towards rewarding efforts and merits for individual and joint contribution to the Group’s results, whilst having also due regards to market conditions, the interest of the shareholders and to the financial well being of the Group. The Corporate Governance Committee is composed of the hereunder Directors:

Mr Carl Ah Teck Chairman

Mr Alex Fon Sing Non-Executive Director

Mr Clifford Fon Sing Non-Executive Director

Mr Adam Issop Moollan Independent Non-Executive Director

Dr Pitumber Rye Ramdenee Independent Non-Executive Director

Mr Tommy Ah Teck Chief Executive Officer


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13 Gamma Code of Professional and Ethical Conduct

On 11 February 2011, the Board adopted the Gamma Code of Professional and Ethical Conduct (the “Gamma Code”).

The Gamma Code applies to the Gamma Group of companies and to all its employees.

14 Safety, Health and Environment

The Company complies with the Occupational Safety and Health Act 2005 and other applicable legislative and regulatory frameworks. It is committed to sustainable development and ensures that its operations are conducted in ways that minimize their impact on the environment and on society at large.

15 Directors’ Remuneration and Benefits

Remuneration and benefits received and receivable by the Directors from the Company, its subsidiaries and related corporations are as follows:

2011RsM

2010RsM

Remuneration and benefits paid by the Company and related corporations to:Directors of the Company - Executive - Non-Executive

78.51.4

65.52.0

Directors of subsidiary companies - Executive - Non-Executive

84.21.9

71.62.9

The Directors’ remuneration is disclosed by category in view of the confidentiality and sensitivity of the information.

16 Directors’ Share Interests

At 30 June 2011, the Directors’ Interests of the Company were:

Directors Direct Indirect

Mr Carl Ah Teck 755,288 1,487,387

Mr Patrice Ah Teck 920,713 1,344,462

Mr Tommy Ah Teck 1,893,522 371,653

Mr Alex Fon Sing 41,950 297,750

Mr Clifford Fon Sing 235,584 283,860

Mr Cyril How Kin Sang 921,720 1,493,862

Mr Adam Issop Moollan - -

Dr Pitumber Rye Ramdenee - -

The Directors are fully aware of the principles of the Model of Code of Securities Transactions by Directors, as detailed in Appendix 6 of the Mauritius Stock Exchange Listing Rules.


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17 Directors’ Service Contracts

The Directors have no service contracts with the Company.

18 Dividend Policy

Generally the Company distributes dividend twice a year. Interim dividend is paid in April and a final dividend in November, provided cash resources is available. The Board has appointed a financial advisor to propose a dividend policy for the company.

19 Shareholders’ Agreement

To the knowledge of the Company, there is no shareholders’ agreement between its direct shareholders.

20 Employee Share Option Scheme

Presently the Company has no share option plan.

21 Third Party Management Agreement

To the knowledge of the Company, there is no third party management agreement with regards to the Company and/or its subsidiaries.

22 Auditors’ Remuneration

The fees paid to the auditors for audit and other services are as follows:

Group Company2011 2010 2011 2010

Rs Rs Rs Rs

Audit fees- Principal auditors- Other auditorsOther fees- Principal auditors- Other auditors

2,230,8651,111,685

-115,000

1,264,930 460,000

-115,000

500,000-

--

500,000-

--

23 Calendar

Forthcoming events Month

Publication of first quarter results November 2011

Publication of Annual Report November 2011

Annual Meeting of Shareholders November 2011

Publication of half-yearly results February 2012

Declaration of Interim Dividend February 2012

Publication of third quarter results May 2012

Financial year end June 2012

Declaration of Final Dividend September 2012

Publication of abridged end-of-year results September 2012


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24 Share Price Information

25 Directors dealing in Shares of the Company

Regarding the Directors’ dealing in the shares of the Company, the Directors confirmed that they have followed the principles of the Model Code on Securities Transactions by Directors of Listed Companies, as detailed in Appendix 6 of the Mauritius Stock Exchange (SEM) Listing Rules.

During the year under review, share dealings by Directors were as follows:

DirectorNumber of Shares Purchased Directly

Number of Shares Purchased Indirectly

Number of Shares Sold

Directly

Number of Shares Sold Indirectly

Mr Carl Ah Teck - 24,996 - 26,700

Mr Tommy Ah Teck 29,185 - - -

Mr Patrice Ah Teck - - 4,414 -

Mr Cyril How Kin Sang - - 49,767 -

Mr Alex Fon Sing - - 25,000 31,774

Mr Clifford Fon Sing - - - 6,056

No other Director dealt in the shares of the Company during the year under review.

26 Related Party Transactions

Please refer to Note 32 of the Financial Statements.

27 Contracts of Significance

The Company and its subsidiaries have no contracts of significance with either a Director or a controlling shareholder.

28 Risk Management

Risk Management of the Company falls under the responsibility of the Audit Committee which makes recommendation to the Board. A third party consultant has been appointed as internal auditor for putting in place structures and processes for the identification and management of risk in compliance with the National Code on Corporate Governance.

Share

Pri

ce (

Rs)

30/0

6/10

30/0

7/10

30/0

8/10

30/0

9/10

30/1

0/10

30/1

1/10

30/0

4/11

30/0

5/11

30/0

6/11

30/1

2/10

30/0

1/11

28/0

2/11

28/0

3/11

450400350300250200150

Gamma-Civic Ltd

Date


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29 Corporate Social Responsibility (“CSR”)

In May 2010 the Gamma Foundation was launched in line with the Company’s commitment towards the Community. The Foundation has been delegated the specific task of working towards the welfare of society with particular focus on children, by eradication of poverty and promoting education for needy children.

30 Donations

Donations made for the year ended 30 June 2011 by the Company and its subsidiary companies were as follows:

Group Company

2011 2010 2011 2010

Rs’000 Rs’000 Rs’000 Rs’000

Political donations 1,925 7,000 1,925 7,000

Others including Corporate Social Responsibility (CSR) 3,914 4,152 3,191 3,474

31 Statement of Directors’ Responsibilities The Company Law requires the directors to prepare financial statements for each financial year, which present fairly the financial position, financial performance, changes in equity and cash flow of the Company and its subsidiary companies. In preparing those financial statements, the Directors are required to:

a. Select suitable accounting policies and then apply them consistently; b. Make judgments and estimates that are reasonable and prudent;c. State whether International Financial Reporting Standards (IFRS) have been followed and complied

with, subject to any material departures disclosed and explained in the financial statements;d. Keep proper accounting records which disclose with reasonable internal accuracy at any time the

financial position of the Company;e. Safeguard the assets of the Company by maintaining internal accounting and administrative

control systems and procedures, and risk management;f. Take reasonable steps for the prevention of fraud and other irregularities; andg. Prepare the financial statements on the going concern basis unless it is inappropriate to presume

that the Company will continue in business.

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

The Board acknowledges that the responsibility of the external auditors is to report on these financial statements.

On behalf of the Board

Chian Yew Ah Teck Adam Issop Moollan Chairman Director

28 September 2011


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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 in terms of Section 166(d).

Tommy Lo Seen ChongIntercontinental Secretarial Services Ltd

28 September 2011

Certificate from the secretary

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This report is made solely to the shareholders, as a body, in accordance with section 205 of the Mauritius Companies Act 2001. Our audit work has been undertaken so that we might state to the company’s shareholders those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s shareholders as a body, for our audit work, for this report, or for the opinions we have formed.

Report on the Financial Statements We have audited the financial statements of Gamma-Civic Ltd and its Subsidiaries set out on pages 26 to 78 which comprise the statements of financial positions as at 30 June 2011 and the statements of comprehensive income, statements of changes in equity and statements of cash flows for the year then ended and a summary of significant accounting policies and other explanatory information. Directors’ responsibility for the financial statements The Company’s 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 Mauritius Companies Act 2001 and the Financial Reporting Act 2004. They are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. 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 auditor’s judgment, 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 auditor considers 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 control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by 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 on pages 26 to 78 give a true and fair view of the financial position of Gamma-Civic Ltd and its Subsidiaries as at 30 June 2011, and of their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with the requirements of the Mauritius Companies Act 2001 and the Financial Reporting Act 2004.

Independent auditor’s reportTo the shareholders of Gamma-Civic Ltd

A N N U A L R E P O R T 2 0 1 1

25

Report on other legal and regulatory requirements Mauritius Companies Act 2001 • We have no relationship with, or interests in, the Company and its subsidiaries other than in our

capacities as auditors, tax advisors and arm’s length dealings in the ordinary course of business; • We have obtained all information and explanations that we have required; and• In our opinion, proper accounting records have been kept by the Company as far as appears from

our examination of those records.

The Financial Reporting Act 2004 The directors are responsible for preparing the Corporate Governance Report and making the disclosures required by Section 8.4 of the Code of Corporate Governance of Mauritius (”Code”). Our responsibility is to report on these disclosures. In our opinion, the disclosures in the Corporate Governance Report are consistent with the requirements of the Code.

Independent auditor’s report (cont’d)To the shareholders of Gamma-Civic Ltd

DeloitteChartered Accountants

28 September 2011

Sydney Ah Yoong, FCCALicensed by FRC

A N N U A L R E P O R T 2 0 1 1

26

Statements of financial positionAt 30 June 2011

Alex Fon SingElder Statesmen

Tommy Ah TeckChief Executive Officer

GROUP COMPANYNotes 2011 2010 2011 2010

Rs Rs Rs RsASSETSNON-CURRENT ASSETSProperty, Plant and Equipment 5 961,588,174 1,133,265,525 349,430,092 655,556,411 Intangible Assets 6 33,827,046 78,952,631 971,996 41,403,343 Investments in Subsidiaries 7 - - 39,484,000 54,849,000 Investments in Associates and Joint Venture 8 693,180,408 460,033,801 33,748,040 32,748,040 Investment Properties 9 1,414,585,967 1,393,889,190 - -Other Investments 10 14,319,415 14,105,915 14,319,415 14,105,915 Amounts due from Subsidiaries 7(c) - - 737,381,067 663,988,473 Amounts due from Associates 8(f) 20,264,977 34,147,525 20,264,977 34,147,525 Deferred Tax Asset 18(b) - - 55,540,196 -Non-current Deposits and Prepayments 91,844,534 41,287,969 593,400 2,367,418

3,229,610,521 3,155,682,556 1,251,733,183 1,499,166,125 CURRENT ASSETSStocks and Work in Progress 11 144,362,810 281,301,147 - 179,686,881 Debtors and Prepayments 12 1,197,955,896 1,050,261,504 314,349,756 414,312,845 Amounts due from Subsidiaries - - 362,874,582 359,895,430 Cash at Bank and in Hand 30 1,463,745,199 98,409,466 1,288,402,102 1,292,710

2,806,063,905 1,429,972,117 1,965,626,440 955,187,866

TOTAL ASSETS Rs 6,035,674,426 4,585,654,673 3,217,359,623 2,454,353,991

EQUITY AND LIABILITIESCAPITAL AND RESERVESStated Capital 13 133,250,000 133,250,000 133,250,000 133,250,000 Share Premium 86,482,579 86,482,579 86,482,579 86,482,579 Other Reserves 2,109,659,073 1,011,437,016 1,369,605,974 530,629,365

EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY 2,329,391,652 1,231,169,595 1,589,338,553 750,361,944 NON-CONTROLLING INTERESTS (65,035,979) (4,457,490) - -

TOTAL EQUITY 2,264,355,673 1,226,712,105 1,589,338,553 750,361,944

NON-CURRENT LIABILITIESLoans 14 740,680,603 744,144,307 268,413,082 225,445,413 Obligations under Finance Leases 15 168,178,934 276,618,220 57,141,125 175,861,430 Other Creditor 20(b) 140,000 10,140,000 - -Loan due to Subsidiary 16 - - 42,091,637 117,087,082 Retirement Benefit Obligations 17 171,185,000 54,346,000 152,900,000 41,513,000 Deferred Tax Liability 18(b) 47,945,889 31,722,497 - 4,721,000

1,128,130,426 1,116,971,024 520,545,844 564,627,925

CURRENT LIABILITIESBank Overdrafts 19/30 496,928,416 589,622,641 368,673,642 437,189,453 Loans 14 608,942,226 319,180,881 310,420,752 182,385,670 Obligations under Finance Leases 15 53,258,460 67,539,365 26,416,011 46,924,046 Creditors and Accruals 20(a) 1,403,808,117 1,183,901,740 147,384,639 370,697,375 Amounts due to Subsidiaries - - 174,562,190 21,547,616 Amount due to Associate 21 75,000,000 75,000,000 75,000,000 75,000,000 Current Tax Liability 18(a) 5,251,108 6,726,917 5,017,992 5,619,962

2,643,188,327 2,241,971,544 1,107,475,226 1,139,364,122

TOTAL LIABILITIES 3,771,318,753 3,358,942,568 1,628,021,070 1,703,992,047

TOTAL EQUITY AND LIABILITIES Rs 6,035,674,426 4,585,654,673 3,217,359,623 2,454,353,991 Approved by the Board of Directors and authorised for issue on 28 September 2011

A N N U A L R E P O R T 2 0 1 1

27

Statements of comprehensive incomeFor the year ended 30 June 2011


Rs Rs Rs Rs

Continuing Operations

Turnover 22 Rs 4,509,368,800 3,115,123,698 - -

Operating Profit/(Loss) 24 595,396,507 (253,559,770) 794,053,214 (63,343,933)

Net Gain From Fair Value Adjustment on Investment Properties 17,448,465 366,719,411 - -Finance Costs 25 (137,408,018) (151,659,487) (78,992,764) (70,002,298)Share of Profit of Associates 8(e) 17,084,813 57,185,590 - -

Profit/(Loss) before Taxation 492,521,767 18,685,744 715,060,450 (133,346,231)Taxation 18(a) 83,132,500 8,881,594 89,226,583 -

Profit/(Loss) for the Year from Continuing Operations 575,654,267 27,567,338 804,287,033 (133,346,231)

Discontinued Operations

Profit for the Year from Discontinued Operations 23 163,705,618 98,641,260 121,540,695 181,821,842

Profit for the Year 739,359,885 126,208,598 925,827,728 48,475,611

Other Comprehensive Income

Net Gain on Other Investments 213,500 108,500 213,500 108,500 Increase in Revaluation of Property 390,378,752 39,650,500 15,500,000 31,150,500 Deferred Tax on Revaluation of Property (28,965,387) - (28,965,387) -Realised Gain on Disposal of Property (20,299,232) - (20,299,232) -

Other Comprehensive Income/(Loss) for the Year 341,327,633 39,759,000 (33,551,119) 31,259,000

Total Comprehensive Income for the Year Rs 1,080,687,518 165,967,598 892,276,609 79,734,611

PROFIT ATTRIBUTABLE TO:Owners of the Company 810,194,424 161,260,498 925,827,728 48,475,611 Non-controlling Interests (70,834,539) (35,051,900) - -

Rs 739,359,885 126,208,598 925,827,728 48,475,611

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:Owners of the Company 1,151,522,057 201,019,498 892,276,609 79,734,611 Non-controlling Interests (70,834,539) (35,051,900) - -

Rs 1,080,687,518 165,967,598 892,276,609 79,734,611

EARNINGS/(LOSS) PER SHARE

From Continuing and Discontinued Operations 27 Rs 60.80 12.10 69.48 3.64

From Continuing Operations 27 Rs 48.52 4.70 60.36 (10.01)

A N N U A L R E P O R T 2 0 1 1

28

Statements of changes in equityFor the year ended 30 June 2011

(a)

Gro

up

Stat

ed C

apita

l Sh

are

Prem

ium

Reva

luat

ion

Rese

rve

Cap

ital R

eser

veFa

ir V

alue

Re

serv

eRe

tain

ed

Earn

ings

Att

ribu

tabl

e to

O

wne

rs o

f th

e Pa

rent

Non

-Con

trollin

g In

tere

sts

Tota

lRs

RsRs

RsRs

RsRs

RsRs

Bala

nce

at 1

Jul

y 20

0913

3,25

0,00

0 86

,482

,579

18

8,98

9,34

7 27

9,61

2 (1

,003

,000

)67

8,78

2,80

9 1,

086,

781,

347

18,0

93,4

10

1,10

4,87

4,75

7 Re

valu

atio

n Su

rplu

s of

Ass

ocia

te R

ealis

ed

on

Dep

reci

atio

n of

Pro

perty

- -

(907

,250

) -

-90

7,25

0 -

- -

Prof

it/(L

oss)

for

the

Year

-

- -

- -

161,

260,

498

161,

260,

498

(35,

051,

900)

126,

208,

598

Oth

er C

ompr

ehen

sive

Inco

me/

(Los

s)

for

the

Year

- -

39,6

50,5

00

-10

8,50

0 -

39,7

59,0

00

-39

,759

,000

Tota

l Com

preh

ensi

ve In

com

e/(L

oss)

f

or th

e Ye

ar -

-39

,650

,500

-

108,

500

161,

260,

498

201,

019,

498

(35,

051,

900)

165,

967,

598

Cap

ital f

rom

Non

-con

trolli

ng S

hare

hold

ers

- -

- -

- -

-12

,501

,000

12

,501

,000

D

ivid

end

(Not

e 26

) -

- -

- -

(56,

631,

250)

(56,

631,

250)

-(5

6,63

1,25

0)

Bala

nce

at 3

0 Ju

ne 2

010

133,

250,

000

86,4

82,5

79

227,

732,

597

279,

612

(894

,500

)78

4,31

9,30

7 1,

231,

169,

595

(4,4

57,4

90)

1,22

6,71

2,10

5 Re

valu

atio

n Su

rplu

s of

Ass

ocia

te R

ealis

ed

on

Dep

reci

atio

n of

Pro

perty

- -

(907

,250

) -

-90

7,25

0 -

- -

Prof

it/(L

oss)

for

the

Year

-

- -

- -

810,

194,

424

810,

194,

424

(70,

834,

539)

739,

359,

885

Oth

er C

ompr

ehen

sive

Inco

me

for

the

Year

- -

341,

114,

133

-21

3,50

0 -

341,

327,

633

-34

1,32

7,63

3

Tota

l Com

preh

ensi

ve In

com

e/(L

oss)

f

or th

e Ye

ar -

-34

1,11

4,13

3 -

213,

500

810,

194,

424

1,15

1,52

2,05

7 (7

0,83

4,53

9)1,

080,

687,

518

Dis

posa

l of S

ubsi

diar

y -

-(3

74,8

78,7

52)

- -

374,

878,

752

- -

-C

apita

l fro

m N

on-c

ontro

lling

Sha

reho

lder

s -

- -

- -

- -

10,2

56,0

50

10,2

56,0

50

Div

iden

d (N

ote

26)

- -

- -

-(5

3,30

0,00

0)(5

3,30

0,00

0) -

(53,

300,

000)

Bala

nce

at 3

0 Ju

ne 2

011

Rs13

3,25

0,00

0 86

,482

,579

19

3,06

0,72

8 27

9,61

2 (6

81,0

00)

1,91

6,99

9,73

3 2,

329,

391,

652

(65,

035,

979)

2,26

4,35

5,67

3

A N N U A L R E P O R T 2 0 1 1

29

Statements of changes in equity (cont’d)For the year ended 30 June 2011

(b)

Com

pany

Stat

ed C

apita

l Sh

are

Prem

ium

Reva

luat

ion

Rese

rve

Cap

ital R

eser

veFa

ir V

alue

Re

serv

eRe

tain

ed

Earn

ings

Tota

lRs

RsRs

RsRs

RsRs

Bala

nce

at 1

Jul

y 20

0913

3,25

0,00

0 86

,482

,579

16

6,75

1,31

6 27

9,61

2 (1

,003

,000

)34

1,49

8,07

6 72

7,25

8,58

3 Pr

ofit

for

the

Year

-

- -

- -

48,4

75,6

11

48,4

75,6

11

Oth

er C

ompr

ehen

sive

Inco

me

for

the

Year

- -

31,1

50,5

00

-10

8,50

0 -

31,2

59,0

00

Tota

l Com

preh

ensi

ve In

com

e fo

r th

e Ye

ar -

-31

,150

,500

-

108,

500

48,4

75,6

11

79,7

34,6

11

Div

iden

d (N

ote

26)

- -

- -

-(5

6,63

1,25

0)(5

6,63

1,25

0)

Bala

nce

at 3

0 Ju

ne 2

010

133,

250,

000

86,4

82,5

79

197,

901,

816

279,

612

(894

,500

)33

3,34

2,43

7 75

0,36

1,94

4 Pr

ofit

for

the

Year

-

- -

- -

925,

827,

728

925,

827,

728

Oth

er C

ompr

ehen

sive

(Los

s)/I

ncom

e fo

r th

e Ye

ar -

-(3

3,76

4,61

9) -

213,

500

-(3

3,55

1,11

9)

Tota

l Com

preh

ensi

ve (L

oss)

/Inc

ome

for

the

Year

- -

(33,

764,

619)

-21

3,50

0 92

5,82

7,72

8 89

2,27

6,60

9 D

ivid

end

(Not

e 26

) -

- -

- -

(53,

300,

000)

(53,

300,

000)

Bala

nce

at 3

0 Ju

ne 2

011

Rs13

3,25

0,00

0 86

,482

,579

16

4,13

7,19

7 27

9,61

2 (6

81,0

00)

1,20

5,87

0,16

5 1,

589,

338,

553

A N N U A L R E P O R T 2 0 1 1

30

Statements of cash flowsFor the year ended 30 June 2011


Rs Rs Rs RsCASH FLOWS FROM OPERATING ACTIVITIESProfit after Taxation 739,359,885 126,208,598 925,827,728 48,475,611 Taxation (46,293,427) (2,197,862) (70,710,436) 6,683,732

Adjustments for:Depreciation 158,504,081 129,567,860 56,984,765 75,110,626 Amortisation/Impairment of Intangible Assets 37,095,000 17,725,909 4,827,570 6,024,069 Impairment Loss Recognised on Trade Debtors 47,652,383 18,971,647 38,578,367 17,359,173 Impairment Loss Recognised on Amount due from Subsidiaries - - 370,000,000 -Decrease in Fair Value of Investment - - 15,375,000 -Interest Expense 153,549,952 165,599,301 90,187,450 94,236,981 Interest Income (4,130,821) (1,161,379) (4,834,332) (20,022)Dividend Income (5,700,858) (106,875) (5,700,858) (106,875)Non-cash Element of Retirement Benefit Expense 132,487,000 7,683,000 127,200,000 2,745,000 Loss/(Profit) on Disposal of Property, Plant and Equipment and Intangible Assets 6,053,767 (1,853,383) (16,240,862) (1,651,480)Profit on Disposal of Subsidiaries 35/36 (1,124,650,028) (13,376,538) - -Profit on Disposal of Investment Properties (6,009,822) - - -Exceptional Item 35 - - (1,335,225,000) -Impairment Loss Recognised on Investment Properties 18,285,965 - - -Net Gain from Fair Value adjustment on Investment Properties (17,448,465) (366,719,411) - -Share of Profit of Associates (17,084,813) (57,185,590) - -

OPERATING PROFIT BEFORE 71,669,799 23,155,277 196,269,392 248,856,815 WORKING CAPITAL CHANGES

Decrease/(Increase) in Stocks and Work in Progress 136,938,337 (23,065,657) 179,686,881 57,081,502 (Increase)/Decrease in Debtors and Prepayments (288,145,567) (23,149,427) 61,384,722 (138,105,118)(Decrease)/Increase in Amounts due from Subsidiaries - - (388,605,152) 60,286,508 Increase/(Decrease) in Creditors and Accruals 228,363,167 346,597,228 (223,312,736) (5,707,143)Increase/(Decrease) in Amounts due to Subsidiaries - - 153,014,574 (1,392,922)

CASH GENERATED FROM/(USED IN) OPERATIONS 148,825,736 323,537,421 (21,562,319) 221,019,642 Interest Paid (153,549,952) (165,599,301) (90,187,450) (94,236,981)Dividend Paid (53,300,000) (56,631,250) (53,300,000) (56,631,250)Dividend Received 56,063,413 106,875 5,700,858 106,875 Income Tax Paid (28,918,416) (20,942,466) (19,118,117) (11,105,525)Retirement Benefits Paid (2,226,000) (3,697,000) (187,000) (603,000)

NET CASH FLOWS (USED IN)/GENERATED FROM OPERATING ACTIVITIES (33,105,219) 76,774,279 (178,654,028) 58,549,761

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of Property, Plant and Equipment 29 (249,688,842) (292,155,610) (6,035,914) (48,531,075)Purchase of Intangible Assets (3,637,269) (16,150) (65,100) -Proceeds from Disposal of Property, Plant and Equipment 342,545,267 2,148,957 266,617,473 1,660,956 Proceeds from Disposal of Intangible Assets 35,670,502 35,670,502 Acquisition of Subsidiaries 37 (25,010,000) - - -Incorporation of New Subsidiaries - - (10,000) (225,000)Further Payment for Shares in Subsidiaries and Associates - (10,000,000) (1,000,000) (10,049,000)Disposal of Subsidiaries 35/36 1,336,694,235 14,754,971 1,335,225,000 -Purchase of Investment Properties - (55,991,728) - -Disposal of Investment Properties 48,064,809 - - -Proceeds from Issue of Shares to Non-controlling Shareholders 1,000,000 - - -Interest Received 4,130,821 1,161,379 4,834,332 20,022 (Increase)/Decrease in Non-current Deposits and Prepayments (50,556,565) (2,113,974) 1,774,018 645,469

NET CASH FLOWS GENERATED FROM/(USED IN) INVESTING ACTIVITIES 1,439,212,958 (342,212,155) 1,637,010,311 (56,478,628)

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from Issue of Shares to Non-controlling Shareholders - 12,501,000 - -New Loans 629,950,633 324,045,562 287,987,760 79,453,207 Repayment of Loans (368,652,992) (128,770,664) (116,985,009) (77,035,934)New Lease Agreements - 24,848,127 - -Repayment under Lease Agreements (213,257,970) (54,202,679) (139,228,340) (49,531,253)Movement in Non-current Amounts due from Subsidiaries and Associates 13,882,548 - (59,510,046) (170,477,344)Movement in Non-current Amounts due to Subsidiaries - - (74,995,445) 74,619,322 New Loan from Associate - 75,000,000 - 75,000,000 Decrease in non-current other creditor (10,000,000) (4,860,000) - -

NET CASH FLOWS GENERATED FROM/(USED IN) FINANCING ACTIVITIES 51,922,219 248,561,346 (102,731,080) (67,972,002)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 1,458,029,958 (16,876,530) 1,355,625,203 (65,900,869)

CASH AND CASH EQUIVALENTS AT 1 JULY (491,213,175) (474,336,645) (435,896,743) (369,995,874)

CASH AND CASH EQUIVALENTS AT 30 JUNE 30 Rs 966,816,783 (491,213,175) 919,728,460 (435,896,743)

A N N U A L R E P O R T 2 0 1 1

31

Notes to the financial statementsFor the year ended 30 June 2011

1 INCORPORATION AND ACTIVITIES

Gamma-Civic Ltd is referred to as the Company and, together with its subsidiaries, is collectively referred to as the Group. The Company is a public company incorporated in Mauritius and listed on the Official Market of the Stock Exchange of Mauritius. Its registered office is situated at Level 3, Alexander House, 35 Cybercity, Ebene, Mauritius. The Company operates mainly as an investment company. The Group operates in the following activities: building materials, construction, property investment, sale of construction equipment and commercial vehicles, and lottery. Its principal place of business is situated at Royal Road, Chapman Hill, Beau Bassin, Mauritius.

2 APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

In the current year, the Group has applied all of the new and revised Standards and Interpretations issued by the International Accounting Standards Board (“IASB”) and the International Financial Reporting Interpretations Committee (“IFRIC”) of the IASB that are relevant to its operations and effective for accounting periods beginning on 1 July 2010. 2.1 Standards and Interpretations applied with no effect on the financial statements

The following relevant new and revised Standards and Interpretations have been applied in these financial statements. Their application has not had any significant impact on the amounts reported in these financial statements but may affect the accounting for future transactions or arrangements.

IAS 1 Presentation of Financial Statements - Amendments resulting from April 2009 Annual Improvements to IFRSsIAS 7 Statement of Cash Flows - Amendments resulting from April 2009 Annual Improvements to IFRSsIAS 17 Leases - Amendments resulting from April 2009 Annual Improvements to IFRSsIAS 27 Consolidated and Separate Financial Statements - Amendments resulting from May 2010 and Annual Improvements to IFRSsIAS 32 Financial Instruments: Presentation - Amendments relating to classification of rights issuesIAS 36 Impairment of Assets - Amendments resulting from April 2009 Annual Improvements to IFRSsIAS 39 Financial Instruments: Recognition and Measurement - Amendments resulting from April 2009 Annual Improvements to IFRSsIFRS 3 Business Combinations - Amendments resulting from May 2010 Annual Improvements IFRSIFRS 8 Operating Segments - Amendments resulting from April 2009 Annual Improvements to IFRSs

2.2 Standards and interpretations in issue not yet applied

IAS 1 Presentation of Financial Statements - Amendments resulting from May 2010 Annual Improvements to IFRSs (effective 1 January 2011)IAS 1 Presentation of Financial Statements - Amendments to revise the way other comprehensive income is presented (effective 1 July 2012)IAS 12 Income Taxes - Limited scope amendment (recovery of underlying assets) (effective 1 January 2012)IAS 19 Employee Benefits - Amended Standard resulting from the Post-Employment Benefits and Termination Benefits projects (effective 1 January 2013)IAS 24 Related Party Disclosures - Revised definition of related parties (effective 1 January 2011)IAS 27 Consolidated and Separate Financial Statements - Amendments resulting from May 2010 and Annual Improvements to IFRSs (effective 1 July 2010)IAS 28 Investments in Associates (effective 1 January 2013)IAS 34 Financial Instruments: Disclosures Amendments resulting from May 2010 Annual Improvements to IFRSs (effective 1 January 2011)

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Notes to the financial statements (cont’d)For the year ended 30 June 2011

2 APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (cont’d)

2.2 Standards and interpretations in issue not yet applied (cont’d)

IFRS 7 Financial Instruments Disclosures – Amendments resulting from May 2010 Annual Improvements to IFRSs (effective 1 January 2011)IFRS 7 Financial Instruments: Disclosures - Amendments enhancing disclosures about transfers of financial assets (effective 1 July 2011)IFRS 9 Financial Instruments - Classification and measurement (effective 1 January 2013)IFRS 10 Consolidated Financial Statements (effective 1 January 2013)IFRS 12 Disclosure of Interests in other Entities (effective 1 January 2013)IFRS 13 Fair Value Measurement (effective 1 January 2013)IFRIC 14 IAS 19 - The limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction (November 2009 amendment with respect to voluntary prepaid contributions effective 1 January 2011)

The directors anticipate that these amendments will be adopted in the financial statements for annual periods beginning on the respective dates as indicated above. The directors have not yet had an opportunity to consider the potential impact of the adoption of these amendments.

3 SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted by the Group and the Company are as follows:

(a) Basis of Preparation

The financial statements are prepared under the historical cost convention, as modified by the revaluation of certain property, plant and equipment, investment properties and certain financial instruments, and in accordance with International Financial Reporting Standards (“IFRSs”).

(b) Investments in Subsidiaries

In the Company’s financial statements, investments in subsidiaries are stated at cost, less any impairment loss.

(c) Investments in Associates and Joint Venture

Associates are those companies which are not subsidiaries, over which the Group exercises significant influence and in which it holds a long-term equity interest.

A joint venture is a company where the Group has a joint control over the entity.

Investments in associates and joint venture are accounted for at cost in the Company’s accounts and under the equity method of accounting in the Group accounts. The Group’s share of the associates’and joint venture’s profit or loss for the year is recognised in the Statements of Comprehensive Income and the Group’s interest in the associate and joint venture is carried in the Statements of Financial Position at an amount that reflects its share of the net assets of the associates and joint venture.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate and joint venture recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment on an annual basis as part of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in the Statements of Comprehensive Income.

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3 SIGNIFICANT ACCOUNTING POLICIES (cont’d)

(d) Basis of Consolidation

The consolidated financial statements include the results of the Company and its subsidiaries. The results of subsidiaries acquired or disposed of during the year are included in the Statements of Comprehensive Income from the date of their acquisition or up to the date of their disposal. Intragroup balances and transactions are eliminated on consolidation.

Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the minority’s share of change in equity since the date of the combination. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity.

(e) Business Combinations

The acquisition of subsidiaries is accounted for using the acquisition method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair values at the acquisition date.

A joint venture is a company where the Group has a joint control over the entity. Investments in associated companies and joint ventures are accounted for in the consolidated financial statements using the equity method.

Goodwill arising on acquisition is recognised as an asset and 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 recognised. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in the Statements of Comprehensive Income.

Goodwill is subsequently measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.


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(f) Property, Plant and Equipment

All property, plant and equipment are initially recorded at cost.

Land and buildings are subsequently shown at revalued amounts less accumulated depreciation. Revaluations are made by independent professional valuers. All other property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Surpluses arising on revaluation are credited to revaluation reserve. Deficits that offset previous surpluses of the same asset are charged against the revaluation reserve. All other deficits are charged to the Statements of Comprehensive Income.

Property, plant and equipment in the course of construction for production, rental or administrative purposes, or for purposes not yet determined, are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group’s accounting policy. Depreciation of these assets, on the same basis as other assets, commences when the assets are ready for their intended use.

Depreciation is calculated to write off the cost or revalued amount of property, plant and equipment, with the exception of freehold land and property, plant and equipment in progress, on a straight line basis over the expected useful lives of the assets concerned.

Property, plant and equipment held under finance leases are depreciated over their expected useful lives on the same basis as owned assets.

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the assets and is recognised in Statements of Comprehensive Income.

The principal annual rates used for the purpose are: Buildings - 2% to 20%Plant and Machinery - 10% to 50%Motor Vehicles - 20%Furniture, Fittings and Equipmen - 10% to 33 1/3%

No depreciation is provided on freehold land and on plant and equipment in progress.

(g) Intangible Assets

(i) Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.


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(g) Intangible Assets (cont’d)

(ii) Computer Software

Computer software that is not considered to form an integral part of any hardware equipment is recorded as intangible assets. The software is capitalised at cost and amortised over its estimated useful life. The principal annual rates used for the purpose are 20% to 33 1/3%.

(iii) Quarry Expenditure incurred prior to the exploitation of a quarry under lease are recorded at cost as intangible assets. The cost of quarry is amortised over the period of the lease. (h) Stocks and Work in Progress Stocks and work in progress are valued at the lower of cost and net realisable value. In general, cost is determined on a weighted average basis. The cost of finished goods and work in progress comprise all costs of purchase, costs of conversion and other costs, including a proportion of relevant overheads, incurred in bringing them to their present location and condition. Net realisable value is the estimate of the selling price in the ordinary course of business, less the costs of completion and selling expenses.

(i) Financial Instruments Financial assets and financial liabilities are recognised on the Statements of Financial Position when the group has become a party to the contractual provisions of the instrument.

(i) Other Investments (other than in subsidiaries, in associates and joint venture)

Investments in equity securities are recognised on a trade-date basis and are initially measured at cost. At subsequent reporting dates, they are treated as available-for-sale financial assets. Available-for-sale assets are normally carried at fair value, with changes in fair value recognised directly in equity (Fair Value Reserve) until the asset is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is recognised in the Statements of Comprehensive Income. However, available-for-sale assets which do not have a quoted price and whose fair value cannot be reliably measured are carried at cost, less any impairment loss.

(ii) Debtors

Debtors are treated as Loans-and-Receivables and are generally stated at their nominal value, as reduced by appropriate allowances for estimated irrecoverable amounts.

Non-current debtors with a maturity that is fixed or that can be estimated are discounted using an appropriate discount rate at inception and are subsequently measured at amortised cost, less any impairment loss.

(iii) Creditors and Accruals Creditors are generally stated at their nominal value.

Non-current creditors with a maturity that is fixed or that can be estimated are discounted using an appropriate discount rate at inception and are subsequently measured at amortised cost.

(iv) Borrowings Interest-bearing borrowings, such as loans and finance leases, are carried at outstanding principal amount. Accrued interest payable thereon is included within Creditors and Accruals.


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(j) Taxation Income tax expense represents the sum of the tax currently payable and deferred tax.

(i) Current tax The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated Statement of Comprehensive Income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible.The Group liabilityfor current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

(ii) Deferred taxation

Deferred taxation is provided for on the comprehensive basis using the liability method.

Deferred tax liabilities are recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and unused tax losses can be utilised.

(iii) Current and deferred tax for the period

Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items that are recognised outside profit or loss (whether in other comprehensive income or directly in equity), in which case the tax is also recognised outside profit or loss, or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is included in the accounting for the business combination.

(k) Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

(i) Lessor Amounts due from lessees under finance leases are recognised as receivables at the amount of the Group’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases.

(ii) Lessee Assets acquired under finance leases have been recorded in the Statements of Financial Position as tangible fixed assets at their capital value and are depreciated over their estimated useful life. The corresponding liability has been recorded as an obligation under finance lease and the finance charges are allocated to the Statements of Comprehensive Income over the lease period.

Lease payments under operating leases, which include leases of land where title is not expected to pass to the lessee by the end of the lease term, are recognised as an expense in the Statements of Comprehensive Income on a straight line basis over the lease term.


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(l) Investment Properties Investment properties, which are property held to earn rentals and/or for capital appreciation, are stated at its fair value at the Statements of Financial Position date. Gains or losses arising from changes in the fair value of the investment properties are included in the Statements of Comprehensive Income in the period in which they arise. (m) Foreign Currency Translation Transactions in foreign currencies are translated into the functional and presentation currency, Mauritian rupees, at the rates of exchange ruling at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies in the Statements of Financial Position are translated into Mauritian rupees at the rates of exchange ruling at the Statements of Financial Position date, and any differences in exchange arising are taken to the Statements of Comprehensive Income. (n) Revenue Recognition

Turnover is based on invoiced values, net of value added tax, of all sales of goods and services, rental income, gross ticket sales and other contract work executed less discounts, allowances and returns.

Sales of goods and services are recognised when goods are delivered and the services have been rendered.

Revenue from construction contracts is recognised in accordance with the Group’s accounting policy on construction contracts.

Interest and other income are recognised on an accrual basis, unless collectability is in doubt.

Dividend income from equity investments is recognised when the shareholders’ rights to receive payment have been established.

Rental income from operating leasesis recognised on a straight line basis over the term of the relevant lease.

(o) Construction Contracts Revenue and costs from construction contracts, the outcome of which can be reliably estimated, are recognised by the percentage of completion method. The stage of completion of a contract is determined by surveys of work performed. Revenue is recognised only to the extent of contract costs incurred that it is probable will be recoverable on contracts, the outcome of which is uncertain. Losses are recognised immediately on contracts where they are foreseen. (p) Pre-operational Expenses, Project Management and Professional Fees Pre-operational expenses, project management and professional fees are written off to the Statements of Comprehensive Income in the period in which they are incurred. (q) Retirement Benefits Retirement Benefits in respect of The Employment Rights Act 2008 and defined benefit pension plan for certain qualifying employees.


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(q) Retirement Benefits (cont’d)

The present value of retirement benefits payable in respect of the Employment Rights Act 2008 gratuities and the defined benefit pension plan is recognised in the Statements of Financial Position as a non-current liability, after adjusting for any unrecognised actuarial gains and losses and any unrecognised past service cost. The valuation of the obligations is carried out annually by a firm of actuaries.

The current service cost and any recognised past service cost are included as an expense together with the associated interest cost.

A portion of the actuarial gains and losses will be recognised as income or expense if the net cumulative unrecognised actuarial gains and losses at the end of the previous accounting period exceeded 10% of the present value of the defined benefit obligation at that date.

State plan

Contributions to the National Pension Scheme are expensed to the Statements of Comprehensive Income in the period in which they fall due. (r) Borrowing Costs Borrowing costs attributable to the acquisition of plant and machinery and construction of buildings, which are assets that necessarily take a substantial period of time to get ready for their intented use or sale, are capitalised as part of the respective assets until such time as the asset are substantially ready for their intended use or sale.

All other borrowing costs are recognised in Statements of Comprehensive Income in the period they are incurred. (s) Dividends

Dividends are recognised as a liability in the period in which they are declared.

(t) Impairment

At each Statement of Financial Position date, the Group reviews the carrying amounts of their assets to determine whether there is any indication that those assets have suffered an impairment loss. If such an indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any, and the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in the Statements of Comprehensive Income unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. (u) Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event which it is probable will result in an outflow of economic benefits that can be reasonably estimated.

(v) Cash and Cash Equivalents Cash comprises cash at bank and in hand and demand deposits net of bank overdrafts. Cash equivalents are short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. (w) Comparative Figures Comparative figures have been regrouped or restated where necessary, to conform to the current year’s presentation.


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4 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

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

Critical judgments in applying the Group’s accounting policies

Contract variations Contract variations are recognised as revenues to the extent that it is probable that they will result in revenue which can be reliably measured. This requires the exercise of judgment by management based on prior experience, application of contract terms and relationship with the contract owners.

Percentage-of-completion

The Group uses the percentage-of-completion method in accounting for its construction contracts services. Use of the percentage-of-completion method requires the Group to estimate the proportion of work performed to date as a proportion of the total work to be performed and it is management’s judgment that the use of the costs to date in proportion to total estimated costs provides the most appropriate measure of percentage of completion. Property, plant and equipment Property, plant and equipment is depreciated over its estimated useful life, which is based on estimates for expected usage of the asset and expected physical wear and tear which are dependent on operational factors. Management has not considered any residual value as it is deemed immaterial. Key sources of estimation uncertainty

Construction cost estimates The Group uses internal quantity surveyors together with project managers to estimate the costs to complete construction contracts. Factors such as escalation of material prices, labour costs and other costs are included in the construction cost estimates based on best estimates. Allowance for doubtful debts on trade receivables Allowance for doubtful debts is determined using a combination of factors, including the overall quality and ageing of receivables, continuing credit evaluation of the customers’ financial strength and collateral requirements from customers in certain circumstances. Management makes allowance for doubtful debts based on its best estimates at the Statement of Financial Position date.


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4 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (cont’d)

Key sources of estimation uncertainty (cont’d)

Impairment of goodwill Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value. The carrying amount of goodwill at the Statements of Financial position date was Rs29.3M (2010: Rs37.5M). Unquoted Investments Determining whether other investment is impaired requires an estimation of the value in use of the investment. In considering the value in use, the Directors have taken into consideration the management accounts and cash flow projections. The actual results could however, differ from the estimate.


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(a) Group

Freehold Land and Buildings

Plant and Machinery Motor Vehicles

Furniture, Fittings and Equipment Total

Rs Rs Rs Rs RsCOST OR VALUATIONAt 1 July 2009 405,423,601 1,085,715,459 106,104,033 46,591,263 1,643,834,356 Transfer from intangible assets - 925,455 - 80,125,930 81,051,385 Reclassification (222,875) - - 222,875 -Revaluation surplus 39,650,500 - - - 39,650,500 Additions 38,490,138 99,265,170 66,020,719 196,778,315 400,554,342 Disposals - (4,958,557) (1,515,999) (579,910) (7,054,466)

At 30 June 2010 483,341,364 1,180,947,527 170,608,753 323,138,473 2,158,036,117 Revaluation surplus 15,500,000 - - - 15,500,000 Additions 13,541,458 49,122,858 13,219,228 264,343,077 340,226,621 Disposals (171,144,806) (901,611,395) (29,622,800) (7,707,469) (1,110,086,470)

At 30 June 2011 Rs 341,238,016 328,458,990 154,205,181 579,774,081 1,403,676,268

ACCUMULATED DEPRECIATIONAt 1 July 2009 44,088,328 746,347,029 81,749,868 29,776,399 901,961,624 Charge for the Year 11,167,585 87,846,559 8,862,665 21,691,051 129,567,860 Disposals - (4,958,557) (1,229,900) (570,435) (6,758,892)

At 30 June 2010 55,255,913 829,235,031 89,382,633 50,897,015 1,024,770,592 Charge for the Year 20,978,442 76,391,362 9,147,129 51,987,148 158,504,081 Disposals (31,155,744) (674,474,063) (28,166,495) (7,390,277) (741,186,579)

At 30 June 2011 Rs 45,078,611 231,152,330 70,363,267 95,493,886 442,088,094

NET BOOK VALUEProperty, Plant and Equipment in Use 296,159,405 97,306,660 83,841,914 484,280,195 961,588,174 Property, Plant and Equipment in Progress - - - - -

At 30 June 2011 Rs 296,159,405 97,306,660 83,841,914 484,280,195 961,588,174

Property, Plant and Equipment in Use 428,085,451 317,263,053 81,226,120 264,135,907 1,090,710,531 Property, Plant and Equipment in Progress - 34,449,443 - 8,105,551 42,554,994

At 30 June 2010 Rs 428,085,451 351,712,496 81,226,120 272,241,458 1,133,265,525

Property, plant and equipment have been pledged as security for bank facilities granted to the Group (Note 14 and 19)

5 PROPERTY, PLANT AND EQUIPMENT


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(b) Company

Freehold Land and Buildings

Plant and Machinery Motor Vehicles

Furniture, Fittings and Equipment Total

Rs Rs Rs Rs RsCOST OR VALUATIONAt 1 July 2009 339,660,828 841,131,114 67,776,384 25,548,203 1,274,116,529 Reclassification (222,875) - - 222,875 -Revaluation surplus 31,150,500 - - - 31,150,500 Additions 12,532,396 79,558,528 701,000 1,702,151 94,494,075 Disposals - (4,958,557) (880,227) (579,910) (6,418,694)

At 30 June 2010 383,120,849 915,731,085 67,597,157 26,893,319 1,393,342,410 Revaluation surplus 15,500,000 - - - 15,500,000 Additions 353,304 4,271,347 138,824 1,272,439 6,035,914 Disposals (99,442,049) (738,882,211) (28,265,359) (6,022,243) (872,611,862)

At 30 June 2011 Rs 299,532,104 181,120,221 39,470,622 22,143,515 542,266,462

ACCUMULATED DEPRECIATIONAt 1 July 2009 36,442,706 553,545,955 59,192,646 19,903,285 669,084,592 Charge for the Year 7,064,619 61,546,758 3,883,562 2,615,687 75,110,626 Disposals - (4,958,557) (880,227) (570,435) (6,409,219)

At 30 June 2010 43,507,325 610,134,156 62,195,981 21,948,537 737,785,999 Charge for the Year 3,992,319 48,242,829 2,422,698 2,326,919 56,984,765 Disposals (22,399,713) (546,833,926) (26,995,698) (5,705,057) (601,934,394)

At 30 June 2011 Rs 25,099,931 111,543,059 37,622,981 18,570,399 192,836,370

NET BOOK VALUEProperty, Plant and Equipment in Use 274,432,173 69,577,162 1,847,641 3,573,116 349,430,092 Property, Plant and Equipment in Progress - - - - -

At 30 June 2011 Rs 274,432,173 69,577,162 1,847,641 3,573,116 349,430,092

Property, Plant and Equipment in Use 339,613,524 271,147,486 5,401,176 4,944,782 621,106,968 Property, Plant and Equipment in Progress - 34,449,443 - - 34,449,443

At 30 June 2010 Rs 339,613,524 305,596,929 5,401,176 4,944,782 655,556,411

5 PROPERTY, PLANT AND EQUIPMENT (cont’d)


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Note:Buildings of the company were revalued in 1993 by an independent professional valuer based on their open market values. Land of the company and its subsidiaries were revalued as at 30 June 2011 by Raj Ramlackhan, MSc, F.R.I.C.S, an independent valuer, based on their open market value.

(c) The net book value of property, plant and equipment held under finance leases is as follows:

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Freehold Buildings 4,512,487 17,042,659 4,512,487 17,042,659 Plant and Machinery 103,384,226 212,407,843 61,713,182 141,355,087 Motor Vehicles 15,659,094 20,562,784 1,385,841 3,619,051 Furniture, Fittings and Equipment 58,861,412 929,485 551,139 929,485

Rs 182,417,219 250,942,771 68,162,649 162,946,282

(d) Had the Group’s land and buildings been measured on a historical basis, their carrying value would have been as follows:

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Freehold Land and Buildings Rs 140,183,333 150,547,313 81,715,360 135,151,440

5 PROPERTY, PLANT AND EQUIPMENT (cont’d)


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GroupConsolidation Computer

Goodwill Software Quarry Project TotalRs Rs Rs Rs Rs

COSTAt 1 July 2009 52,834,978 27,088,921 43,233,742 81,051,385 204,209,026 Transfer to Property, Plant and Equipment - - - (81,051,385) (81,051,385)Additions 10,000,000 16,150 - - 10,016,150

At 30 June 2010 62,834,978 27,105,071 43,233,742 - 133,173,791 Additions 24,001,023 3,637,269 - - 27,638,292 Disposal - (756,292) (43,233,742) - (43,990,034)

At 30 June 2011 Rs 86,836,001 29,986,048 - - 116,822,049

ACCUMULATED AMORTISATION/IMPAIRMENT LOSSES

At 1 July 2009 13,600,000 18,571,872 4,323,379 - 36,495,251 Impairment losses recognised in the year 11,700,000 - - - 11,700,000 Charge for the year - 3,864,217 2,161,692 - 6,025,909

At 30 June 2010 25,300,000 22,436,089 6,485,071 - 54,221,160 Impairment losses recognised in the year 32,233,172 - - - 32,233,172 Charge for the year - 3,780,982 1,080,846 - 4,861,828 Disposals - (755,240) (7,565,917) - (8,321,157)

At 30 June 2011 Rs 57,533,172 25,461,831 - - 82,995,003

NET BOOK VALUE

At 30 June 2011 Rs 29,302,829 4,524,217 - - 33,827,046

At 30 June 2010 Rs 37,534,978 4,668,982 36,748,671 - 78,952,631

CompanyComputerSoftware Quarry Total

Rs Rs RsCOSTAt 1 July 2009 and 30 June 2010 27,088,921 43,233,742 70,322,663 Additions 65,100 - 65,100 Disposals (756,292) (43,233,742) (43,990,034)

At 30 June 2011 Rs 26,397,729 - 26,397,729

ACCUMULATED AMORTISATIONAt 1 July 2009 and 30 June 2010 18,571,872 4,323,379 22,895,251 Charge for the year 3,862,377 2,161,692 6,024,069

At 30 June 2010 22,434,249 6,485,071 28,919,320 Charge for the year 3,746,724 1,080,846 4,827,570 Disposals (755,240) (7,565,917) (8,321,157)

At 30 June 2011 Rs 25,425,733 - 25,425,733

NET BOOK VALUEAt 30 June 2011 Rs 971,996 - 971,996

At 30 June 2010 Rs 4,654,672 36,748,671 41,403,343

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Group

Goodwill acquired in a business combination is allocated, at acquisition, to the cash-generating units (CGUs) that are expected to benefit from that business combination. Before recognition of impairment losses, the carrying amount of goodwill had been allocated as follows:

2011 2010Rs Rs

Building materials and Equipment and Investment and Media- Building Materials and Equipment CGU - 28,814,581 - Investment CGU 8,178,389 8,720,397 - Media CGU 21,124,440 -

Rs 29,302,829 37,534,978

The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired.

At 30 June 2011, based on the impairment tests, management determined that there was impairment of certain of its CGUs to which goodwill had been allocated.

The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates and growth rates. Management estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs. The growth rates are based on past growth experience.

The calculations use cash flow forecasts, derived from the extrapolation of past cash flows, for the next five years based on an estimated growth rate of 1%. This growth rate does not exceed the average long-term growth rate for the relevant market. The rate used to discount the forecast cash flows for the CGUs is 10%. Management believes that any reasonably possible change in the key assumptions on which the recoverable amounts of the CGUs are based would not cause the carrying amounts of the CGUs to exceed their recoverable amounts.

6 INTANGIBLE ASSETS (cont’d)


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GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Investments in Subsidiaries Rs - - 39,484,000 54,849,000

(a) The subsidiaries of the company as at 30 June 2011 are as follows:

Class of Carrying Value Effective % Activity Shares Held of Investment Holding

Rs

Accacias Co Ltd Investment Ordinary - 100.0%Aggregate Resources Co Ltd Plant hire Ordinary - 100.0%Al-Kato Construction Co Ltd Construction and plant hire Ordinary - 100.0%A.S. Burstein Management Ltd Lottery Ordinary - 100.0%Boron Investments Ltd Investment Ordinary 6,200,000 100.0%BR Capital Ltd Property investment Ordinary - 75.0%BR Hotel Resorts Ltd Investment Ordinary - 100.0%BR Investments Ltd Investment Ordinary - 100.0%BR Realty Ltd Investment Ordinary - 100.0%Burford Development Ltd Property investment Ordinary 25,000 100.0%Burford Investments Ltd Property investment Ordinary - 75.0%Burford Property Ltd Property investment Ordinary 25,000 100.0%Burford Realty Ltd Property investment Ordinary 25,000 100.0%Centreview Development Ltd Property investment Ordinary 25,000 100.0%Centreview Investments Ltd Property investment Ordinary - 100.0%Concassage Albion Phare Limitée Plant hire Ordinary - 100.0%Damalot Technical Services Ltd Technical Services Ordinary - 100.0%Effluent Dynamics Ltd Investment Ordinary - 100.0%Fine Point Property Ltd Property investment Ordinary - 100.0%Fine Point Realty Ltd Property investment Ordinary - 100.0%Gamlot Technologies Ltd Equipment Hire Ordinary - 100.0%Gamma Asia Construction Ltd Construction Ordinary - 100.0%Gamma Cement Ltd Investment Ordinary 1,000,000 100.0%Gamma-Civic Construction Holdings Ltd Investment Ordinary 25,000 100.0%Gamma-Civic Construction Ltd Construction Ordinary - 100.0%Gamma-Civic Hotel Holdings Ltd Investment Ordinary 25,000 100.0%Gamma Civils Ltd Construction Ordinary - 100.0%Gamma Energy Holdings Ltd Investment Ordinary - 100.0%Gamma Energy Ltd Energy Ordinary - 100.0%G-Traxx Equipment & Rental Ltd (formerly Gamma Equipment Ltd) Trading Ordinary - 100.0%Gamma Leisure Ltd Investment Ordinary 50,000 100.0%Glot Holdings (Mauritius) Ltd Investment Ordinary 99,000 99.0%Glot Management Ltd Investment Ordinary 100,000 100.0%Land Securities Ltd Investment Ordinary 1,000,000 100.0%Lottotech Ltd Lottery Ordinary - 75.0%Lottotech Management Ltd Investment Ordinary - 100.0%

7 INVESTMENTS IN SUBSIDIARIES


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Class of Carrying Value Class ofActivity Shares Held of Investment Shares Held

Rs

Lotwin Capital Ltd Investment Ordinary - 100.0%Lotwin Holdings Ltd Investment Ordinary 10,000 100.0%Lotwin Investments Ltd Investment Ordinary - 100.0%Lotwin Technologies Ltd Dormant Ordinary 25,000 100.0%Ludgate Investments Ltd Property investment Ordinary - 100.0%Ludgate Property Ltd Property investment Ordinary - 100.0%Maurilot Investments Ltd Investment Ordinary 50,000 100.0%Natlot Investments Ltd Investment Ordinary 10,050,000 100.0%North Point Holdings Ltd Investment Ordinary - 100.0%North Point Stone Products Ltd Plant hire Ordinary - 100.0%Osterley Investments Ltd Property investment Ordinary - 98.0%Raffles Fourth Ltd Property investment Ordinary - 50.0%Raffles Third Ltd Property investment Ordinary - 50.0%Randabel Bessamer Fowler (Mauritius) Ltd Dormant Ordinary - 51.0%Readymix Ltd Dormant Ordinary - 100.0%Reel Mada SA Lottery Ordinary - 65.0%RHT Media Ltd Investment Ordinary - 100.0%Stamford Fourth Ltd Property investment Ordinary - 50.0%Stamford Properties Ltd Property investment Ordinary - 50.0%Traxx Ltd Trading and Plant Hire Ordinary 100,000 100.0%Westview Development Ltd Property investment Ordinary 20,550,000 100.0%Westview Realty Ltd Property investment Ordinary 100,000 100.0%

Rs 39,484,000

Impairment of investment in subsidiaries amount to Rs15,375,000 (2010: Nil) during the year (Note 24).Reel Mada SA is incorporated in Madagascar. All the other subsidiaries are incorporated in Mauritius.

7 INVESTMENTS IN SUBSIDIARIES (cont’d)


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7 INVESTMENTS IN SUBSIDIARIES (cont’d)

(b) New Subsidiaries

New subsidiaries during the year are as follows:

- Accacias Co Ltd- BR Hotel Resorts Ltd- BR Investments Ltd- BR Realty Ltd- Damalot Technical Services Ltd- Gamlot Technologies Ltd- Gamma Civils Ltd- Gamma Materials Ltd- Lottotech Management Ltd- Lotwin Capital Ltd- Lotwin Holdings Ltd- Lotwin Investments Ltd- Ludgate Investments Ltd- Ludgate Property Ltd- Reel Mada SA- RHT Media Ltd

Gamma Materials Ltd was incorporated during the year. The Company entered into a joint venture agreement with Ingenerie et Participations Financieres and disposed of its rights to subscribe for 10,000 new ordinary shares in Gamma Materials Ltd, hence Gamma Materials Ltd subsequently became a joint venture. The joint venture has been consolidated using the equity method.

(c) Amounts due from Subsidiaries

Company

The amounts due from subsidiaries classified as non-current assets are unsecured, interest-free and will not be recalled within the next twelve months. The directors consider that these amounts are in substance an extension of the equity investments in these subsidiaries so that the amounts are stated at nominal value.

A provision for impairment on amount due from subsidiaries of Rs 370,000,000 (2010: Nil) has been recognised in the Statement of Comprehensive Income during the year.


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(a) Investments in AssociatesGROUP COMPANY

2011 2010 2011 2010Rs Rs Rs Rs

At 1 July 453,780,401 393,970,088 26,494,640 15,314,000 Transfer of Shares to the Company at Fair Value - 8,385,480 - 11,180,640 Share of Profit of Associates 17,084,813 57,185,590 - -Dividend Received (50,362,555) (5,760,757) - -Additions 29,845,560 - - -

Carrying Value 450,348,219 453,780,401 26,494,640 26,494,640 Loans to Associates 30,773,400 6,253,400 6,253,400 6,253,400

At 30 June Rs 481,121,619 460,033,801 32,748,040 32,748,040

ValuationQuoted Equity Investments at Fair Value 460,860,520 460,860,520 - -Unquoted Equity Investments at Cost 280,881,405 246,053,575 32,748,040 32,748,040

Rs 741,741,925 706,914,095 32,748,040 32,748,040

The fair value of quoted equity investments are based on quoted prices at Statements of Financial Position date. The unquoted equity investments are stated at cost since reliable fair value cannot be obtained.

(b) Investments in Joint VentureGROUP COMPANY

2011 2010 2011 2010Rs Rs Rs Rs

Investment in Unquoted Equity Share 212,058,789 - 1,000,000 -

Total Investment in Associates and Joint Venture 693,180,408 460,033,801 33,748,040 32,748,040

(c) The following are the associates of the Company:

Name ActivityClass of

Shares Held Effective % Holding % of Voting Power Held2011 2010 2011 2010

Cement Logistics Ltd Dormant Ordinary 44.7% 44.7% 73.0% 73.0%Holcim (Mauritius) Ltd Cement Ordinary 44.7% 44.7% 73.0% 73.0%Gamma-Civic Cement Holdings Ltd Investment Ordinary 32.0% 32.0% 32.0% 32.0%Govenland Co Ltd Investment Ordinary 49.0% 0% 49.0% 0%Morning Light Co Ltd Hotel Ordinary 25.1% 25.1% 25.1% 25.1%Viva Voce Limitee Media Ordinary 25.7% 0% 25.7% 0%Star Cement Ltd Investment Ordinary 39.0% 39.0% 39.0% 39.0%

(d) Details of the investment in the joint venture are as follows:

Name ActivityClass of

Shares Held Effective % Holding % of Voting Power Held2011 2010 2011 2010

Gamma Materials Ltd Building Materials Ordinary 50.0% 0.0% 50.0% 0.0%

8 INVESTMENTS IN ASSOCIATES AND JOINT VENTURE


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(e) Summarised financial information in respect of the Group's associates and joint venture is set out below:

Associates Joint Venture2011 2010 2011 2010

Rs Rs Rs Rs

Total Assets 3,037,382,248 1,710,107,883 1,241,648,303 -Total Liabilities (1,473,965,859) (481,878,295) (817,530,725) -

Net Assets Rs 1,563,416,389 1,228,229,588 424,117,578 -

Group’s Share of Associates’ and Joint Venture's Net Assets 588,121,330 411,345,811 212,058,789 -Goodwill 74,285,678 42,434,590 - -Loans to Associates 30,773,400 6,253,400 - -

Rs 693,180,408 460,033,801 212,058,789 -

Turnover Rs 1,386,116,990 1,353,122,964 - -

Profit for the Year Rs 34,263,843 146,042,332 - -

Group's Share of Associates' Profit for the Year Rs 17,084,813 57,185,590 - -

Equity accounting has been applied and the Group’s share of losses of associates recognised in the Group Statements of Comprehensive Incomes only to the extent of bringing the carrying amount of the investments in the respective associates down to zero.

The directors consider that the investments in associates in the Company’s Statements of Financial Position are not impaired.

The loans to associates are unsecured, interest free and will be repayable after more than one year.

(f) Amounts due from Associates

Company and Group

The amounts due from associates at the reporting date are unsecured, interest free and will be repayable after more than one year. The directors consider that these amounts are in substance an extension of the equity investments in these associates so that the amounts are stated at nominal value.

(g) Contingent Liabilities

The Group's share of joint venture's contingent liabilities amount to Rs15M.

8 INVESTMENTS IN ASSOCIATES AND JOINT VENTURE (cont’d)


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GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

At 1 July 1,393,889,190 1,064,760,282 - -Additions - 55,991,728 - -Disposal (49,449,719) (93,582,231) - -Impairment (Note 24) (18,285,965) - - -Net Gain from Fair Value Adjustment 88,432,461 366,719,411 - -

At 30 June Rs 1,414,585,967 1,393,889,190 - -

The Group's major investment properties were revalued as at 30 June 2011 by Raj Ramlackhan, MSc, F.R.I.C.S, an independent professional valuer, based on their open market values. The directors consider the carrying amount of all other investment properties as fair value.

Income earned by the Group from its investment properties during the year amounted to Rs62,752,796 (2010: Rs110,381,374) and direct operating expenses arising on these investment properties during the year amounted to Rs48,840,766 (2010: Rs17,827,859).

All of the Group's investment properties are held under freehold interests.

10 OTHER INVESTMENTS

Available-for-sale InvestmentsGROUP COMPANY

2011 2010 2011 2010Rs Rs Rs Rs

At 1 July 14,105,915 13,997,415 14,105,915 13,997,415 Net Gain from Fair Value Adjustment 213,500 108,500 213,500 108,500

At 30 June Rs 14,319,415 14,105,915 14,319,415 14,105,915

ValuationQuoted Equity Investments at Fair Value 4,319,000 4,105,500 4,319,000 4,105,500 Unquoted Equity Investments at Cost 10,000,415 10,000,415 10,000,415 10,000,415

Rs 14,319,415 14,105,915 14,319,415 14,105,915

The fair value of quoted equity investments are based on quoted prices from SBM Global Fund at Statement of Financial Position date. The unquoted equity investments are carried at cost since reliable fair values are not available.

11 STOCKS AND WORK IN PROGRESS

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs RsAt cost

Raw Materials and Consumables 75,103,645 54,264,122 - 19,543,740 Work in Progress 449,417 19,703,995 - 14,733,878 Finished Goods 13,109,986 98,125,268 - 83,963,084 Spare Parts and Diesel 55,696,402 100,080,419 - 56,268,489 Goods in Transit 3,360 9,127,343 - 5,177,690

Rs 144,362,810 281,301,147 - 179,686,881

Inventories have been pledged as security for bank facilities granted to the Group (Note 14 and 19).

9 INVESTMENT PROPERTIES


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12 DEBTORS AND PREPAYMENTS

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Trade Debtors Net of Provision 580,067,805 675,987,706 127,698,705 318,373,662 Amount due from Joint Venture 224,757,262 - 117,101,711 -Other Debtors and Prepayments 360,704,433 350,158,960 69,549,340 95,939,183 Taxation (Note 18) 32,426,396 24,114,838 - -

Rs 1,197,955,896 1,050,261,504 314,349,756 414,312,845

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

The average credit period on sales of goods is three months. Allowance for doubtful debts is normally determined by the Group as a percentage of overdue debts. No interest is charged on the trade receivables.

Before accepting any new customer, the Group assesses the potential customer's credit quality and defines credit limits by customer. Of the trade receivables balance at the end of the year, Rs34,428,210 (2010: Rs68,392,551 due from a Ministry) is due from a Government Authority which represents the Group's largest customer. There are five customers (2010: five) who represent 14% (2010: 16%) of the trade receivables and there are no other customers who represent more than 5% of the total balance of trade receivables.

Included in the Group's trade receivable balance are debtors with a carrying amount of Rs201,562,302 (2010: Rs290,470,571) which are past due at the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts are still considered recoverable. The Group does not hold any collateral over these balances.

Ageing of past due but not impaired:GROUP COMPANY

2011 2010 2011 2010Rs Rs Rs Rs

91 - 180 days 9,218,431 73,489,147 2,370,365 31,504,844 Over 180 days 192,343,871 216,981,424 136,655,137 176,009,196

Total Rs 201,562,302 290,470,571 139,025,502 207,514,040

Movement in the Allowance for Doubtful Debts:GROUP COMPANY

2011 2010 2011 2010Rs Rs Rs Rs

At 1 July 77,880,927 58,909,280 70,434,338 53,075,165 Debt written off against provision (41,682,289) - (41,682,289) - Impairment Loss Recognised on Trade Debtors (Note 23/24) 47,652,383 18,971,647 43,330,361 17,359,173 Impairment Loss Reversed on Trade Debtors (Note 24) - - (4,751,994) -

At 30 June Rs 83,851,021 77,880,927 67,330,416 70,434,338

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. Accordingly, the directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.


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13 STATED CAPITAL

GROUP AND COMPANY2011 2010

Rs Rs

13,325,000 Ordinary Shares of Rs10 each Rs 133,250,000 133,250,000

Fully paid ordinary shares carry one voting per share and carry the rights to dividends.

14 LOANSGROUP COMPANY

2011 2010 2011 2010Rs Rs Rs Rs

Secured Loans Repayable by Instalments 1,349,622,829 1,063,325,188 578,833,834 407,831,083 Less: Amount due for Settlement within one year (shown under Current Liabilities) (608,942,226) (319,180,881) (310,420,752) (182,385,670)Amount due for Settlement after one year (shown under Non-current Liabilities) Rs 740,680,603 744,144,307 268,413,082 225,445,413

The loan due for settlement after one year are repayable as follows:

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

After one year before two years 193,092,331 138,105,027 71,619,181 52,873,008 After two years before five years 398,566,651 396,090,841 169,733,550 146,223,199 After five years 149,021,621 209,948,439 27,060,351 26,349,206

Rs 740,680,603 744,144,307 268,413,082 225,445,413

The loans are secured by fixed and floating charges on all the assets, including property, plant and equipment and investment properties and inventories, of the borrowing companies. Included in loans is an amount of Rs20,272,631 (2010: Rs32,846,276) in USD at variable interest rate of 2.32% p.a. (2010: 2.00% p.a.) and an amount of Rs23,084,067 (2010: Rs1,199,286) in EURO at variable interest rate ranging from 1.71% p.a. to 3.6% p.a. The rates of interest of the remainder loans are variable and range between 7.35% p.a. to 10.50% p.a. (2010: 8.3% p.a. to 11.75% p.a.). The directors estimate the fair value of loans approximates their carrying amount.

15 OBLIGATIONS UNDER FINANCE LEASES

(a) Group

Minimum Lease PaymentsPresent Value of Minimum Lease

Payments2011 2010 2011 2010

Rs Rs Rs Rs

Amounts Payable under Finance Leases:- within one year 70,868,676 97,603,733 53,258,460 67,539,365 - after one year before five years 170,893,716 301,683,501 140,595,114 242,127,146 - after five years 29,514,127 38,633,728 27,583,820 34,491,074

271,276,519 437,920,962 221,437,394 344,157,585 Less: Future Finance Charges (49,839,125) (93,763,377) - -

Rs 221,437,394 344,157,585 221,437,394 344,157,585

Less: Amount due for Settlement within one year (shown under Current Liabilities) (53,258,460) (67,539,365)

Amount due for Settlement after one year (shown under Non-current Liabilities) Rs 168,178,934 276,618,220


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(b) Company

Minimum Lease PaymentsPresent Value of Minimum Lease

Payments2011 2010 2011 2010

Rs Rs Rs Rs

Amounts Payable under Finance Leases:- within one year 32,675,618 67,314,871 26,416,011 46,924,046 - after one year before five years 62,835,458 195,226,011 52,700,925 158,550,919 - after five years 4,705,631 20,207,736 4,440,200 17,310,511

100,216,707 282,748,618 83,557,136 222,785,476 Less: Future Finance Charges (16,659,571) (59,963,142) - -

Rs 83,557,136 222,785,476 83,557,136 222,785,476

Less: Amount due for Settlement within one year (shown under Current Liabilities) (26,416,011) (46,924,046)

Amount due for Settlement after one year (shown under Non-current Liabilities) Rs 57,141,125 175,861,430

The obligations under finance leases relate to freehold buildings, plant and machinery, motor vehicles and furniture, fittings and equipment with lease term ranging from three to seven years. The Group and the Company have the option to purchase the leased assets for a nominal amount at the conclusion of the lease agreements.

The obligations under finance leases are effectively secured as the rights to the leased assets revert to the lessor in the event of default. The rates of interest are fixed and floating and range between 7.85% p.a. and 11.25% p.a. (2010: 8.75% p.a. and 11.25% p.a.). The fair value of obligations under finance leases approximates their carrying amount.

16 LOAN DUE TO SUBSIDIARY

Company2011 2010

Rs Rs

Repayable within one year (included in Amount due to Subsidiaries classified in Current Liabilities) 2,652,000 2,652,000 Repayable after one year 42,091,637 117,087,082

Rs 44,743,637 119,739,082

The loan due to subsidiary is unsecured and bears interest from nil to 9.00% p.a (2010: nil to 9.00% p.a.).

17 RETIREMENT BENEFIT OBLIGATIONS

(a) Defined Contribution Plan

The Group operates a defined contribution pension plan for all qualifying employees. The assets of the plans are held separately from those of the Group in funds under the control of an independent management committee. Where employees leave the plans prior to full vesting of the contributions, the contributions payable by the Group are reduced by the amount of forfeited contributions. Any residual gratuities under the Employment Rights Act 2008 for the qualifying employees after allowing for permitted deductions in respect of the pension plan are included below in the tables for the retirement benefits in respect of The Employment Rights Act 2008.

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Amount recognised as an expense for the defined contribution plan Rs 9,070,323 7,124,593 3,279,321 4,016,399

15 OBLIGATIONS UNDER FINANCE LEASES (cont’d)


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(b) Retirement Benefits in respect of The Employment Rights Act 2008 and defined benefit pension plan for certain qualifying employees

Amounts recognised in the Statements of Financial Position:

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Present Value of Unfunded Obligations 155,065,000 50,422,000 136,483,000 36,889,000 Unrecognised Actuarial Gain 16,120,000 3,924,000 16,417,000 4,624,000

Rs 171,185,000 54,346,000 152,900,000 41,513,000

Amounts recognised in the Statements of Comprehensive Income:

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Current Service Cost 14,828,000 4,781,000 11,956,000 2,618,000 Interest Cost 15,687,000 3,640,000 14,165,000 2,855,000 Actuarial Gain Recognised (61,000) (521,000) (67,000) (472,000)Past Service Cost recognised 107,355,000 - 105,076,000 (2,256,000)Curtailment or settlement gain (5,322,000) (217,000) (3,930,000) -

Total included in staff costs (Note 23) Rs 132,487,000 7,683,000 127,200,000 2,745,000

Movements in the liability recognised in the Statements of Financial Position:

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

At 1 July 54,346,000 50,360,000 41,513,000 39,371,000 Total Expense as above 132,487,000 7,683,000 127,200,000 2,745,000 Transfer of past service cost to subsidiaries (13,422,000) - (15,626,000) -Retirement Benefits paid (2,226,000) (3,697,000) (187,000) (603,000)

At 30 June Rs 171,185,000 54,346,000 152,900,000 41,513,000

The principal actuarial assumptions used for accounting purposes were:

GROUP COMPANY2011 2010 2011 2010

% % % %

Discount Rate 10.0 10.5 10.0 10.5Future Salary Increases 5.5 to 8.0 6.0 to 8.5 8.0 8.5Future Pension Increases Nil to 5.5 Nil to 4.0 3.0 to 5.5 4.0

Reconciliation of the present value of defined benefit obligation:

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Present Value of Obligation at 1 July 50,422,000 38,144,000 36,889,000 28,840,000 Current Service Cost 14,828,000 4,781,000 11,956,000 2,618,000 Interest Cost 15,687,000 3,640,000 14,165,000 2,855,000 Past Service Cost 107,355,000 - 105,076,000 (2,256,000)Transfer of past service cost to joint venture and subsidiaries (13,422,000) - (15,626,000) -Curtailment or settlement gain (1,626,000) (217,000) - -Benefits Paid (2,226,000) (3,697,000) (187,000) (603,000)Liability (Gain)/Loss (15,953,000) 7,771,000 (15,790,000) 5,435,000

Rs 155,065,000 50,422,000 136,483,000 36,889,000

Reconciliation of fair value of plan assets:

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Employer Contributions 2,226,000 3,697,000 187,000 603,000 Benefits Paid (2,226,000) (3,697,000) (187,000) (603,000)

Fair Value of Plan Assets at 30 June Rs - - - -

17 RETIREMENT BENEFIT OBLIGATIONS (cont’d)


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History of obligations, assets and experience adjustments:

Group

2011 2010 2009 2008 2007Rs Rs Rs Rs Rs

Fair Value of Plan Assets - - - - -Present Value of Defined Benefit Obligation (155,065,000) (50,422,000) (38,144,000) (32,617,000) (33,188,000)

Rs (155,065,000) (50,422,000) (38,144,000) (32,617,000) (33,188,000)

Liability Experience Gain/(Loss) during the Year Rs 15,194,000 (7,700,000) (601,000) 4,688,000 2,966,000

Employer Contributions in the following financial year is expected to be Rs1,639,000.

Company

2011 2010 2009 2008 2007Rs Rs Rs Rs Rs

Fair Value of Plan Assets - - - - -Present Value of Defined Benefit Obligation (136,483,000) (36,889,000) (28,840,000) (25,052,000) (24,652,000)

Rs (136,483,000) (36,889,000) (28,840,000) (25,052,000) (24,652,000)

Liability Experience Gain/(Loss) during the Year Rs 15,090,000 (5,382,000) (978,000) 3,717,000 2,482,000

Employer Contributions in the following financial year is expected to be Rs1,234,000.

Retirement benefit obligations have been based on the report dated 29 August 2011 and submitted by Aon Hewitt Ltd, Actuaries and Consultants.

(c) State Pension Plan

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

National Pension Scheme Contributions Expensed Rs 7,479,132 7,851,711 2,244,057 3,811,797

17 RETIREMENT BENEFIT OBLIGATIONS (cont’d)


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(a) Income Tax

The current tax liability is based on profit as adjusted for tax purposes and is calculated at the rate of 15.0% (2010: 15.0%) for the Group and for the Company.

(i) Income Tax in Statements of Financial Position

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

At 1 July 11,103,427 10,159,724 9,829,108 9,925,610 Paid (10,246,807) (3,318,708) (9,132,506) (3,267,437)

856,620 6,841,016 696,602 6,658,173 Over Provision in Previous Year (484,830) (2,319,571) (483,853) (2,316,268)Paid - APS (2,900,218) (6,631,420) (2,656,662) (6,512,797)Current Tax Liability - Continuing Operations 1,078,321 6,529,670 483,853 5,316,268 Current Tax Liability - Discontinued Operations 18,516,147 6,683,732 18,516,147 6,683,732

17,066,040 11,103,427 16,556,087 9,829,108 Tax Deducted at Source (TDS) (44,241,328) (28,491,348) (11,538,095) (4,209,146)

Current Tax (Asset)/Liability net of TDS Rs (27,175,288) (17,387,921) 5,017,992 5,619,962

Excess TDS in Debtors and Prepayments (Note 12) (32,426,396) (24,114,838) - -Current Tax Liability 5,251,108 6,726,917 5,017,992 5,619,962

Current Tax (Asset)/Liability net of TDS Rs (27,175,288) (17,387,921) 5,017,992 5,619,962

(ii) The Income Tax expense for the year can be reconciled to the accounting profit/(loss) as follows:

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Profit before Taxation Rs 492,521,767 18,685,744 715,060,450 (133,346,231)

Tax at the above Applicable Rate 73,878,265 2,802,862 107,259,068 (20,001,935)Net Tax Effect of Non-taxable and Other Items (72,799,944) 3,726,808 (106,775,215) 25,318,203

Current Tax Liability 1,078,321 6,529,670 483,853 5,316,268 Overprovision in Previous Year (484,830) (2,319,571) (483,853) (2,316,268)

Current Income Tax Expense 593,491 4,210,099 - 3,000,000 Deferred Tax Movement (Note 18 b) (83,725,991) (13,091,693) (89,226,583) (3,000,000)

Taxation Rs (83,132,500) (8,881,594) (89,226,583) -

The Group is subject to a minimum tax payable known as "Alternative Minimum Tax" when it pays dividends.

18 TAXATION


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(iii) Income Tax recognised in Statements of Comprehensive Income

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Current Tax Liability 1,078,321 6,529,670 483,853 5,316,268 Overprovision in Previous Year (484,830) (2,319,571) (483,853) (2,316,268)Deferred Tax Movement (Note 18 b) (83,725,991) (13,091,693) (89,226,583) (3,000,000)

Rs (83,132,500) (8,881,594) (89,226,583) -

(b) Deferred Taxation

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs RsAt 1 July 31,722,497 44,814,190 4,721,000 7,721,000 Charge to Other Comprehensive IncomeRevaluation of Land and Buildings 28,965,387 - 28,965,387 -Fair Value Adjustment on Investment Properties 70,983,996 - - -Charge to Tax ExpenseDeferred Tax (Income)/Expense (83,725,991) (13,091,693) (89,226,583) (3,000,000)

At 30 June Rs 47,945,889 31,722,497 (55,540,196) 4,721,000

The deferred tax liability/(asset) can be analysed as follows:

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Accelerated Capital Allowances 34,649,750 9,159,838 4,029,417 24,729,000 Revaluation Surplus on Land and Buildings 28,965,387 43,616,022 28,965,387 -Fair Value Adjustment on Investment Properties 110,289,870 - - -Unused Tax Losses (36,907,826) (190,363) - -Other Temporary Differences (89,051,292) (20,863,000) (88,535,000) (20,008,000)

Rs 47,945,889 31,722,497 (55,540,196) 4,721,000

The Group has aggregate unutilised tax losses and deductible temporary differences of Rs443,730,633 (2010: Rs238,122,808) to carry forward against future taxable income for which a deferred tax asset has not been recognised due to uncertainty of their recoverability.

19 BANK OVERDRAFTS

The bank overdrafts are secured by fixed and floating charges on the assets of the Company and of the Group.

Interest rates are floating rates and range between 8.35% p.a. and 10.00% p.a. (2010: 8.65% p.a. and 10.00% p.a.).

18 TAXATION (cont’d)


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(a) Creditors and Accruals

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Trade Creditors 601,308,011 424,782,983 8,419,825 129,916,910 Amount due to Joint Venture 37,458,063 - - - Other Creditors and Accruals 765,042,043 759,118,757 138,964,814 240,780,465

Rs 1,403,808,117 1,183,901,740 147,384,639 370,697,375

The directors consider that the carrying amount of trade creditors approximates their fair value.

The average credit period of creditors is two months. No interest is charged on trade payables. The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe.

(b) Other Creditor

GROUP2011 2010

Rs Rs

Repayable in instalments 5,140,000 15,140,000 Repayable within one year (included in Creditors and Accruals classified in Current Liabilities) (5,000,000) (5,000,000)

Repayable after one year Rs 140,000 10,140,000

The other creditor is unsecured, interest free with no fixed terms of repayment.

21 AMOUNT DUE TO ASSOCIATE

The amount due to associate is unsecured, has no fixed terms of repayment and bears bank savings interest rate but with a moratorium period of one year at zero interest rate, starting as from the date funds are disbursed.

20 CREDITORS AND ACCRUALS

22 TURNOVER

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Sale of Goods 64,392,690 159,364,810 - -Construction Contract Revenue 1,043,397,262 770,951,675 - -Income from Investment Properties 62,752,796 110,381,374 - -Lottery 3,252,991,416 1,884,853,908 - -Rendering of Services 85,834,636 189,571,931 - -

Rs 4,509,368,800 3,115,123,698 - -


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The road works and building materials operations were transferred in January 2011 from the Company to two newly incorporated subsidiary companies namely Gamma Civils Ltd and Gamma Materials Ltd. The Company entered into a joint venture agreement in June 2011 with Ingenerie et Participations Financieres and disposed of its rights to subscribe for 10,000 new ordinary shares in Gamma Materials Ltd.

The combined results of the discontinued operations included in the Group and Company Statement of Comprehensive Income are set out below. The comparative profit from discontinued operations have been re-presented to include those operations classified as discontinued in the current year.

GROUP COMPANY2011 2010 2011 2010 Rs Rs Rs Rs

Profit for the year from discontinued operations

Revenue 1,082,491,762 813,522,038 895,667,632 1,375,234,710 Expenses 881,947,071 708,197,046 755,610,790 1,186,729,136

Profit before Tax 200,544,691 105,324,992 140,056,842 188,505,574

Taxation (36,839,073) (6,683,732) (18,516,147) (6,683,732)

Profit Rs 163,705,618 98,641,260 121,540,695 181,821,842


The Operating Profit is arrived at:

(i) after (crediting):

Profit on Disposal of Property, Plant and Equipment (16,326,211) (1,046,957) (16,908,784) (1,255,827)Net Foreign Exchange Gains - - (1,733,448) (2,194,412)Other Operating Income (68,284) - (230,705) (10,940,173)

(ii) and charging:Cost of Sales 597,503,877 495,996,234 572,042,620 936,146,011 Operating Expenses- Distribution Costs 167,624,670 134,485,926 97,900,059 146,377,625 - Administrative Expenses 117,071,085 64,044,060 93,346,362 94,361,229 - Net Foreign Exchange Losses - 354,011 - -- Other Operating Expenses - 423,988 - -

Included in Cost of Sales and Operating Expenses are:Cost of Inventories Expensed 94,505,427 221,435,448 492,271,597 816,395,853 Depreciation 52,182,808 48,364,464 53,418,501 70,363,366 Amortisation of Intangible Assets 2,904,544 2,163,440 1,091,029 2,184,855 Staff Costs 132,861,053 104,539,485 88,792,604 142,180,407 Impairment Loss Recognised on Trade Debtors 44,460,507 9,603,612 43,330,361 3,782,359

23 DISCONTINUED OPERATIONS

FINANCE COSTGROUP COMPANY

2011 2010 2011 2010Rs Rs Rs Rs

Interest Expense on:Bank Overdrafts 2,839,870 - - -Loans Repayable by Instalments 5,954,631 6,007,205 2,506,157 6,102,570 Finance Charges on Finance Leases 7,347,433 7,932,579 8,688,529 18,132,113

Total Finance Costs Rs 16,141,934 13,939,784 11,194,686 24,234,683

Cash flows from discontinued operationsGROUP COMPANY

2011 2010 2011 2010Rs Rs Rs Rs

Net Cash inflows from Operating Activities Rs 300,092,550 165,456,508 237,896,733 264,836,154


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GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs RsContinuing Operations

The Operating Profit/(Loss) is arrived at:

(i) after (crediting):Exceptional Item (Note 35) - - (1,335,225,000) -Dividend Income (5,700,858) (106,875) (5,700,858) (106,875)Profit on Disposal of Property, Plant and Equipment - (806,426) - (395,653)Profit on Disposal of Intangible Assets (1,625) - (1,625) -Profit on Disposal of Investment Properties (6,009,822) - - -Profit on Disposal of Subsidiaries (Note 35 and 36) (1,124,650,028) (13,376,538) - -Net Foreign Exchange Gains (45,993,932) (3,425,282) (41,964,831) (1,575,906)Impairment Loss Reversed on Trade Debtors - - (4,751,994) -Interest Income (4,130,821) (1,161,379) (4,834,332) (20,022)Other Operating Income (233,112,910) (28,400,292) (84,551,730) (59,981,856)

(ii) and charging:Cost of Sales 4,020,427,897 2,894,554,415 1,108,192 3,340,376 Operating Expenses- Distribution Costs 113,638,948 112,461,538 - -- Administrative Expenses 1,199,505,444 408,944,307 296,493,964 122,083,869 - Impairment of Investment in Subsidiaries (Note 7) - - 15,375,000 -- Impairment Loss Recognised on Amount due from Subsidiaries (Note 7) - - 370,000,000 -

Included in Cost of Sales and Operating Expenses are:Cost of Inventories Expensed 393,684,126 847,916,563 - -Depreciation 106,321,273 81,203,396 3,566,264 4,747,251 Amortisation of Intangible Assets 1,957,284 3,862,469 3,736,541 3,839,214 Impairment of Intangible Assets included in Administrative Expenses 32,233,172 11,700,000 - -Staff Costs 581,676,170 430,753,706 183,109,323 70,677,012 Loss on Disposal of Property, Plant and Equipment 22,381,603 - 669,547 -Impairment Loss on Investment Properties (Note 9) 18,285,965 - - -Impairment Loss Recognised on Trade Debtors 3,191,876 9,368,035 - 13,576,814

24 OPERATING PROFIT/(LOSS)

25 FINANCE (INCOME)/COSTS

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Interest Expense on:Bank Overdrafts 49,262,828 47,968,934 31,700,762 32,419,508 Loans Repayable by Instalments 79,821,996 90,712,194 46,370,096 35,664,537 Finance Charges on Finance Leases 15,367,213 20,948,154 921,906 1,918,253 Other Interest 478,630 1,144,622 - -

Finance Costs 144,930,667 160,773,904 78,992,764 70,002,298 Amount Capitalised (7,522,649) (9,114,417) - -

Total Finance Costs Rs 137,408,018 151,659,487 78,992,764 70,002,298

Interest Income on:Bank Balances (3,308,143) (1,141,357) - -Loans (822,678) (20,022) (4,834,332) (20,022)

Finance Income Rs (4,130,821) (1,161,379) (4,834,332) (20,022)


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GROUP AND COMPANY 2011 2010 Rs Rs

Final Dividend of Rs 0.50 (2010: Rs3.50) per Share in respect of previous year 6,662,500 46,637,500 Interim Dividend of Rs 3.50 (2010: Rs 0.75) per Share in respect of current year 46,637,500 9,993,750

Total Dividend declared and paid during the Year Rs 53,300,000 56,631,250

Post Statement of Financial Position Event

A special dividend of Rs 40.00 per share was declared on 18 July 2011 and paid in August 2011 in respect of current year.

27 EARNINGS/(LOSS) PER SHAREGROUP COMPANY

2011 2010 2011 2010Rs Rs Rs Rs

Profit Attributable to Owners of the Company Rs 810,194,424 161,260,498 925,827,728 48,475,611

Earnings used in the Calculation of Earnings per Share from Continuing and Discontinued Operations 810,194,424 161,260,498 925,827,728 48,475,611 Profit for the Year from Discontinued Operations (163,705,618) (98,641,260) (121,540,695) (181,821,842)

Earnings/(Loss) used in the Calculation of Earnings per Share from Continuing Operations Rs 646,488,806 62,619,238 804,287,033 (133,346,231)

Number of Shares for Earnings per Share Calculation 13,325,000 13,325,000 13,325,000 13,325,000

EARNINGS/(LOSS) PER SHAREFrom Continuing Operations 48.52 4.70 60.36 (10.01)From Discontinued Operations 12.28 7.40 9.12 13.65

From Continuing and Discontinued Operations Rs 60.80 12.10 69.48 3.64

26 DIVIDEND

28 CONSTRUCTION CONTRACTSGROUP COMPANY

2011 2010 2011 2010Rs Rs Rs Rs

In respect of constructions contracts in progress at Statements of Financial Position date:

Contract costs incurred and recognised profits less recognised losses to date 1,521,602,381 1,957,540,914 - -Less: Progress billings (1,400,589,725) (1,940,598,941) - -

Rs 121,012,656 16,941,973 - -

Retentions held by customers (included in Debtors and Prepayments - Note 12) Rs 75,724,046 95,718,522 - -

Advances received from customers (included in Creditors and Accruals - Note 20) Rs 60,456,138 127,598,546 - -

Amount due from customers for contract work (included in Debtors and Prepayments - Note 12) Rs 123,989,082 16,941,973 - -

Amount due to customers for contract work Rs 2,976,426 - - -

Retentions held by customers and advances received from customers are carried at amortised cost using an effective interest rate of 9.0% p.a (2010: 10.90% p.a.).


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GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Property, Plant and Equipment purchased Rs 340,226,621 400,554,342 6,035,914 94,494,075

Financed as follows:Finance Leases 90,537,779 108,398,732 - 45,963,000 Cash Disbursed 249,688,842 292,155,610 6,035,914 48,531,075

Total Rs 340,226,621 400,554,342 6,035,914 94,494,075

30 CASH AND CASH EQUIVALENTSGROUP COMPANY

2011 2010 2011 2010Rs Rs Rs Rs

Cash at Bank and in Hand 1,463,745,199 98,409,466 1,288,402,102 1,292,710 Bank Overdrafts (496,928,416) (589,622,641) (368,673,642) (437,189,453)

Rs 966,816,783 (491,213,175) 919,728,460 (435,896,743)

29 PURCHASE OF PROPERTY, PLANT AND EQUIPMENT


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IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segments identified previously under IAS 14, Segmental Reporting. The Group's reportable segments under IFRS 8 are:

- Building Materials and Equipment- Lottery- Contracting- Investments- Project and Others

(a) Segment Revenue and Results

2011Building

Materials and Equipment Contracting Investments Lottery

Project and Others Eliminations Total

Rs Rs Rs Rs Rs Rs Rs

REVENUE

External Sales from Continuing and Discontinued Operations 1,232,719,088 1,043,397,262 62,752,796 3,252,991,416 - 5,591,860,562

Inter-segment Sales 201,973,206 1,689,866 12,097,375 - - (215,760,447) -

1,434,692,294 1,045,087,128 74,850,171 3,252,991,416 - (215,760,447) 5,591,860,562

Discontinued Operations 1,082,491,762 - - - - - 1,082,491,762

Revenue from Continued Operations Rs 352,200,532 1,045,087,128 74,850,171 3,252,991,416 - (215,760,447) 4,509,368,800

RESULT

Segment Results from Continuing Operations 552,764,505 (86,224,679) 38,165,901 (197,273,721) (43,318,317) 331,282,818 595,396,507

Discontinued Operations 216,686,625 - - - - - 216,686,625

Segment Results 769,451,130 (86,224,679) 38,165,901 (197,273,721) (43,318,317) 331,282,818 812,083,132

Net Gain from Fair Value Adjustment on Investment Properties 17,448,465

Finance Costs on Continuing Operations (137,408,018)

Finance Costs on Discontinued Operations (16,141,934)

Share of Profit of Associates 17,084,813

Profit before Taxation 693,066,458

Taxation 46,293,427

Profit for the Year Rs 739,359,885

31 SEGMENT INFORMATION


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31 SEGMENT INFORMATION (cont’d)

(a) Segment Revenue and Results (cont’d)

2010Building



Rs Rs Rs Rs Rs Rs RsREVENUEExternal Sales from Continuing and Discontinued Operations 1,162,458,779 770,951,675 110,381,374 1,884,853,908 - 3,928,645,736

Inter-segment Sales 303,131,040 65,305,125 7,280,222 - - (375,716,387) -

1,465,589,819 836,256,800 117,661,596 1,884,853,908 - (375,716,387) 3,928,645,736


Revenue from Continued Operations Rs 652,067,781 836,256,800 117,661,596 1,884,853,908 - (375,716,387) 3,115,123,698

RESULT

Segment Results from Continuing Operations 20,727,460 (182,586,588) 68,390,119 (103,871,937) (18,869,776) (37,349,048) (253,559,770)


Segment Results 139,992,236 (182,586,588) 68,390,119 (103,871,937) (18,869,776) (37,349,048) (134,294,994)

Net Gain from Fair Value Adjustment on Investment Properties 366,719,411

Finance Costs on Continuing Operations (151,659,487)

Finance Costs on Discontinued Operations (13,939,784)

Share of Profit of Associates 57,185,590

Profit before Taxation 124,010,736

Taxation 2,197,862

Profit for the Year Rs 126,208,598

Inter-segment sales are effected on an arm’s length basis.

(b) Segment Assets and Liabilities

2011Building



Rs Rs Rs Rs Rs Rs RsASSETSSegment Assets 1,843,946,179 928,486,851 2,099,752,534 1,050,800,441 8,798,633 (732,826,527) 5,198,958,111

Investments in Associates 693,180,408

Unallocated Corporate Assets 143,535,907

Total Assets Rs 6,035,674,426

LIABILITIES Segment Liabilities 244,763,149 1,034,081,544 381,687,038 846,267,809 53,478,823 (829,487,772) 1,730,790,591

Unallocated Corporate Liabilities 2,040,528,162

Total Liabilities 3,771,318,753

Non-controlling Interests (65,035,979)

Shareholders' Funds 2,329,391,652

Total Equity and Liabilities Rs 6,035,674,426


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(b) Segment Assets and Liabilities (cont’d)

2010Building




ASSETSSegment Assets 1,771,450,550 910,124,053 1,649,896,853 460,841,300 8,784,054 (775,026,270) 4,026,070,540

Investments in Associates 460,033,801

Unallocated Corporate Assets 99,550,332

Total Assets Rs 4,585,654,673

LIABILITIES Segment Liabilities 993,116,755 980,103,663 415,211,949 323,291,417 10,251,929 (877,238,415) 1,844,737,298

Unallocated Corporate Liabilities 1,514,205,270

Total Liabilities 3,358,942,568

Non-controlling Interests (4,457,490)

Shareholders' Funds 1,231,169,595

Total Equity and Liabilities Rs 4,585,654,673

For the purpose of monitoring segment performance and allocating resources between segments:

All assets are allocated to reportable segments other than investments in associates, amounts due to associates, non-current deposits and prepayments, and excess TDS (Tax Deduction at Source) in Debtors and Prepayments. Goodwill is allocated to reportable segments as described in note 6. Assets used jointly by reportable segments are allocated on the basis of the revenues earned by individual reportable segments; and

All liabilities are allocated to reportable segments other than loans, obligations under finance leases, deferred tax liability, current tax liability and amount due to associate.


(c) Other Information

(i) Capital Additions, Depreciation and Amortisation

2011Building




Capital Additions 299,144,502 6,212,514 426,981 38,079,893 - - 343,863,890

Depreciation and Amortisation 96,605,594 18,245,599 223,632 50,196,648 - (1,905,564) 163,365,909 Impairment Loss on Investment Properties - - 18,285,965 - - - 18,285,965

Impairment of Intangible Assets 18,828,907 - 13,404,265 - - - 32,233,172

2010Building




Capital Additions 176,210,968 4,372,293 56,765,140 222,264,584 - (3,050,765) 456,562,220

Depreciation and Amortisation 95,696,288 19,608,890 192,499 21,890,800 - (1,794,708) 135,593,769

Impairment of Intangible Assets 1,700,000 - 10,000,000 - - - 11,700,000


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(c) Other Information (cont’d)

(ii) Geographical

The Group has started its lottery operations in Madagascar during the year and is now operating in two geographical segments, hence no comparatives for 2010.

2011Mauritius Madagascar Elimination Total

Rs Rs Rs Rs

Segment Revenue from Continuing and Discontinued Operations 5,504,034,926 87,825,636 - 5,591,860,562 Discontinued Operations 1,082,491,762 - - 1,082,491,762

Segment Revenue from Continuing Operations Rs 4,421,543,164 87,825,636 - 4,509,368,800

Segment Results from Continuing and Discontinued Operations 1,224,894,016 (184,886,737) (11,237,522) 1,028,769,757 Discontinued Operations 216,686,625 - - 216,686,625

Segment Results from Continuing Operations Rs 1,008,207,391 (184,886,737) (11,237,522) 812,083,132

Segment Assets Rs 5,840,918,247 194,756,179 - 6,035,674,426

Segment Liabilities Rs 5,840,918,247 194,756,179 - 6,035,674,426

(iii) Information about major customers

No single customer contributed 10% or more of the Group's revenue for both 2011 and 2010.


(iii) Revenue from Major Products and Services

The following is an analysis of the Group's revenue from continuing operations from its major products and services.

2011 2010Rs Rs

Building Materials 38,203,928 147,349,375 Equipment 26,188,762 12,015,435 Contracting 1,043,397,262 770,951,675 Investment Properties 62,752,796 110,381,374 Lottery 3,252,991,416 1,884,853,908 Others 85,834,636 189,571,931

Rs 4,509,368,800 3,115,123,698


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Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. The transactions of the Group with related parties during the year are as follows:


(a) Sales of Goods and Services

To Directors 294,398 447,387 294,398 447,387 To Associates and Joint venture 128,642,464 11,965,870 69,927,869 9,056,566

(b) Sale of Property, Plant and Equipment2011 2010 2011 2010 Rs Rs Rs Rs

To Associates and Joint venture 375,382,953 - 264,896,556 -

(c) Sale of Inventories2011 2010 2011 2010 Rs Rs Rs Rs

Spare Parts to Joint Venture at Cost 60,059,159 60,059,159 Raw Materials and Finished Goods to Joint venture 82,628,154 - 82,628,154 -

(d) Transfer of Obligations under Finance Leases2011 2010 2011 2010 Rs Rs Rs Rs


(e) Transfer of Retirement Benefit Obligations2011 2010 2011 2010 Rs Rs Rs Rs


32 RELATED PARTY TRANSACTIONS

(f) Purchases of Goods and Services2011 2010 2011 2010 Rs Rs Rs Rs

From Directors 1,191,215 1,345,006 915,215 1,069,006 From Director-related Entities 887,779 3,092,901 382,935 3,006,201 From Associates and Joint venture 212,357,598 194,064,923 97,169,118 188,094,892

(g) Income derived from Administrative Services and Loan Interest Income2011 2010 2011 2010 Rs Rs Rs Rs

From Associates and Joint venture 2,220,000 2,220,000 2,220,000 2,220,000

(h) Compensation of Key Management Personnel2011 2010 2011 2010 Rs Rs Rs Rs

Short-term Benefits 59,166,546 67,545,925 31,421,586 33,074,085 Post-employment Benefits 23,654,637 1,988,709 22,821,578 1,001,173

Rs 82,821,183 69,534,634 54,243,164 34,075,258


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(i) Outstanding Balances

(i) Amount due from Related Parties:


Directors and Director-related Entities 318,976 721,163 318,976 721,163 Amounts due from Subsidiaries - - 1,100,255,649 1,023,883,903 Associates included in Debtors and Prepayments 9,472,503 9,896,744 9,472,503 9,005,076 Associates 20,264,977 34,147,525 20,264,977 34,147,525 Joint Venture 224,757,262 - 117,101,711 -

Rs 254,813,718 44,765,432 1,247,413,816 1,067,757,667

(ii) Amount due to Related Parties


Director-related entities - 20,000 - 20,000 Amounts due to Subsidiaries - - 216,653,827 138,634,698 Associates and Joint venture included in Creditors and Accruals 38,948,922 57,043,560 358,118 55,108,754

Rs 38,948,922 57,063,560 217,011,945 193,763,452

(iii) Loan due to Associates:GROUP COMPANY

2011 2010 2011 2010 Rs Rs Rs Rs

Associates Rs 75,000,000 75,000,000 75,000,000 75,000,000

In addition to the amounts disclosed for the Group, transactions with the subsidiaries of the Group are disclosed below:

2011 2010 Rs Rs

(a) Sales of Goods and Services 136,844,264 286,967,030 (b) Purchases of Goods and Services 92,867,781 182,593,042 (c) Loan Interest Expense 15,762,450 367,523 (d) Management Fees 61,596,350 22,649,444

32 RELATED PARTY TRANSACTIONS (cont’d)


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In its ordinary operations, the Group is exposed to various risks such as capital risk, foreign currency risk, interest rate risk, credit risk and liquidity risk.

(a) Capital Risk Management

The Group manages its capital to ensure that the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group’s overall strategy remains unchanged from 2010.

The capital structure of the Group consists of debt, net of cash and cash equivalents and equity comprising issued capital, reserves and retained earnings.

(b) Gearing Ratio

The Group reviews the capital structure on a regular basis and as part of this review, management considers the cost of capital and the risks associated with its capital.

The gearing ratio at the year end was as follows:

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Debt (i) 1,571,060,223 1,407,482,773 704,482,607 747,703,641 Cash and Cash Equivalents (Net of Bank Overdrafts Note 30) (966,816,783) 491,213,175 (919,728,460) 435,896,743

Net Debt Rs 604,243,440 1,898,695,948 (215,245,853) 1,183,600,384

Equity Rs 2,264,355,673 1,226,712,105 1,589,338,553 750,361,944

Gearing Ratio 27% 155% 0% 158%

(i) Debt is defined as short and long term borrowings, as detailed in notes 14, 15 and 16.(ii) Equity includes capital and reserves of the Group/Company.

(c) Significant Accounting Policies

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

33 FINANCIAL INSTRUMENTS

(d) Fair Values

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

Categories of Financial InstrumentsGROUP COMPANY

2011 2010 2011 2010Rs Rs Rs Rs

Financial Assets

Loans and Receivables (including Cash and Cash Equivalents) 2,725,860,852 1,145,442,225 2,840,174,986 1,467,653,505 Available-for-sale Financial Assets 14,319,415 14,105,915 14,319,415 14,105,915

Rs 2,740,180,267 1,159,548,140 2,854,494,401 1,481,759,420

Financial Liabilities

At Amortised Cost Rs 3,444,242,555 3,060,293,876 1,411,400,848 1,648,883,353


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(e) Fair Value Measurements recognised in the Statement of Financial Position

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fairvalue, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

- Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

- Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

GROUP AND COMPANY Available-for-sale investments

2011 2010 Rs Rs

Hierarchy levelsLevel 1 4,319,000 4,105,500 Level 2 - - Level 3 - -

Rs 4,319,000 4,105,500

33 FINANCIAL INSTRUMENTS (cont’d)

(f) Currency Risk

The Group is exposed to the risk that the exchange rate of the Mauritian rupee relative to the currencies listed below may change in a manner which has a material effect on the reported values of its assets and liabilities.

(g) Currency Profile

The currency profile of the Group's and the Company’s financial assets and financial liabilities is summarised as follows:

(i) GroupFinancial Assets Financial Liabilities

2011 2010 2011 2010Rs Rs Rs Rs

Currency

Mauritian Rupee 1,444,804,434 1,158,673,530 3,400,885,857 3,026,248,077 United States Dollar 1,289,219,882 639,036 20,272,631 32,846,276 Euro 6,155,877 235,500 23,084,067 1,199,523 UK Pound Sterling 74 74 - -

Rs 2,740,180,267 1,159,548,140 3,444,242,555 3,060,293,876

(ii) CompanyFinancial Assets Financial Liabilities

2011 2010 2011 2010Rs Rs Rs Rs

Currency

Mauritian Rupee 1,566,563,766 1,481,274,143 1,383,475,751 1,624,429,909 United States Dollar 1,287,385,248 485,203 4,841,030 23,253,921 Euro 545,313 - 23,084,067 1,199,523 UK Pound Sterling 74 74 - -

Rs 2,854,494,401 1,481,759,420 1,411,400,848 1,648,883,353


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(h) Foreign Currency Sensitivity Analysis

The Group is mainly exposed to United States Dollar (USD), Euro and UK Pound Sterling (GBP).

The following table details the Group’s sensitivity to a 5% increase and decrease in USD, Euro and GBP against the Mauritian Rupee. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year end for a 5% change in foreign currency rates. A negative number below indicates a decrease in profit where the USD, Euro and GBP strengthen 5% against the Mauritian Rupee. For a 5% weakening of the USD, Euro and GBP against the Mauritian Rupee, there would be an equal and opposite impact on the profit, and the balances below would be positive.

Impact of 5% increase of the USD, EURO and GBP against the Mauritian Rupee:

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

United States Dollar 63,447,362 (1,610,362) 64,127,210 (1,138,436)Euro (846,409) (48,201) (1,126,937) (59,976)UK Pound Sterling 4 4 4 4

Profit/(Loss) Rs 62,600,957 (1,658,559) 63,000,277 (1,198,408)

The above is mainly attributable to the Group exposure outstanding on cash and cash equivalents and borrowings in USD, Euro and GBP.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year end exposure does not reflect the exposure during the year.


(i) Compliance Risk

Compliance risk arises from a failure or inability to comply with the laws, regulations or codes applicable to the industry. Non-compliance can lead to fines, public reprimands, enforced suspension of operations or, in extreme cases, withdrawal of authorisation to operate.

(j) Credit Risk Management

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties, as a means of mitigating the risk of financial loss from defaults.

The Group's credit risk is primarily attributable to its trade receivables. The amounts presented in the Statement of Financial Position are net of allowances for doubtful receivables, estimated by management based on prior experience and represents the company’s maximum exposure to credit risk.

The Group does not have other significant concentration of risks.


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(k) Interest Rate Risk

The Group is exposed to interest rate risk as it borrows funds at both fixed and floating interest rates. The risk is managed by the company by maintaining an appropriate mix between fixed and floating rate borrowings.

The interest rate profile of the financial liabilities at 30 June was:

Financial Liabilities

Bank Overdraft Bank Loan Loan due to SubsidiaryFloating Interest Rate Fixed and Floating Interest Rate Floating Interest Rate2011 2010 2011 2010 2011 2010

% % % % % %

United States Dollar - - 2.00 2.00 - -Euro - - 1.71 3.60 - -

Mauritian RupeeFrom 8.35 to

10.00From 8.65 to

10.00From 7.35 to

10.50From 8.30 to

11.75 From 0 to 9.00 From 0 to 9.00

Obigations under Finance LeasesFixed and Floating Interest Rate

2011 2010% %

Mauritian RupeeFrom 7.85 to

11.25From 8.75 to

11.25

The interest on loan to associate is detailed in Note 21.


(l) Interest Rate Sensitivity Analysis

The sensitivity analysis below has been determined based on the exposure to interest rates for the non-derivative instruments at the balance sheet date. For floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the balance sheet date was outstanding for the whole year. A 25 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 25 basis points higher and all other variables were held constant, the Group's and the Company’s profit for the year ended 30 June 2011 would have decreased as follows:

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Loss Rs 5,044,972 4,867,764 2,557,891 2,837,233

This is mainly attributable to the company’s exposure to interest rates on its variable rate borrowings.

(m) Liquidity Risk Management

The Group manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The following tables detail the Group’s and the Company's remaining contractual maturity for their non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and the Company can be required to pay. The table includes both interest and principal cash flows.


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(m) Liquidity Risk Management (cont’d)

(i) Group

Less than1 year 1 - 5 years 5+ years Total

Rs Rs Rs Rs2011Non-interest Bearing 1,478,808,117 140,000 - 1,478,948,117 Finance Lease Liability 70,868,676 170,893,716 29,514,127 271,276,519 Variable Interest Rate Instruments 1,179,488,373 761,773,724 239,279,020 2,180,541,117 Fixed Interest Rate Instruments 50,000,000 - - 50,000,000

Rs 2,779,165,166 932,807,440 268,793,147 3,980,765,753

2010Non-interest Bearing 1,258,901,740 10,140,000 - 1,269,041,740 Finance Lease Liability 97,603,733 301,683,501 38,633,728 419,969,977 Variable Interest Rate Instruments 1,002,715,941 724,986,170 226,369,819 1,954,071,930 Fixed Interest Rate Instruments 50,000,000 - - 50,000,000

Rs 2,409,221,414 1,036,809,671 265,003,547 3,693,083,647


(ii) Company

Less than1 year 1 - 5 years 5+ years Total

Rs Rs Rs Rs2011Non-interest Bearing 396,946,829 - - 396,946,829 Finance Lease Liability 32,675,618 62,835,458 4,705,631 100,216,707 Variable Interest Rate Instruments 735,635,210 316,168,602 2,391,551 1,054,195,363 Fixed Interest Rate Instruments 50,000,000 - - 50,000,000

Rs 1,215,257,657 379,004,060 7,097,182 1,601,358,899

2010Non-interest Bearing 467,244,991 - - 467,244,991 Finance Lease Liability 67,314,871 195,226,011 20,207,736 282,748,618 Variable Interest Rate Instruments 787,906,679 265,172,005 8,753,907 1,061,832,591 Fixed Interest Rate Instruments 50,000,000 - - 50,000,000

Rs 1,372,466,541 460,398,016 28,961,643 1,861,826,200


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(a) The Group as Lessor

Leasing Arrangements

The Group leases office space with lease term of three to seven years, with an option to extend for a further period of three to five years on same terms and conditions. The operating lease contracts contain market review clauses in the event that the lessee exercises its option to renew. The lessee does not have an option to purchase the property at the expiry of the lease period.

The rental income earned by the Group under operating leases amounts to Rs62,752,796 (2010: Rs110,381,374). Direct operating expenses incurred for the year amount to Rs21,183,038 (2010: Rs15,595,218).

Non-cancellable Operating Lease Receivables

GROUP COMPANY2011 2010 2011 2010

Rs Rs Rs Rs

Less than one year 44,259,042 41,754,480 - - Between two to five years 142,300,319 160,509,120 - - More than five years - 15,083,244 - -

Rs 186,559,361 217,346,844 - -

(b) The Group as Lessee

Leasing Arrangements

The Group leases state and privately-owned land and residential buildings with lease term of ranging from one to thirty years, with an option to extend on same terms and conditions. The operating lease contracts contain market review clauses in the event that the lessee exercises its option to renew. The lessee does not have an option to purchase the property at the expiry of the lease period.

Non-cancellable Operating Lease PayablesGROUP COMPANY

2011 2010 2011 2010Rs Rs Rs Rs

Less than one year 22,684,197 8,404,792 1,050,000 3,722,592 Between two to five years 33,084,967 10,051,260 - 6,245,500 More than five years 41,257,729 74,718,265 - 13,390,000

Rs 97,026,893 93,174,317 1,050,000 23,358,092

Payments recognised as an ExpenseGROUP COMPANY

2011 2010 2011 2010Rs Rs Rs Rs

Minimum Lease Payments Rs 15,361,439 7,061,072 962,500 3,594,372

34 OPERATING LEASES


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On 23rd June 2011, the Company entered into a strategic alliance with Ingenerie et Participations Financieres and disposed of its rights to subscribe for 10,000 new ordinary shares in Gamma Materials Ltd for a consideration of USD 47,500,000.

Rs

Consideration Received in Cash and Cash Equivalents Rs 1,335,225,000

Analysis of Assets and Liabilities at the disposal date: Non-Current AssetsProperty, Plant and Equipment 418,856,215 Intangible Assets 17,480,436

Current AssetsInventories 85,381,961 Trade Receivables and Prepayments 79,753,060 Amount due from Group Companies 18,729,032 Cash at Bank and in Hand 623,449

Non-Current LiabilitiesLoan (45,833,334)Obligations under Finance Leases (58,300,368)Retirement Benefit Obligations (6,694,000)Deferred Tax Liability (42,239,000)

Current LiabilitiesBank Overdraft (48,645,035)Loan (12,500,000)Obligations under Finance Leases (14,388,324)Trade Payables and Accruals (67,786,672)Amount due to Group Companies (112,378,631)

Net Assets disposed of Rs 212,058,789

Profit on Disposal of Subsidiary (Note 24) Rs 1,123,166,211

Net Cash Inflow from Disposal of Subsidiary:

Consideration Received in Cash and Cash Equivalents 1,335,225,000 Less: Cash and Cash Equivalent Balances disposed of -

Rs 1,335,225,000

35 EXCEPTIONAL ITEM


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During the year, the Group disposed of Stamford South Third Ltd, one of its subsidiaries.

In 2010, the Group disposed of the following subsidiaries:

- Fowlers Ltd- Raffles Seventh Ltd- Stamford North Seventh Ltd- Stamford North Third Ltd- Stamford Seventh Ltd- Stamford South Fourth Ltd- Stamford South Seventh Ltd

2011 2010Rs Rs

Consideration Received in Cash and Cash Equivalents Rs 1,469,235 14,842,168

Analysis of Assets and Liabilities over which Control was Lost:

Non-Current AssetsInvestment Properties 7,394,732 93,582,231

Current AssetsDebtors and Prepayments 1,047,476 2,594,167 Cash and Cash Equivalents - 87,197

Current LiabilitiesCreditors and Accruals (8,456,790) (94,797,965)

Net (Liabilities)/Assets disposed of Rs (14,582) 1,465,630

Profit on Disposal of Subsidiaries Rs 1,483,817 13,376,538

Net Cash Inflow from Disposal of Subsidiaries:

Consideration Received in Cash and Cash Equivalents 1,469,235 14,842,168 Less: Cash and Cash Equivalent Balances disposed of - (87,197)

Rs 1,469,235 14,754,971

37 ACQUISITION OF SUBSIDIARY

During the year, the Group acquired two subsidiaries, Accacias Co Ltd and RHT Media Ltd. The fair values of assets and liabilities acquired were as follows:

Accacias Co Ltd RHT Media Ltd Rs Rs

Investment in Subsidiary and Associate 25,000,000 3,875,560 Debtors 10,000 -Liabilities (27,870,583) (6,000)

Share of Net Assets Acquired (2,860,583) 3,869,560 Goodwill 2,870,583 21,130,440

Total Consideration, Satisfied by Cash Rs 10,000 25,000,000

Accacias Co Ltd contributed a loss of Rs2,870,583 and RHT Media Ltd a profit of Rs3,769,560 to the Group’s profit before tax for the period between the date of acquisition and the Statements of Financial Position date.

36 DISPOSAL OF SUBSIDIARIES


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The Company has secured the liabilities of some of its subsidiaries by giving guarantees to the relevant banks for a total amount of Rs1,146.0M (2010: Rs536.0M).

The Company has secured the liabilities of its joint venture by giving guarantees to the relevant banks for a total amount of Rs365.0M (2010: Rs Nil).

39 CONTINGENT LIABILITIES

The Group has contingent liabilities in respect of legal claims arising in the ordinary course of business. It is not anticipated that any material liabilities will arise from them.

Contingent liabilities not provided for in the Group financial statements relate to bank guarantees of Rs20.3M(2010: Rs72.7M), customs guarantees of Rs2.9M (2010: Rs2.9M), performance bond of Rs342.9M (2010: Rs357.5M), tender bond of Rs7.5M (2010: Rs2.1M), letters of credit amounting to Rs17.5M (2010: Rs60.7M), spot forward exchange contracts of Rs0 (2010: Rs0), advance payment guarantees of Rs175.1M (2010: Rs187.1M), bill of exchange of Rs0 (2010: Rs0) and guarantees of Rs397.0M (2010: Rs100.0M) to third parties.

Contingent liabilities not provided for in the Company financial statements relate to bank guarantees of Rs5.2M (2010: Rs2.6M), customs guarantees of Rs2.9M (2010: Rs2.9M), performance bond of Rs296.4M (2010: Rs254.2M), tender bond of Rs5.3M (2010: Rs2.0M), letters of credit amounting to Rs13.0M (2010: Rs57.6M), spot forward exchange contracts of Rs Nil (2010: Rs6.6M), advance payment guarantee of Rs175.1M (2010: Rs187.1M) and guarantee of Rs392.0M (2010: Rs41.9M) to third party.

38 GUARANTEES FOR SUBSIDIARIES’ AND JOINT VENTURE’S LIABILITIES


a nnual report 2011 - gamma

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